LEADING IN THE NEW: SAUDI ARABIA
Xavier Anglada
Accenture Digital Lead, Middle East & Turkey

• Moore’s law (Information technology 2x value impact every 12 – 18 months) is
applying to a range of disruptive technologies (10+)
o AI, Cloud, Drones, Blockchain, …
• The intersection of these technologies create even faster and deeper disruption as
the impact …
1. Dramatically changes the cost structure of an industry (marginal costs)
2. Creates abundance (vs. the traditional scarcity/pricing paradigm)
SETTING THE SCENE
THE PERFECT ‘EXPONENTIAL’ STORM
Facts
Implications
• DNA sequencing costed 2.7bn USD in 2003, today less than 300 USD and will be in
the single digits soon
• Face recognition will identify in less than 3 years if you lie or not
Complications
• Our brains (and our organizations) are designed to think linearly, not exponentially
• Our organizations / businesses are being disrupted by people with no/very limited
background about the industry itself (i.e. Elon Musk)
‘Every company designed for success in the 20th century is doomed for failure in the 21st ’ – David Rose

Advanced technologies’
performance relative to cost
is improving exponentially.
Unsurprisingly, this trend
presents huge value
opportunities
The declining cost of advanced technologies
Logarithmic cost index, 2002 = 100
Sources: Accenture Research estimates based on data from: IHS Markit; NY Times; WEF.
100.0
.10
10.10
20.10
30.10
40.10
50.10
60.10
70.10
80.10
90.10
2002 2007 2012 2017
10.0
1.0
0.5
Electric vehicle battery pack ($US/kWh)
Genome sequencing cost ($US/genome)
Cloud storage costs ($US/GB per month)
Global bandwidth costs (US$/1000 MBps)
Global PV module prices ($US/W)
Commercial/military drone minimum prices ($US/unit)
3d printing machines ($US/machine)
EXPONENTIAL TECHNOLOGY INNOVATIONS ARE CREATING
ABUNDANT VALUE OPPORTUNITIES

BUT TOO MANY COMPANIES ARE FAILING TO CONVERT THE
OPPORTUNITY INTO VALUE - WE CALL THIS TRAPPED VALUE
*
60%
Trapped Value = % of
Economic Opportunity that
is not converted into
Economic Reality, yet
Saudi Arabian
businesses are
finding themselves
being trapped in the
present, the future
or both – 56% are
omni-trapped
*
Sources: Accenture Research analysis, S&P Capital IQ
To measure trapped value we analyzed the growth of current operations (Current value) and investor expectations (future value) of 100 of the largest companies by revenue across 15 industries. Time
period of analysis: 2012 to 2017.
Current vs Future Value Consistency
CV and FV Consistency %, 2012-2017, Bubble size represents Average Enterprise Value
CG&S
Industrial Equipment and
Machinery
Infrastructure & Transportation
Services
Retail
Travel
Banking
Insurance
Chemicals
Energy
Natural Resources
Utilities
Health
Communications
High-Tech
Media and Entertainment
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
%OFYEARSFUTUREVALUEGROWTHOUTPERFORMED
INDUSTRYGROWTHMEDIAN
% OF YEARS CURRENT VALUE GROWTH OUTPERFORMED INDUSTRY GROWTH MEDIAN
OMNI-TRAPPED FUTURE-TRAPPED
56% 15%
Delivering solid current
performance, but lacking
future potential
Struggling with present
performance, and lacking in
future potential
60%
VALUE RELEASERSPRESENT-TRAPPED
18% 11%
Creating future expectations,
but not delivering strong
performance at present
Growing both Future Value and
Current Value in tandem

+
$326
billion
in Enterprise
Value at risk
of being
disrupted
=65% 54%
40%of organizations said they feel unsure or
dissatisfied that their company’s innovation efforts will
position them well to overcome future disruption. The
same share concede that their companies are not
prepared for disruption
of companies are highly
susceptible to future disruption
of companies are
experiencing disruption
Sources: Accenture Research analysis, S&P Capital IQ, Pitchbook,
World Economics, OECD, IDC, Various public and governemt sources
Our disruptability framework measures an industry’s current level of disruption by examining two components: the presence and penetration of disruptor companies and the financial performance of
incumbents. To gauge susceptibility, we measure three components: incumbents’ operational efficiency, commitment to innovation, and defences against attack. To measure these variables, we built
a bottom-up index using data from 100 companies across 17 industries in Saudi Arabia. Time period of analysis: 2012 to 2017.
For survey data: n = 75 C-suite executives across 11 industries
~59% of respondents said they expect
their industry to be significantly disrupted in the
next three years
AS INNOVATIVE COMPANIES UNLOCK MORE TRAPPED VALUE, THE
GREATER THE DISRUPTION LEAVING MANY VULNERABLE

