Navigating the Road to High Performance  
Martin Cole
Group Chief Executive
Communications & High Tech
Accenture The pace of convergence and technology change creates enormous opportunities for companies in the Communications & High Tech industry. Technology moves from the lab to the market in months. Newer and better products and services hit the stores every few weeks – all at lower prices – and each day more of the world gets connected. In this environment, argued Martin Cole, Group Chief Executive ─ Communications & High Tech at Accenture, companies and the industry need to ask whether they are being built on a solid and sustainable foundation for future growth. They need to understand what it means to be ‘high performers’. Three years ago, Accenture launched its ongoing research program geared to identifying the key ingredients of high performance, as well as the characteristics that enable companies to consistently outperform their peers. At a top-line level, as Cole pointed out, high performance is definable. High performing companies sustain their superiority over time, business cycles, industry disruptions and changes in leadership. For example, at one point, there were hundreds of companies manufacturing personal computers; hundreds developing new handset products. Today, both sectors have boiled down to a few major, relevant global players that represent 80 percent of the global market. Some early high performers are either no longer at that level – or in some cases are no longer in the market at all. High performance is quantifiable in terms of factors such as profitable growth, positioning for the future, and consistency of their performance. For example, Adobe, the software company, has returned a total return to shareholders of over 20 percent and has grown revenues between 15-25 percent annually – for the last seven years. It is an enormous challenge to achieve this level of performance. Indeed, Accenture’s research (of over 6,000 companies across 36 industry segments) showed that fewer than 10 percent of public companies are high performing, according to these definable and quantifiable measures. But the research also underlined the fact that high performance is achievable by focusing on three key building blocks for high performance. These are: - Market focus and position
- Distinctive capabilities, and
- Performance anatomy
High Performance Building Blocks Cole emphasized how market focus and position is all about knowing when and where to compete. High performance businesses have remarkable clarity when setting strategic direction. They network for success. And, even if they are small, they have the ability to continually innovate new technology platforms. Some of the best communications companies have consistently managed to shift their position as the market has moved from domestic voice and wireline, to broadband to Voice over IP (VoIP) to IPTV to content distribution on an international level. The next building block ─ ‘Distinctive capabilities’ ─ can be defined as doing business in a way that creates value above and beyond that of the competition. This does not mean being world class in every dimension of businesses operations. In reality, the Accenture research shows that most high performers have very average business practices overall – but they are absolutely exceptional at the handful of critical processes that are valued by the customer or that differentiate them from their competitors. High performers are also willing to abandon these capabilities in an instant, moving to something new if it meets the needs of the business. And this courage to move quickly is a key feature of the third building block for high performance. Perhaps the most difficult attribute to develop and sustain, performance anatomy is all about the culture and leadership of a company over time ─ the ‘winning mindset’. Focusing on Consumer Electronics To see what this means for companies in a particularly tough marketplace, Cole focused on the Consumer Electronics segment where some companies are nevertheless delivering extraordinary returns in the face of shrinking returns and increased product commoditization. The Accenture research found that high performers in this sector tend to fall into two broad categories, Market Definers and Value Players. Market definers have catapulted past the competition with a hit, iconic product or service. Most of these are easily recognizable. One of the best examples is the Blackberry, from RIM. They often achieve high performance by offering focused, end-to-end solutions, not just products. And crucially, they have a track record of multiple product innovation over time. The Value Players are those companies with the scale needed to deliver profitably in a dynamic, exploding market. They tend to differentiate themselves by service, marketing or value. They are not good at everything – but they are world class in a handful of critical areas and they sustain high performance by centering on highly differentiated core competencies. Successful Value players use several common strategies to sustain their performance. One example is sticking to a product platform approach. This allows increased margins and enables more flexible design and production, resulting in less cost per unit. Nokia in particular has become very adept at developing and leveraging hardware/software platforms across its products and markets. Linking back to the building blocks introduced earlier, Cole stressed how Market Definers and Value Players share one common attribute ─ a consistent performance anatomy. They drive innovation in everything they do and they always deliver on their promises. In the context of convergence, high performance is all about what companies do together. So as challenging as it is to establish the building blocks in one organization, the challenge of applying them across the entire value chain is even greater. This is a key issue. High performance companies that get connected in value chains with lower performance will inevitably suffer. The Journey Ahead Cole reminded the audience that high performance is achievable ─ high performers are made, not born. And in the Communications and High Tech industry, the organizations that manage to thrive from now on will be the ones the ones that have successfully identified and implemented the key building blocks ─ setting themselves apart from the competition, and doing so sustainably over time.   Martin Cole
Group Chief Executive— Communications & High Tech
Accenture
Marty Cole is group chief executive of Accenture’s Communications & High Tech operating group, a position to which he was appointed in September 2006. He is a member of Accenture’s Executive Leadership Committee. Prior to this, Mr. Cole was the chief executive for the Government operating group. There he was responsible for the organization’s strategic direction and operational excellence in the 25 countries in which they operate. In 2004 Mr. Cole was the managing partner of Accenture’s Outsourcing & Infrastructure Delivery group, where he led the development and oversaw the execution of Accenture’s transformational outsourcing strategy. Prior, Mr. Cole held numerous leadership positions in Accenture’s Government operating group, including managing partner of New Business Models, operating unit managing partner for State & Local Government in North America and managing partner for the Northeast and East geographic regions. Mr. Cole joined Accenture in 1980 in the Austin, Texas, office and became a partner in 1989. |