Accenture's Four Periods of Industry Disruption Matrix Template

Description
In 2018, World renowned Consulting firm Accenture, published its "Disruptability Index" (https://hbr.org/2018/01/how-likely-is-your-industry-to-be-disrupted-this-2x2-matrix-will-tell-you ). Its objective is to help business leaders understand how likely their industry is under the threat of disruptors and take corresponding appropriate strategic actions.

The Matrix is composed of two axis which have sub-factors influencing the strength of levels of disruption (current & future):

✅ Y-AXIS -> Measuring the Current Level of Disruption (2 factors):

1/ 💪Performance: Has the financial performance of incumbents declined?
- Growth and expectations
- Profitability
- Volatility

2/ 🦄Disruptors: Have incumbents been challenged by new players?
- Disruptive start-ups
- Disruptive capital
- Disruptive titans

✅ X-Axis -> Measuring Susceptibility to Future Disruption (3 factors):

1/ 💡 Innovation: Is there an opportunity to drive superior product and service innovation?
- Commitment
- Digital effectiveness
- Positioning of the future

2/ 🛡Defences: Is there an opportunity to capture market share or circumvent regulation?
- Brand prominence
- Openness & Strength
- Value creation potential

3/ 📈Efficiency: Is there an opportunity to drive a step-change in efficiency?
- Transaction intensity
- Asset intensity
- Labour intensity

➡️Source of Axis descriptions:https://www.accenture.com/us-en/blogs/blogs-good-things-come-those-who-dont-wait

The combination of these two axis leads to 4 distinct periods (categories) and corresponding strategic actions.

- 1️⃣ VOLATILITY: High Current Disruption + High Future Disruption (e.g.
-> Sources of Strength have become weaknesses
-> Large Disruptors unlock new sources of value

- 2️⃣ VIABILITY: High Current Disruption + Low Future Disruption (e.g.
-> Embryonic or reborn industries
-> High rates of innovation mean sources of competitive advantage are short-lived

- 3️⃣ DURABILITY: Low Current Disruption + Low Future Disruption (e.g.
-> Structural incumbent advantages and consistent performance
-> Relatively few large disruptors attracted to the sector

- 4️⃣ VULNERABILITY: Low Current Disruption + High Future Disruption (e.g.
-> Structural weaknesses expose the sector to significant risk
-> Barriers to entry inhibit disruptor penetration—for now

And 4 corresponding Strategic Actions (PERIOD/CATEGORY):

- 🛠 Transform the Core (DURABILITY): The objective in this period is to focus on transforming the core business, not try to preserve it. Some ideas may be to maintain competitive cost structures, use technologies that improve the efficiency of the organisation, with the final objective to improve profitability. The corresponding additional profits can then be used to invest in structural adjustments, innovation, R&D and business experiments to make the current products/services offered possibly better and cheaper simultaneously to current clients.

- 💪 Grow the Core (VIABILITY): Companies belonging to industries in this phase have to keep high and regular rates of innovation to stay competitive in terms of capabilities (e.g. Digital Marketing, Analytics...). The objective is to incrementally grow the core business by leveraging an existing user-base to new demand and offers. Likewise, the strength of the core business means possible growth opportunities in adjacent or totally new markets.

- ↺ Pivot Wisely (VOLATILITY): The only way to survive for companies in this period is to drastically change strategic direction. Though the temptation to abandon the core business is high, a more balanced approach must be undertaken. Indeed, for a successful "pivot" to happen, relying on the temporarily strong financial situation of the core business is important to bear the risks of change. Conversely, waiting too long to achieve a successful pivot may mean the company will become obsolete. A clear corporate strategy and financial governance is key in this period to make it through.

- 🚀 Scale the New (VULNERABILITY): In this period, the key is to make the organisation structurally evolve towards the acceptance of the emergence of new business lines, products or services. Having spotted scalable innovations, in a context of compressed profits and heightened competition, organisations need to leverage their core strengths (e.g. data, market access, strong brand, technology, key talents...), to launch with success new business lines addressing strong customer pain points. The strategy required here is a shift towards an innovation centric design, with the simultaneous launch of varied forms of business innovation generation structures (labs, startup-studios, incubators, accelerators,...). See Board of Innovation's Matrix to pick and position new initiatives: https://www.eloquens.com/tool/k9Z9IZ4Z/strategy/innovation-management-best-practices/innovation-matrix-board-of-innovation-template

➡️Source of Action Plans for each Period: https://www.accenture.com/t20180223t073210z__w__/us-en/_acnmedia/pdf-72/accenture-disruptability-index-pov-final.pdf*

Given the success and pertinence of this innovation framework, I could not resist the temptation to see how it could be made applicable for companies and their Business Units in a slightly more "hands-on plug&play" approach. Thus, I re-created the matrix on PowerPoint and added the possibility for strategists and leaders to identify on the matrix the industries in which they are playing, and their current/future disruption combination level.

This slide can be useful to present in board rooms to take a helicopter view 🚁 of a company's risk profile (Business Unit Level) when talking about disruption. By looking at each industry in which it has Business Units (BUs), various action plans and strategies can be undertaken to maximise shareholder value creation. 💰

The Best Practice is composed of:
- 2 editable Microsoft PowerPoint Template Slides (one global, and one where the organisation can highlight its industries).
- an Excel Model for the graphs to plot the Matrix (copy-paste from the Excel to the PPT necessary)
- with an online & offline 20 step-by-step methodology, with pedagogical illustrations for each step.

Should you have any questions on using this top tier Industry Disruption Analysis Matrix slide, you're welcome to reach out to me via Private Message.

Good luck!
Tim

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