Is an idea meritocracy the way to encourage experimentation in your organisation?

Firstly you may be asking yourself what is an idea meritocracy? This is an ideology and way of working that let’s the best idea win regardless of who the idea comes from. Successful companies such as Bridgewater associates and Pixar animation studios use such techniques to build a culture of radical transparency and this ensures that innovation continues to prosper.

A quick aside, I wrote this blog a few weeks ago sitting at the Amazing V&A Waterfront in Cape Town and then forgot to publish it. The picture below was taken on the day. ADVERT: Cape Town is an amazing place to start a business!

I first came across this idea from Ray Dalio’s book Principles and would highly recommend that you read this book. Bridgewater Associates which Dalio founded over 40 years ago runs on a radically transparent culture and is the number one hedge fund in the world. The stories in the book are amazing such as junior employees having the openness to tell Ray Dalio that his performance in a meeting was D- and that he was obviously unprepared. There are many organisations where this would be seen as insubordination but not at Bridgewater where honest feedback is valued and required.

This type of culture is not an easy one to follow as it is very different to what many of us know but I believe that it is a very good model to use to promote experimentation. Experimentation requires failure and honest feedback to improve. Where people are punished for failure experimentation is unlikely.

So what steps can you take to move to an idea meritocracy and a radically transparent company culture?

  1. Have an open mind
  2. Learn more about it by reading and studying other companies following this ideology
  3. Discuss this with your team
  4. Implement and know that you will make mistakes and have failures along the way. The important thing to remember is that as long as you are learning from these then you are moving forward

For more information check out this great article by Edward D. Hess that I used when writing this blog.

 

Attention African Startup Founders

Are you a Startup Founder or someone who wants to solve a problem in Africa? If this is you then I want to grab your attention. We are living in the 21st Century and therefore it is important that you take this into account when starting up your venture. Organisations in the 21st century need to use Exponential attributes to ensure success.

I have written about these attributes before and have included a diagram of the elements below for a refresher.

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This image is supplied courtesy of ExO Works

It is vital that you have an MTP as this will ensure that you are working towards a purpose that moves you and is inspiring. If you want to determine what that purpose is you can use the Ikigai to help you.

I highly recommend that you follow these steps when creating a new business:

Step 1: Create an MTP (Massive Transformative Purpose)

Here is a tool to help you do this

Step 2: Create or Join a Community

Physical/Virtual, look at what is out there on Meetup / Eventbrite or others. Remember that you need to offer value before pushing your agenda. Read Jab Jab Jab Right Hook to understand this. BTW check out DIY Drones it is a great example of a community.

Step 3: Build a Team

Most successful startups are 3-4 people in the beginning. The team needs the Visionary/Dreamer; Finance/Business; Programmer/Engineer; User Experience/Design. What is vital is that you all agree on the MTP

Step 4: Create the Breakthrough Idea

Be bold, ask the community, make a difference

Step 5: Build a Business Model Canvas

Here is a tool to help you do this

Step 6: Find a Business Model

Read Kevin Kelly’s Article better than free 8 ways to make money when the base service is free to give you some ideas

Step 7: Build an MVP

Remember that your minimum viable product is just the basics that will solve the problem

Step 8: Validate Marketing and Sales

Use Design thinking and Agile Methodology

Step 9: Implement External Attributes

These are the SCALE Attributes

Step 10: Establish the Culture

It is important to do this when you are small. You can go with an Idea Meritocracy, Holocracy, or your own hybrid but create principles about how you want to run the organisation, this ensures implementation of IDEAS and SCALE.

Step 11: Ask Key Questions Periodically

This is to check you are following the Exponential Organisational method and building what you want to.

Step 12: Build and Maintain a Platform

This will allow for the best use of all the data you collect and build and use the network effect.

I will go into more detail with regards to these steps over time, I highly recommend that you read Exponential Organizations as well as Bold. These are two books that will ignite your mind to the many possibilities and the opportunities when solving massive problems and then how to go about doing that. The framework described here is straight out of Exponential Organizations.

