Reinventing Your Business with AI

What does it mean for the rest of professional service world when a giant like Accenture rebrands consulting as Reinvention Services?

And Accenture nomenclature aside, how should you be thinking about AI’s role in reinventing your own company?

Should you just start renaming things, or is there more to it than that?

There is.

Hi, I’m Courtney Baker, and this is AI Knowhow from Knownwell, helping you reimagine your business in the AI era.

As always, I’m joined by Knownwell CEO, David DeWolf, Chief Product and Technology Officer, Mohan Rao, and NordLite CEO, Pete Buer.

Pete Buer joins us as always to break down the business impact of some of the latest and greatest in AI news.

Hey Pete, how are you?

I’m good Courtney, how are you doing?

I’m doing good.

According to Business Insider, Accenture is giving consulting a new name as it doubles down on AI Reinvention Services.

Pete, what’s the takeaway here?

So Accenture just announced it’s combining a number of its business lines, practice areas, strategy, consulting, technology and operations, all into a single unified unit called the Reinvention Services.

Just for a minute, imagine being on point for doing that re-org, like 500,000 people around the world, across practices, across regions, across industries.

No thanks.

But of course, this exercise is not about, despite the title of our article, it’s not about just giving a new name to the work.

It’s about re-defining, re-thinking the way that consulting services get deployed and delivered.

For me, though, the Accenture decision is more interesting when you take it outside of the context of just consulting.

What Accenture is doing is what we should all be doing, thinking about the work we do as an integrated set of considerations, people, technology, operations.

We see examples of bold steps being taken forward by other companies into this space.

Moderna’s decision recently to combine IT and HR, the Shopify CEO resetting standards for hiring, where you begin with the thought of what AI can do first and then ask yourself, then what do we need the human for?

And then there are lots of others, and we’ve talked about some of them here.

I think if I were a social industrial historian in the future looking back to this time, I might be tempted to mark this as the beginning of the next era of AI adoption.

So moving from experiments to understand its capabilities and roadmaps to start laying out our biggest opportunities or our biggest threats from a strategy perspective, finally reaching a place to sort of fully integrating it as a core element of the work design in all areas of our business.

So that would be my takeaway for business leaders today.

If you self-assess on the frame that I just laid out, where are you in the progression?

Is that where you want to be?

And if not, assuming not, what steps can you take to accelerate yourself to a place where you’d rather be?

Pete, I think that’s such a good reminder to think about how this applies to our own businesses and what we can learn here.

Thank you as always.

Thank you, Courtney.

The story is so interesting to me and so squarely in the wheelhouse of the show that I had to hear what David and Mohan thought about the restructuring at Accenture.

Hey David, how are you?

Hey Mohan, hey Courtney.

Hey Courtney.

I’ve got a great topic for you today.

Are you all starting without me?

So excited.

Is that what’s happening right now?

What is the topic, David?

Let’s see how prepared you are.

What are we talking about today?

I could make up anything.

What do you guys want to talk about?

I’ll bell you out here today.

What I want to talk to you about is actually Accenture.

So Accenture just collapsed.

Did you hear this news?

You know what I mean?

Yeah.

This is going to be fun.

This is big news.

Just collapsed five separate practices under one banner called Reinvention Services.

And really…

Replacing the word consulting.

Okay.

I see I’m ready for these hot takes.

Let’s get down to the brass tacks.

But really, I think what they’re doing there, you know, is kind of signaling that AI driven change is no longer episodic, but really going to become more continuous.

But before we get into that more, I want to unpack what that means for leaders and what we can learn from what they’re doing.

You know, obviously, most of us don’t work in businesses that size or that scale.

And I think there’s something really interesting here to unpack and see if there are some things that we can take away as leaders.

So there you go.

That’s what I want to talk about.

And by the way, Pete and I also talked about this earlier in the episode.

And so, yeah.

Yeah.

So we get to compare notes and see how offline we are from Pete.

Because he’s definitely the brain in the room.

So I mean, nothing against you, Mohan.

No, no, I agree with that.

You know, I’ll tell you, when I first read this, I’ll tell you the first thing that really hit me about this.

Having been in professional services my entire life, I know that the most difficult thing in services is to truly differentiate.

You know, when you look at business strategy, to me, business strategy boils down to defining how do we compete.

And the easy way to compete is we’re bigger, faster, stronger, right?

I’m better than you.

But a better-than-you strategy leads to commoditization, right?

It is simply, it always boils down to, can I just be a little bit better?

And we’re taking market share from each other.

