This week in our 5-minute CIO series, Accenture chief strategy officer Omar Abbosh reveals how organisations and people can manage technological disruption.
He is responsible for overseeing all aspects of Accenture’s strategy, innovation programmes and investments. In this role, Abbosh also has management responsibility for Accenture’s Dublin centre for innovation, The Dock; security; ventures and acquisitions; industry programmes; research; and corporate citizenship. He is a member of Accenture’s global executive and global management committees.
‘We have displaced tens of thousands of full-time roles out of our technology and business process operations in India in the last 18 to 24 months, but we haven’t had to fire a single soul because, what we do is, we retrain people’
– OMAR ABBOSH
Before being appointed to his current position in March 2015, Abbosh held several management roles, including senior managing director (MD) for growth and strategy, resources operating group; MD of the resources business in the UK and Ireland; MD of global utilities; MD of Accenture smart grid services; and MD of energy consumer services.
What are some of the main responsibilities of your own role, and how did you evolve to the position you are in?
I have been with Accenture about 28 years now. Before that, I worked in industry with General Electric. In 1989, I joined what was then called Andersen Consulting [now Accenture], where I did two shifts. One shift was as a software engineer and, after that, I did MBA school and returned to the company as a strategy consultant.
From 2004 onwards, I have been in various global roles in the company, such as our global utilities business, and I’ve run chunks of the P&L in the UK, managing the resources businesses – including oil and gas, chemical, utilities – and, in more recent years, in strategy and corporate development roles for the resources industry.
In the last couple of years, I have been the chief strategy officer for the whole company. That has many different pieces, but, to summarise, it involves strategy formalisation for the entire business. This includes scenarios such as: how do we grow in China? What do we do about the phenomenon of public cloud? What should Accenture think about developments in the retail banking sector?
I am also responsible for all of our investing, and that includes our acquisition agendas. We do more than $1bn worth of acquisitions a year. We are also investing through our P&L in meaningful numbers. I make choices like: how much should we invest in our core SAP business versus our emerging AI business? How much should we invest in certain countries? How much should we invest in consumer products versus insurance?
I have a series of other responsibilities in my portfolio, which means I have one of the luckiest jobs on the planet. I am responsible for Accenture research. I am responsible for all of our industry programmes. All of the industry vertical managing directors report to me, and also our functional managing directors – such as supply chain, talent and organisation – report to me. I am accountable for our cybersecurity practice of 5,000 people around the world, and I am also responsible for our corporate citizenship agenda as a corporation.
It is an incredibly diverse, fun, exciting and complex portfolio, and I feel privileged every day to learn what our clients and client teams teach me in terms of what is happening in the world.
With more than 405,000 employees, and a role as a leader in technology trends, how does Accenture manage disruption, and what implications will AI and automation have for your workforce?
Without short-circuiting what I will be talking about at Inspirefest, my talk basically is all about what is going on in the world and why. Why does it lead to disruption and what should companies do about it?
And so, in summary, there are two things going on.
One is a logarithmic cost reduction in technology, where basically there are zeros falling off of a vertical axis. Not just IT, but any technology where information flows, which of course affects every single industry. If you look at photovoltaic cells or electrical vehicle battery packs, or if you look at genome costs, any discipline we can look at, that logarithmic cost reduction is going on. That of course leads to innovation and experimentation because the technology is cheaper.
The second thing is combinatorial innovation, which is people combining different types of innovation to create completely brand new innovations that you would never have conceived of two years ago. And it is a combination of that logarithmic cost reduction and the combinatorial innovation that leads to disruption.
Where that innovation meets an old business model, that means disruption.
Why does disruption have to sound like a bad word? Should it also not mean opportunity?
Corporations find it very hard to react to that because they are finely tuned to run efficiently against a particular business model that was designed for the 20th century, and, in fact, was not designed to move as rapidly as some of these technology innovations demand.
I plan to get into this in more detail with everyone in Ireland in a few weeks.