Leading companies that
unlock trapped value
BUILD INNOVATION
PROCESSES and
ADOPT PRACTICES
that lead to
organizational change.
Our INNOVATION
MATURITY INDEX
measures this
TRAPPED VALUE IS WHY INNOVATION MATTERS IN THE AGE
OF DISRUPTION

55 55
73
Overall
Country
Others Innovation
Champions
Innovation Maturity Index Scores (out of 100)
73
59
Innovation
Champions
Others
Innovate By Design
73
54
Innovation
Champions
Others
Innovation Practices
—4 percent of the sample—
The overall country score on the Innovation Maturity Index was 55 out of 100. But a small group of innovation
champions—4 percent of the sample—averaged 73 points
Sources: Accenture Research analysis based on Leading in the New: Innovation Maturity survey questionnniare
THERE IS A SHARP DIVIDE BETWEEN THOSE ON THE WINNING SIDE OF
INNOVATION AND THOSE BEING DISRUPTED BY IT

58
52
59
55 57
51 52
82
67
71
76
72
69
80
Asset
Smart
Technology
Propelled
Data
Driven
Hyper
Relevant
Inclusive Talent
Rich
Network
Powered
24
15
12 21
15 18
28
Others Innovation Champions
74
91
Innovation
Champions
Others
17
59
63
Innovation
Champions
Others
4
50
67
Others
Innovation
Champions
17
Sources: Accenture Research analysis based on Leading in the New: Innovation Maturity survey questionnniare
Innovate By Design Innovation Practices
WHAT SETS LEADERS APART IS THAT THEY UNLOCK TRAPPED VALUE BY
MAKING INNOVATION PART OF THE COMPANY’S DNA

The digital age calls for a new approach to
organizational change that enables companies to
make a Wise Pivot to their new businesses
1. TRANSFORM THE CORE BUSINESS...
to drive up investment capacity.
2. GROW THE CORE BUSINESS...
to sustain the fuel for growth.
3. SCALE NEW BUSINESS...
to identify and scale new growth areas at pace.
A Wise Pivot also requires the right INVESTMENT
STRATEGY to ensure that the timing, scale, and
direction of investments are calibrated adequately.
Sources: Accenture 2018
CHAMPIONS MANAGE DISRUPTION CONFIDENTLY BY EXECUTING A
WISE “PIVOT” STRATEGY TO THE NEW

The level of current
and future disruption
determines which
strategic action
companies need to
prioritize, today
THE EMPHASIS OF CHANGE ACTIVITIES DURING THE PIVOT DEPENDS
ON THE SEVERITY OF DISRUPTION COMPANIES FACE
Industry Exposure to Disruption
TRANFORM THE CORE:
Build and sustain sources
of competitive advantage
SCALE THE NEW:
Address structural
productivity challenges
GROW THE CORE:
Remain in a constant
state of reinvention
PIVOT WISELY:
Decisively change
course, repositioning
the business
Median: 0.55
Sources: Accenture Research Disruptability Index
1Total sample = 100
Average EV
of companies
in sample1
Median: 0.50
Communications
High-Tech
Media and Entertainment
Banking
Insurance
Health
Automotive
CG&S
Industrial Equipment and Machinery Infrastructure & Transportation Services
Life Sciences
Retail
Travel
Chemicals
Energy
Natural Resources
Utilities
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00
CURRENTLEVELOFDISRUPTION
SUSCEPTIBILITY TO FUTURE DISRUPTION

Build sufficient
investment
capacity for change
Enable the organization
by developing a strong
innovation capability
Seek and create
synergies between
the old and the new
55
73
67
85
67
79
Leading companies build innovation processes and adopt
winning practices that lead to organizational change.
Rotation progress hinges on having investment capacity:
All innovation champions say they have the right level of
investment capacity required to transform the core (vs. 51%
of others), grow the core (vs. 39% of others) and scale new
business (vs. 8% of others)
Innovation champions are focused on tapping into the
potential to cross-sell between the new and legacy businesses.
67% of Innovation champions consider the potential to leverage
new business in order to reshape the culture of the legacy
business (vs. 49% of others).
PRECONDITIONS ROTATION SCORE
Innovation
Champions
Others
Innovation
Champions
Others
Innovation
Champions
Others
Sources: Accenture 2018
1
2
3
TO PREPARE FOR THE WISE PIVOT JOURNEY, CHAMPIONS CREATE
THREE PRECONDITIONS TO REINVENT THEIR ORGANIZATIONS

THANK YOU