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11 characteristics of Exponential Organizations

What do Amazon, Uber, Airbnb, Spotify and Netflix have in common? They are all considered "Exponential Organizations". These companies grow at an above-average rate – up to ten times faster than comparable companies in the industry – but can make do with considerably fewer resources thanks to new forms of organization and the use of new, especially digital, technologies.

What makes these companies, which all have very different business models, stand out from the competition? Salim Ismail, who first coined the term Exponential Organizations (ExOs), has identified 11 attributes that characterize the paradigmatic ExO: the Massive Transformative Purpose (MTP), five internal attributes, and five external attributes. And with a little bit of poetic license, Ismail has come up with a memorable acronym for the 10 remaining characteristics of Exponential Organizations: IDEAS SCALE.

See the info grafic below to discover these 11 factors.


pic_11 Characeteristics_11




Interfaces
Interfaces - Interfaces are algorithms and automated workflows that route the SCALE outputs as efficiently as possible to the right people within the organization.




Dashboards
Dashboards - To track and monitor performance, all members of an organization can access real-time metrics via a dashboard.


Experimentation
Experimentation - ExOs use methods facilitating rapid experimentation and process improvement through fast feedback loops.

Autonomy
Autonomy - ExOs have flat hierarchies to promote agility and accelerate learning and reaction times.
Social Technologies
Social Technologies - Social technologies drive real-time, zero-latency conversations across the organization.



























pic_11 Characeteristics_12


Staff on Demand
Staff on Demand - To act quickly and flexibly in a fast-changing world, ExOs leverage external contractors. Outsourcing as many tasks as possible rather than maintaining a large full-time workforce allows companies to fill expertise gaps and ensure a constant flow of fresh ideas.
Community & Crowd
Community & Crowd - ExOs build and join communities, and they crowdsource or crowdfund ideas to achieve rapid growth.
Algorithms
Algorithms - Companies such as Google, Airbnb and DHL are based on algorithms, which allow for dynamic pricing, credit card fraud detection, traffic optimization and much more. ExOs use machine-learning technologies to refine these algorithms.
Leveraged Assets
Leveraged Assets - Renting, sharing and leveraging assets such as office facilities, machinery, copiers and even office plants has long been standard. Now, companies are increasingly outsourcing mission-critical assets. Apple, for example, uses its manufacturing partner Foxconn’s factories for key product lines. Not owning assets increases agility and allows quick scaling.
Engagement
Engagement - User engagement techniques such as gamification and incentive prizes help ExOs to engage markets quickly.


































MTP

The Massive Transformative Purpose (MTP) marks the “why” behind the organization. The MTP goes beyond a mission statement because it is on a far larger, more aspirational scale and this means it can revolutionize an industry and even a society.

For example, South-Africa-born engineer and visionary Elon Musk has founded a series of startups with audacious, potentially world-changing MTPs – including:

  • Tesla, whose “mission [it] is to accelerate the world’s transition to sustainable energy.”
  • SpaceX, which “was founded […] to revolutionize space technology, with the ultimate goal of enabling people to live on other planets.”
  • The open-source Hyperloop concept which “is revolutionizing terrestrial transportation.”




Photo credit: Shutterstock/Andrii Symonenko, Mascha Tace, Gaidamashchuk, RedlineVector, Max Griboedov, CharacterFamily, Evgenii Bobrov, cifotart, venimo