“Any company designed for success in the 20th century will fail”, this is what I read in former Head of Innovation at Yahoo Salim Ismail’s book, and it’s true. A company that is starting out now will only last 20 years, they’re lasting less and less time. People who are breaking the market now will more than likely disappear in 10 years. My analogy goes something like this: Most companies are like mammoths, big, slow, and inefficient. There are only a few exceptions to this analogy, and these companies are known as Exponential Organisations (ExO’s).
What is an ExO?
So, what is an Exponential Oragnisation? To give you an idea, companies such as Google, Airbnb, Uber, and Facebook are all ExO’s. They started out from a bunch of developers pulling together some lines of code and hoping for the best, now they’re determining how we live our lives. Some are calling it the Fourth Industrial Revolution, businesses characterized by mind-blowing technological innovation and record-breaking growth. An ExO is defined as an organization whose impact or output is disproportionately larger (at least 10 times!) larger than an ordinary one.
“30 exponential steps=26 circles around the world. Our mind isn’t prepared to think in this way!”
Basically, unlike linear growth, which emerges from repeatedly adding a constant, exponential growth occurs from repeatedly multiplying a constant. Therefore, this linear growth, over time produces a nice steady and stable straight line, whereas exponential growth rockets at an unimaginable pace!
The key conception is defined by leverage of information and technology, not by human capital or physical assets to achieve rapid growth. The most successful companies in the 21st century are all chasing a Massive Transformational Purpose (MTP).
What is MTP?
In order to make money, businesses need to find a much bigger reason than money alone. The Massive Transformative Purpose is just this, it’s bigger than a mission statement; it’s why you do what you do, an ideology you strive towards, the reason your company exists. The baseline is “think big”, bigger than we could even imagine. And the goal is radical transformation, disrupting the norms and breaking the boundaries. For example, Googles MTP was to “organize the world’s information”, to make information available to everyone. TED Talks MTP was “ideas worth spreading”, to allow the world to have access to inspirational ideas and knowledge. These were both big and ambitious ideas that go beyond just making financial profits.
The cost of technology is constantly getting cheaper and rapidly becoming more affordable to the average person. Meaning, the option to innovate and bring something to the market quickly is open to anyone. For example, AI, drones, sustainable energy, blockchain, all now form the new industrial revolution. This technology is accessible to everyone, and therefore is now changing the world! Tesla, for example, disrupted the automotive world with technology with the first 2012 model S which is still the world’s most advanced car. Now Tesla is proposing to give away free cars and will use promotions to help with sales in return.
How can you transform your business into an ExO?
One fundamental question that is dominating the industry “How are these new companies growing exponentially when we aren’t?”. In the 21st century, you’re either a disruptor or you’ve been disrupted. Technologies are changing so fast and transforming businesses that in order to even try to become more exponential is difficult. If you’re an early-stage startup, then you have a massive head start already. There’s no pre-existing legacies or predetermined paths you have to follow, you can instead strive towards your MPT from the beginning, bypassing the big companies.
5 hacks to convert your company into an ExO:
Hack #1: Think feely and grow faster. Usually, people come from different industries so they can think differently. Increase the speed of decision-making (10x faster at least).
Hack #2: Awareness of trends. It’s vital to know what’s going on in the world and be able to predict trends. Encourage new, fresh entrepreneurs into your company, Generation Z is important.
Hack #3: Work for a bigger reason. Bigger than just money or yourself. Strive to resolve or improve a global problem. Make sure that the goal is big enough, transformational and resolute.
Hack #4: Develop a team to execute this goal and build a community devoted to your goal.
Hack #5: Be disruptive. Create disruptive projects and disrupt the industry.
“The minute your company is slower than that of the outside world, you’re dead.”Salim Ismail
Gines is the President and Founder of Impact Hub Malaga. He started his first social enterprise at only 10 years old. He has rejected numerous traditional and prestigious jobs to work on projects and companies with a positive impact. Now he helps others to do the same: build lives, businesses, and careers where they don’t have to choose between making a living or leaving a positive mark. Gines is truly passionate about the transformation of Exponential Organizations and the Purpose of Mass Transformation. Check out his blog here.