Exponential Organizations - Salim Ismail, Michael S. Malone, Yuri Van Geest

Technology is more and more present in the management processes every day. The human community has learned to expand the technology that, today includes numerous advances, in organizations. Salim Ismail, Michael S. Malone, and Yuri Van Geest will explain all this connection through the book "Exponential Organizations".

And how could we build new types of organizations in order to achieve better results and experience new challenges?

There are already a lot of companies you know about adopting this concept. If you haven't realized it yet, it's time to stay tuned. The book also brings some successful cases from big companies, such as Google!

Got interested to learn more about this subject? Stay with us in this summary!

The book "Exponential Organizations"

Published in 2014, "Exponential Organizations: Why New Organizations Are Ten Times Better, Faster, and Cheaper Than Yours" is a renowned work written by big names in the business world.

The book tells how exponential technologies have impacted and changed business practices, leading to a new concept of an organization - more efficient and with a transformative purpose.

In addition, the work presents practical applications and several examples of companies that adopt this "philosophy" and have obtained surprising results.

Who are Salim Ismail, Michael S. Malone and Yuri Van Geest?

Salim Ismail is CEO and co-founder of Singularity University, where he is also a Global Ambassador. He has served as vice president of Yahoo, a management consultant for CSC Europe and ITIM Associates. In addition, he holds a bachelor's degree in theoretical physics from the University of Waterloo, Canada.

Michael S. Malone is one of the most renowned writers in the technology field, where he has worked in Silicon Valley for over 30 years. He pioneered high-tech journalism in the United States. Michael is the author and co-author of several bestsellers such as "The Virtual Corporation" and "The Future Arrived Yesterday".

Finally, Yuri Van Geest is Managing Director and Dutch Ambassador of Singularity University. He holds a master's degree in management and strategic marketing from Erasmus University Rotterdam. Responsible for organizing global movements of lean startup and TEDx. He has served as a consultant to several large companies, such as Google, Samsung, and MIT.

Why should I read it?

The book's content is ideal for any organization that wants to achieve exponential results and adapt to the new age of business: the information technology-based age. There is no better way to learn about business than with the bests in this area, right?

In addition, we suggest this reading also to those interested in opening a startup to learn about business. Increasing your chances to be succeeded in any area you want. The most important here is to pay attention to every content of this summary!

What can I learn from the book "Exponential Organizations"?

• The approach of characteristics, attributes, and implications of Exponential Organizations;
• What factors should be considered when setting up an ExO;
• How to apply ExO's ideas to midsize companies;
• How large companies can adapt to the ExO philosophy;
• How a director should play his role in this change.

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Overview: Disruptive Opportunities Drive Revolutionary Change

Iridium moment

Exponential organizations are based on information technology. The authors Salim Ismail, Michael S. Malone, and Yuri Van Geest says that the organizational techniques adopted by these companies yield at least ten times the result of the other organizations. How can this be true?

It is not difficult to realize. Traditional organizations tend to use linear techniques to predict their outcomes. And that's where the big mistake is.

We live in the exponentially growing present, and with such access to information, the future tends to be even faster. The fact that experts design linearly - at times when change is exponential - is called the Iridium Moment.

Disruptive Opportunities

The authors state that we are moving to an information-based paradigm. Such a paradigm generates disruptive opportunities.

It is not difficult to understand that disruptive opportunities are a kind of market revolution. When an organization launches cheaper, efficient, and affordable technology, it destabilizes competitors (who once dominated the market).

Thus, it is obsolete who was once a trend in the market. You know Android, don't you? An operating system that emerged as a cheaper alternative and today it dominates the world of smartphones.

A moment of revolution can happen as soon as one has a revolutionary idea, which can be anytime. So even traditional industries must be ready for disruption.

Big companies can be anything but stupid

The book "Exponential Organizations" states that traditional organizations grew based on the concept of ownership. Owning the information and then negotiating access to it is an action that worked to manage scarce resources.

Consequence: You create a hierarchy system and a predictable environment.

Organizational structures still function quite linearly. When you think linearly, you get linear results.

However, when one thinks exponentially, one gets geometric results in relation to the investment.

Rather than monopolizing access to information, Exponential Organizations (ExO) have realized that information sharing has more impact in a full and information-based world.

