Accenture research indicates nearly three-quarters of companies are in a state of or on the brink of disruption.1 And no industry is immune—from manufacturers such as consumer goods companies to banks in financial services. The stark difference between those who thrive amid disruption and those who don’t can be summed up in three words: Purpose. Agility. Culture.
The companies that thrive are those that go further in driving transformation by investing with purpose, adopting agile operating principles, and empowering people at all levels of the organization. And those moves are paying off: The long-term EBITDA growth for truly agile organizations is 16 percent compared with only 6 percent on average for non-agile organizations.2
Through a zero-based mindset, nearly 50 percent of the G2000 has adopted strategies that show potential to significantly increase execution speed and create investment capacity.
Don’t let cost transformation efforts sputter
Businesses have been battling disruption by capturing savings to reinvest in growth. Many management teams have applied a zero-based mindset to unlock up to—and in some cases even greater than—1,000 basis points of their P&L to create a critical source of investment capacity into operational agility.3
But that’s only half the battle. While these funds may boost the bottom line, is the money flowing to the right places to fuel growth? Leaders must consider why, how, where and by whom work gets done to execute against strategic imperatives else they may fail competitively, and earnings will suffer.
Consumers and employees are increasingly seeking out brands that stand for something bigger than themselves. As a result, companies investing with purpose are not only attracting customers and talent, but they are also building sustainable trust and connections that lead to increased profitability and competitiveness.
Lay the agile foundation for growth
Agile structures that rally around a purpose inspire employees and enable teams to work more effectively, collaborate more intensely, and engage more broadly across their ecosystem to drive better outcomes for the business. This creates the speed and flexibility necessary to sense and respond to volatile industry economics, shifting customer expectations and emerging business models.
Breaking down internal silos is critical as a starting point. Creating cross-functional teams that operate in flexible pod-like structures focused on specific imperatives can discover and solve problems in ways they simply couldn’t within traditional, more restrictive structures. These moves can unleash innovation, enable them to execute in sprints and collaborate for better outcomes.
Bet on big thinkers
An operating model is only as good as the people who put it into practice. Yet today’s C-suite is saturated with leaders who bring to the table "left-brain" (scientific) skills that draw on data analysis and critical reasoning. In fact, a whopping 89 percent of the C-suite hold left-directed degrees.4 This leaves a gap when it comes to empathy, embracing change and having a clear vision—attributes that provide the courage, empowerment and resilience to create differentiated positioning in the market.
Unlocking the frozen middle—typically two to three levels below the C-suite—is critical. This group often has what the most senior leadership often does not—"whole-brain thinking" that unleashes innovation capability and frees creativity needed to solve the most complex business problems, explore possibilities and realize outcomes.
While only 8% of companies globally employ whole-brain leadership today, 82% of companies state they intend to embrace the whole-brain approach in the next three years.
Overcoming disruption is not about survival—it’s about coming out as the strongest in the pack. Applying zero-based strategies to cost transformation puts companies on the right path, but it takes a clear purpose, the right investments, an agile operating model and an empowered workforce to thrive and not just survive.
1. Prepare for takeoff
Prioritize the removal of rooted systems and structures that prevent the ability to scale and innovate at speed.
2. Invest with purpose
Provide a mechanism to become a disruptor with the help of a galvanizing purpose, expanded innovation breadth and ecosystem partnerships to access technologies and talent.
3. Foster a growth mindset
Reset cultural norms across the organization to embrace creative thinking and relentless innovation. Balance legacy left-brain thinkers with bold right-brain minds willing to push new boundaries.
4. Reward innovation
Implement new or adjust existing incentive structures for behaviors and results related to the new or evolved business models. Relentlessly measure and recognize the right behaviors.
1 Accenture Disruptability Research 2.0; “Breaking Through Disruption,” 2019