ExO Attributes

Let’s now list the major characteristics of Exponential Organizations. These are based on our original research plus the last eight years of experience.

The first stands alone: Massive Transformative Purpose (MTP). As the name suggests, MTP is the ExO’s core reason for existing. MTP is the foundation upon which all company actions take place. It establishes a long-term goal for the company so sweeping and profound that it is always within reach yet always unreachable. It sets a moral foundation for all company interactions between all stakeholders. It keeps the company disciplined and on target. It inspires employees and customers. And it galvanizes employee morale and retention.

Beyond MTP, 10 key attributes define and power ExOs. The first five characteristics are the “outward-facing” traits of an ExO and are encapsulated by the acronym SCALE.

SCALE: Outward-Facing Characteristics

1. Staff on Demand: Increasing speed and functionality by leveraging external workers according to need rather than hiring internal employees. 

2. Community and Crowd: Attracting, engaging, and leveraging communities and the crowd, whose like-mindedness adds to creativity, validation, and even funding efforts.

3. AI & Algorithms: Leveraging automated functions (machine learning, deep learning, etc.) to obtain new insights and automate operations and services.

4. Leveraged Assets: Accessing, sharing, renting, or otherwise outsourcing assets to remain nimble and reduce capital expenditures.

5. Engagement: Leveraging outside interest through gamification, digital reputation systems, incentive programs, and crypto economics to create network effects and positive feedback loops.

The next five attributes of an ExO are inward-facing. They are encapsulated by the acronym IDEAS.

IDEAS: Inward-Facing Characteristics

1. Interfaces: Different ways of interacting, processing, and automating the SCALE attributes so the organization is doing the right work at the right time. 

2. Dashboards: Making real-time information, with essential company and employee metrics based on Objectives and Key Results (OKRs), accessible to everyone internally, with short feedback loops.

3. Experimentation: Introducing lean startup methodology in all departments, with new ideas and processes, culturally enabling rapid, validated learning.

4. Autonomy: Instituting a flat structure that allows individual employees or multidisciplinary teams to operate independently and effectively.

5. Social Technologies: Leveraging peer-to-peer collaborative tools to facilitate transparent, real-time conversations across the organization.

As we mentioned in the beginning of the book, in the Note to the Reader, we have found the best visual metaphor for the ExO model is the brain and its two hemispheres. We call this the ExO Mind Map™.The five SCALE attributes represent creativity and growth, and the five IDEAS attributes deliver the control framework and drive culture.

Beyond these attributes, an ExO also exhibits certain unique characteristics. Many of these are found in other companies, but they are intrinsic to and inherent for ExOs:

• Environment: The ExO is a worthy steward of the environment and a net contributor to the planet’s health. This contribution is many times that of its more traditional competitors. In practice, this means an exponential reduction in negative impact (environmental CO2, reduction of plastic waste, use of recyclables, etc.) combined with a massive positive impact created by the company’s offerings.

• Sustainable Development Goals: This is a corollary to the MTP. A successful ExO establishes challenging but realizable sustainable development goals to guide its development on the path to its MTP target. Most MTPs will attempt to solve the Sustainable Development Goals (SDGs).

• Ethics: An ExO, from the start, develops, unanimously ratifies among all stakeholders, and adheres to a globally valid code of ethical conduct that will discipline and color all of its operations for the life of the enterprise.

• People: The ExO rates higher than its traditional competitors on all measures of employee and customer satisfaction, loyalty, and retention. It does so by creating a rewarding work environment and providing a sense of career purpose.

• Productivity: ExO employees, by leveraging the multiplier power of technology, exhibit a productivity per employee that is a 10x multiple of linear competitors. This, in turn, means total employment numbers that are a fraction of those of their competitors. 

• Near-zero marginal costs: ExOs are uniquely able, due to new technologies, innovative organizational models, social networks, crowdsourcing, and other tools, to drive the cost to as near zero as possible for the manufacture, market, and sales of each unit.

• Income: Due to the radical drop in costs and the ability to scale externally with community and leveraged assets, ExOs enjoy fast and consistent growth in both revenues and profits.

• Intangible assets: ExOs exhibit measurable improvement in social, environmental, and societal capital through continuous, rapid growth in intellectual (as opposed to physical) capital.