What is an Exponential Organization?

An Exponential Organization (ExO) is one whose impact is disproportionately large—at least 10x larger—compared to its peers because of the use of new organizational techniques that leverage exponential technologies.”

Introducing Exponential Organizations (ExO’s):

We are at the very beginning of fourth industrial revolution – the current and developing environment in which disruptive technologies and trends such as the Internet of Things (IoT), robotics, virtual reality (VR) and artificial intelligence (AI) AR (augmented reality) are changing the way we live and work.

We are going From Scarcity to Abundance
Basically, Exponential Organizations are about managing abundance, and an information-based world drives us towards that abundance. Abundance of Information, media, energy & resources

Every organization needs to adapt to the disruptions happening across its industry. Exponential technologies are changing our world and the way we do business, which can be seen as both a challenge and an opportunity. A new type of business is successfully emerging in this new age: The Exponential Organization.

The challenge is to survive the 4th Industrial Revolution:
The Solution is – To either become an Exponential Organization or adapt current businesses following the ExO principles. It’s key to overcome external disruption and to operate on the same level of the ExOs that may be emerging in your industry.

The main challenge for existing organizations is that the immune system always attacks innovation.

The key to becoming an exponential entrepreneur is to understand and harness the 4 D’s of exponential technology and use them to your advantage.

  1. Digitalization:
  2. Disruptive Growth:
  3. Demonetization:
  4. Democratization:

1) Digitalization:

Once you digitize a product or service (photography, finance, manufacturing, biology, etc…) into nes and zeros, that product or service becomes an information-based technology and it hops on an exponential growth curve. Something digitized can be replicated and transmitted for a nearzero marginal cost.

2) Disruptive Growth:

What follows early deceptive growth is disruption. 30 doublings later something has grown 1 billion-fold. That first 0.01 megapixel Kodak camera is now generating a 10 megapixel image. The result of which is the complete dematerialization and demonetization of film photography.

3) Demonetization:

Once a product/service has become dematerialized into bits, its cost of replication and transmission is near zero and ultimately leads to their eventual demonetization. As an example, digital photography has totally demonetized the field.

4) Democratization:

As products and services dematerialize and demonetize they become available to billions of users across the planet. Today there are 3 billion people connected on planet Earth. By 2025 that will increase to 8 billion connected individuals. Create a digital banking or insurance product and you have the opportunity to market it across the globe.

Exponential Organizations’ model – started with a research into successful organizations at the World Economic Forum (WEF), it’s descriptive, and identified 11 ‘success factors’ which we call ExO Attributes

Attributes:

MTP = Massive Transformative Purpose

• Five External attributes comprise SCALE

  1. Staff on Demand
  2. Community & Crowd
  3. Algorithms
  4. Leveraged Assets
  5. Engagement

• Five Internal attributes make up IDEAS

  1. Interfaces
  2. Dashboards
  3. Experimentation
  4. Autonomy
  5. Social Technology

Almost every business school case study today is now out-of-date, they almost all teach how to optimize and manage scarcity & most management practices, predominately focus on scaling efficiency, and that is also out of date.

The key economic basis of an ExO is as follows:

When running a business, you are constantly optimizing the cost of generating Demand and the cost of managing Supply. The internet, for the first time ever, allowed businesses to drop the cost of demand generation exponentially via online marketing and referral marketing – in fact, if you achieve a viral loop, your acquisition cost goes fully to zero.

Every organization needs to adapt to the disruptions happening across its industry.

Exponential technologies are changing our world and the way we do business, which can be seen as both a challenge and an opportunity.

A new type of business is successfully emerging in this new age: The Exponential Organization.

The development and accessibility of these technologies has three major implications on businesses:

The solution to survive the 4th Industrial Revolution?

To either become an Exponential Organization or adapt current businesses following the ExO principles. It’s key to overcome external disruption and to operate on the same level of the ExOs that may be emerging in your industry.

However, even though we knew the direction we want to evolve our organization, the main challenge for existing organizations is that the immune system always attacks innovation.