So it’s a brutal business.

So you don’t want to compete on being better.

You don’t want to compete to be a little bit faster, right?

And in services, that’s hard because you’re providing people and knowledge and like, how do you differentiate that?

A differentiated strategy is positioning in a way where you provide a value proposition, a promise that is different from your competitors, even if it’s about the same essence of service or whatever.

And when you do that, you actually create market.

It’s not a zero sum game.

And what happens is you win and you lose by that strategy.

And one of the signs you look for of good strategy is, am I losing because of my strategy, not just am I winning because of my strategy, right?

What I read Accenture’s play at, just at the surface level when I first read this is, here they go.

In this world of AI, they have been pushed further and further towards commoditization and they need to reposition in order to make sure they’re not bucketed with all the other consultants that are also doing AI-related stuff, right?

And so I largely do see this as a positioning thing more than ever.

Every time we did this, I did this at 3Pillar, you roll out new strategy, you refine it, you are always building and refining your strategy, right?

It’s iterative.

Every time you do it, you try to, like good strategy isn’t just designed, it’s actually carried through in your value chain.

You reorganize to deliver on that promise.

And so, what they’ve done is they’ve said, hey, this is not just, hey, we’re embracing AI, we’re going to use tools.

This is we are redesigning our value chain.

We are combining business units and we’re thinking differently and we’re different because.

Now, Accenture, because they’re Accenture, can get away with that at a much more broad level than most of the firms that are listening to this podcast, right?

They’ve got the value of the Accenture brand so they can make a big claim like reinventing business and have credibility, right?

Because they’re Accenture, but I think the same principle applies.

It’s about figuring out how will I be different and then how do I reorganize my value chain to deliver on this and to prove it and to back it up to my customers.

And to me, that’s the essence of what’s going on here.

Okay, Mohan, I have to hear, because I love your takes after David’s.

Do you think something’s similar?

And what do you think are the practical takeaways here for listeners?

Now, let’s set aside the fact that Accenture’s stock price is down about 20 percent in the last six months, and this is not a move based on that.

Did you say it’s not a move or we’re just assuming it’s not a move?

Let us assume that it is not a move because of that, because there’s a lot of speculation.

Last week, I was a little bit under the weather and I watched a lot of CNBC, and the CEO of Accenture was on, defending this move and promoting this move.

But the fact is that their stock price is getting hammered for multiple reasons.

Overall, let’s also assume that this is not just a branding exercise, but it’s going to be backed by real change.

Make those two assumptions.

If you make those two assumptions, I think it’s a very smart move.

Because I think we know that AI collapses hierarchy and silos just the way that it cuts across.

It seems like a good move.

The other thing that’s coming out of this is that, we used to think of change and reinvention as surge and settle.

You surged, you worked on a project, you worked on five projects for like two years, and then there was a period of, we’ve got to now consolidate and settle, right?

That model is going away, and it’s going to be much more of a continuous AI first reinvention.

It could be small steps, but it’s continuous set of small steps to get there.

We’ve done software development like this forever, so we can understand this, but organizational transformation in iterations is where I think the reinvention is going to be real and how it’s going to stick.

So I’m curious, Courtney, let me put it back on you.

I’m curious what your thoughts are.

I do think it’s a smart play.

If it is positioning only, I think it’s a smart play still.

If it’s beyond more than positioning, I think it’s an even smarter play.

And so, I mean, obviously, we’re sitting here talking about it on a podcast.

And so, you know, I think anytime, especially when things, maybe the results aren’t what you expected them to be, getting the world to talk about what you’re doing is a really smart play.

So I think in that lens, this has been successful.

I think the interesting thing will be, are there things that people can glean from this in their own practices will probably tell us over time if it’s really successful.

Yeah.

So I’m curious, let’s pull all these threads together.

Mohan, you watched all this news last week and you were consuming and digesting this more than the rest of us.

You know, to some extent, this is kind of par for the course for me with Accenture.

I’ve known several senior leaders over there for a while.

And they do this like every, I want to say every six months, but it’s not, right?

It’s 18 to three years.

And we saw the creation of Accenture Song and Accenture Digital.

And we’ve gone through these evolutions where the theme of the day is what they reorganize around.

And to Courtney’s point, probably rightly so, right?

I think one of the realities of professional services business is you ride trends, you ride waves.

And unlike a software business, for example, where you’re trying to build an operating necessity and be embedded within a business, in a professional services business, you’re trying to take the waves and the trends that are happening and help companies out as different areas of business peak and valley to smooth that out and provide expertise where they can’t.

