Four of the top 10 disruptors that executives cite are technological advances in:
And no wonder. Technological change gets faster, broader, and more pervasive every year. It is difficult to think of an occupation or a part of life unaffected by it.
Worldwide there are about 3.5 million industrial robots. While slowing economic growth in China (by far the largest market for robots) and Europe may trim sales in the short run, the long-range trend is clear–14% growth, which means the industrial robot population doubles every five years. 1
In 2018, 80% of U.S. consumers planned to visit a retail store for their holiday shopping. Four years later, just 57% planned to, according to the AlixPartners U.S. Retail Holiday Sales Forecast.
The value of digital payments, according to Statista, will grow at a compound annual rate of 12.3% between now and 2027, to a total value of $15.17 trillion worldwide.2 Meanwhile the number of commercial checks processed by the U.S. Federal Reserve, 3.7 million in 2021, is half of what it was 10 years before and less than a quarter of what it was in 2001.3
The worst of the COVID-19 pandemic has passed, but the percentage of work done remotely has stabilized at a surprisingly high level, with more than 30% of workdays taking place at home. Seven out of 10 employees working on global teams interact with colleagues from other countries at least once a week.4 To support these remote or dispersed workers, the market for collaboration software tools, worth $11 billion in 2018, is expected to reach $17 billion in 2023.5 These transitions will cause a seismic change in what workplaces look like and in the skills people need to perform. In 2020, 84% of employers told the World Economic Forum that they expect to digitalize working processes rapidly, and the WEF estimates that more than half of all employees will require significant reskilling as a result.6 Brookings Institution research shows that 70% of jobs today require medium- to high-level digital skills.
Accelerating technological change opens the door for new industries and entrants–think fintech, martech, and healthtech, for starters–or causes incumbents to make radical changes to survive. It creates new value and threatens traditional sources of value. It changes how companies interact with customers and opens new ways in which to delight, or dismay, them.
Legacy systems. Disparate platforms. Aging technology. A complex technological landscape built over years of rapid growth, bolt-on acquisitions, geographic expansion, and heavily-customized services.
For Bain Capital, addressing these challenges was a central priority for its investment into data analytics and brand consulting firm Kantar Group. A successful transformation of the company’s digital infrastructure would empower the company to achieve its ambitious growth goals.
Headquartered in London, Kantar operates in over 90 markets and provides critical market insights to companies that are trying to reach an increasingly online and evolving consumer. In 2019, Bain acquired a 60% stake in Kantar from media group WPP plc.
Task number one was getting a clear understanding of the technology estate and spend. What were the areas at risk? How did the cost base compare to competitors? What could be done quickly to ensure readiness to close and smooth separation? And what were the immediate opportunities for remediation?
Going forward, the company developed a comprehensive technology strategy to bring many disparate technology initiatives together with a 3-5 year horizon to drive value creation. Balancing vision and pragmatism, this strategy encompassed prioritizing applications for investment to drive revenue growth, migrating infrastructure to cloud for increased agility and efficiency, developing a comprehensive financial plan to cover necessary investments, and putting in place a strong leadership team to drive the strategy. They put in place plans to reduce cyber risks and reduce costs by developing centers of excellence and standardizing tech tools across the organization.
By pursuing these strategies, the company improved top-line expansion by getting the organization fit and streamlined for growth. Today, Kantar is a stronger, more agile competitor at the top of its industry.
Among the four disruptive megatrends, technological acceleration is unique in one other way: More than the others, it is one where companies can be proactive at least as much as they are reactive. While advanced companies can–and do–try to get ahead of demographic change, deglobalization, and the climate transition, they are much more able to design their own destiny when it comes to technology. On average, business leaders feel that certain technological challenges—such as technological advances in materials and processes as well as AI, automation, and robotics–are more of an opportunity than a threat, while 61% say they are either setting the pace or among the leaders in their industry when it comes to digital tools and technologies. Now, clearly, three out of five cannot be leaders, but that optimistic self-assessment is an indicator of executives’ belief that technological change is something they can use to win.
As we will see, however, the fastest-growing companies experience and respond to technological acceleration differently from the rest.
TECHNOLOGY ACCELERATION = GROWTH ACCELERATION
Growth leaders (see page 18) are not more likely to be technology companies themselves, but their attitude toward and response to technological change is markedly different from their competition. What do they do differently?
source of competitive advantage. 73% say they set the pace in their industry when it comes to digital tools and technology, compared to just 9% of non-growth leaders. They pay for what they get–57% are investing more resources in digital tools and technologies than they were the prior year, compared to 36% of slower growers–a difference of 21 percentage points. And 94% of growth leaders say that investing in new technology and digital
solutions is a priority for their company’s board of directors or leadership team and board.
They also get what they pay for. Growth leaders are more likely than others to believe their company needs to target the most advanced technologies over the next year, such as AI, 5G networking, and quantum computing. But a more striking difference is the growth leaders’ focus on practical digital technology.
Growth leaders also know that technological change is never one-and-done. While they are more committed to technological change, more invested in it, and more successful at implementing and managing technology than others, they are also more anxious about it. 73% of these companies are setting the pace for technological change, but 65%–roughly two out of three–worry that the very change they are driving is happening faster than they can keep up with. Given their determination to gain advantage through advanced technology practically applied, it is no wonder that one in four growth leaders (25%) agree their company needs to engage external experts or make strategic hires in order to fully leverage digital technology.
BACK TO THE FINDINGS REPORT
AlixPartners Disruption Index 2023
The world keeps getting more complex. Myriad disruptions arise, feed off one another, and cascade around the world at an accelerated pace. The leadership challenge is unprecedented: Amid so many formidable issues—daunting long-term disruptions and difficult short-term demands—how should we focus our all-too-finite resources of capital and time? As leaders focus on rising to the challenge of disruption, AlixPartners believes leaders who seize its opportunities will be positioned for success. View the findings report, here.
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