Major companies are aware that this ownership structure has numerous disadvantages. For this, they are striving to correct them.

The method that ExOs use to achieve their goals makes them grow quickly. This is because they do not care about owning the market, but about using it to their advantage/purpose. Such an attitude allows for greater flexibility within the market as profits take off.

The External Characteristics of an ExO

Ismail, Malone, and Geest explain that ExOs have a Massive Transformer Purpose, called MTP. This allows for exponential growth without losing coherence. It requires organizations to think and dream big.

This ambitious purpose is not isolated. Its goal is to somehow impact the ecosystem where we live.

The external characteristics of an Exponential Organization can be defined by the acronym SCALE. Not all ExOs have all these characteristics, however, the more characteristics it fits, the greater its ability will be to expand the results.

(S): Staff on demand

Rather than focusing on willpower and working hours, ExOs take a different approach. They aim to explore the diversity of ideas, allowing the employee to better exploit their potentials.

This feature enables greater learning from new perspectives, builds stronger bonds among team members, and is critical to the company's speed, success, and flexibility.

(C): Community and Crowd

ExOs' intention is to bring "who's in the crowd to those in the community" (core teams, users, partners, fans, etc.).

Such action causes a foundation of new ideas, generating greater learning. It also promotes exponential growth.

(A): Algorithms

Implementing algorithms within Exponential Organizations causes a lower incidence of errors, which stabilizes growth and is easily updatable.

This requires some specific learning techniques and cultural acceptance.

(L): Leveraged assets

Sharing assets, rather than owning them, removes the need to manage assets, reduces the cost of delivery, and increases agility.

However, you must have many assets or "easily accessible assets" to be effective.

(E): Engagement

Engagement techniques, such as sweepstakes and discounts, have a greater impact on customers and lead to positive company feedback.

This increases loyalty and leverages marketing. It also has a great impact on generating new members for the community, inspiring them with their passion and purpose.

Seeing an ExO From Inside

Just as there are external attributes of an ExO, The book shows that there are also internal mechanisms that are efficiently and cautiously managed. Features define the acronym IDEAS.

(I): Interface

This letter represents the filtering process of externalities in internal value: it connects external growth factors with internal stabilization.

Algorithms are required at this stage, standardized processes and other externalities must be defined to allow process automation.

(D): Dashboards

Many ExOs are embracing the OKR concept to keep up with their goals. This acronym stands for goals (where you intend to go) and key results (small goals that guarantee the progress of your progress).

Dashboards are important for monitoring critical growth factors. Such action needs acceptance by employees and the culture.

(E): Experimentation

The experimentation consists of the lean launchpad methodology with controlled risks.

Lean startup is based on the principles of Lean Manufacturing: identifying and reducing the main waste of a production process.

Many companies have explored this scope within their processes. They have even been adopting continuous improvement methods such as Kaizen to make their processes more efficient.

This application ensures a process aligned with the constant external change, as well as reducing costs and increasing production speed.

(A): Autonomy

Multidisciplinary teams are self-organized and function with a certain authority. These teams are encouraged to create and be part of new projects, increasing the chances to invent a new product with creativity.

Such action promotes employee flexibility and creates an open and confident culture, as well as providing satisfaction with the team.

(S): Social Technologies

The implementation of social technologies promotes a change in the organizational structure of companies. What would previously be a hierarchical/vertical structure now has horizontal interactions.

These measures seek to streamline the decision-making process and encourage the community to form ideas. As a result, there is faster, shared learning and greater stabilization during growth.

For this, the company must have/adopt a cooperative culture.

Implications of Exponential Organizations

The authors say that in a disruptive world, the smaller your company, the easier it will be to apply the concepts of an Exponential Organization.

On the other hand, and even logical, if you have more employees, you will have more difficulty adapting your business to new strategies.

But it is important that you are enabled for new information as it allows you to be more flexible in your approach and speed up your process.

Creating an ExO

After understanding the whole organizational structure of an ExO, a famous question arises: How does it work in practice? How is this organization generated?

Salim Ismail, Michael S. Malone, and Yuri Van Geest quote elements that a person must consider creating an exponential organization. They point out that there is no startup manual, to be sure.

