Exponential Organizations create exponential technologies that in turn create exponential profit opportunities for us as investors!
Today, in our first ever Seraph Innovation and Technology Podcast I interviewed my friend and colleague, Kent Langley. We discussed Exponential Organizations, a concept made mainstream by Salim Ismail and Yuri Van Geest in their book of the same name: Exponential Organizations.
Kent is the Head of the Global ExO Movement. In that role he works closely with Salim to deliver support for the needs of the rapidly growing ExO community of practitioners and consultants around the world.
Kent is also core faculty at Singularity University. He teaches Data Science and Exponential Organizations, doing his part to assist SingularityU with its mission to impact and educate as many people as possible on how to use technology to positively impact the lives of billions of people.
Finally, Kent is the author of the blog The 41st Square, and the CxO of ProductionScale a company that harnesses the possibilities for the application of technology for the benefit of humanity.
You can listen to the podcast now (or keep reading and come back to it…).
What are Exponential Organizations?
The definition is quite simple, according to Salim’s website, exponentialorgs.com:
“Our environment is changing exponentially, mainly driven by exponential technologies and globalization. As a result, the world is becoming increasingly open and transparent and we are slowly moving from a world of scarcity to a world of abundance.
However, our organizations are still linear: hierarchical, centralized, closed, top down and focusing on ownership due to scarcity of people, resources, assets and platforms. They evolved one hundred years ago for an era of economies of scale and relative stability and predictability.
Now it is time to introduce the Exponential Organization leveraging openness, transparency and abundance in a new way. This is a new organizational model that is conducive to an exponential age. It closes the gap between the linear organization and its exponential environment. It is at least 10x more effective, efficient and/or faster relative to its linear peers in the same market.”
The best way to illustrate what an ExO is is to give examples…
Fortunately Salim and Yuri’s book provides many excellent ones, and for those who want to really grasp what this movement is about it’s the first place to start. In fact, I’ll go so far as to say it’s the most inspiring work I’ve read in the last couple of years (in addition to Peter Diamandis’ Bold).
ExOs are by their nature, disruptive. They typically displace other competitors or entire industries. This is natural selection at work! These organizations are the evolution of the linear structure that has given way to the non-linear, Internet-driven reality of modern times.
Kodak held the patents to digital photography but decided it was too potentially disruptive to its print photo business, so it never acted on the technology. Where is Kodak today?
AT&T was advised by McKinsey & Co. that the mobile phone business would never take off! They lost first mover advantage and we all know what came next.
Waze destroyed Navteq, which had been acquired by Nokia for over 8 billion dollars. It did it with less than a few dozen employees, owning virtually zero assets other than IP.
Netflix, Hulu, YouTube… all devastating television and network broadcasting, which relies on an old school advertising model to this day.
There are literally dozens of high-profile examples you’ve heard of, and thousands more you have not.
Contemplate this for a moment… What happens to manufacturing-based economies like China when 3D printers become cheap enough for everyone to have one? Much of what China builds and exports can be created by machines that will soon be ubiquitous.
Exponential Organizations and technologies are the foundation of all disruption…and where there is disruption there’s profit to be made.”
We’ll delve much deeper into this subject over the coming weeks and months. We’ll interview other experts and even identify ways we can invest and profit from this future.
Thanks for reading and for listening!
“People think the world is getting worse…. What’s actually happening is our information about what’s wrong in the world is getting better.” – Ray Kurzweil
Note: The remarks made in this interview are those of Kent Langley and do not reflect the views of Singularity University.