If you find this helpful then share it and comment.

It is time to define success

Always remember that you are an individual and that there is no one on this Earth with its 7.6 Billion people that have the same DNA makeup as you. There may be many people that are similar, with aspirations that may be the same but no two people are exactly the same. It is vital to remember that when it comes to the notion of success. You need to define what success looks like in your life. You can use others as inspiration but do not simply follow someone else’s success path because it looks as though they are living a wonderful life. A great place to start when determining what gets you out of the bed in the morning and what you need to strive towards to be successful is the Japanese Ikigai. It is a great tool that you can use to determine your purpose and therefore what you should work towards to have success.

There are 4 areas of life to look at, these are:

What you love

What you are good at

What the world needs and

What you can get paid for.

Where three areas intersect you can have a great life but there is something missing.

At the Intersection of What you love, What you are good at and What the world needs You have great fulfilment but you have no way of making money which we all need to live.

At the Intersection of What you love, What the world needs You and What you can get paid for. You have excitement although uncertainty as you are not good at what you are doing

At the intersection of What the world needs, What you can get paid for and What you are good at, you are comfortable but you do not feel fulfilled

At the intersection of What you can get paid for, What you are good at and What you love, you will feel satisfaction but purpose is missing.

The intersection of all four of these areas is your purpose.

Take time to look at these areas, try different things, fail, make changes and move towards your purpose. Something that is quite important to understand is that there may be variations of this or different areas of focus at different times in your life. Having said that I do believe it is important to have a personal MTP (Massive Transformative Purpose) and the Ikigai is a great tool to help you determine what it should be.

IKIGAI

 

Building an Exponential Organisation (ExO)

ExO Attributes

In order to build and run an exponential organisation, Salim Ismail, author of Exponential Organisations,  suggests that a company must have an MTP and at least 4 of the 11 attributes depicted in the diagram above. In order to determine whether you can consider yourself exponential they developed an exponential quotient and a test to determine your exponential quotient. You can take the test here. Once you have completed the test share your results so that we can improve the score and celebrate the road to exponential.

The one non negotiable of an Exponential Organisation is an MTP. This is a Massive Transformative Purpose. People have called this a Big Hairy Audacious Goal (BHAG) or a company Vision and Mission. It is vital to understand that what ever you call it the Purpose of the organisation must be something that is massive and transformative and all the values of the organisation and the goals must work towards achieving it. This is not a nice to have slogan on the wall. This is what the organisation must live by. Some Examples of MTP’s are:

  1. SpaceX: “Humans must become a multi-planetary species”
  2. TED: “Ideas worth spreading.”
  3. X Prize Foundation: “Bring about radical breakthroughs for the benefit of humanity.”
  4. Google: “Organize the world’s information.”

Once you have developed your MTP the next step in being exponential is to understand the internal and external Characteristics that make an organisation exponential. The internal characteristics are Interfaces, Dashboards, Experimentation, Autonomy and Social. The acronym used is IDEAS. The external attributes are Staff on demand, Community and crowd, Algorithms, Leveraged assets and Engagement. The acronym used is SCALE.  The tables below summarise these attributes.

IDEAS – The Internal Characteristics of ExO’s
Characteristic What is it? Advantages Requirements
Interfaces Provide the bridge between external activities and internal control frameworks, e.g. platforms, user interfaces, API’s •Filter external abundance into internal value

•Link external growth drivers to internal stabilizing factors

•Automation allows scalability

•Standardised processes

•Scalable externalities

•Alogorithms

Dashboards Metrics to measure, real time and meaningful •Track critical growth drivers in real time

•Objective-Key Results (OKR) as management framework

•Minimise errors by short feedback loops

•Real time metrics

•Analytical capability

•OKR’s

•Cultural acceptance by employees

Experimentation Lean startup methods of testing assumptions and consistently experimenting with controlled risks •Keeps processes aligned with rapidly changing externalities

