Global professional services company Accenture followed up its 2019 study on how innovations affect revenue growth among organizations. The new report, “Make the Leap, Take the Lead,” further reinforces the earlier findings that leaders who prioritize innovation increased their companies’ revenue five times than the lagging adopters.
Before the pandemic, leaders recorded twice as much growth as the Laggards. More than 50% of the Leaders further accelerated their investments during the pandemic enabling them to maximize existing innovations as a result of early adoption.
The survey found over 70% of Leaders increased investments in cloud security and 68% in hybrid cloud. Leaders also dug deeper into the Internet of Things technology (70%) and artificial intelligence (AI) and machine learning (59%).
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“The way we differentiate leaders and laggards is the technology adoption within the companies,” said Ambe Tierro, technology lead, Accenture in the Philippines. “We also looked at the extent of the adoption and the readiness of the organization to adopt those technologies and so looking at those three factors that adoption extent and readiness, we classified companies as leaders or laggards.”
Accenture used the System of Strength scale to determine the company’s performance. They were judged also in terms of application of technologies and organizational and cultural readiness for tech-enabled innovation.
The report surveyed 4,300 respondents across 25 countries and 20 industries and assigned a score based on Systems Strength and Flip Size. The study determined which companies were Leaders (Top 10% of the entire sample), Leapfroggers (18% of the sample), and Laggards (bottom 25%) and looked at the financial performance of each group.
Tierro noted that the primary measure (of the findings) is the revenue growth of the companies that participated in the survey.
Organizations that amplified their investments in what are now essential technologies in the age of remote working — AI, the cloud, cybersecurity, data, and the Internet of Things (IoT) — experienced a. revenue growth of five times the rate of Laggards, which Accenture said is “exceptionally higher than the doubled growth rate Leaders reported just a few years ago.”
While Laggards managed to keep their business and technology operations during the pandemic, they are still behind in terms of revenue.
This illustrates the significance of innovations even if the situation doesn’t call for them. In a way, Leaders future-proofed their businesses seeing how easily they were able to adopt in haste as a response to the lockdowns brought about by the pandemic.
Tierro highlighted the new entrant to the list of company classifications for the study — Leapfroggers.
The Leapfroggers, or those who made their pivot quickly, invested in the right technologies and practically overhauled their system to respond to the new way of doing business.
Tierro said the success of Leapfroggers provided a roadmap to companies that are still trying to figure out their own pivot story. In essence, those who intend to catch up can follow these steps: replatform, reframe, and reach.
“Replatform is a set of actions that increase a company’s system’s strength,” explained Tierro. “The most typical action that companies are taking today is moving to the cloud so that they can innovate faster and offer more services at speed. So changing the way that they deliver is a way “to replatform.”
To reframe is simply changing the mindset and focus on how to accelerate innovation in the face of challenges.
“The way to reframe is to think that ‘OK if I’m already behind how do I accelerate?” Tierro said. “Sometimes, it’s not about building things on your own but also about partnering with other companies and collaborating with those who already have the infrastructure.”
Expanding the reach follows when companies have established their technology architecture.
“They expand access to technology across different functions and they have a broader value agenda,” Tierro said. “It’s really addressing readiness of their own organization.”
Leapfroggers transformed their technology strategies and priorities in a short time frame, using the crisis to increase the use of advanced and emerging technologies by 17% and scaling technology across their enterprises.
Some companies that provided support — tangible and intangible — to their people also reaped the benefits of preparation and understanding the current business operations landscape.
“You wouldn’t typically think about things like mental wellbeing resilience and mental health, Tierro said, “but our research says that it’s not just about technology, it’s also about the people who are using the technology.”
Accenture’s “Make the Leap, Take the Lead” research is the third installment in a series that aims to map out how technology innovations are allowing leaders to scale up and future-proof businesses.