According to the Accenture (NYSE: ACN) Wise Pivot C-level survey, 80 percent of Malaysian companies use innovation strategically to unlock value in new business opportunities, without leveraging those innovations to revitalise their core business.
Currently, just 20 percent of companies surveyed manage change as a perpetual journey involving planned transformational programmes. It is a matter of urgency as Malaysian companies are at a critical tipping point, with disruptive forces stalling or slowing growth in the core businesses.
Corporate leaders struggle to find the right balance between focusing on the core and expanding into the new despite knowing they must harness the opportunities that accompany disruption.
Accenture pioneered the Wise Pivot as a strategy for the digital age that can help companies pursue new growth opportunities without abandoning their core business.
Wisely pivot investments to balance new and core businesses
Accenture’s survey shows that Malaysian companies do not have sufficient investment capacity to scale new businesses.
While it is encouraging to see some companies in Malaysia proactively exploring new business opportunities, they shouldn’t neglect their core. All respondents in the Accenture survey reported that their core business continues to contribute to more than 50 percent of revenues today.
This dependency on the core is not set to change drastically as only 13 percent of executives expect to generate more than 50 percent of revenue from new businesses three years from now. The majority (86 percent) still anticipate core businesses to contribute more than half of revenues in that time.
Transforming core business to fuel pivot to the new
“Legacy businesses are often attached to capital intensive infrastructures, contractual agreements, outdated technology and an attachment to existing products and services,” said Ridhuan Sidek, Managing Director, communications, media and technology, Accenture.
“To make the Wise Pivot, they need to prioritise innovation to transform the core business that will then free up investment capacity for other change activities.”
Transforming the core involves driving greater efficiencies and positioning the business for growth. This could include moving technology infrastructure to the cloud, divesting certain business lines or even increasing workforce efficiency through digital adoption. Executives in Malaysia need to increase priority for these activities as less than a third surveyed see these as very important.
Apply innovation perpetually and pervasively
The majority of businesses are still tackling disruption with periodic, reactive and typically rapid responses, often leading to short term, incremental changes. To ride the waves into the new, a change approach requires perpetual transformation, with innovation applied pervasively throughout the organisation. This is an approach that is less about fighting the tide, but rather, surfing the waves of disruption.
Getting to Malaysia Reimagined Now
Companies can forge a path for the nation’s transformation by making the wise pivot within their organisations. To create that reimagined nation, organisations should focus on these 6 key areas:
- Be hyper relevant for the customer
- Reimagine work and transform the workforce
- Create a new culture of innovation
- Drive cost efficiency
- Deploy strategic technologies that will leapfrog our capabilities
- Drive innovation agenda throughout the organisation
Summarising the importance of changes in these core areas, Azwan Baharuddin, country Managing Director, Accenture Malaysia, said, “Malaysia has the opportunity to leapfrog into the future but it will take courage to navigate the seas of change, to rethink how we do business, work, live and play. It will require wisdom for our corporate leaders to strike a balance between transforming and growing their core and scaling into the new while ensuring that the unlocked value benefits not just their organisation, but goes towards building a Malaysia Reimagined, Now.”