SCALE and IDEAS - The Frameworks of the Exponential Organization

Last week I posted about framework thinking and provided a short list of a few of my favorites. Here are two more that I am convinced will become very important over the next decade: SCALE and IDEAS, the frameworks of the exponential organization.

The Problem with the Current State

The concept of the exponential organization is the coolest thing on my radar right now. Why? Because I have been actively testing how AI can accelerate learning, improve software code and help pinpoint potential improvements in product development.

I am convinced that AI is poised to disrupt every industry in a massive extinction event similar to the advent of the internet. But it will probably happen faster. Remember what Instagram did to Kodak (the inventor of the digital camera)... Wordpress to newspapers... Uber to the taxi...Amazon to the bookstore....Netflix to Blockbuster....Spotify to radio....

The wave of massive innovation is about to happen again because the tools used by the organizations I listed above are now available to the micro organization. Before jumping into the what and how of the Exponential Organization, I want to share some observations on the current state:

The Disruption

Here is the premise: Businesses built over the last decade are highly exposed to competitive disruption over the next decade. It's not really my premise, I learned this from Peter Diamandis and Salim Ismail in their book Exponential Organizations. More on this in a moment... but expanding on the idea a bit...

Businesses designed with the ideas of the last few decades have to pivot hard to compete with the businesses being designed now. My "stomping ground" is biopharmaceutical manufacturing, and I can clearly see these symptoms, but this isn't localized in just that space.... The problem is everywhere. Many carry large organizations with inefficient governance, they operate in closed networks where information is siloed and unavailable, they can be notoriously slow to change, and although they may collect data they don't always leverage that data efficiently.

And the biggest obstacle? This is what the authors refer to as the traditional organizations immune system - "...if you attempt disruptive innovation in a traditional organization, it will get attacked by the organizations internal immune system. One of two outcomes is typical. Either the disruptive idea is rejected outright, or it gets as diluted..."

The result? Operations that are starting and scaling now with the tools of today, the tools of the exponential organization, have a massive advantage.

So What is An Exponential Organization?

The Exponential Organization, or ExO as Diamandis and Ismail define it have characteristics encapsulated in the acronym SCALE and IDEAS:

SCALE

• Staff on Demand:
  They keep a lean core team but leverage freelancers and specialists on demand to scale operations rapidly.
• Community & Crowd:
  They tap into communities and crowds for ideas, funding, and growth, creating a shared sense of ownership and engagement.
• Algorithms:
  They use data and algorithms to drive decisions and automate operations, enhancing efficiency and scalability.
• Leveraged Assets:
  They favor accessing and leveraging assets rather than owning them, which reduces costs and increases flexibility.
• Engagement:
  They employ techniques like gamification to engage customers and users deeply and keep them coming back.

IDEAS

On the other side, IDEAS focus on the internal mechanisms that foster a scalable learning and experimenting environment:

• Interfaces:
  Custom-designed processes that connect scale resources with a stable core, efficiently and without bureaucracy.
• Dashboards:
  They rely on real-time data and analytics to monitor performance and make informed decisions quickly.
• Experimentation:
  They embrace a culture of testing and learning, where rapid experimentation is encouraged to innovate and iterate.
• Autonomy:
  They are characterized by a decentralized authority, which allows for faster decision-making and responsiveness to changes.
• Social Technologies:
  They use social technologies to enhance communication and collaboration both internally and externally.

Exponential Organizations leverage technology, mindset and organizational structure that seeks to stay agile, adaptable, and aligned with the rapidly changing landscape. This approach allows them to achieve exponential growth rates, disrupting traditional industries and often creating new markets in the process.

I find this fascinating. New tools, new strategies and a massive sea change. If you want a crash course on these ideas, check out the video below.