Challenges to Transformation

Apply­ing the ExO frame­work to an exist­ing orga­ni­za­tion will lead to trans­for­ma­tion but it will also bring you face-to-face with a num­ber of challenges.

FINDING THE RIGHT BUSINESS MODEL

Tra­di­tion­al busi­ness mod­els are based on scarci­ty: val­ue is derived from sell­ing a prod­uct or ser­vice that is in lim­it­ed sup­ply. How­ev­er, expo­nen­tial tech­nolo­giesare gen­er­at­ing an abun­dance of everything—from infor­ma­tion to energy—so
the main chal­lenge that all indus­tries face is find­ing new busi­ness mod­els that work for abundance.

THE CORPORATE IMMUNE SYSTEM WILL ALWAYS ATTACK INNOVATION

You may already be famil­iar with the busi­ness mod­el that your orga­ni­za­tion should imple­ment in order to con­nect with abun­dance. That’s great, but pick­ing the right busi­ness mod­el is
the easy part. The chal­lenge you will inevitably face is that any time a large orga­ni­za­tion attempts to innovate
or trans­form itself, the cor­po­rate immune system—certain employ­ees and process­es hard-wired to pre­vent orga­ni­za­tion­al transformation—will always attack.

The cor­po­rate immune sys­tem does its job for a good rea­son: estab­lished orga­ni­za­tions usu­al­ly have a work­ing busi­ness, which is impor­tant to main­tain. The goal here isn’t to kill the immune sys­tem; instead, it is to man­age it.

TRANSFORMING PEOPLE

Trans­form­ing an orga­ni­za­tion is not only about the orga­ni­za­tion itself, but also about updat­ing the mind­set and knowl­edge base of the peo­ple who work for it. This issue is strong­ly linked to the chal­lenge posed by the cor­po­rate immune sys­tem. In order to tack­le the lat­ter, you must first address the for­mer: trans­form your organization’s anti­bod­ies (its white cells) into orga­ni­za­tion­al champions—red blood cells ded­i­cat­ed to dri­ving innovation.

EXISTING EFFICIENCY-ORIENTED CULTURE, MANAGEMENT AND PROCESSES

Estab­lished orga­ni­za­tions are focused on effi­cien­cy; their pur­pose is to max­i­mize prof­its. Such man­age­ment prac­tices and process­es don’t work, how­ev­er, when the goal is dis­rup­tive innovation.

YOU DON’T LEARN HOW TO PLAY BASKETBALL FROM A BOOK

The fol­low­ing books out­line some of the search-ori­ent­ed method­olo­gies pre­vi­ous­ly men­tioned: The Lean Start­up, by Eric Ries; Four Steps to the Epiphany, by Steve Blank; and Expo­nen­tial Orga­ni­za­tions, by Sal­im Ismail, Michael Mal­one and Yuri van Geest.
Nonethe­less, in the same way that nobody real­ly learns how to play bas­ket­ball from a book, your team won’t under­stand how to imple­ment these method­olo­gies sim­ply by read­ing about them. It’s cru­cial that your team mem­bers own and run the trans­for­ma­tion process them­selves, which means they’ll need to adopt
a hands-on approach to tru­ly learn how it works.

THE SMARTEST PEOPLE DON’T WORK FOR YOU

Regard­less of your organization’s size, there will be always more peo­ple out­side your orga­ni­za­tion than with­in. This fact has two impor­tant impli­ca­tions: First, you won’t always have access to the most knowl­edge­able per­son for any spe­cif­ic issue. Sec­ond, your cus­tomers, who have the answers to key ques­tions about whether your inno­va­tion will suc­ceed or fail, aren’t nec­es­sar­i­ly avail­able either.

LACK OF SPEED (AND ENGAGEMENT)

The pri­ma­ry focus of an orga­ni­za­tion is to run its exist­ing busi­ness, not to trans­form itself. As a result, inno­v­a­tive activ­i­ties are always sec­ond-tier pri­or­i­ties. This slows the progress of dis­rup­tion and transformation.

At the same time, run­ning one-day work­shops or small pro­grams is not effec­tive either. While such short-for­mat pro­grams are a great way to get peo­ple excit­ed and open their minds, they don’t change behavior.

EXPONENTIAL THEORY Reimagine the Future Through the Power of Thinking Big

By Aaron D. Bare + N. Forbes Shannon

With the rise of digital technology, business moves at unprecedented speeds, now an exponential pace. This pace is wreaking havoc on the business landscape as we know it. Disruption has brought "too big to fail" companies to their knees in a matter of months. It has made some industries obsolete.

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