In the future of work, you’re either the one causing Change or you’re the one being changed. The most successful companies of our times are at the forefront of Innovation and disruption and are experiencing wild growth. What does it mean to be an Exponential Organization

Exponential organisations use a small footprint to leverage accelerating technologies to go outside their traditional boundaries. As opposed to the larger companies that had a hard time innovating because of their size, Exponential companies have generally kept things compact and agile so they could adapt as needed.

What does it take to be exponential?

Salim Ismail of Singularity University has identified 10 characteristics of Exponential organisations. 5 external and 5 internal. Salim Ismail predicts that organisations can reach 10 times performance improvement by adapting just 4 of the 10 characteristics.

The 5 external characteristics fit to the acronym of SCALE

  • S: staff on demand. Just like Uber doesn’t actually employ its own workers, we’re moving to a model where companies outsource most of their major work, which gives them more flexibility to adapt to market changes quickly.
  • C: community and crowd. Exponential organizations use collaborative means to build community and scale their work.
  • A: algorithms. UPS is a good example of a company using an algorithm to maximize its efficiency–in this case, finding the best routes for its trucks.
  • L: leased assets. Similar to having staff on demand, exponential companies have assets on demand and don’t own much of what they use.
  • E: engagement. To create connectedness between the organization and the community, exponential organizations use things like digital feedback, incentives, and gamification.

The 5 internal characteristics

  • I: interfaces. These organizations have very customized processes for how they interface with customers and other organizations. An example of this is Apple’s strict rules on what reaches its app store.
  • D: dashboards. To manage employees with a light weight and high touch, exponential organizations use real-time management systems and dashboards to measure business metrics.
  • E: experimentation. Exponential organizations operate like lean start-ups–they are constantly adapting, tweaking, and tuning their efforts to match external factors.
  • A: autonomy. Many exponential organizations streamline with a decentralized authority structure, which means no reporting structure or job titles.
  • S: social. Using collaborative technologies, these organizations manage real-time communication to keep all employees up to date.

Traditionally the practice has been for Business strategies to project at the most 5 years ahead at the most and Leaders tend to generally focus on day to day matters. The industry presumes that we cannot plan for what we don’t know. But we now live in an Exponential world where traditional Linear Thinking in 5 year bursts will no longer suffice. Exponential Leaders are tuned into tomorrow. They must have the ability to identify the next Uber, Kickstarter or Air BnB before it starts disrupting your industry and have strategies in place to handle opportunities or plans to handle the fallouts.

Why you must be the Exponential Leader?

In a world where technologies are ‘breeding’ becoming a leader who is learning how to navigate a Volatile, Uncertain, Complex and Ambiguous Business world is not enough. Leveraging the opportunities VUCA offers to disrupt Business as usual to become the Exponential Leader, is already beginning to define Leadership success.

Digitization and Disruption are now the norm with Driverless cars, Bitcoins and 3D printers which are already here. By 2020 the expectation is that the Internet of Things will link 30 billion devices. In a changing world thinking long term is the responsibility of every Leader!

What can be most important for Leaders to become Exponential Leaders? Prepare themselves to build Exponential organisations.

  • Agility– Developing the ability for nimble processes, systems that enable quick decision making and the ability to adapt, adjust and change quickly is key.
  • Vision for the Future– interpreting trends, understanding, and interpreting the market and new Business models and identifying a plan for the future is key. Similarly, ability to make choices is going to be key in a disruptive Business environment.
  • Openness– To embrace new ideas, evolve, adapt is key. Remaining married to the past and proven theories will adversely impact building the ExO. Thinking Exponential is exciting but counter-intuitive to most Leaders. The problem is that most people in Leadership positions have over the past many decades got used to a linear model, where things stay the same for years and the changes were slow and incremental. The main concern then was to survive in the present. With Technologies converging, overlapping, and proliferating it is not easy to predict the future- but essential for Leaders to learn how to do this! With disruptions in every single industry- Finance, Manufacturing, Media, Medicine -there is no escaping disruption for every industry!
  • Robustness– Being prepared to take difficult decisions and undo what you built and handled in the past will become important in this new business environment.
  • Market awareness– is key to build a new Customer strategy that works and remains relevant in the VUCA world.
  • Courage– to take risks, accept mistakes, course correct, and charter new territories will be important.
  • Influence to foster Innovation, encourage Collaboration, enable Problem Solving will all be key.
  • Big Picture thinking will be key to ensure new Strategies and ideas to emerge. This can enable leading the real disruption in your industry.
  • Growth mindset– ability to think Big, grow Big and build on disruptions is key to enable growth.
  • Hunger for Learning– Exploring, learning from a vast reservoir of resources including learning from Institutions like the Singularity University and other Resources is key. Learning from the experiences and both Success and Failures of other organisations can enable key insights for building the Exponential organization.

Innovation and Technology deployment are going to be key differentiators in the new world as Peter Drucker famously said, “Innovation is work more than Genius”- driving an Innovative Culture, requires creating a Culture of Psychological safety which allows employees to experiment and Fail before Succeeding. There needs to be a climate which identifies Blameworthy mistakes and Praise-worthy mistakes and treats them differently.

Incubating Innovation takes a lot of work as does deploying Technology meaningfully. Investing in on current Technology is not enough. Deploying Technology, Managing Change and Adoption are important prerequisites to enable Technology to deliver Value. Creating a mind set to think Technology Solutions is key to deploy Technology in a disruptive manner and enable business growth to multiply many times.

The problem we have with Technology today is that most in Leadership positions are migrants to Technology and may not think of Technology Solutions, much needed to build an Exponential Organization. Compounded strategies yielding compounded results require Leaders to behave differently.

  • Be the Emergence Leader– the old is going the new is emerging so drive Change and Culture in your job if you are the leader.
  • Organized Information Flow– the Agile organization that deploys Technology needs information to move fast so ditch hierarchy. There’s no room for Bureaucracy in the new-age organisations Openness, radical feedback and full transparency are key.
  • Empower individuals– build teams and empower people to do great work! More autonomy is key to build the ExO.
  • Create an ExO mindset– this requires Leaders to provide the Vision and then allows people to Learn Fast and Fail Fast. Creating and ExO requires Psychological Safety in the Culture to make mistakes.
  • Establish Feedback Loops– Exponential Leaders give and receive feedback regularly and create a Culture where people speak up, participate, feel empowered and own the solutions they are generating.

In conclusion, Exponential Leadership means letting go of Legacy thinking, Legacy processes Legacy Expectations and Legacy mindsets.

It requires leaders to be unshackled from the past, have the Intellectual Curiosity to embrace the Now and develop the humility to understand and accept that the best ideas for compounding the Business may not reside at the top of the organization.