•Maximised value capture

•Faster time to market (Minimal Viable Product)

•Risk taking provides an edge and faster learning

•Measurement and tracking of experiments

•Cultural acceptance

Autonomy New “empowered” or team based organisational forms •Increased agility

•More accountability at customer face

•Faster reactions and learning times

•Better morale

•MTP

•Self starting employees

•Dashboards

Social Technology Create horizontal interactions in vertical organised businesses •Faster Conversations

•Faster decision cycles

•Faster learning

•Stabilizes team

•MTP

•Cloud social tools

•Co-operative culture

SCALE – The External Characteristics of ExO’s
Characteristic What is it? Advantages Requirements
Staff on Demand More part time, specialised,

mission based staff

•Best skills for the job

•Agility

•Learning of core team

•Stronger bonds in core team

•Capability to hire services on demand

•Clear task specifications

Community & Crowd Harness the power of the community and crowd by engaging with them through whatever means •Increase loyalty

•Enable exponential growth

•Validate new ideas and learn

•Agility & rapid implementation

•Create new ideas

•MTP

•Engagement

•Authentic leadership

•Easy to participate for outsiders

•Peer to peer capabilities

Algorithms Use data and automate decisions or reduce human biases while making decisions •Scalability of products and services

•Leverage connected devices/ sensors

•Lower error rate & stabilize

•Easy to update

•Machine or deep learning

•Cultural acceptance

Leveraged Assets Use assets, do not own them unless they are scarce •Scalability of products and services

•Lower marginal costs of supply

•Removes having to manage assets

•Agility

•Easy available assets

•Interfaces

Engagement Engage community and crowd •Increase loyalty

•Gain ideas

•Converts crowd to community

•Leverage Marketing

•Play & Learn

•Digital feedback loop to customers

•MTP

•Clearness & fairness

How Exponential is your company and what is your MTP?

 

The 6 D’s along the Exponential Curve

Technology is advancing but it has to start at zero and move from there. The Exponential technologies that are in the mainstream right now are all many years into their development and we are only seeing them in the mainstream now because they have moved out of the deceptive phase.  The graph below depicts the 6 D’s that you find along the exponential curve. Peter Diamandis from Singularity University put together the 6 D’s as a way of showing people what to expect when it comes to Exponential technology.

exo-6-ds1.png

The six D’s are unpacked further below:

Digitized | Initial stage where digitalization of physical processes takes place. Many services have already been digitised and at the moment thanks to Blockchain technology even more is being digitized.

Deception | It takes a while to get up to speed. People often loose hope at this stage as it seems that the technology is not taking off. Virtual Reality was in this deceptive phase during the 2000’s, as was 3D printing a technology that is over 30 years old. Use of blockchain and smart contracts is in this stage right now.

Disruptive | This is when the technology starts make a real difference as the exponential doublings are significant. For the digital camera when the quality was 0.1, 0.2, 0.4, 0.8, 1.6 this was not disruptive but when it reached 3.2 megapixels this essentially killed film.

Demonetization | This occurs when money is taken out of the equation. The reduction of fees due to technology use is partial demonetization although the complete elimination of cost that digital photography brought about is a good example. With film camera’s there was a cost before photographs could be viewed.

Dematerialization | This occurs when physical assets disappear. The mobile phone is a perfect example of how many products have dematerialised. A mobile phone contains $1000’s of dollars of equipment from a GPS to a video camera, books and maps etc.

Democratization | This occurs when the technology becomes ubiquitous generally because the costs are reduced significantly and this gives many more people access. The mobile phone is an example of this with smart phones following suit and almost every person on the planet owning a mobile phone. Think about the planet when technologies such as the Internet, Renewable Energy, AI, etc reach democratization.

Here is a video of Peter Diamandis explaining this further.