Risk & Business Magazine Knight Archer Insurance Spring 2016 | Page 16

Exponential Organizations
How Technology WILL Change Your Business
BY: SALIM ISMAIL, AUTHOR OF THE EXPONENTIAL ORGANIZATIONS

“In business, performance is key.
In performance, how you organize
can be the key to growth.”
S

alim Ismail, author of the book The Exponential Organization and one of the founders of Singularity
University, is one of the biggest proponents of the concept of an exponential organization (ExO).
He is, in fact, one of the originators of the term. He defines an ExO as an organization that performs
a minimum of ten times better than their competitors in the same space by leveraging the power of
information and improvements in technology. In following with that, these companies have been able
to use relatively few resources to cause major changes in many industries. It can be said, perhaps, that
technology is the only true driver of change in the world.
Traditional companies not only do not perform at the levels that ExOs do, but they fail to
understand the consequences of not adapting to changes in both information and technology.
As entrepreneur David Rose put it so eloquently, “any company designed for success in
the 20th century is doomed to failure in the 21st.” He isn’t kidding. Over the last
two decades, a number of leading companies have failed because of a lack of
vision or a lack of adaptation. Kodak, once the leader in photographic
technology, failed due to completely ignoring the move to digital.

The Law of Accelerating Returns
To begin determining how an ExO becomes an ExO, one should begin by looking at
the Law of Accelerating Returns, as defined by futurist, Ray Kurtzweil. He states that
the basic measure of information technology follows an exponential (and predictable)
trajectory. Obviously this flies in the face of the idea that the future cannot be
predicted. Many aspects of the business world (and whether a given business will
fail or succeed) are still unpredictable, but through the prediction of the trajectory of
information technology, a number of aspects can, in fact, be predicted.
Kurtzweil has made a name for himself as a futurist through a number of predictions
he has made regarding the advancement of technology. One of these is that a
computer would eventually be able to defeat a human in a game of chess. Another is
that we would eventually have self-driving cars (thanks, Google). The genius of the

16 SPRING 2016