An exponential organization, or ExO, is an organization that is very flexible and versatile, because of this flexibility these organizations have often a greater impact than a regular organization in the field. An ExO can do more, produce more and dominate the market with less resources when compared to a regular organization, which also mean faster rate and success. This sort of fast progress is what sets ExOs apart – companies like Uber, AirBnB and Google are just some examples of successful ExO companies.
An ExO greatest ability is adaptation. This new businesses aren’t afraid of competition, because the competitors come equally from a startup based in a garage kind of thing. So instead of being a competition, this is all a collaboration.
Old-school organizations are too constricted in their thinking. ExOs are rapid, flexible and clever.
Companies are no longer limited by traditional restraint on expansion. Linear growth – the idea that a company will grow consistently by a certain percentage each year – is definitely over.
With technology, this is true. Moore’s Law states that the computing price-to- performance ratio doubles every 18 months to two years. This means that you as a consumer pay less and less for more and more powerful/advanced technology.
Traditional companies based on linear thinking and growth are in danger.
As we find new ways of sharing ideas and building projects, such linear thinking will die out. The developers of Iridium learned this the hard way. While their project, creating a satellite net for cell phones to access global communications, was worthy, the company’s planning was slow and organization convoluted, thus it failed.
By working dynamically and avoiding physical infrastructure costs, ExOs can avoid such failures.
Becoming an ExO is way more than just understanding technology. It’s a new way of thinking.
So why would you change your company to adopt the ideas and system of an ExO?
First, consider the fundamental advantages of ExO companies. Linear organizations are dependent on having assets and a large number of employees. ExOs have less employees and are thus more flexible, and they can make use of resources that they don’t own.
Company AirBnB, for example, has a small team of employees, but they can access a very large number of apartments and houses.
The most important asset for an ExO is information. Customer and market data have to be stored and analyzed. This doesn’t necessarily require much manpower, or office space but it does require experimentation and flexibility. Many ExOs manage data automatically with the help of technological innovations.
Your MTP gives you a competitive edge. Granted, only Google is bold enough to aim for organizing all of the world’s information!
An MTP also makes consumers feel great about using a product. Red Bull, for example, is more than just an energy drink – when you drink it, you’re part of the community that “grows wings.”
If you aren’t ready to develop an MTP, you can attempt first to achieve a clear plan for corporate social responsibility. This means offering something more meaningful to both your customers and employees aside from a great product or a comfortable working environment.
For many ExOs, being socially responsible is a required approach.
Disruption, unpredictability, risk taking and short-term planning: ExOs likes it all.
ExOs are a big part of society’s changing landscape. These companies have emerged from several dynamic shifts in the way modern businesses function.
Huge improvements in information storage and processing technologies have accelerated the speed at which companies can do business. Product cycles are shorter, and new forms of competition have arisen. And today, one search engine (Google) dominates its field, while one e- commerce site (Amazon) has revolutionized online retail.
Trust, too, is more essential nowadays. You have to trust your employees to manage themselves if you want to maximize their creativity. Simple tasks can be automated; and micromanaging isn’t efficient anymore – if it ever was!
The last development is a fundamental one: the idea that today, everything is measurable and knowable. This is a cornerstone of ExO thinking.
