A new study by management consulting firm Accenture has found that industry disruption is a reality for most large companies globally and that disruption has a pattern that can be identified and prepared for.
The research analysed over 3,600 companies with annual revenues of at least US$100 million in 82 countries for current levels of disruption and the susceptibility to future disruption.
The results showed that 63% of companies are currently face high levels of disruption whilst 44% show signs of susceptibility to future disruption.
As part of the research, Accenture developed a ‘disruptability index’ by breaking down disruption into its key components. Business leaders can use the index to understand the position of their industry. It allows them to identify risks and opportunities and then prepare the right strategic response.
Accenture applied the index to position companies in 20 industry sectors and 98 sub-segments across four periods of disruption:
Durability: Disruption is evident but not life-threatening; companies still experience structural advantages and deliver consistent performance. 19% of the companies surveyed fell into this period.
Vulnerability: The current level of disruption is moderate, but companies are susceptible to future disruption, due to structural productivity challenges such as high labour costs. 19% of companies in the study experienced this period of disruption.
Volatility: This is categorised by a prominence of violent, sudden episodes of disruption, 25% of the companies studied fell into this period.
Viability: Disruption is constant, and sources of competitive advantage are often short-lived. Over 37% of the companies studied fell into this period of disruption.
“Disruption is continual and inevitable – but it’s also predictable,” said Omar Abbosh, chief strategy officer at Accenture. “Business leaders need to determine where their company is positioned in this disruption landscape and the likely speed of change. The more clearly they see what’s changing around them, the better they can predict and identify opportunities to create value from innovation for their business and rotate to the ‘new’.”