Book Review: Exponential Organisations

exponential-organisationsOne of my goals for this year is to average a book a week and share my thoughts on the more interesting ones. Despite my mother’s somewhat malicious suggestion to start with War and Peace I actually kicked off with The Warrior of Rome Series while travelling through Italy. I found Historical Novels a great resource if you are that way inclined.

But here is the first serious book of the year Exponential Organisations by Salim Ismail.

Summary: Lots of good ideas but steeped in an outdated value set of the role of business in society.

The key concepts were grouped into two acronyms of SCALE and IDEAS

Staff on Demand: contractors and casual workers instead of full time employees.
Community & Crowd
: building large online communities around the venture.
Algorithms
: automate everything, the server runs the business.
Leverage Assets
: don’t own things, use other people’s things.
Engagement
: make user experiences fun and addictive.

Interfaces: simple ways for people to find what they need in the system. 
Dashboards: manage large amounts of data through real time dashboards.
Experimentation: make it cheap and easy try lots of things.
Autonomy: create the space for people to choose their own adventure.
Social Technologies: help people connect with each other.

Coming from folks behind the Singularity University it had a good overview exponential growth, particularly how unintuitive it is for people to grasp. Despite being quite predictable it always seems to take us by surprise.

LakeMichigan-Final3Source: Mother Jones

I often evaluate books by the ‘how many ideas do I want to copy’ metric and Exponential Organisations had a reasonable amount of this. It was first recommended to me because of the amount of case studies and  whether it was reading about TED scaled to 12,000 events over 5 years or how Github became the backbone of the open source community there were lots of useful nuggets.

Despite that I found the overall language of the book quite toxic and embedded deeply in the business mentality of ‘if it is big and makes money it must be good’. Ugh. I think the heart of my distaste was that a lot of the strategies had the explicit intent of externalising costs from a business onto society and a lot of the case studies celebrated companies which had done that well.

For example, in the Staff on Demand section a case study was given on how Allstate (insurance) ran a competition on Kaggle with a prize of $10,000 to rewrite their claims algorithm. The winning entry had a 271 percent improvement which was estimated to save the company tens of millions annually. “Quite an interesting ROI” as the author put it.

Kaggle describe themselves as “harnessing the ‘cognitive surplus’ of the worlds best data scientists” which makes me wonder who is paying for generating that cognitive surplus if Kaggle’s customers aren’t. Whether it was Uber or Airbnb, time and time again the book highlighted companies which had grown very fast and made their shareholders very wealthy by externalising costs onto society and clipping the ticket on virtual marketplaces.

The case studies were biased towards a ‘growth is good’ mentality whether the thing growing was cancerous or beneficial. I guess that is fair enough given the topic of exponential growth but I would love to have seen more discussion on the consequences and downsides of these types of organisations.

I suspect the authors would say they are explaining a phenomenon that is morally neutral and can be used for many purposes. That this is a book on the techniques of sword fighting, not the morality of warfare. But just like sword fighting will lead in a certain direction I think a fair number techniques in this book lead to companies which steal value from society rather than create true value.

Despite that there are lots of practices which are just plain better and useful for anyone who is interested in making an impact. The book clearly describes a new breed of organisation which is pretty important to understand.

 

Book Review: Exponential Organisations

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