Human brains were designed for a world of lateral change. But, as Ray Kurzweil and others remind us, learning-by-trial-and-error systems introduce the potential for exponential change. This has huge implications for how we design and build organizations and systems.
Among the most profound shifts facing organizations and their leaders today is that of going from linear change to exponential change. The “exponential” organizational form is radically different than one built to capitalize on linear evolution. Such organizations leverage technology and networks to create impacts that people working in more conventional settings could never accomplish.
With linear growth, progress proceeds additively. 1+1 becomes 2. 2+1 becomes three. A journey that is to take 100 days will be 1/3 complete after 33, and so on. These mental models are deeply embedded in organizational mindsets and practices. Some of our most tried-and-true approaches to management, such as management by exception or management by objectives posit a “norm” from which deviations represent problems. Such techniques also emphasize specific targets and metrics which people ought to be meeting, making the assumption that such things are knowable in advance. And sometimes they are, as amazing advances in quality and supply chain design has shown us.
People find linear change straightforward to understand. For most of humanity’s evolution, that was all that was necessary. When the biggest challenge you face is a predator moving toward you, figuring out how to get from where you are to some other location makes a lot of sense. Similarly, when the assumption behind organizational design is that of incremental change, it makes sense to build on what we know incrementally. Industrial business models were often defined by their use of machines to create increasing returns to scale and scope, while simultaneously creating barriers to entry.
If you are building innovations with the goal of achieving exponential growth, you need to be extremely careful of imposing linear expectations of progress on them. Remember –in the early stages, exponential combinations are tiny and remain that way for some time. Progress looks slow. Results are not immediate. The danger is that projects subject to linear expectations are likely to be dropped or to lose support, even as they may have amazing potential.
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