Power of Exponential Thinking and Execution

Planet earth has been around for roughly 4 billion years and humanity just got around. but even since then earth has evolved so much but its nothing compared to how your great grandparents, grandparents, your parents, you and your kids live. It will be different in every aspect. Your grandparents lived in an age where everything used to be just about linear. You take a walk in Africa, they only have to worry about their local environment. We live in a world which is much more global and connected. we are living in an exponential era where if anything happens in china or Korea. It affects us in Mumbai within minutes, via news, stocks, media, etc anything.

If I were to demonstrate the difference between linear and exponential. It will be something like this. Thinking in linear would be going from 1, 2, 3, 4, 5, and more. How far would you end up taking linear steps? But exponential steps would be like 1, 2, 4, 8, 16, and more. How much would be take you to reach a billion? no much I suppose.

That’s the difference between our ability to project linearly and project exponentially. It’s what’s really causing disruptive stress because as humans we think linearly, but the world is changing exponentially.  So a CEO in a company like Kodak or a company in the newspaper industries or the record industry doesn’t see the exponential technology coming out of right field and can put them out of business. Meanwhile you have companies going from zero to billions of dollars of valuation in 16, 18, 24 months that are growing in exponential curves.

A study at Harvard suggests three ways to build your exponential thinking mindset.

 

1. Comfortable with uncertainty – 

The incremental mindset draws a straight line from the present to the future. A “good” incremental business plan enables you to see exactly how you will get from here to there. But exponential models are not straight. They are like a bend in the road that prevents you from seeing around the corner, except in this case the curve goes up.

Without an exponential mindset, Google would never have created such an ambitious vision as “organizing the world’s information,”Facebook would never have set out to “make the world more open and connected,” and Airbnb to “create a world where all 7 Billion people can Belong Anywhere.” Similarly, a group of innovative organizations in the public sector are out to solve global social issues by achieving “transformative scale.”

In Maine they have an expression that “You can’t get there from here.” In the launch phase, you need to realize that an exponential strategy has inherent uncertainty. You can’t know what things will look like on the other side of the curve. You can’t draw a straight line from where you are to where you are going. There’s no step-by-step plan. The exponential mindset helps you become comfortable with uncertainty and more ambitious with your vision.

 

2. Courage – 

These days, many companies are able to get through the launch phase with an exponential mindset. They manage their uncertainty, take the leap, and start the journey despite being unable to see around the bend. Fear of disruption and envy of unicorns can be a powerful motivator. But then something happens. Or more precisely, something doesn’t happen.

The nature of exponential change is that, Things happen very slowly before they happen very quickly. If this was the only world we knew, it wouldn’t be a problem. But we were raised with an incremental mindset. So we can’t help but compare the exponential path to the incremental path. And this creates a problem.

We are accustomed to measuring progress linearly and incrementally. If 30% of the time has gone by, we assume that we should be 30% of the way there. That’s how things work in the physical world when we are traveling to a destination. But exponential models don’t work that way.

What happens is that businesses run into something I call the “expectation gap,” where the exponential strategy is at greatest risk from the incremental mindset. It’s where many companies abandon the exponential model for the incremental.

I see this consistently on a micro scale in my own work. My workshops are designed with an exponential mindset to generate new ways of thinking about marketing, culture and strategy. Somewhere around a third of the way into a workshop, the leader invariably says something like “so when are we going to get something done?” The reason is that they are still operating with an incremental mindset. A third of the time has passed, but it seems like they are only 10% of the way to our destination. In fact, most of the progress happens once the curve starts to bend. Invariably by the end of the day the same people are remarking that they can’t believe how much we got done in such a short period of time.

In your exponential journey, pay attention to when people get the most impatient for results. It’s the point in the chart where there is the largest gap between incremental and exponential paths. This expectation gap is a risk to the business strategy because the impatience can be used by opponents or skeptics to convince stakeholders to jump from the exponential to the incremental. You will have the immediate relief of having line of sight once again and see steady progress. But you will also have given up the possibility of accelerating returns and the opportunity to keep up with customers and competitors. The exponential mindset helps you have the courage to persevere and the patience to see it through.

 

3. Agility – 

In the third phase, you have managed the uncertainty of the early days, the impatience of the middle phase, and now you are firmly “in the curve.” Growth is happening faster than you can handle. At this point, the incremental mindset is to try to rein things in and get things under control. But that would be a mistake. To sustain the accelerating returns, you need to shift your mindset about how to mobilize and manage resources.

The incremental mindset assumes that it takes more inputs to produce more outputs. So as growth starts to accelerate, teams start to look for more resources in proportion to the growth. But the addition of too many people or too many resources can “flood the engine” of growth. You need an exponential mindset to figure out how 1X additional input can create 10X additional output.

You also need to apply an exponential mindset to how you manage the resources you have. The incremental mindset about management is like creating a line of dominos. Everything needs to be highly coordinated with active oversight to make progress one step at a time. The exponential mindset is like this demonstration with ping pong balls in which things happen in parallel with a focus on the interactions among participants.

As I’ve written about separately, there is a way to let go without losing control. In the exponential mindset, managers replace control of people with control of principles. The use of doctrine to guide decision-making generates alignment, consistency and empowerment. But most leaders are accustomed to making decisions rather than empowering decisions. The anxiety from a loss of control can easily push companies off the exponential path back onto the incremental path. The exponential mindset helps to grow output faster than input, and empower teams to achieve both alignment and autonomy.

To summarize, digital business models require a shift from incremental to exponential. At the start, it takes vision and a leap of faith to commit to the unknown. In the early days, it takes courage and patience to build the foundation for growth even when results aren’t yet apparent. When growth kicks in, agility comes from empowering others and letting go without losing control. In all of the stages, the challenge is to “unlearn” familiar ways of thinking and embrace the unfamiliar. But with a shift from the incremental to exponential mindset comes the opportunity for real innovation.


Ref source – https://hbr.org/2016/07/how-to-create-an-exponential-mindset

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