Becoming an Exponential Organization in an Age of Disruption

Any company designed for success in the 20th century is doomed to failure in the 21st.

It used to take 20 years to make a billion-dollar company – Slack took 8 months.
An Exponential Organization (ExO) is one whose impact is at least 10X larger compared to its peers because of the use of new organizational techniques that leverage emerging technologies. Let's take a look at the key attributes of a 10X company and the steps to retrofit your organization for exponential growth.

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Transcript

1. Becoming an Exponential Organization How to thrive in an Age of Disruption … schoolofdisruption.com Rob van Alphen
2. “Any company designed for success in the 20th century... ...is doomed to failure in the 21st.” —Investor David Rose
3. Mega trends impacting the #FutureofWork Aging population 100-year life Millennials / Gen Z Power shifts Developed vs Developing Move to cities Digital Nomads Exponential growth of data Smarter algorithms Faster processing speeds Demographic shifts Economics Urbanization Technology breakthroughs
4. DISRUPTIVE FORCES Robotics 3D Printing Autonomous Vehicles Blockchain Artificial Intelligence Digital Biology Internet of Things Immersive Reality Nanotechnology Disruptive technologies have emerged…
5. … enabling disruption across industries HOSPITALITY > AirBnB HEALTHCARE > Digital biology FINANCE > Blockchain MANUFACTURING > 3D printing EDUCATION > Coursera RETAIL > Amazon
6. The forces driving this 1. DIGITIZATION
7. Early 90s office desk…
8. NASA Apollo vs. iPhone https://www.zmescience.com/research/technology/smartphone-power-compared-to-apollo-432 YOUR IPHONE IS 120 MILLION TIMES FASTER THAN ALL OF NASA’S COMPUTERS USED FOR THE MOON LANDING. size cost $3.5M
9. Digitizing humans
10. The forces driving this 2. DEMONETIZATION
11. Technology is becoming FASTER & CHEAPER 3D Printing Industrial robots Drones 2007: $100,000 2017: $100 1,000x price drop 2007: $500,000 2017: $20,000 25x price drop 2007: $100,000 2017: <$100 1,000x price drop LIDAR Sensors Solar Biotech (1 DNA profile) 2007: $20,000 2017: $200 100x price drop 1987: $30 per KwH 2017: $0,015 per KwH 2,000x price drop 2007: $10,000,000 2017: <$100 100,000x price drop
12. Yesterday vs. Today RECORD STORE RESEARCH/LIBRARY BOOK STORE CLASSIFIEDS LONG DISTANCE LOCAL STORES
13. The forces driving this 3. DEMOCRATIZATION
14. 0.8 billion Internet users in Asia 2010 1.3 billion 2013 ? billion 2022 2.1 billion 2018 Source: Statista.com
15. 8bn Global population Global ubiquitous connectivity. How will you engage the next +4 billion connected consumers? 7bn Connected minds 80bn Connected devices 3.9tn Enterprise AI market 0.5tn IoT sensors market
16. Impact comes from anyone, anywhere
17. Linear vs. Exponential thinking
18. Chaos/ Amazement You are here Disappointment Difficult to predict! Deception of Linear vs. Exponential growth TIME RATE OF CHANGE Linear Exponential What Execs/CFO think is happening
19. Let’s imagine… “Mom, can I get 1 cent but you double it each day for just 1 month?” Emily (6 years old) Allowance: $10/week
20. Emily – allowance $10/week “Mom, I only want $0.01/day, but doubled for 1 month.” Day 1 Day 2 Day 31 $0.01 $0.02 $0.04 Day 3 $10,737,418 Day 15 $164
21. 30 Meters 01 … 12 11 10 09 08 07 06 05 04 03 02 “Take 30 steps”
22. Deception of Linear vs. Exponential “Take 30 Exponential steps…” 26X Around the Earth! …1,073,741,824 meters
23. Example: Threat of linear thinking 0 0.2 0.4 0.6 0.8 1 1.2 2015 2020 2025 2030 2035 2040 Humans are poor at making predictions… 1,000,000 vehicles per year by 2020 Millions of vehicles In 2015, the Energy Information Alliance predicted the annual sales of EVs would be no more than 1,000 in total.
24. 40% of the S&P 500 won’t exist by 2025. Your competition isn’t just the company down the street any longer; it’s companies from anywhere in the world. Source: Innosight.com
