Successful Companies Pivot to New Opportunities by Revitalizing Not Neglecting Their Core Businesses, Accenture Report Finds

The majority (54 percent) of C-level executives expect their new
business activities to generate at least half of their company’s
revenues within the next three years, even though only one-third (33
percent) of the executives said their company currently generates more
than half of its revenues from business activities started in the past
three years, according to new research from Accenture (NYSE: ACN).

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Shifting to new revenue streams (Graphic: Business Wire)

The report, titled “Make
Your Wise Pivot to the New” and based on a survey of 1,440
C-level executives across 11 industry sectors and 12 countries, reveals
that just six percent of companies have successfully achieved what
Accenture refers to as a ‘wise pivot’ to new opportunities.
Specifically, these companies reported that at least 75 percent of their
current revenues come from business activities, investments and ventures
into previously unexplored markets begun in the past three years. Almost
two-thirds (64 percent) of these companies, categorized as “Rotation
Masters,” have grown sales by at least 11 percent, while more than half
(57 percent) achieved the same growth results in profits (as measured by
earnings before interest, taxes and depreciation, or “EBITD”).

Rotation Masters establish the right pre-conditions for a successful
wise pivot in three ways, according to the analysis:

“Leading companies rotate to new opportunities successfully not in spite
of their legacy businesses, but because they strengthen them to release
the resources needed to scale new business activities,” said Omar
Abbosh, Accenture’s chief strategy officer. “They have the courage
to take bold steps – from strategic cost reduction, driving innovation
into the core and divesting underperforming assets – to transform their
core business to fuel new investments.

“Our work with clients shows that successful companies are deliberate
about the way they foster innovation throughout their organization to
both transform their core business and scale the new. Leading companies
concentrate innovation capabilities so that they can spot promising
ideas from around the company and commercialize them, with the right
focus and sponsorship.”

Actions to execute the ‘wise pivot’Organizations face
different challenges when shifting to new businesses. The report
recommends a range of actions for companies that are less advanced on
their journey than Rotation Masters.

Rotation Drivers – those that currently generating between 51
percent and 75 percent of their revenues from business activities they
started in the past three years – should:

Rotation Starters – those that generate between one percent and
25 percent of their revenues from businesses they started in the past
three years – should:

About AccentureAccenture is a leading global professional
services company, providing a broad range of services and solutions in
strategy, consulting, digital, technology and operations. Combining
unmatched experience and specialized skills across more than 40
industries and all business functions – underpinned by the world’s
largest delivery network – Accenture works at the intersection of
business and technology to help clients improve their performance and
create sustainable value for their stakeholders. With approximately
442,000 people serving clients in more than 120 countries, Accenture
drives innovation to improve the way the world works and lives. Visit us
at www.accenture.com.

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