RESEARCH REPORT

In brief

In brief

  • The Innovation Maturity Index 2018 explores how much value is at risk in the Middle East and how prepared companies are to fight back.
  • Using outside-in analysis of 200 companies based in KSA & the UAE, we've estimated how much trapped value exists across Middle Eastern industries.
  • The report also delves deep into how to manage disruption like an innovation champion


The digital revolution has exposed abundant value opportunities for companies to raise efficiency and develop new kinds of products, services, and business models. In many industries, upstarts have shown the way—disrupting traditional ways of doing business with innovations such as online retailing or ride-hailing services. Too often, while disruptors rack up rapid growth, steal share, and enjoy fat margins, incumbents are left behind. This does not have to happen. A small group of outstanding players across industries and economies has shown that large incumbents can innovate, release trapped value, compete with disruptors—and even act as disruptors. These companies are executing what we call a “wise pivot”—a way to reinvent themselves and harness the power of disruption. They are using data, digital tools, and new ways of working to optimize and grow the core business, even as they build a future business.

What prevents most companies from “untrapping” value and accelerating growth is their limited innovation capabilities. Conversely, the small minority of companies that do release trapped value also score highly on the Accenture Innovation Maturity Index. This index takes a new approach to measuring innovation capabilities. In addition to looking at specific innovation processes—whether the innovation function is centralized, for example—the Innovation Maturity Index looks at how companies have adopted seven characteristics, like being “hyper relevant” to customers or being data-driven. The presence of these characteristics reflects a deep organizational change that gives companies the ability to surface new ideas, shepherd them through development, and implement them at scale, enabling them to unlock trapped value.

Only by building strong innovation capabilities, can companies successfully make the wise pivot and manage disruption. The wise pivot allows companies to shift decisively—but safely—to new digital processes and build new tech-enabled products, services, and businesses. The approach involves a series of decisions about where and how to invest so companies can transform and grow the existing business while also scaling the new.

Sixty three percent of Middle Eastern companies are "omni-trapped" meaning that they are struggling to unlock trapped value
  1. Transform the core business to drive up investment capacity. This includes building competitive agility and more competitive cost structures in order to improve flexibility and increase profits in the existing core business model (e.g. using zero-based budgeting, sourcing, cloud technologies and intelligent automation).
  2. Grow the core business. Use the new investment capacity to support digital marketing and analytics (to gain new operational insights) and improve web/mobile interactions (to activate new demand and expand into new markets). For example, make smaller, strategic bets that add niche offerings to refresh the core business.
  3. Scale the new business. Scaling requires building a new innovation architecture inside the business (e.g., innovation hubs, labs, partnerships, etc.) that is reflective of the different levels of maturity of those innovations. It’s a prerequisite for moving new innovations from the start-up community to becoming material and scalable for a large corporation.
  4. Pivot wisely. Clients need to strike a delicate balance: If they pivot too quickly from the core to the new, they will over-invest and financially stretch themselves too thin. If they pivot too slowly from the core to the new, they could become obsolete. By carefully scaling and timing investments, they can build “the new” and continue to nurture and grow the core.

45%

of Middle Eastern companies are feeling the impact of disruption today

44%

of Middle Eastern companies are susceptible to disruption in the future

Xavier Anglada

Managing Director


Yusof Seedat

Thought Leadership Director

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