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 technologies
are 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.

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