exponential organisataions

Five steps to cope with the digital asteroid coming your way soon

What happens when all technologies cross collide and digitisation, demonetisation and dematerialisation come together at exponential speed? 

Exponential change

It goes back to what “The second machine age” explains as the difference between linear change and exponential change. One is gradual, the other one doubles every 6 or 12 months. And with exponential change we are on the second part of the chessboard. We are now talking the laws of accelerating returns. Here are some examples of what that means.

  • If you are in computing; $ 2.7 billion to sequence DNA in 2000. Now it costs $ 1,000. It will cost a penny by 2020. It will be cheaper to sequence your DNA than flushing your toilet.
  • If you are in data; by 2020 we will have created 73.5 zettabytes of data (21 zeros).
  • If you are in transport; a Predator drone cost 4 million. The crowd can build if for $ 300. The development of drones is accelerating at twice the speed of Moore’s law.
  • If you are in farming or retail; in 3 years there will be nano fridges that can print broccoli.
  • If you are in pensions; in 5 years there will be at least 2 million people that are completely digitized. DNA, neuro-profiles, bio markers, bacteria, food intake, etc. You will live to be 200 years. That is the current pension system gone.
  • If you are an accountant; Bitcoin will make accounting obsolete.

Builders need to be aware of 3D and 4D printing. By 2020 there will be fifty billion connected devices. A trillion by 2030. We will have robots, virtual technology, sensors everywhere, augmentation, AI, solar, nano, collaborative consumption, open innovation, local Techshops everywhere, neuro-enhancements, drones, Bitcoin, quantified self (everything in your life is measured). Name it. Impacting every industry. Doubling the speed of development every year. Getting cheaper, better, smarter.

Are you ready?
Is your company organised for something like that? Can your top down, hierarchical, linear, large, financial outcome driven organisation, asset based, with unengaged staff with a five year strategic plan, cope with this?  The answer is a resounding “no”.

Exponential organisation
“Exponential organisations” looks at how organisations should be organised if they are to survive the oncoming tsunami of change or what they call the asteroid of digitised information. Helping you to avoid becoming the dinosaur that will be extinct.

Disruption is the norm
Because disruption will be the new norm. Everywhere! You can either do it yourself, or someone will do it for you. The outsider has all the advantage. And forget about the experts. They don’t understand exponential either (neither do economists).

How quick are you?
How long does it take to get your new product to market? Apparently the average is about a year. Quirky can do it 29 days. Airbnb owns no physical assets and is worth $10 billion, which is bigger than Hyatt Hotels. Hyatt Hotels has 45,000 staff and 549 hotels. Airbnb has 1,300 staff, 500,000 listings in 33,000 cities. And it is only 6 years old.

What to do?

Step 1. Define a massive transformative purpose, in order to capture the heart, minds, ambition and imagination of staff and clients.

  • First mover advantage
  • Recruitment
  • CSR at heart of organisation
  • Meaning and purpose
  • There are now 668,000 social enterprise, generating $ 270 billion per year

Step 2. Create a community

  • Staff on demand
  • Open innovation
  • Collective intelligence
  • “The smartest people in the world are not working for you”
  • Net Promoter Score  (if your NPS is very high, your sales function is free)
  • “The world has over a trillion hours a year of free time to commit to shared projects”
  • Serendipity

Step 3 Algorithms and data

  • Automate as much as you can
  • Measure as much as you can
  • Machine learning and deep learning
    • 16,000 computers connected, started to recognise cats in 3 days
    • Computers detect video episodes and describe them
  • Google X
  • Quantified employee
  • Quantified workforce

Step 4 Leverage assets

  • Techshop has already created 6 bln of products and is now used by large companies as part of their innovation infrastructure
  • Quirky has signed up with GE
  • Use the platorms
  • Collaborative consumption, peer to peer, etc.

If your Net Promoter Score is high, your sales cost are minimal. If you have a peer-to-peer community, your service costs are low. You do not own anything. You leverage what is already there. If you are really good and successful, you become the platform.

Step 5 Organise

  • OKR (objective and key results)
  • Dashboards of value metrics, which will include IQ, EQ and SQ
  • Complete openness transparency
  • Decentralise
  • Autonomy and cooperation
  • Social sharing
  • Focus on experimentation
  • Innovate
  • Holacracy (system where authority and decision making are distributed via fractal, self organising teams).
  • Importance of diversity
  • Serendipity
  • Hire on potential and passion

The ultimate aim is to build a zero latency business. The time between idea, acceptance and implementation disappears.

The rules

  • Trust beats control
  • Average is over
  • Open beats closed
  • Everything is measurable and anything is knowable
  • From scarcity to abundance

Three years of Bookbuzz
It is a cracking book. It is “future vision” on steroids. In fact it is the best we have read in years. There is 3 years of Bookbuzz in this book. Here are some links (and we would be happy to send you more on request):

Forget everything you have been learning in university or at your MBA (all based on scarcity models). Find your transformative purpose and go for it.

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