Nothing happens by chance. We are currently living in the age of Exponential Organizations (ExOs) and there is a reason for that: exponential technologies are generating a new environment where these new types of businesses are flourishing. Also, ExOs are experiencing exponential growth rates and there is a reason for that: actually, there are eleven reasons, which are the common attributes that Exponential Organizations usually use: The ExO Attributes.
As Peter Diamandis and Steven Kotler described in the bestseller Abundance, the exponential trend of technologies is generating a new world of abundance. We all now have unlimited and free access to knowledge, soon will have unlimited and free access to energy, Internet, 3D-printed objects at home, etc.
Later, Salim Ismail explained in the bestseller Exponential Organizations, why a new type of business emerged in this world of abundance: the Exponential Organization (ExO), which is a purpose-driven entity that leverages new exponential technologies and a set of common organizational attributes that allow them to tap into and manage abundance to scale exponentially as technology does. Some examples are Google, which taps into an abundance of information; AirBnB, which taps into an abundance of places to stay; Uber, which taps into an abundance of drivers, etc.
The set of common organizational attributes, which allow businesses to become Exponential Organizations, are called the ExO Attributes and there are eleven of them: Massive Transformative Purpose, Staff on Demand, Community, Algorithms, Leveraged Assets, Engagement, Interfaces, Dashboards, Experiments, Autonomy and Social Technologies.
Not all ExOs implement the eleven attributes, but there is an ExO formula (MTP + IDEAS + SCALE) that provide us with three groups of ExO Attributes that always have to be implemented, so at least we have to pick one or more ExO Attributes of each of the three groups of the ExO formula.
MTP, making the difference by implementing the key ExO Attribute
- The MTP (Massive Transformative Purpose) is the only ExO Attribute out of the eleven that is mandatory and what actually differentiates a traditional type of organization and an ExO. The MTP reflects an organization’s aspiration—the core purpose of its existence. It describes the change in the world that the organization wants to achieve. In fact, while traditional startups are only focused on economic profit, ExOs are focused on transforming the world for a better future (which is also compatible with economic profit).
Some great examples of MTPs are Google’s (Organizing world’s information) and Airbnb (everyone belongs everywhere).
SCALE, a group of five attributes focused on connecting and keeping abundance
- Staff on Demand: Relies on a pool of prequalified workers hired on an as-needed basis to conduct operational elements of your core business. Responsibilities range from simple tasks to complex work and may even include mission-critical processes.
Good examples of Staff on Demand are Uber’s drivers and Kaggle’s data scientists.
- Community & Crowd: Communities are made up of a large global group of individuals (or entities) who are passionate about your MTP and are directly involved in the main functions of your organization. They are loyal to a shared goal and devoted to solving the grand challenges surrounding your organization‘s MTP. Crowd is made up of an even larger global group of individuals— including infrequent users—who have some passive interest in your MTP but are not (yet) directly connected to your organization.
An awesome example of community implementation is TED’s community, which is actually the main engine of this great global movement.
- Algorithms: To automate what people do, so the business grows without increasing staff at the same pace. Algorithms allow products and services to be fully scaled and improve quality by finding better solutions to problems—through decision support systems. Also, algorithms provide organizations with new capabilities that not even humans would be able to provide, so it’s not only about automation but also about doing new things that weren’t possible before.
There are plenty of examples of algorithms everywhere, our life is mainly run by algorithms nowadays. One good example is Facebook’s, LinkedIn or even Twitter’s algorithm that decides what’s the content we will read next (selecting amount thousands of possibilities every time that shows something on screen).
- Leveraged Assets: Similar to Staff on Demand, the Leveraged Assets attribute gives you on-demand access to resources, replacing the need for ownership. This also allows the organization to become much more dynamic, flexible and grow as much as needed really quickly.
The best example of leveraged assets may be Airbnb, which is already the biggest hotel chain in the world and owns no hotels, nor rooms.
- Engagement: The use of techniques such as reputation systems, gamification, loyalty programs and incentive prizes to keep these groups interested, involved and increasingly committed to your shared purpose.
There are plenty of examples on how to engage users, partners and community in general. One of them is Duolingo, a language learning platform that implements a great system of points and badges to engage users during their learning experience.
IDEAS, a group of five attributes focused on managing abundance to grow
- Interfaces: The main idea is to make the complex simple, and it can be either what your users interact with or what other systems interact with. For users, the user interface (UI) is the visual part of the software application that they see and the user experience (UX) is the way they interact with the system. For systems, application programing interfaces (APIs) are the code-based connections your systems will have with external (or internal) systems in order to gather and exchange data and functionality.
Examples of great interfaces and user experience are Airbnb, which is able to manage millions of places to stay in a super simple user interface.
- Dashboards: It provides the real-time information you need to run your business. ExOs use dashboard with non-traditional metrics, such as innovation accounting and indicators focused on tracking the process towards the purpose. Actually, it’s not about how to show the data (this is not new) but about what’s the type of data that should be shown.
An example of great type of data to include into a dashboard is Innovation Accounting systems, which provide us with information about the progress we are doing towards the innovation process and whether we are learning or not.
- Experimentation: The activity of validating assumptions before making significant investments into the organization or new ideas. Each experiment creates a set of learnings that can be used to improve products or services.
Great techniques to implement here are to learn startup or customer development, which will allow us to find out what’s the right value proposition and business model that fits the market.
- Autonomy: The use of self-organized, multi-disciplinary teams that operate with decentralized authority. Autonomy can be also applied to staff on demand or even users, providing them with the freedom to operate more independently, thereby offering the organization greater potential for exponential growth.
One of the best ways to generate autonomy is by implementing an OKR system where teams can define their own way to achieve its goals, while we can also implement a dashboard showing the OKR system that provides real-time information and transparency across the organization.
- Social Technologies: It is about improving internal operations by encouraging social interaction via technology—which includes communications, collaboration and workflow—and exploring how to do this well.
There are plenty of tools that allow us to increase the internal communication inside the company, one of them is Slack. Also, it’s important to implement customized ways to allow users, providers, and our community in general, to talk among themselves. A great example of this is Airbnb, which allows travelers and owners to talk between them even before renting the place.
Wow! That was a lot… I’m sure you are now asking yourself which the right ExO Attributes are to implement and how to do it. Well, a few years ago, a group of 100+ ExO practitioners around the world get together in order to co-create the ExO Canvas, which is a tool that allows innovators and entrepreneurs to easily design an ExO by applying the ExO Attributes. I highly recommend you use it to start designing proper Exponential Organizations and/or to apply the ExO Attributes to existing projects.
After analyzing the common attributes that compound Exponential Organizations, we can observe that only two of the eleven ExO Attributes (Algorithms and Interfaces) are highly technology-based, meaning that building Exponential Organizations is not only about implementing technology, but about doing things in a different way.
Actually, what really makes an organization scalable or not is implementing a truly scalable business model and we should take into account the ExO Attributes when doing it, as described in the following article: Five steps to design an exponential business model.
Now, there are no excuses for not making your business grow and adapt it to the external industry disruption. Now, you have not only one key element to do it, but eleven key elements that have been used by the fastest-growing companies during the last years. It’s time to start implementing the ExO Attributes in order to get the best version of your current business. Download the ExO Canvas and start now!
This was originally featured on the OpenExO Blog page on September 24, 2019 and written by OpenExO.
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