Exponentials Exponentials

Exponentials Exponentials Inspiring disruption Exponentials bring a whole new In our Technology Trends 2014 report, meaning to an organization’s we took a look at “exponentials” for the ecosystem strategy first time. In collaboration with faculty at There is significant hype surrounding Singularity University, a leading research exponentials, and we caution organizations institution—based in the heart of Silicon not to pursue each exponential as the next new Valley and whose founders include Cisco, “shiny object.” For corporate executives who Google, and others—we explored innovations are crafting three- to five-year strategic plans, that are accelerating faster than the pace such a narrow focus could overshadow the of Moore’s law, that is, technologies whose broader issue: Significant change in industry performance relative to cost (and size) doubles landscapes will likely need much more than every 12 to 18 months. The rapid growth of a technology strategy. The goal should be exponentials has significant implications. as much about developing organizational Powerful technologies—including quantum capabilities, particularly related to innovation computing, artificial intelligence (AI), robotics, intent, to navigate the pace of change as additive manufacturing, and synthetic or about understanding and determining the industrial biology—are ushering in new and implications of any individual breakthrough. disruptive competitive risks and opportunities A totally new type of “exponential for enterprises that have historically enjoyed entrepreneur” is emerging as exponentials dominant positions in their industries. In this usher in new players and alter market year’s Technology Trends report, we once again dynamics. The new breed is using discuss exponentials to build awareness and crowdsourcing, crowdfunding, and cloud share new knowledge about their trajectory solutions to scale quickly. An army of and potential impact. 145 Tech Trends 2015: The fusion of business and IT entrepreneurs enjoying diminishing barriers affecting established fields. Establishing a to entry and with an appetite for taking on culture of curiosity and learning in your significant risk pose new competition for organization helps, but it likely won’t be established organizations. At the same time, enough, considering the pace of change and they can provide new opportunities for market the complexity of emerging fields. To scope partnerships and alliances. The disruption and scan, or “sense,” and then participate in theory of Singularity University’s co-founder emerging technology and business trends, Dr. Peter Diamandis is playing out across companies should consider several concurrent industries: As technologies become digitized approaches. First, companies should leverage and thus able to dematerialize existing their existing set of partners, vendors, and products and solutions, there is potential for alliances in order to get the pulse of their them to become democratized, which could direct and closest collaborators. This can threaten the market positions and demonetize include holding joint innovation workshops the margins of existing players. Exponentials to understand the variables directly impacting are not solely the domain of research labs, a company’s organization. This can help CIOs start-ups, and incubators. Indeed, large and other strategists tap into new thinking global organizations can also harness these and their legacy partners’ roadmaps that can, forces with dramatic effect. But doing so may in turn, spur new ideas. This can also start the likely require bold and imaginative thinking, process of collaboration within traditional discipline, and a commitment to reshaping circles while identifying and launching leading business as usual. change agents. Enough attention has been paid to In addition, many organizations are innovation to debunk myths of spontaneous, establishing internal research and development breakthrough eureka moments. As Peter functions to explicitly monitor advances and Drucker famously said, “Innovation is imagine impacts to the business. Scenario work rather than genius.”1 How do large planning techniques are then being used enterprises, agencies, and organizations invoke to turn these due diligence and discovery and harness these forces? By establishing a activities into potential real-life business deliberate, measurable approach to identifying, opportunities or threats. For example, one experimenting, and investing, while also retail company has hired science fiction cultivating an environment for organic and writers to explore the future of retail.2 Other creative entrepreneurial-minded innovation. organizations have incorporated demos, Leading companies are crafting effective prototypes, and visual storyboards to bring innovation strategies that encompass four R&D-originated concepts to life—using “show” dimensions: trend sensing, ecosystems, instead of “tell” to break out of incremental experimentation, and edge scaling. thinking. Some leading companies are also forging new relationships and developing Trend sensing a broader ecosystem with non-traditional In trend sensing, organizations find stakeholders—such as start-ups, scientists, ways to stay on top of new developments in incubators, venture investor communities, technology, and to identify and understand academia, and research bodies—which can the exponential forces and sustaining advances lead to a wide range of fresh perspectives. 146 Exponentials Ecosystems on-board mini-supercomputers, analytics, New relationships indicate shifting and customer experiences have become ecosystems—the communal networks in which competitive differentiators. At the same companies partner, compete, collaborate, grow, time, crowdsourcing is disrupting the and survive. Historically, many organizations consumer automobile market, for example, have created ecosystems characterized by through services such as Uber, Zipcar, traditional relationships—for instance, and Lyft. Combined, this perspective shift partnerships with long-standing vendors, will likely need to be accompanied by the suppliers, and customers. Or they might introduction of a new set of partners working have forged alliances with complementary in collaboration with a company’s existing organizations to collaborate on sales and alliances and strategic partners—players from marketing efforts. With these partnerships relevant adjacencies such as a new breed of come well-established operating protocols entrepreneurs, start-ups, venture capitalists, that foster consistency and predictability. scientists, and engineers, that have not been For example, long-standing supplier and traditionally on an organization’s radar. manufacturer ecosystems have been prewired for efficiency, with little margin for error. Experimentation When innovation is linearly paced, these In the third dimension, experimentation, ecosystems are effective. However, as the organizations rewire planning, funding, and pace of change from disruptive technologies delivery models so they can explore new increases exponentially, traditional notions concepts and ideas. Most large enterprises of an ecosystem may need to be redefined have somewhat linear approaches to investing, and, in many cases, flipped on their head. predicated on thorough business cases built The mind-set for new ecosystems should be around concrete ROI and fixed timelines. agile and adaptable instead of prewired and For an exponential organization, a culture static. For companies that are accustomed to of critical mass experimentation should be linear change but are planning for exponential fostered and embedded into the process of change, the requirements gap may prove to learning and growing—failing fast and cheap, be significant. yet moving forward. Doblin3 has defined 10 Consider an established automotive distinct types of innovation, many oriented manufacturer with an ecosystem evolved from, around organizational structure, business and centered on, traditional manufacturing model, channel, or customer experience.4 techniques to produce consistent products Strategies include: Think beyond incremental for a fairly constant set of customers. Then impacts. Moreover, don’t constrain ideas suddenly, due to exponentials such as AI, to new products and business offerings. In robotics, and sensors, the important parts of early stages, forgo exhaustive business cases, the automobile shift from engine performance and focus instead on framing scenarios to in-car technologies such as self-driving around impact, feasibility, and risk. Consider controls and augmented reality infotainment co-investment models for emerging concepts systems. Instead of manufacturing techniques, that allow vendors and partners to more collectively shoulder the risk. 147 Tech Trends 2015: The fusion of business and IT THE EXPONENTIAL ORGANIZATION Salim Ismail, Founding executive director, Singularity University; Lead author, Exponential Organizations: Why New Organizations Are Ten Times Better, Faster, and Cheaper Than Yours (and What to Do About It) A new technology that scales quickly from one to a million users has become a common and straightforward phenomenon. Scaling an organization at exponential speed, however, is quite another matter. Organizational growth is usually linear—incremental and slow. In recent years, however, a new breed of exponential organizations (ExOs) such as Waze and WhatsApp have experienced dramatic growth trajectories and achieved multibillion-dollar valuations in just a few

Load more