Industry Magazine Commercial Kitchen Fall 2016 | Page 18

to the individuals who are watching
them. They also use that data to determine
what to put on their service. In the words
of Jenny McCabe, their Director of Global
Media Relations, they “look for those
titles that deliver the biggest viewership
relative to the licensing cost.”

Why Traditional Companies Have
Trouble Adapting
Large companies have to, by their very
nature, have systems in place to resist
change. After all, they became successful
because of the things that they have
already accomplished. Thus, when
changes or disruptions are made in these
companies, the changes are resisted.
When something or someone begins
to disrupt the way that an organization
functions, the “immune system” of that
organization will come in and try to stop
those changes from taking place.

What Makes an Exponential
Organization?
ExO’s spring out of the new wave
of entrepreneurs which are attacking
existing
industries
with
relative
impunity. They aren’t trying to figure
out why things are the way that they
are. They are trying to figure out why
things aren’t better. This leads from a
situation of scarcity to a situation of
abundance. Once something becomes
information based, the cost goes down
and the prevalent mindset becomes
one of abundance. The mindset of these
individuals is that nothing is impossible.
When speaking with Elon Musk about
issues with high-speed hyperloop bullet
train, Salim found that Elon replied that
(to paraphrase), “that’s an issue we have
to overcome”. In other words, Elon did
not consider the problem he was facing
to be impossible; he simply considered it
something that needed to be worked out.
The Internet allows us to drop the
cost of demand exponentially. The issue
now is finding a way to drop the cost of
supply exponentially. That solution is
what existing ExO’s like Uber, AirBnB,
Zappos, and many others have found.
That is why they are having the success
that they are having. Decentralization and
low overhead is the key to success in the
game of exponential growth.

FALL
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2016

So what is it that makes an EXO?
Three things: Massive Transformative
Purpose, S.C.A.L.E. and I.D.E.A.S.
The Massive Transformative Purpose
is something that is uniquely theirs. It
is highly aspirational and is not narrow
or specific to a given technology. This
is aimed at the heart and the mind and
is declared with both sincerity and
confidence. In other words, it is the driving
passion behind the company. Again, it’s not
narrow and it’s not specific. It is more like
the ethical and philosophical framework
in which the company operates.
S.C.A.L.E. stands for staff on demand,
community
&
crowd,
algorithms,
leveraging assets, and engagement.
Constantly adding information and having
the people on hand to leverage that
information is an extremely important
aspect of ExOs.
I.D.E.A.S. stand for interface processes,
dashboards, experimentation, autonomy,
and social technologies. This is where these
companies begin to really stand out. They
are constantly tweaking their systems and
optimizing all aspects of what they are
doing.
If a company is able to implement 4 out
of the 10 topics in S.C.A.L.E. and I.D.E.A.S.
then they will see their 10x improvement
and will cross into exponential growth
territory. An example of this would
be the way Valve, a popular software
company, operates. They have a very
small footprint and tap into abundance
through the use of technology. There is
no middle management, no dedicated
teams. People work on what they wish
to work on and, should a problem arise,
anyone who wishes to can fix it. This
has resulted in a massive profit for
the company over the last decade. Per
worker, they have one of the highest
profit margins in the world.

How Organizations Can Become
Exponential
The fundamental change in an ExO
model is the democratization of the
business process. So how can a large
existing company take advantage of this
and begin to change? A few things will
lead down the path to the right direction.
One is to update the leadership. It is

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