How to integrate existing and new businesses for success

It’s not called “Business Disruption” for nothing. Disruption is an existential crisis for companies. Recent history shows that no matter how big or dominant a company is, it can become irrelevant in less than five years. It took Blackberry less than that to succumb to the joint onslaught of Apple and Google’s Android – and they had nearly 40% of the market less than 10 years ago. There was a time everybody’s next cellphone was another Nokia. That brand has basically disappeared. Not even the giant Microsoft could re-invent the platform in time to ensure its dominance. 

So it’s no wonder that companies facing disruption want to pivot their businesses so that they are more able to face the future. And in doing so, it’s tempting for them to look at their legacy businesses and wonder if they should exit them completely and embrace the new world order. 

We have researched companies which are turning – or pivoting –  to face the new threats successfully and referred to these as the “Rotation Masters.” 

What is surprising about these Rotation Masters is how they create synergies between the old and the new businesses. The Rotation Masters are actively looking for ways to cross-sell between new and existing businesses. They are doing this at twice the rate of other companies. They acknowledge that establish or maintain a leadership position they will need a completely new business model. More than four out of five (81%) of Rotation Masters rated this very or critically important. At the same time they are actively looking to capitalise on their legacy business and to leverage the new business to reinvigorate the culture of the legacy businesses and not abandon them altogether. 

Another strategy adopted by this group is collaboration with external networks such as Innovation consortia. JVs etc particularly for synergies to build on the strengths of their legacyThis collaboration helps them accelerate innovation at scale.  

 The example of CVS Health, in one of my previous blogs is a good case of companies that have adopted the strategy of driving synergies between the new and the old.   

An example is biotech innovator Biogen, 1QBit and Accenture Labs. They are in the business of getting drugs to market. The early phases of drug design and discovery involves examining drugs at the molecular level to predict what effects they might have. 

Leveraging their existing business, they forged a partnership with Accenture Labs and 1QBit. They spent two months developing an application using Quantum computing. This app generates molecular comparison results with deep insights about how molecules match. 

This collaboration dramatically reduced costs and time to market, while accelerating drug discovery for complex diseases including multiple sclerosis, AlzheimersParkinsons and Lou Gehrig’s disease. 

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.