The Need for Exponential Organizations

Exponential Organizations is the latest terminology designed to help enterprises reshape how we think about organizational growth and performance. By definition, exponential organizations (ExOs) are those “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.”

Championed by futurist Salim Ismail , CEO of OpenExO and the author of the book of the same name, the concept of ExOs is one that we at MBO resonate closely with, as the use of independent labor is critical to growth.

For several years, Salim and his team investigated more than 200 ExOs—private companies valued at $1 billion or more. During their research, they discovered that between 2014 and 2021, the top 10 ExO-friendly companies in the Fortune 100 enjoyed 2.6x higher revenue growth, 6.8x higher profitability, 11.7x times higher return on assets, and 40x higher total shareholders return.

Last week, we joined Ismail and co-author Peter Diamandis on a webcast that discussed how organizations can become an ExO, and several key themes emerged:

●?????Finding a “Massive Transformative Purpose (MTP),’’ which serves as the company’s guiding mission and unites its stakeholders towards the fulfillment of a common goal.

●?????Leverage freelancers, contractors, and other contingent workers to scale operations based on need and demand.

●?????Build an engaged audience and tap into collective intelligence to promote innovation and create value.

●?????Utilize machine learning and artificial intelligence (AI) to optimize business processes, buttress decision-making, and personalize customer experiences.

●?????Leverages platforms or assets to reach new markets, create new products, and generate new revenue streams.

●?????Engages with customers by creating compelling user experiences that enable an ExO to build a strong emotional connection with customers.

Many of these key tenets are achievable only by leveraging an extended workforce to access top talent and pursue the agility necessary to achieve ExO status. Why? ?

By harnessing the talents of independent workers, an enterprise can boost its overall performance, alleviate employee workload leading to increased performance in other critical tasks, and lastly, scale operations swiftly and efficiently.

Of course, organizations need to remember that to fully enjoy the benefits of engaging with independents; they need to identify their long- and short-term needs to optimize the right mix of worker types they need to scale their operations and meet growth targets. The social contract between worker and enterprise is changing, and the path to becoming an ExO through the use of independents is just one example. See Salim discuss this topic in a quick clip from last week’s webcast – MBO is even highlighted as a potential way to help solve the issues faced.

There are naturally many ways to drive business impact, and ExOs are just one helpful framework, yet another reinforcement that independent labor is critical to business strategy more so than ever before.

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Today’s Trending Topic: Return to Office Causing Revolts ?

Today, we dive deep into the return-to-office chatter. The more large organizations push for a return to the 9-5 in-office world, the more employees push back. Will companies ever find their way from the messy middle? The jury is still out. We particularly like Forrrester’s take on the issue , with analyst J.P. Gownder doing a nice job covering not just the future of the office, but actionable ways to solve what he calls the “messy middle of hybrid.”

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● Many companies are eager to bring people back to the office, but workers have differing views. According to a Deloitte survey , young employees are concerned about a return-to-office policy's potential effects.

●?????Workers at Farmers Insurance are up in arms over a return to office mandate after they were told last year that they’d be allowed to remain working from home.

●?????According to economist Tyler Cowen, there is a “serious crisis of morale” in the post-pandemic workplace. This statement shows that year-over-year productivity growth has been negative for the past 5 quarters for the first time since World War II.

●?????Martha Stewart steps into the return-to-office debate, stating that enterprises should abolish the work-from-home set-up since it limits worker productivity. The irony of a woman who made her career championing how to run a home, declaring that offices are necessary, is not lost on us.

●?????Companies like Google and Salesforce continue to enforce measures to persuade?employees to return to the office. Google is implementing strict measures by warning employees that non-compliance to the return-to-office mandate could affect their performance reviews. Meanwhile, Salesforce promises to donate to local nonprofits for each day workers come to the office. The employees of both firms are pushing back as they prefer remote work due to its positive effect on their mental health and personal lives.

Should you have any questions, we’re always here for you.

Of course, we’d love to talk virtually as well. Share your thoughts with us at MBO Partners on Twitter , Facebook , Instagram , and LinkedIn , and we’ll see you again next week!

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