Exponential Organizations: Why new organizations are ten times better, faster, and cheaper than yours (and what to do about it) | Salim Ismail, Michael Malone, Yuri van Geest | 2014 | 314 pages
In the past five or six years, the world has seen “the birth of a new breed of company—the Exponential Organization—that has revolutionized how a company can accelerate its growth by using technology.” ExOs are companies which are either born or recast to heavily leverage assets like community, big data, algorithms, and new technology, and experience near-exponential rates of growth as a result. Think Uber, Haier, Apple, Alibaba; in fact, check out the top 100 ExOs according to the authors here. From the book: “[a]n ExO can eliminate the incremental, linear way traditional companies get bigger, leveraging into achieving performance benchmarks ten times better than its peers.”
Ismail, Malone and van Geest throughout this fascinating look the new face of business structure and growth work to not only offer examples of fantastically successful business births and transformations, but offer a bit of a how-to guide to evaluate one’s own company for ExO values and a series of activation strategies to begin the process of starting or recasting a company in the ExO framework.
Transformational technology breakthroughs [and valuations] are shattering the command-control corporate model that dominated the 20th Century and replacing it with companies comprised of decentralized hives of teams leveraging technology on a scale and in ways the world has not only never seen before; in ways we’ve never imagined. Though it’s not mentioned in the book, take grapheme, which at one-atom thick is simultaneously the thinnest material in the world and 200 times stronger than steel. The material promises to be transformational to any physical goods industry- think cars, airplanes, cell phones. This stuff exists right now. The company which eventually leverages this technology into successful commerce has yet to be born. But it might be the first trillion dollar company shortly after it is.
In 2014, Facebook bought WhatsApp, a messaging service with about a million users and less than 30 staff, for $22 billion. Apple’s stock price has risen 2700% since 2000. AirBNB wasn’t really a thing four years ago and now has more than 15 million annual guest stays. ExOs are rewriting the definition of success in global business.
Sure, Organizations very well could be just another faddish business book, but what Ismail, et al have to say seems to speak to newly emerging economic fundamentals that I think we all at least sense, even if we don’t quite comprehend what they mean. If you’re going to read a business book this year, read this one.