You are right, I have spent a long time worrying about this. It applies to us because we have 405,000 people that this affects. Obviously, in terms of the services industry, a lot of what our people do – whether it is directly running a process or a technology for a client – in principle, some of that is susceptible to automation or AI.
Our way of handling that is to make sure that we are the world leader in applying those technologies and, as you say, eating our own dog food.
We have displaced tens of thousands of full-time roles out of our technology and business process operations in India in the last 18 to 24 months, but we haven’t had to fire a single soul because, what we do is, we retrain people.
And frankly, that enables us to become more competitive on existing contracts and actually grow our contract base because we are more efficient.
Our logic dictates that if that innovation is out there, rather than have someone else come and do it to us, we are going to do it to ourselves and make ourselves more competitive and agile.
That’s the logic we pursue, and it is certainly not as trivial as I make it sound. But that’s essentially what we are doing.
But if the speed of change is accelerating, how should other industries and individuals keep up?
What I tell Accenture leadership when I talk to them and their people is: ‘Yes, it is true, the pace of change throughout human history has always increased’. This is not new. The rate of change is accelerating. The more people have collaborative techniques – the first was language – the more they have been able to build on the previous generation’s shoulders.
Today you have language, but also incredible collaborative techniques around big data, social media and so on, and that allows for the next generation to build even more rapidly on the shoulders of the previous generation. So the pace of change increases, there is no question.
All I can ask people to do to manage it is to be, first of all, incredibly open to learning. And there are many, many ways people can learn. The ability to teach ourselves today is vastly superior than it has ever been in human history. You can log on to Khan Academy and learn tons of stuff you never could before from some of the world’s best teachers.
You can set up a Twitter feed and point it at a whole series of sources – real or fake, depending on your proclivity – and learn a whole load of excellent stuff. So learning for me is 100pc the number one thing that any normal person who is interested in the future needs to be able to do.
The second thing is to understand that innovation isn’t a one-off activity, or for somebody else to worry about. Innovation needs to be part of our daily lives.
Whether you are a chef, a cleaning lady or a CEO, there are different ways that innovation can touch your life and each of us needs to understand how we plug into that. I will discuss that at Inspirefest from a company point of view.
For me, education and innovation are the only mechanisms to keep oneself up to date and protected.
Disruption – while the word is being bandied around loosely – is not new.
When electricity became prevalent, that was very bad for the whale oil industry, which was the primary form of lighting at the time. When refrigeration became prevalent, that was bad for the ice farmers in Minnesota who used to chop ice out of the lakes and ship it around the planet. Similarly, when Google Maps came along, it wasn’t so good for TomTom Navigation Systems, either. So that kind of explosive disruption that literally removes the need for an industry is what people imagine when you say disruption.
It turns out, it is not the most common form of disruption at all. There is another form of disruption that I will discuss in more detail at Inspirefest, which we call compressive disruption, which takes a longer time period to achieve its effect but squeezes the profits out of industry over time, and many, many industries are susceptible to that. So, in principle, management teams have a chance to respond to it and act if they are alert to it, and some do.
Sometimes when people talk about disruption, they think of these billionaires in Silicon Valley and how brilliant it is, but there are positive effects in terms of bringing convenience to people’s lives – such as more affordable products and services – and that’s the positive side of disruption.
There are, of course, side effects and implications, because it may leave behind segments of society that can’t access that, or dislocate certain types of jobs that are not able for it.
I think policymakers and business leaders need to look at that and figure out what is acceptable and what is the right approach to handle the dual nature of these things.
There is nothing new about that. When we invented the ship, we also invented the shipwreck. When we invented the aeroplane, we also invented the air crash. And when we invented the internet, we also invented cyber warfare.
So, each new innovation has a lot of positives and the benefits vastly outweigh the negatives. But there are always unintended side effects and we have to figure out how to manage those.
Omar Abbosh will be speaking at Inspirefest, Silicon Republic’s international event connecting sci-tech professionals passionate about the future of STEM. Book now to join us from 6 to 8 July in Dublin.
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