And so it makes sense that that’s their playbook.

But I’m curious, what do you guys see that’s different about this?

Like beyond just exercising that professional services playbook and quote reinventing themselves to be modern and current and relevant?

Like what is there that actually makes this move, this rebranding, this reorganization, actually the right one at this point in time?

David, it’s funny, you mentioned song because that’s one of the divisions being bucketed under Reinvention Services.

And frankly, I had to find out what song was, being in Nashville, I’m assuming it’s some kind of music division and I won’t comment on what poor branding I think this is.

But what do you think about that?

Well, I think it’s just, you know, proof that these things change and we live these waves in professional services, because song was the thing, like it was the Reinvention Services that we were talking about just a few years ago, right?

And that’s how quickly technology changes, where now it’s a part of something new that’s different.

And so they’re taking and reorganizing their value chain to deliver what’s relevant for today versus what was relevant for yesterday.

Yeah, I think the big question that I think they’re trying to answer is the, can the AI narrative, can it be operationalized?

Right?

As opposed to bunch of tools, a lot of excitement for a few months, things die down, right?

So, they’re really kind of betting on, can the narrative be operationalized?

In a sense, what that means is that it’s not about new tools and new data stacks and so on and so forth, but AI becomes part of the air that Accenture breathes internally, but also that clients breath, right?

So AI becomes part of everything.

And the way I think that they’re pushing this is to say, you need an architecture, you need 90-day execution sprints, we need to rethink the metrics that matter here.

Now, I might be ascribing a lot of positive things for them and maybe Accenture should recruit Knownwell for this type of advice, but I’m super imposing my thoughts onto them.

But I think what they’re trying to do is to take the AI narrative from tools and data stacks and million-dollar purchases of infrastructure to saying how can this be taken from being an episodic thing to something that is systematic within the organization and where it becomes part of the operating system.

And that’s why I think they’re calling it Reinvention Services, that there is a constant spiral of reinvention and not really think of this as a seven-year strategy that you’re moving towards.

Yeah.

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You know, Mohan, I’m curious if you know, because I have not been really tracking Accenture’s stock price lately, nor McKinsey’s or any of the other big firms.

But is everybody down similarly?

Because I would think in this moment, I’m curious to get y’all’s thoughts, because y’all are more in tune with these firms than I usually am.

But I would think out of all the big firms, Accenture would have been the one that I would have probably put my money on to be the best suited to really make strong headway during the AI era.

So I’m curious, is everybody down?

Do y’all agree with that statement about Accenture being the one you would place a bet on?

I think what makes Accenture unique is that they have excelled at having deep technology roots, being true technologists, but being able to sit in the boardroom at the same time.

And most large, quote, integrators have not done a good job in that and have not been able to, at least they haven’t been able to institutionalize it, right?

You see episodic points where they can.

And I think that’s why Accenture has that reputation that’s in your head.

And I think it’s largely deserved, right?

I think they do a phenomenal job at building very deep enterprise relationships from the boardroom down.

And, you know, I think largely they are competent from a technology perspective.

They do have the baggage of being a massive organization, right, and a publicly traded organization.

I think there are other organizations that may be more nimble, that are able to be more cutting edge than they are.

I don’t think many people see them as truly cutting edge.

But it doesn’t surprise me that here they are the first big company to make a move.

Now, here’s the part that does surprise me about Accenture.

I have been waiting and looking for the emerging services firms who truly specialize in AI business transformation, right, that are truly attuned to how do we leverage AI in order to just revamp everything from processes to KPIs, operating metrics, all that kind of stuff.

There’s a massive, massive opportunity there.

And there are a lot of adjacent industries that could pivot into that world, right?

The integrators, right?

The digital engineering firms, right?

The world that I come out of are flailing a little bit because the need for software engineering isn’t what it used to be.

It’s not a native growth market anymore.

And so you’ve got to fight for that.

None of these firms, right?

The IT consultants, the integrators, the digital engineering firm, all could pivot into that space and launch practices there.

None of them have done it well for my sake.

What I have seen, literally in the last month or so, I’m starting to see startups and boutiques that are truly AI first going and doing projects of, hey, we’re going to automate your entire sales outreach process.

We’re going to do that for you, put all the tools in place, right?

All these tools are there, but nobody has best practices and stuff.

So these consulting firms are coming in and say, hey, we’ll transform you.

And you can see those services getting bigger and bigger.

It used to be this small little work stream.

