Exponential Organizations: It refers to the fact that an organization's influence (or output) increases disproportionately (at least 10 times) compared with its peers with the help of new organizational methods using high-speed technology.
Foundation: Information technology dematerializes the original entity and transforms it into something in the most demanding digital world.
I. Past life, Exponential Organizations
Fortune 500 companies are the vane of business. The average life expectancy of 1920 is 67 years, while that of 20 15 years is only 12 years. This means that once established big companies are gradually replaced by emerging companies. The fundamental reason is that traditional linear thinking has been defeated by exponential thinking.
1, subversive information technology
Everything that is being "informatized": exponential growth has become the mainstream, and the linear model is no longer applicable;
Modern economy has established a new paradigm based on information.
2. Google's Linear Nokia VS Index
Nokia spent $8 1 100 million to acquire Navteq, but Google spent $ 1 100 million to acquire Waze. Navteq spends a lot of money to bury a large number of sensors on both sides of the street to obtain street information. Waze's strategy is to use GPS sensors on users' mobile phones to obtain traffic information. Navteq is a classic of linear thinking, and Waze is a typical representative of exponential thinking.
The most classic theory of exponential thinking is Moore's Law: every 18-24 months, the number of components that an integrated circuit can accommodate will double, and the performance will also double. In this way, every update is an exponential accumulation, similar to the power curve of mathematics.
Linear thinking creates linear organization; It is difficult for large matrix organizations to cope with high-speed or subversive changes; Exponential Organizations is the most promising organization, and it is better at using external factors based on information.
Second, Exponential Organizations's 1 1 attribute.
MTP: A lofty and eager goal-the most important attribute of Exponential Organizations.
Great changes
Purpose, the grand goal of change.
For example, Google's slogan is "Managing information around the world", Quirky's ideal is "Making inventions within reach", and Fandeng Reading Club's mission is "helping 300 million people in China develop reading habits".
It is important to have motivation when starting a business. What kind of changes do you want to bring to the world? Describe this thing in the form of MTP It is not only ambitious enough, but also has a revolutionary idea. At the same time, it is a great goal, which can help you attract some like-minded people to push this goal forward with you.
Exponential Organizations's five external attributes (scale)-conducive to the rapid expansion of the organization.
External attribute 1: staffed according to needs and hired flexible outsourcing team to replace the traditional post appointment system.
For today's companies, having regular employees is full of more and more risks. The external temporary labor force can keep updating, fill the vacancy of professional ability and reduce the cost of employing people.
To read e-books, it is necessary to convert a large number of paper books into e-books. If you recruit full-time staff to do it, the cost will be high. The solution of palm reading is to establish a working platform and hire part-time college students to do it. If the work passes the examination, the palm reading will give him money, which not only ensures the quality, but also saves the cost.
External attribute 2: community &; Crowd), a large group of enthusiastic professional skill lovers form a community.
Generally speaking, building a community around Exponential Organizations requires the following three steps:
① Use MTP to attract early members to participate: MTP is a powerful force to attract members into orbit. Tesla and Ted are among the best.
② Cultivating community: The focus of cultivation includes listening and feedback.
③ Create an equal participation and automation platform: for example, Airbnb landlords and users will fill out evaluation forms.
External attribute 3: algorithm, to obtain massive data.
The development of today's world depends largely on algorithms. Whether Uber or Airbnb, the biggest contributor to its rapid growth is algorithms. The so-called algorithm is HVVBH, that is, collecting data first; Reorganize these data; Then start to apply these data, find out the key points and summarize the trend; Finally, release these data and make it a platform to develop valuable services and new functions with open data.
External attribute 4: Leveraged assets, replacing physical assets.
Uber doesn't have its own car, but it can make cars all over the world make money for it through the platform; Airbnb doesn't have its own room, but it can let every household contribute extra rooms through the platform, which is a leveraged asset. Therefore, the most important thing in any Exponential Organizations is not physical assets, but data. Everything else can be achieved through outsourcing or leveraged assets.
External attribute 5: engagement. Take ingenious methods to involve users.
Participation will produce a large-scale network effect and positive feedback loop, thus improving the loyalty of users, or transforming the public into a community, also with the help of the propaganda power of the market.
Exponential Organizations's five internal ideas-prudent and efficient management.
Internal attribute 1: User interface
User interface refers to the process of filtering and matching the external properties of Exponential Organizations connection and management ruler. A good user interface is an important condition for organizational expansion. In our life, user interfaces such as Uber, Taobao, and public comment are very friendly and easy to operate.
Internal Attribute 2: Dashboard-a tool for measuring and managing organizations.
Dashboards that display key indicator information in real time can let everyone in the organization know the key information. This requires embedding indicators in the company's operations and tracking them in real time.
For example: OKR working method
Internal attribute 3: Experiment to realize fast iteration.
