Table of Contents
Jason Yotopoulos, while at SAP, find-out that large companies often fail to recognize that there are different types of employees and that each type is optimally suited for different roles within the company. These types include:
Optimizers: Run large businesses at scale and squeeze efficiency to maximize profits.
Scalers: Take a proven model and grow it.
Evangelists: Champion new ideas and move projects from the idea stage to initial commercialization.
Companies frequently make the mistake of taking their best performers from one area and moving them to another, expecting them to perform equally well. For example, a manager might ask an Optimizer to become an Evangelist, a role for which the employee may be completely unsuited, either inconsistently or in terms of skills.
The manager then wonders why a top performer failed so spectacularly. What is really required, however, is to tap those revolutionary Evangelists from the inside, the ones who know the corporation’s unique assets and capabilities. Such arbitrary management decision-making—dropping people into slots for which they aren’t suited—almost never works.
And in the world of Exponential Organization, it can be particularly catastrophic because successful leadership in these organizations looks profoundly different from successful leadership in enterprises founded before, say, 2008.
What is Exponential Organization
An Exponential Organization 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.
Rather than using armies of people or large physical plants, Exponential Organizations are built upon information technologies that take what was once physical in nature and dematerialize it into the digital, on-demand world.
Everywhere you look you see this digital transformation taking place: In 2012, 93 percent of U.S. transactions were already digital; physical equipment companies like Nikon are seeing their cameras rapidly being supplanted by the cameras on smartphones; map and atlas makers were replaced by Magellan GPS systems, which themselves were replaced by smartphone sensors; and libraries of books and music have been turned into phone and e-reader apps. Similarly, retail stores in China are being replaced by the rise of e-commerce tech giant Alibaba, universities are being threatened by MOOCs (Massive Open Online Courses) such as edX and Coursera, and the Tesla S is more a computer with wheels than it is a car.
“The greatest shortcoming of the human race is our inability to understand the exponential function.” – Albert A. Bartlett
Characteristics of Leaders
Rob Nail, CEO and Associate Founder of Singularity University, has examined leadership qualities in detail and determined six characteristics of Exponential Organization leaders:
- Visionary Customer Advocate: In a period of rapid transition, it is easy for organizations and their products to stray from the originally successful connection they had with their customers/clients. Having the leader of the organization as the ultimate owner of this understanding and priority assures that it is consistently represented. Steve Jobs is a good example of a Visionary Customer Advocate who had access to extraordinary capabilities and new technologies, and who personally stayed involved in decisions regarding every aspect of the customer experience. If customers see their needs and desires being attended to at the highest levels, they are much more willing to persevere through the chaos and experimentation that often comes with exponential growth.
- Data-Driven Experimentalist: To create order out of high-speed chaos requires a process-oriented approach that is ultimately nimble and scalable. The Lean Startup approach can be applied at any scale to quickly iterate and build institutional knowledge. We have many social tools and other vehicles to maintain incredible connections with our customers and community. When engaged properly, customers are not just likely to be flexible with the process, they may even be excited or demand to be part of it. However, without a data-centric approach, entailing rapid feedback and timely progression of a product or service, customers will become frustrated and, ultimately, disengage.
- Optimistic Realist: When scaling rapidly, striving to understand and quantify the reality of a situation or opportunity is critical to navigation. When staring in the face of reality, however, some interpretation is always needed. Leaders able to articulate a positive outcome through any scenario, even downside scenarios, will be able to help maintain objectivity within their teams. Rapid growth and change may well be exciting for some, but most people generally find transformation disconcerting and difficult to adapt to. An overly pessimistic leader can exacerbate the fight or flight response, ultimately leading to poor decision-making.
- Extreme Adaptability: As a business scales and its activities morph, so too must its management. For leaders to oversee long periods of accelerated growth, they must transform their focus and adapt their skills accordingly. It is rare to find a leader who can transform exponentially along with the technology and organization, so with disruption of business models comes the opportunity/requirement to adapt/change the leadership. Constant learning is critical to staying on the exponential curve.
- Radical Openness: A tremendous opportunity exists to embrace experts outside the organization. Unfortunately, along with this opportunity comes the challenge of having to interact with a large and diverse community. Ultimately, engaging the crowd introduces a lot of noise and invites potential criticism and feedback. While many leaders and organizations ignore most of the criticism and suggestions, creating an open channel to the crowd and the mechanisms to determine signal from noise can provide new perspectives and solutions, allowing access to whole new layers of innovation.
- Hyper-Confident: In order to live on the exponential curve and not get caught in the linear mindset of organizational bureaucracy, you must be willing to be fired or even fire yourself. Battles must be fought and naysayers overcome, and that requires extreme selflessness and self-confidence if a leader is to push to the edge. Two of the most important personality traits for an exponential leader to have are the courage and perseverance to learn, adapt and, ultimately, disrupt your own business.
Follow these recommendations – Keep diversity in mind when appointing to governance and advisory boards. Regularly take your senior leadership through a personal transformation program. Examine your own leadership skill sets. Remove anyone who puts his or her own career ahead of the success of the enterprise.
Content Credit to ‘Exponential Organizations: Why new organizations are ten times better, faster, and cheaper than yours (and what to do about it)’ by Salim Ismail.
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