How to build an exponential organization like AirBnB – PANDO. Ventures

How to build an exponential organization!

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How to build an exponential organization like AirBnB, UBER & CO.!


These are disruptive times we live in and it gives rise to exponential organisations (ExOs) like AirBnB, Uber, Instagram, Snapchat, Google, Facebook, etc. You know. Those old things. Instagram for example, took only 2.5 months to hit 1 million users! And the relaunched version of Path, a social photo sharing app took only 2 weeks to get to 1 million users. So, what is an exponential organisation you ask? Well!

The authors Ismail, Malone and Van Geest defined it as – “[an organisation] whose impact (or output) is disproportionately large – at least 10 times larger – compared to its peers because of the use of new organisational techniques that leverage accelerating technologies”. These organisations operate in the world of information technology – taking what was once physical and making them digital.

As elaborated on at-length is the book “Exponential Organisations” by the authors of the above definition, these organisations share certain characteristics. These are a Massive Transformative Purporse (MTP) and 10 other characteristics that are divided into internal and external attributes. If it sounds like a lot though, worry not as research indicates that only 4 of them is enough to turn your organisation’s output exponential.

Let us begin by discussing the MTP.

Exponential Organization PANDO. Ventures

Massive Transformative Purpose

An MTP is like a vision. It stands for the organisation’s higher “aspirational” purpose and shows the world what is stands for! It is like branding and we all know effective branding works wonders. And being aspirational, your MTP has to be bold! Like Google’s aim to organise all the world’s information.

An MTP should not describe what you do, but rather what you wish to accomplish. It gives you purpose! And ideally it should be something that could generate a movement for your employees.

There are many advantages to have a sweeping MTP, one that gets the crowd excited. The obvious PR, Marketing and business aspects aside, it also calls the talented young idealist hopefuls to you. It has been said that meaning is among the true keys to happiness. Well, your MTP will make it more meaningful for these people to come work for you. They have a goal, an ideal and a cause that you all share and so they will fight for you. Or as the co-founder of PayPal Peter Thiel said: “Why would the 20th employee join your startup without the perks [such as] co-founder title or stock {options]?”

Your MTP gives people something to stand behind, be it the end consumers, business associates, employees or any stakeholder. It is something they can hold high above their heads, and gives meaning to their association with you.


The 5 External Characteristics of an ExO

These can be boiled down to the acronym S-C-A-L-E.

Staff on Demand. This means keeping a small group of permanent staff at hand and outsourcing everything else to private contractors. It is very important for an ExO as it ensures the ability to stay mobile, flexible and agile. Like a runner, you ain’t gonna be going very fast carrying a 50 kg weight on your shoulders.

Community & Crowd. Your Community is the core staff, ex-staff, customers, vendors, partners and fans. The Crowd is everyone else outside of that circle.
Far from being just a few stakeholders, you have to take this group and turn it into a Community because that is where the magic happens. That’s when peer to peer idea sharing happens, and all of the members of that community can benefit from the shared wisdom and experience of all those involved in the project – your ExO! Remember the little green aliens in the Toy Story cartoons and their Unimind? Sharing knowledge is important and allows you to accomplish many great things in less time!
And let’s not forget the Crowd. The power of the millions that you can “pull” into your cause is no small thing. They too offer priceless knowledge that you could use! Crowds can be used for validation. Need to know if something works? Ask the crowds. Trapped in a box and can’t think your way out of a corner? Ask the crowds! 10,000 heads are better than 1! Need funding for your new project? Well that’s what crowdfunding is for! The Unreasonable Institute even used to utilise crowdfunding as an audition for their accelerator program. The possibilities are endless!
So make sure people like you. Because people help the people they like.

Algorithms. Algorithms have made leaps and bounds of progress in many different industries. Google built their fortunes on the back of their search algorithm. The point of all this is that algorithms, Big Data, and machine learning, they’re the future and it’s time to get on board. Information is currency now (as good as) and so it’s time to go digital. Collect your data, organise it, then apply machine learning tools to it like Hadoop. Finally expose it to the crowd where more new insights can be layered upon your existing data.