26. New Unicorns are born every day Source: CB Insights, 2017
27. The organization’s immune system attacks innovation
28. 3% of companies have completed true digital transformation programs2 93% of Chief Strategy Officers say new technologies will rapidly change their company’s industry1 54% of companies have no program in place to build the skills of the future3 1 https://newsroom.accenture.com/news/chief-strategy-officers-say-digital-disruption-is-inevitable-but-few-are-prepared-finds-accenture-report.htm 2 https://www.sap.com/dmc/exp/4-ways-leaders-set-themselves-apart/index.html 3 https://www2.deloitte.com/global/en/pages/about-deloitte/articles/deloitte-study-report-c-suite-isnt-working-together.html Companies are NOT prepared
29. Time to think 10X An Exponential Organization (ExO) is one whose impact is at least 10X larger compared to its competition because of the use of new organizational techniques that leverage emerging technologies.
30. 2014 2018 ingredients recipe Where it all started…
31. The ExO formula MTP + SCALE + IDEAS
32. ExO Attributes MTP MASSIVE TRANSFORMATIVE PURPOSE The higher, aspirational purpose of the organization. The MTP serves as a guiding principle when key decisions need to be made.
33. Massive Transformative Purpose (MTP) "Ideas worth spreading" "Organize the world's information" "Outsmarting traffic, together"
34. S C A L E 10 ExO Attributes Staff on Demand Algorithms Leveraged Assets Engagement Community and Crowd TAP INTO ABUNDANCE External attributes which allow organizations to access global abundance.
35. Staff on Demand The smartest people don’t work for you Tapping into a global talent pool
36. Staff on Demand
37. Community & Crowd Leverage the community passionate about your MTP to scale Leverage the crowd to ideate, validate and support ideas
38. Community & Crowd
39. Algorithms Make sense of the abundance of information Human + Machine
40. Algorithms
41. Leveraged Assets Access, rent or share assets to stay nimble
42. Linear Exponential Leveraged Assets Founded in 1957 Founded in 2008 $7.8B $53-65B
43. Engagement Convert Crowd into Community Gamification
44. Engagement
45. I D E A S Interfaces Experimentation Autonomy Social Technologies Dashboards 10 ExO Attributes MANAGE ABUNDANCE Internal attributes which allow organizations to manage global abundance.
46. Interfaces Managing & filtering the outputs of the external SCALE attributes
47. Dashboards Provide the real-time information needed to run your business
48. Experimentation
49. Autonomy Self-organized, multi-disciplinary teams that operate with decentralized authority Agile – OKR - Holacracy
50. Social Technologies Allow staff to communicate and collaborate in real-time Reducing the gap between data gathering and decision making
51. S C A L E I D E A S Interfaces Experimentation Autonomy Social Technologies Dashboards RECAP - 10 ExO Attributes (You need an MTP + at least 4) Staff on Demand Algorithms Leveraged Assets Engagement Community and Crowd MTP MASSIVE TRANSFORMATIVE PURPOSE TAP INTO ABUNDANCE MANAGE ABUNDANCE
52. Adapted Organization New ExO New ExO New ExO Original Organization Edge Initiatives Core Initiatives Balancing innovation & risk Type of ExO initiatives – Core vs. Edge Adapt & improve existing business model Disruptive & scalable new business model
53. Original Organization Edge Initiatives Core Initiatives Balancing innovation & risk Reinventing organizations dealing with the immune system
54. So what now? ü Assess your Innovation Readiness ü Scan & map the environment ü Agile experimentation (2-3 pilot projects) ü Put in place employee skill development plans ü Leverage the ecosystem (no longer DIY) ExO workshop / ExO Sprint
55. WWJBD? (what would Jeff Bezos Do)
56. What is your MOONSHOT? What is the one area of your work where you should shoot for 10X growth, rather than 10%?
57. Rob van Alphen Founder rob@schoolofdisruption.com schoolofdisruption.com