Summary Of The Book Exponential Organizations: Why New Organizations Are Ten Times Better, Faster, And Cheaper Than Yours

Introduction

You have to face different problems, different situations to grow your business within a short time of span. The growth of your business depends on many key elements; performance is one of the key elements. With the performance, you should be proficient as well as innovative. Now the question is, how you can build the business which is quick, innovative and adapt to the people who will part of this in future? How can you challenge this accelerating new World? The answer to this is “The Exponential Organization”. “An Exponential Organization (ExO) is one whose impact is disproportionally large (at least 10x larger) compared to its peers because of the use of new organizational techniques that leverage accelerating technologies.” In the last few years, the business/start-up world have seeing birth of these new type of organizations. It is the revolutionary change that how organizations can accelerate their growth rate by using the latest technologies. Normally organizations are built upon huge factories or plants with large manpower whereas Exponential Organizations are based on Information Technologies. ExO features are based on Moore’s law, which states that the performance of computation will get doubled after every eighteen months. This has become true for the last 60 years. Ray Kurzweil has studied deeply and noticed that this doubling pattern applies to any information technology. When you move to an information-based environment, the speed of development changes to exponential curve just like Moore’s law. As we can see in the graph below, In Liner Organizations changing rate is constant whereas in Exponential Organizations rate of change is dependent on exponential function value. Because of this, there is a huge difference between Exponential and Liner Organizations.

Characteristics of Exponential Organization

If we study fast-growing organizations/start-ups who have implemented ExO, we can find some similar major characteristics within all of them. Almost all of them include a “Massive Transformative Purpose” and other 10 attributes viz. five internal (IDEAS) and five external (SCALE) attributes are common within them. Massive Transformative Purpose (MTP) is the soul of the organization. It unites everyone who is related to the organization to achieve the organization’s mission. MTP should be huge and unique to the organization as well as it should focus on one major goal. It should be meaningful as well. The main aim is to capture the minds and hearts as well as to convey imaginations and ambitions to people who are related to the organization and also outsiders. For example, “Organize the world’s information” is the MTP of Google. And all the employees are working to achieve MTP only. Along with MTP five external and five internal characteristics are important in Exponential Organizations. External attributes are ‘SCALE’ which is the acronym for Staff on Demand, Community and Crowd, Algorithms, Leveraged Assets, Engagements.

Staff on Demand

In the business which is information enables a large number of internal staff is seems unnecessary, expensive and unproductive. Nowadays companies who have a permanent staff, some of them are not able to keep their skills up to date. For an ExO, Staff on Demand is the essential property for speedy functionality and flexibility in the current fast-changing world. By 2020, five billion people around the world will be available to work online by using smartphones, tablets and net cafes. They can work for you whenever you need them for their devices. Ex. Up-work, Freelancers.

Community & Crowd

Core team members, alumni (former team members), partners, vendors, customers, users, and fans are considered as ‘Community’ of organization and everyone else apart from these are considered as ‘Crowd’.

Algorithms

Today in the world almost everything runs on an algorithm. From Facebook post to Air traffic control, algorithms are everywhere in the modern world. There are mainly two types of algorithms, Machine Learning and Deep Learning. Machine learning is the ability to perform new and unseen task accurately which is based on known properties and predictions. Deep learning is a new and existing part of Machine learning based on neural net technology. It allows the machine to generate or search new patterns without exposing old data.

Leveraged Assets

The basic idea is that own only that things which are required or critical to your organization and take a service of rest of things.

Engagements

It is the combination of games, quiz, some interesting prize, and digital reputation systems from which an organization can get positive feedback from customers, which will help in the faster growth of an organization. Internal attributes are ‘IDEAS’ which is an acronym for Interfaces, Dashboards, Experimentation, Autonomy, and Social Technologies.

Interfaces

Interfaces are algorithms and automated workflows which give directions to the output of ‘SCALE’ externalities to the correct person at the correct time internally. If we consider ExO Uber, Uber use interface and some mechanisms for managing their drivers, the algorithm matches the location of the user and suggest nearest drivers to the user.

Dashboard

An organization has to manage a large amount of data from users/customers and employees. The solution for this is adaptable dashboard with all requirements of the organization. The dashboard is required because there is a chance of mistake during the process. If it is not caught, it can grow fast and very big. Using dashboard organization can work on that mistake in real time.

Experimentation

According to Zappos CEO Tony Hsieh, Most reputed brands or organizations never stop their process. Every time they try something new innovative or they experiment with something. The main idea of the Experiment is that you research on the need of customers and conduct an experiment to check whether the proposed product matches to users need.

Autonomy

It means give freedom to your employees or team to their task/work in the best way. Team with autonomy is self-organizing, multi-disciplinary.

Social Technology

According to Salim Ismail, Social Technology is a combination of Social objects, Activity streams, Task management, File sharing, Telepresence, Virtual worlds, and Emotional sensing. The main use of Social Technology is to make faster communication with users or customers.

Conclusion

The author wants to say that, the world which information based now growing exponentially but our business or organizational architecture is still linear way especially older and larger ones. No is the time to change the business strategy, the structure of the organization, systems, people of the current organization into the exponential organization. ExO allows people to organize themselves in a new and better way into this information enabled world.