Zuckerberg believes that "the biggest risk is not taking any risks", and continuous experiments are the only feasible way to reduce risks. No matter what kind of industry or organization, many bottom-up ideas that have been properly screened are always better than top-down ideas. Ideally, Exponential Organizations should adopt a two-pronged approach, namely, bottom-up creation and top-down support.
Intrinsic Attribute 4: Autonomy
Under the condition of following MTP, employees can achieve a high degree of autonomy. This organizational style can create a culture of socialization, openness and trust, and bring a more pleasant staff team. To realize employee autonomy, we need a long-term vision, the ability of timely feedback and the display of OKR data on the dashboard every day.
Intrinsic attribute 5: social technology.
Social technology consists of seven elements: social object, activity flow, task management, file sharing, remote communication, virtual world and emotional induction. After realizing these elements, we can create transparency and connectivity and reduce the information delay of the organization, which is very important. Its ultimate goal is a zero-delay enterprise proposed by Gartner, that is, a company that does not waste any time between conception, acceptance and implementation. Achieve faster dialogue, shorter decision-making cycle, faster learning ability, more stable team, resulting in a very high return on investment.
Nine Driving Factors of the Formation of Exponential Organizations
Factor 1: Information makes everything faster and faster.
In one industry after another, the development cycle of products and services is constantly shortening. Now many products will be released in advance in the form of unfinished version and beta version, so as to collect user data as soon as possible and determine how to "complete" this product.
Factor 2: "Monetization" is unstoppable.
In the past 10 years, one of the most important and least-known achievements of the Internet was that it reduced the marginal cost of marketing and sales to almost zero.
Case: The cost of adding a car and a driver to Uber team is basically zero.
Factor 3: "Subversion" becomes the normal state of innovation.
As steve forbes said, "You either subvert yourself or wait for others to destroy you." Subversive innovation has some fixed steps:
◆ Domain (or technology) informatization
◆ The cost is reduced exponentially, and the difficulty of acquisition is also reduced due to monetization.
Amateurs get together to form an open source community.
Bring new technology combinations and mixed disciplines.
◆ Introduce new products and services with improved quality and reduced prices by several orders of magnitude.
◆ The status quo has been subverted (the field is developing towards informationization)
Factor 4: "Experts" are no longer trustworthy.
Factor 5: The "five-year plan" is outdated.
The speed of change in the future is too fast, and thinking ahead can easily lead to wrong expectations. In Exponential Organizations's world, goals are better than strategies, and execution is better than plans. MTP+ 1 year plan+constantly adjust the direction.
Factor 6: Small companies have greater advantages.
A key advantage of a small team is that it can bear much higher risks than a large team. The importance of a company's adaptability and agility will gradually exceed its scale and scale.
Factor 7: "Lease" replaces "own"
Low-cost access to technology and tools means that any individual or small team can obtain the same manufacturing capacity as an established company with deep pockets by renting equipment. The philosophy of "leasing" rather than "owning" is the main factor that constitutes Exponential Organizations's agility and flexibility, which in turn leads to success.
Factor 8: "trust" is better than "control" and "openness" is better than "closure"
Traditional organizations mostly adopt a controlled closed framework, and companies often waste a lot of resources on the long feedback loop between management and teams, so they have to supervise and intervene. In the past few years, the emergence of many new collaboration tools has enabled organizations to control a small team without the supervision and self-management of all employees.
Factor 9: Everything can be measured and known.
The sensor revolution is one of the most important but least known technological revolutions, because with it, we can know the data we want. Just as there are as many as 3,000 sensors in an airplane engine, billions of data points are recorded in each flight. Exponential Organizations is accelerating this trend from two angles: building a new business model on the basis of existing data streams, or adding new data streams to the old model.
Third, how to create Exponential Organizations.
When evaluating the investment value of a startup, investors usually consider three main risk areas:
◆ Technical Risk: Is it feasible?
Market risk: Will people buy this product?
◆ Executive Risk: Can this team operate up to standard?
1, 12 Key steps to create Exponential Organizations.
Step 1: Select an MTP. First of all, ask yourself what is the problem you want to solve most, find the problem area, and then conceive the corresponding MTP to ensure that you have strong enthusiasm and passion for the problem area to be overcome.
Step 2: Join or create a community related to MTP. No matter what industry you are engaged in, a community of people who work hard for the goal will devote themselves to the same goal.
Step 3: Form a team. In any startup company, the careful construction of the entrepreneurial team is a matter of life and death. The key to the success of Exponential Organizations's entrepreneurial team lies in everyone's enthusiasm for MTP.
Step 4: Find a breakthrough idea. You can use the community or the public to discover breakthrough ideas or new implementation models.
Step 5: Establish the blueprint of business model. Once the core idea or breakthrough idea is found, the next step is to plan in detail how to make it go to market.
Step 6: Find the business model. Look for new business models to cooperate with other Exponential Organizations with close ties in specific industries in the long-term strategy.
