Exponential Organizations – My Lessons and Takeaways

Exponential OrganizationsThis past Friday, I presented my synopsis of Exponential Organizations: Why new organizations are ten times better, faster, and cheaper than yours (and what to do about it) by Salim Ismail with Michael S. Malone and Yuri van Geest. Peter Diamindis wrote the foreward and afterword (I presented my synopsis of Abundance by Mr. Diamindis back in July, 2012 at the First Friday Book Synopsis).

I may have written more blog posts prompted by this book than any other book I’ve read. It is a provocative book – provoking thoughts about how organizations can survive, and thrive, in this Moore’s Law era. Maybe the key word is survive. Reading this book makes me think that at no other time have organizations been threatened by a company that they have never yet heard of like they are in this time.

The simple premise of the book is that because of Moore’s Law, when the next “growth” moment hits in some technological capability, the progress is sudden, massive… 10x greater than what came before! From the book:

The sixty-year history of Moore’s Law—basically, that the price/performance of computation will double about every eighteen months—has been well documented.
What is an Exponential Organization? — An Exponential Organization (ExO) is one whose impact (or output) is disproportionally large—at least 10x larger—compared to its peers because of the use of new organizational techniques that leverage accelerating technologies.

To help make this Moore’s Law more tangible, more understandable, consider this:

  • Internet Connected Devices:

  • 2004 — five hundred million Internet-connected devices
  • 2014 — about eight billion.
  • 2020 there will be fifty billion

  • 2030 — a trillion Internet-connected devices as we literally information-enable every aspect of the world inthe Internet of Things.
  • We like to think that thirty or forty years into the Information Revolution we are well along in terms of its development. But according to this metric, we’re just 1 percent of the way down the road. Not only is most of that growth still ahead of us, all of it is. And everything is being disrupted in the process.

I begin my synopses with a section called “Why is this book worth our time?” Here are my three reasons:

#1 — Though we “know” Moore’s Law, we haven’t fully grasped what it means. This book explains that Moore’s Law is truly changing everything in business.
#2 – This book explains why the best companies and approaches of yesteryear have no chance of maintaining their dominant positions if they operate in the same ways today.
#3 – This book will “teach” you what you need to be “learning.”

There are so many insightful excerpts from this book (each of my synopses handouts contain a few pages of quotes/excerpts directly from the books). Here’s one not to miss:

Most CEOs see innovation as product innovation. But there is also process innovation, social innovation, organizational innovation, management innovation, business model innovation, etc.

The book begins with a discussion of Motorola’s “Iridium Moment.” This is the account of the $5 billion decision made by Motorola in the 1980s to invest in new technology to help build the “network” of connections. The equipment (satellite networks for more, better on-earth connections) was obsolete so very quickly, and Motorola lost the “bet,” before they could finish building the network. The “Iridium Moment” served as a metaphor throughout the book. (e.g., Nokia invested in Navtek, and Waze simply bypassed building a network of sensors by the use of their massively fast growth of “moving sensors,” available everywhere, in the individual SmartPhones of users. Thus, again, Nokia “lost the bet”).

As I have written earlier, maybe the most tangible takeaway from this book is this one: a learning organization has to actually learn new stuff – new technology (technologies) – constantly. Again, from the book:

As Eric Ries explains, “The modern rule of competition is whoever learns fastest, wins.”

(Personal note: I’m trained in Rhetoric, and Theology, and self-taught in business. So, after reading this book, I’ve been watching videos on technology issues, like What is an algorithm?” from TEDEd – Yes, I’m way behind even a good starting point in this arena).

And, here are my lessons and takeaways from this exceptional book:

#1 – Exponential Organizations will dominate (for the foreseeable future) – yesterday’s successful organizations cannot continue to succeed doing things as they did

#2 – Identify problems clearly; Identify MTPs (Massive Transformative Purposes) clearly

#3 – Moore’s Law means that (nearly) everything will be going up in capability, going down in price/cost, exponentially (not linearly)
#4 – To survive, and thrive, every organization must become a true learning organization (learning new technologies and their ever-new uses/applications); and, every person must become a genuine life-long learner
#5 – A Problem – where will the jobs be for the lesser-educated?
(consider — Halsall estimates that the sum of these disruptions could reduce the number of people working in construction by more than 25 percent within ten years).

I have read and presented a number of books dealing with issues of innovation, and the moving-changing challenges for organizations. I’m not sure we have arrived at easily transferable workable answers for “established” organizations . But here’s what I think – reading this book provides a pretty clear path to follow, and more importantly, will finally, fully get your attention about why we all have to understand, truly and fully, the new reality of this exponential-change-and-progress era!


My suggestion:  read this book!

But, to reinforce and remind you of what you read, or to get a pretty full “first look” at the book, my synopsis, with my multi-page comprehensive handout, is available on our companion web site, 15minutebusinessbooks.com.  All of my synopses on books dealing with innovation are available, as are synopses covering a wider array of business books.


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