Other parts of this series:
- Four Fifths of Strategy Officers aren’t prepared for disruption
- Some companies navigate disruption better than others. How did they do it?
- Counteract the threat of disruption by building investment capacity
- Trends in innovation show companies how to manage disruption
- The surprising future of legacy business in companies that disrupt themselves successfully
- How the best companies are unlocking trapped value – with remarkable results
Case studies from the frontlines of disruption
More than half of all the companies researched by Accenture recently expect that in three years’ time, more than half their revenue will come from new business activities. But an expectation, or hope, is not a business strategy.
The reality is that less than a third of companies are currently achieving that. This is mostly because companies say they want to change, yet are still relentlessly devoted to existing products, services, and brands — or they have contractual obligations, or are tied into infrastructure that makes a transition difficult. At the same time, some large businesses are indeed successfully navigating the transition.
One company that has spotted the coming disruption and is responding skillfully, is Ecolab. A US$1.5 billion company with 25+ years of dividend growth. They were famous for 3D TRASAR™ Cooling Water Technology that helped big manufacturers improve industrial operations. They are developing specialised solutions leveraging IOT and data driven insights to promote a clean environment and optimise the use of water and energy. How are they staying ahead of disruption? They have woven innovation in the fabric of their organisation through their 1,600 R&D personnel in 19 global technology centres and have focussed on commercialising the best ideas.
UK-based home improvement giant Kingfisher is another success story. They have disrupted their brick-and-mortar business model and pivoted to digital shopping experience keeping in mind the changing customer needs. They put a five-year digital transformation plan in place that spans all digital channels. This includes improved product search, enriched product descriptions, enhanced check-out and introduction of “Click and Collect. They are driving efficiencies in the business to create fuel for this innovation.
Another giant which is transitioning effectively is the US-based CVS Pharmacy. Change is built into their culture. They started as a health and beauty store – a South African equivalent would be Clicks – and they quickly added in-store pharmacy departments. Then they bought MinuteClinic, a pioneer of in-store health clinics, a bit like the in-store clinics at Dis-Chem. Shortly afterwards they acquired CareMark Rx, the US’s leading pharmacy benefits manager and they re-branded themselves CVS Health. They use digital technologies and analytics tools to help get better health outcomes for their patients. And they were the first pharmacy retailer to stop selling tobacco.
The examples above are of organisation that have not only achieved financial success but are also acting nimbly, despite their enormous size. They have made adequate investment capacity for change, woven innovation in the fabric of the organisation and created synergies between the old and the new. Although these examples are outside of Financial Services industries there each of them has a lesson for financial services organisations on how to successfully navigate the challenges that lie ahead.
Learn more about how to manage disruption by downloading The Wise Pivot. Or, contact me to discuss how Accenture’s international research can help you understand and prepare for the coming disruption.