Step 7: Establish MVP. MVP is an application experiment, which determines whether the simplest product can enter the market and what kind of user feedback it can get (and also helps to find investors in the next round of development). Then, you can quickly update and optimize the products in the feedback loop and realize the development route.
Step 8: Verify the market and sales. Once the product has been used in the target market, it is necessary to establish a customer acquisition channel to encourage new visitors to discover your product.
Dave mccullough's AARRR is a good example:
◆ Get: Is it fast for users to find you? (Growth indicators)
◆ Activation: Is the user's first impression good? (Value indicator)
◆ Keep: Will users come back? (Value indicator)
Income: How do you make money? (Value indicator)
◆ Recommendation: Will users tell others? (Growth indicators)
Step 9: Realize scale and ideas. A good Exponential Organizations does not mean to realize the SCALE and IDEAS attributes of all 1 1 items. A good MTP plus three or four other attributes is usually enough to bring success. The key is to determine which attributes should be executed.
Step 10: Shaping culture. In a rapidly expanding organization, culture, MTP and social technology are the adhesives to maintain team cohesion in Exponential Organizations's bilateral treaties. To do this, we need to establish OKR system, and then let the team get used to the style of transparency, responsibility, execution and efficiency, and continue to deepen.
Step 1 1: Review key issues regularly. When setting up a startup, you need to think about eight key issues and review them regularly. Every question that can be answered satisfactorily will bring you closer to your goal step by step.
Who is your client?
② What is the customer problem you solved?
What is your solution? Has the present situation improved by at least 10 times?
How will you market your products or services?
⑤ How about the sales of your products or services?
⑥ How do you use virus effect and net recommendation value to turn customers into propagandists, thus reducing the marginal cost of demand?
⑦ How to expand the customer base?
How do you reduce the marginal cost of supply to zero?
Step 12: Establish and maintain the platform. Building a successful platform requires the following four steps:
① Find out the "pain point" of a consumption use case.
② Find out the core value units or social objects in any interaction between producers and consumers.
③ Design a method to promote this interaction.
④ Decide how to build a network around this interaction.
When everything is ready, that is, an ingenious MTP with corresponding attributes, the result will be amazing.
2. How do medium-sized companies achieve exponential growth?
Transforming the original enterprise into Exponential Organizations requires two conditions:
First of all, the company culture should be able to quickly adapt to rapid and often fundamental changes.
Second, shape a dreamer leader who is fully supported by the board of directors and senior management.
Lei Jun of Xiaomi is a dreamer leader with great thoughts and bold actions. He won the strong support of the board of directors. He has a large number of fans, and it is easier for the public to help him and achieve a certain goal together. Dong Mingzhu of Gree and Ren of Huawei are both representatives of dreamer leaders.
3. Four strategies for big companies to move closer to Exponential Organizations.
Strategy 1: change leadership
Ways to change the level of leadership: education, board management, diversification, skills and leadership.
Education: let the leadership begin to change their thinking and slowly accept the exponential thinking mode. In this case, you can bring in external resources and update your senior management and board of directors based on accelerated technology.
Board management: popularize knowledge for board members and make them agree with CEO's big change plan. In addition, OKR is also used to track the performance of the board of directors.
Diversification: Diversification of gender, experience and age will bring better results. Break down the barriers of the old-fashioned way of thinking and replace the conformists with individuals and teams with diverse experiences and ideas. Remember, the most important aspect of diversity is to let young people stand in the position of power and influence.
Skills and leadership: The types of employees include optimizer, developer and preacher. A big mistake that companies often make is to transfer the best performers in one field to another, hoping that they can do the same. However, only by finding missionaries who seek innovation and change from within can it be more conducive to shaping Exponential Organizations. Therefore, when appointing management and consulting teams, we should always consider diversity, regularly involve senior executives in personal change plans, and carefully examine their leadership skills.
Strategy 2: Alliance, Investment and Acquisition
Large companies can make plans to find and track these subversive Exponential Organizations, so as to achieve the purpose of observation, cooperation, investment and acquisition. Moreover, large companies must take action to lower the investment threshold and take the lead in the competition.
Strategy 3: Subversion
The organizational structure of traditional companies will suppress subversive influence, so it is possible to turn the relatively certain reformers in enterprises to the edge of the organization and let them freely create Exponential Organizations to subvert other markets. Observe their interconnection with the parent company, and then add more changes.
When Jobs was working on Apple's mobile phone, he mobilized about twenty or thirty programmers from Apple and quietly began to develop mobile phones. It was not until Apple's mobile phone came out successfully and became the mainstream product of the company that the company's computer programmers knew what they were experimenting with.
Strategy 4: Create a "simplified version" of Exponential Organizations.
For large companies, Exponential Organizations can operate independently from its original main business. If this Exponential Organizations develops very fast, it will become the main body of the company. Even if large companies have to maintain the status quo and can't transform into Exponential Organizations, it doesn't mean that they can't cultivate some exponential organizational attributes to speed up the company's operation.