Blog

Technology is here for everyone to use as much as they want—moderation and necessity are up to each person. But the reality is that, unless you still live in prehistory and have no idea how you got here, technological advances are an indelible part of the lives of people and companies.

And that is exactly what enables changes across many sectors of the economy, making new products and services launch every day through exponential organizations.

But what are exponential organizations, really?

This concept emerged at Singularity University in 2009 and was popularized in the book of the same name by Salim Ismail. It refers to organizations whose impact or results are disproportionately large—at least ten times greater—when compared to traditional-model companies, due to the use of innovation in favor of the business.

In exponential organizations, innovation is not optional

Traditional companies follow a linear management logic, with a fixed hierarchical structure, a regular number of employees, investment in physical assets, and a certain aversion to change—avoiding, as a result, any kind of risk.

By observing this classic model of business management, specialists like Ismail identified a problem: the inability to keep up with the rapid changes in society in the technological era. Based on that, exponential organizations began to see an opportunity for growth.

It’s important to understand that the market has changed and that a company no longer needs to increase its workforce to produce more.

Whether we like it or not, technology has changed consumer behavior and, therefore, organizations need to adapt to this new reality.

Repetitive tasks within companies began to be widely automated, and processes that used to be manual now constantly evolve through the use of technology.

Exponential organizations are disruptive—that is, they break with the old business model—and they free themselves from the barrier of excessive workforce by prioritizing more flexible processes. Another characteristic is being able to grow without a large initial investment.

This happens because they rely on existing assets to deliver value. Want an example? The way we use taxi services has changed.

In the past, what we had were companies with a call center where the customer called to request a ride. The call center forwarded the request to the car that was closest to the passenger, with no control over timing. Delays happened and the passenger kept calling the company to find out where the car was or when they would be picked up.

Today we can say that, thankfully, that discomfort is in the past. Exponential organizations brought ride-hailing apps, with easy, cheap, and highly controllable usage for the passenger.

On the other side, anyone who has a car, within the standards required by the company, can work as a driver—avoiding the bureaucratic process of obtaining a taxi license.

This means exponential organizations are built on fully technological foundations, which dematerialize what used to be physical and transfer those demands to the digital world, according to market demand.

When the company moves to an information environment, growth enters an exponential trajectory.

Steps to turn companies into exponential organizations

Technological development in business is a one-way road. To avoid being left behind, you and your company have two options: adapt or disappear.

Transformations are necessary for high-level competitiveness—and the answer you need is in your company’s model. Exponential organizations can keep a small group of employees, but with intensive use of advanced technologies. With that, and good planning, changes will come quickly.

If your company is linear but wants to survive in the future, here are some tips:

#1 – Choose a Massive Transformative Purpose (MTP)

Think about a problem you would like to see solved, identify what the problem really is, and create an MTP.

An MTP is not a business decision, but a deep exercise in which the entrepreneur searches for motivations aligned with what they want.

To create an MTP you should evaluate whether you have a purpose and whether it is massive and transformative. In addition, some essential questions need to be answered at this stage, such as:

• Why does the organization exist?
• What is its goal?
• Can everyone understand what the company does (from a child to older people)?

#2 – Be part of relevant MTP communities

Whatever your problem or passion is, there are always communities full of motivated people who will support you in some way.

Community collaboration is essential for exponential organizations. After all, exchanges of ideas and experiences stimulate opportunities. If the community you are part of isn’t engaging, the force of innovation can dissipate—and the consequence is no longer having a company.

#3 – Build a team

The strength of your organization is in the team you build and in the partnerships it enables. Your team should be composed carefully, since everyone must be capable of generating and executing ideas.

For your business to succeed, the founding team should share the same perception and passion for the company’s MTP.

Want to learn more about how to turn companies into exponential organizations? Get in touch with X-Apps. We want to give you the support you need so your business can scale and be part of the future—which, it seems, will be bright.