Leveraged Assets. Another trick to maintaining flexibility is leveraging assets. “Exponential Organisations” state that you don’t always need to own your assets. Not unless these are rare commodities like Amazon’s warehouses. Businesses have been built on the idea of leveraging assets like Uber and Sidecar that aims to utilise under-used cars. That’s also the main idea behind [online] platforms.

Engagement. To keep growing, you need to keep your community and your crowds engaged. It won’t help if they start forgetting about you. It is like a social butterfly trying to maintain her sizeable social network. You have to be visible. You have to be present and interact with people. Likewise with your ExO.
Engage with the community and the crowd using campaigns, competitions, games, etc. Not only will it help to retain your adoring fans but you will also benefit from the sharing of knowledge and perhaps talent from these activities. Competitions will encourage talented individuals or teams out there to give you their best, and games can be leveraged to allow individuals around the world to assist in a simple aspect of a complex task, greatly lessening to workload. EyeWire is a good example of that.
But at the end of the day, always bear in mind that the goal is to empower and not to exploit. That is what will make the difference between a campaign that succeeds and one that crashes and burns.


The 5 Internal Characteristics of an ExO

Now we come to the internal characteristics which are the I-D-E-A-S.

Interfaces. Now we come to controlling. As stated in “Exponential Organisations”, ‘Interfaces are filtering and matching processes by which ExOs bridge from SCALE externalities to internal IDEAS control frameworks’.
Think of it this way. The SCALE we have been talking about generates tonnes of information, connections and data right? Right. Now we need to bring all that data in, into your office so that you can control, analyse, manage and then disseminate the right output. So it’s like a funnel, bringing all that information from the big wide world into your tiny little office, and then back out again. That’s what an interface can help you do. It’s a controlling system!
You don’t need to slog over piles of paper and handle it all yourself or hire an army of people to deal with it. You can now digitise and automate certain functions! Interfaces are proprietary to the organisation that develops them and a good interface is what will make the workload and data manageable and thus allow you to scale UP! Just think of how Uber controls their army of drivers all around the world and you get an idea of how an Interface makes the exponential possible. With a good interface, your empire would hopefully not start getting too big that separatist movements start developing on the fringes.

Dashboards. You need a way for your employees to access data and information in real time. In today’s digital world, speed is of the essence. Walmart blew their competitor’s out of the water with that; something that you might want to read up on. In many ways, it is like the dashboard of a Multiplayer online game. You always have your arsenal and goals at hand around the screen, feeding you important real time information on your current quest. So too, must your teams or projects be aligned.
We don’t need to assess our goals every quarterly anymore. Besides improving results and helping with flexibility and reaction time, employees would also feel more motivated as tangible results are available all the time as a way to assess the performance of their tasks.

Experiment. Experimentation is essential these days to keep on top of things. Of course, the traditional business sense would be to avoid risks like the plague. But in these disruptive times, risks must be taken to avoid certain death from stagnation. It’s like the Kill Your Darlings approach. One-up yourself before someone else gets to one-up you. And if you don’t experiment, how are you gonna come up with that next big thing? At this point, a good book recommendation is “The Lean Startup” from Eric Ries.

Autonomy. Give your employees autonomy. You’d be surprised that the whole office doesn’t suddenly run wild and tear a hole in the wall. There’re only so many hours a day you can spend on Facebook before getting bored. As mentioned above, people need purpose and so they will work. But it makes people happy to have control of their work. An example given in the book involves Valve. Valve gives its employees complete autonomy on what projects to work with as long as it goes with the company’s MTP. And it’s been paying off. In spades.

Social Technologies. Communication is crucial. And the use of social technologies in the workplace will increase transparency and reduce latency between conception to implementation. There are tonnes of apps and programs out there to allow for open communication in offices these days. It’s not just about e-mail anymore. Slack for example, enables IM style messaging between colleagues; ideal for small groups or project teams. Dapulse enables you to digitally share and update your team members on the progress of the current project all by clicking a few buttons. The possibilities are endless!


So what do you think? Ready to take on the challenges of the digital age and head an exponential organisation? You go entrepreneur! Just subscribe to our weekly newsletter and get always updated by the latest stuff!

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