When setting up a startup, investors assess risk in three main areas:

1. Technological risk;
2. Market risk;
3. Risk of execution.

Technological risk assesses product functioning, while market risk assesses whether people will be interested in buying the product. However, the real problem with starting a business lies in the risk of execution.

For example, one big idea is not enough to make a good deal. The way the company is organized can produce a big result or bankrupt it.

When creating an ExO, you should be careful to expand, not shrink your business. In addition, it is critical that you establish direct support from the CEO.

One lesson the authors pass on to the reader is to consider the most disruptive agents in your organization to work on your ExO.

ExOs and the companies

Midsize businesses can also take advantage of the ExO philosophy. Companies already consolidated in the market can start with the results they already have and, from there, adopt an exponential model.

The adoption of the ExO concept has impacted the performance and results of large companies. To prove this point, the book "Exponential Organizations" sheds light on the case of five companies you probably already know or have heard about:

1. TED;
2. Github;
3. Coyote Logistics;
4. Studio Roosegaarde;
5. GoPro.

For example, the already thriving TED by adopting the ExO philosophy created a massive engagement among the crowd, turning it into a community.

What did they do? They made the lectures available on the internet for free. After that, they created an optimization tool to serve these new community members outside the hierarchy standards.

Result? Within a few years, TED, which was once a local meeting that took place annually, has become a major platform for the world's most popular forums. Today, the number of views of your content is around two billion.

Large companies

The more employees an organization has, the harder it will be to change the company's strategy.

The authors expose the three main obstacles faced by large companies:

1. Focus is internal rather than external;
2. Innovative technologies and thoughts are ignored and repudiated;
3. Dependence on innovation from within, not from without.

But of course, ExO philosophy wouldn't be amazing if it couldn't cover all kinds of organizations in some way, right? Thus, there are four strategies that can be adopted by large companies within this accelerated business scenario:

1. Transform leadership;
2. Partner, invest or acquire ExOs;
3. Disruption;
4. Implement ExO Lite internally: adoption of some SCALE and IDEAS attributes.

Coca-Cola, for example, aims to double its revenues by the end of this decade. To this end, it experimented with adopting a PTM that relinquished traditional thinking and adopted another series of SCALE and IDEAS attributes that align with the ExO philosophy.

The exponential executive

Adapting to this era not only impacts the way companies organize themselves but also how they operate. And the role of CEOs is critical to monitor and prepare the organization for this change.

It will be a time of pressure and no one will feel more pressure than the CEO. However, they will reap what they plant, so a prosperous future is almost certain.

Finally, Salim Ismail, Michael S. Malone, and Yuri Van Gees think that within a decade, the trend is that the CEO's name will go through a transition and adopt the acronym CXO: Chief Exponential Officer. We are dealing with an information age.

Several revolutionary ideas are emerging in the business world, which is not known how far it will go. But the certainty is that this is only the beginning.

More books about innovation

In the book written by the Brazilian businessman Flávio Augusto, "Value Generation - Sharing Inspiration" in free translation, he shows, instead of just working for capital, how important it is to create value for customers. This is because, by creating value in people's lives, in return, they will create value for you.

Eric Ries, in "The Lean Startup", explains that it is important that the word "innovation" be understood widely. These can be original scientific discoveries, a new use for existing technology, the creation of a new business model, and more.

In the book "Scaling Up", the author Verne Harnish gives some tips for the pursuit of continuous improvements, such as:

• Employee feedback should be constantly collected to identify obstacles and opportunities for improvement;
• The pace of communication must be well established, making the flow of information within the organization fast and accurate.

Okay, but how can I apply this to my company?

Finally, we've put together the best strategies so that you can apply them to your business routine in order to get the best results. They are:

• Assign your company a Massive Transforming Purpose: something that can transform society in a transformative way;
• Use optimization tools to reduce expenses and improve results performance;
• Value revolutionary ideas from your employees;
• Don't be afraid to try new things as long as it is consistent with the purpose of the business;
• Build a culture of engagement with people outside the company, so they can become part of the community;
• Encourage your employees to participate in company decision-making.

Did you like this summary of the book "Exponential Organizations"?

Are you ready to apply all those lessons in your business life? Leave your feedback in the comments, so we can always offer the best content!

In addition, the book is also available for purchase by clicking on the image below: