Is it possible for an existing company to transform into an Exponential Organisation?
Welcome to the final week of our three-week series looking at Exponential Organisations. The first week we looked at what is causing the rise of exponential organisations, last week we discussed what made a company an exponential organisation and we will conclude this week with how to become an exponential organisation.
But first a recap of the last two weeks
We defined an exponential organisation as a company that grows at an above-average rate – up to ten times faster than comparable companies in the industry – but can make do with considerably fewer resources thanks to new forms of organization and the use of new, especially digital, technologies.
Exponential Organisations have emerged because of the incredible advancements of emerging technologies like 3D printing, advanced robotics, biotechnology, blockchain, digital design, energy storage, high-performance computing including cloud computing, internet of things, artificial intelligence and others.
Exponential Organisations are structured in a way to take advantage of these exponential technologies. They have a Massive Transformative Purpose (MTP) that acts as their North Star guiding their innovation and attracting people to their company. They are also increasingly a mixture of these eleven attributes: Staff-on-Demand, Community & Crowd, Algorithms, Leveraged Assets, Engagement, Interfaces, Dashboards, Experimentation, Autonomy and Social.
“Any company designed for success in the
20th century is doomed for failure in the 21st”
– David Rose – CEO of Gust
Before a company embarks on a transformation journey they need to be made aware of what is happening in the world. This should be a session to all those involved in the transformation process and is called an “Awake session”.
An Awake session will have the following structure:
Exponential technology advancement in the world today.
Competitors and new entrants will use this exponential technology to disrupt your industry.
Start-ups are increasingly rapidly reaching the billion Dollar market cap.
The tremendous opportunities exponential technologies bring.
How to take advantage of these opportunities by building Exponential Organisations.
The result of an Awake session will be to convince as many people in an organisation as possible that change is necessary and that they can assist, not hinder the process. This is a vital step in overcoming a companies immune system which we will look at later in this blog.
ExQ Assessment and ExO Canvas
As your company embarks on the journey it might be difficult to know where to begin and what to focus on. Thankfully there is a tool that you can use to assess your current state. This tool is called an Exponential Quotient Assessment. It consists of 34 questions and will take approximately 30 minutes to complete.
As a consultant working with OpenExO I have access to this tool and have created a specific link for you to use. You can access it here.
Once completed you will be asked to provide your contact details and a report will be emailed to you. To get maximum value from the report it will be best if you meet with a consult, such as myself, who will take you through the results.
Another important tool to assess and understand the Exponential Organisation attributes is something called the ExO Canvas. The ExO Canvas is a 1-page working sheet containing the 11 attributes discussed in the previous blog titled “What makes a company an Exponential Organisation”.
Using the ExO Canvas above consists of two steps:
Current state: First you identify what exponential attributes your company or division currently uses. The output of the ExQ Assessment will assist you in this.
Future state: You now go through the attributes again and identify which attributes you would like to implement within your company.
Once again meeting with an ExO certified consultant is very useful to guide you through this process.
Corporate immune system
Innovation and transformation is very difficult within existing companies. One of the main reasons for this is because it gets attacked by the corporate immune system.
Everything in a company, from sales and marketing through to supply chain management processes, is structured around existing revenue-generating products and services. Employees within the company are also rewarded for achieving goals aligned to the current product and service.
When a new disruptive product or service is introduced to a company there is a good chance that the initial revenue will be negligible, and it will require different processes. There is a very good chance that people within the company will view this new product as a threat to their bonus. Shareholders might also see their revenue drop as the company accommodates the new product or service.
The corporate immune system is the reason why companies have missed the need to transform and has been the cause of the well-known failures like Blockbuster, Kodak, Nokia and others.
How is the corporate immune system overcome?
ExO Works in their article “Recognizing & overcoming the corporate immune systems” has these four tips:
Get the buy-in from the CEO: The Awake session discussed above is used to convince the CEO, C-level suite, management and as many people within a company as possible of the need to transform.
Build out, not up: Ideally a new exponential product or service needs to function independently of the existing organisation’s structure and systems. As the new division, or company, matures it can then be brought back into the company and will sometimes replace the existing products and services entirely.
Embrace the change-makers: Identify the people in the company that are already encouraging change and innovation and provide them with an environment that breaks down the established rules, hierarchies and social constraints.
Invest for the long-term: It is often very difficult for companies to have patience with a new product or service but this is what is sometimes needed for it to flourish.
The ExO Sprint
Is there a way that overcomes the corporate immune system?
The book “Exponential Transformation”, (written by Salim Ismail, Francisco Palao, Michelle Lapierre, Peter H Diamandis and Francisco Poyatos) is a detailed handbook for applying Exponential Organisation principles to a company. Through working with companies they discovered a process to overcome the corporate immune system. This was to allocate people from across the business to spend at least 50% of their work time, over 10 weeks, working on something called an ExO Sprint.
The idea of the ExO Sprint would for teams to identify projects and then get them started to see if there was potential.
The ExO Sprint has two main purposes. The first is to introduce new exponential products and services to the edge of a company where it can operate independently until it matures. Secondly to evaluate the core processes of the parent company and see which can be transformed by adopting exponential attributes.
Below is the structure of the 10-week ExO Sprint.
The ExO Sprint is divided into two 5-week periods. The first 5 weeks will be used to identify exponential technologies and ideas that can be used within your industry. At the end of this period the initial ideas will be presented and accessed. Successful ideas will then enter a second 5-week process, a minimum viable product (MVP) built and the product or service actually launched to a very restricted customer base.
At the end of the ExO Sprint the new ventures and their results will be presented to the company’s management team. Projects would be assessed and, if approved, would get seed money to pursue.
The ExO Sprint has now been used around the world and successfully used by P&G, Visa, HP, Stanley Black & Decker and many more.
A very good overview of the ExO Sprint has been created by ExO Works and can be found here.
Your company can use this concept to successfully launch new exponential products and services that will hopefully revolutionise your business.
During this three part series have you seen how exponential digital technologies have created the Exponential Organisation? Have you been awoken to the need for your organisation to transform and incorporate the 11 attributes that Exponential Organisations have in common? If you answered yes to either of those two questions then I would love to chat to you. You can book me online using Calendly at https://calendly.com/ideastorm, contact me through my website at www.ideastorm.co.za or email me directly at firstname.lastname@example.org.
Until then have a fantastic week!