Now it’s becoming functions of businesses.

And so I see that emerging, but it happened a lot slower than I thought.

I would have thought those start-ups and the smaller firms would have been ahead of Accenture.

But to be perfectly honest with you, I feel like it’s happening at the same time.

That’s the piece of this that has surprised me.

And so if it’s real what they’re doing, they could be more innovative and ahead of not just the big folks, but the smaller ones as well.

And by the way, they are an M&A machine, and so they will gobble up the folks that do start to leave the pack on this.

The interesting thing about Accenture for me is watching, you know, they’ve traditionally always been very good about reinventing themselves.

I mean, all consulting companies are that because they have to, you know, they’ve got to keep up with the times.

And the scale at which Accenture operates, I just looked it up, they have got 800,000 employees worldwide.

That’s a big organization.

The key question for me is, can they successfully reinvent under the glare of being a publicly traded company, right?

So, for most of the consulting companies, right, or privately held, they have their own dynamics, which is hard, but it’s not as hard as being publicly traded.

Previously, when, you know, I was in a publicly traded company as an officer, you had to show quarter by quarter by quarter results.

You did not have the luxury to say, this is a two-year transformation.

And believe you me, two years from now, everything’s going to be great, right?

So you had to show that quarter by quarter by quarter growth and provide guidance every quarter.

And it was really, really hard to make changes in that.

So it’ll be interesting to see how Accenture does that.

I think their hand is being forced here for multiple things, the reasons that are going on.

They macroeconomically, people are not making decisions.

They have a very large government consulting sector, which obviously has taken a hit.

So it’ll be really interesting to see how they do this.

Other companies like McKinsey and others have partnership issues, but at least it’s not in the glare of the public where they have to have these fights and get to the other side.

Mohan, I’m curious, take the other seat for a moment and be the devil’s advocate here.

Having listened to the news and talked about how Julie was getting beat up a little bit and we all know investor reaction was a little bit sketchy and it was a signal.

What are the reasons why some folks are arguing this is a bad move?

I don’t think people are arguing that this is a bad move.

I think customers have always complained that they’ve got to deal with different business units within a large company like Accenture.

So I think it is a customer-friendly move.

The scale of transformation is so massive here.

Whether they can internally pull it off or not, it’s a highly risky move.

That would be one way to think of it.

Is it worth it?

Because we know that in enterprises, large enterprises, especially non-technology sectors, AI hasn’t taken hold.

It’s largely 98% business as usual.

Now, they’re trying to do something where their core market doesn’t need these moves, right?

So they just need stability, right?

So because AI is something that’s slowly approaching and may not even really have major impacts in the next decade for the majority of the enterprises that they serve.

So it’s a question of, you know, one, is it just sort of a branding move or are they going to back it up?

And if they really do the whole transformation, what does it mean to the majority of the revenues that come in and whether they’ll be able to sustain it as they’re trying to get to the new world?

That would be the critique.

Yeah, yeah.

The other element that strikes me is when we just think about the macro environment and, you know, professional services firms really over the last 12 to 18 months, right?

Accenture’s stock price just isn’t down.

The market as a whole has been soft on consulting, right?

And something needs to give there.

You know, there are a lot of…

I tell everybody that asks me about, you know, what I see in the market, you know, in talking to different folks in the professional services space.

I said, by and large, for the last 12 to 18 months, companies have either been up 7% or down 7% in a market where it was normal to find a lot of firms growing 20, 30, 40% year over year, right?

And so it’s pretty neutral.

People are coasting.

And then the outliers like far outliers, you can find some every now and then grow in 30, 40% and you can find some that are really, really struggling in returning clients and are losing share.

But the battle is being won by firms taking from other providers.

It’s not a growth market.

They are in vicious battles for market share.

And that’s how it’s playing out.

And so going back to the very first point about strategy and differentiation, like I think with all of this being said that we just talked through, it really makes a lot of sense to me that it’s not because their stock price is down.

It’s because they are struggling to grow in this economy where consulting is soft and they’re trying to reposition, including restructuring to deliver on that position in order to be able to differentiate and not be in a zero-sum game where they’re just fighting with people for another dollar.

David, Mohan, I think this is a really interesting conversation, I think, for everybody listening.

I think the big takeaway here is that continuous reinvention and really leveraging AI as kind of a unique moment in time to really, you have a whole new set of technology to think about as you continue to reinvent yourself over time.

David, Mohan, thank you as always.

Thanks as always for listening and watching.

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Today, we’re talking about reinventing your business with AI.

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