Exponential Attributes: Experimentation

Experimentation is the third Internal Attribute in the IDEAS acronym. In Chapter 4 of Exponential Organizations you can read more about this and I suggest taking a look at the open source tool developed by the ExO Ecosystem. Also take a look at Exponential Transformation where you can learn about implementing Exponential Attributes in your current organisation.

Building a culture of experimentation is something that all companies should be striving towards. We have all heard the credo fail fast, fail forward. Silicon Valley was built on good failure and many business leaders have indicated that the ability to experiment and learn from failure is vital to their success. As John Seely Brown indicated in a commencement speech given at Singapore Management University, corporate architecture is setup to withstand risk and change and to scale efficiently and predictably, meaning that they create rather static environments. This is a very dangerous environment as it is prone to disruption from smaller more agile organisations that are using experimentation through the Lean approach together with Design Thinking.

I have taken the Lean Startup and Design Thinking approaches and combined them to create a model for experimentation to be built into an organisation culture. The Lean Startup Principles are:

  1. Entrepreneurs are Everywhere
  2. Entrepreneurship is Management
  3. Validated Learning
  4. Innovation Accounting
  5. Build-measure-learn Process

The Design Thinking Principles are:

  1. Human Centered
  2. Mindful of Process
  3. Culture of Prototyping
  4. Bias Toward Action
  5. Show Don’t Tell
  6. Radical Collaboration

So if you want to build a culture of experimentation in your organisation you need to understand these principles and implement them, the diagram below has taken the two frameworks and combined them into one. (The Lean Framework is here and the Design Thinking framework here)

DESIGN THINKING + LEAN

Exponential Transformation outlines six steps to implement experimentation:

  1. Educate your team and align incentives
  2. Define your hypothesis and value proposition
  3. Build and execute experiments to evaluate your hypothesis
  4. Gather and analyse data from the results of the experiments
  5. Learn from the data
  6. Iterate your Approach

These six steps are essentially outlined in the above diagram. It is vital that the approach is data driven and scientific in nature rather than through intuition. It is time to start experimenting. If you start with ensuring that people understand the experimental culture and start with small things you will be able to get on the road to building a culture where experimentation is acceptable and therefore you can become the disruptor rather than being disrupted.

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?