Is an Exponential Organization A Problem or an Opportunity ?

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1. Introduction

2. Definition of ExO

3. Brief history of ExO

4. Why are ExOs ten times better, faster and cheaper

5. Massive Transformative Purpose (MTP)

-Five external attributes (SCALE)

-Five internal attributes (IDEAS)

6. Why ExO concerns Engineering Companies

7. Risks and opportunities

8. How to manage ExO in an engineering Company

9. Conclusion

10. Discussion

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In 2011 futurists predicted that within 10 years40% of existing Fortune 500 Companies wouldno longer survive.

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“The average lifespan of an S&P 500 companyhas decreased from 65 years in the 1920s to15 years today”

- Richard Foster - Yale University

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INFINITE COMPUTINGSENSORS

ARTIFICIAL INTELLIGENCE

NETWORKS

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ROBOTICS

SYNTHETIC BIOLOGY DIGITAL MEDICINE

DIGITAL MANUFACTURING

NANOMATERIALS

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INNOVATORS CROWDFUNDING

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Exponential technologies, capabilities and knowledge that were onceunder the domain of powerful goverments and the world’s largestcorporate giants are now tools in the hands of entrepreneurs. 8

- How can we harness all this creative power?

- How can we construct an enterprise that is as quick,adept and innovative as the people who will be part of it?

- How will we compete in this accelerated new world?

- How will we organize to scale?

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An Exponential Organization (ExO) is one whose

Impact (or output) is disproportionally large -at least 10x larger - compared to its peers because of the use of new organizational techniques that leverage exponential technologies

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In 2009 the ExO paradigm was first identifiedby experts as a weak signal

After 2 years, in 2011, it was revealed that severalnew organizations were following a specific model.

Since 2011 they have been seriously researching this ExO model at the Singularity University.

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In 2014 Salim Ismail wrote a specific book called“Exponential Organizations” and this new paradigmhas assumed a central role in the modern economy.

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“Our mission is to educate, inspire and empowerleaders to apply exponential technologies to address humanity‘s grand challenges.”

Singularity University is a benefit corporation based in San Francisco that provides educational programs, innovative partnerships and a startup accelerator to help individuals, businesses, institutions, investors, NGOs and governments understand cutting-edge technologies, and how to utilize these technologiesto positively impact billions of people.

NASA research park, CA (U.S.)

Book stores Newspapers

Local stores

Travel agencies Record stores13

“Every single job function we can identifyis being fundamentally transformed…… Even old industries such as construction arein the throes of disruption.”

- David Rose – Angel investor

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•Increased collaboration•More sophisticated design software (BIM) •3D Printing

Mike Halsall – Construction company executive

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Halsall estimates that the sum of these disruptions couldreduce the number of people working in construction byMORE than 25% within 10 years.

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IRIDIUM MOMENTAfter 10 years and $ 10 Billion investedWe are now leaders in satellite communications!

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IRIDIUM MOMENTAfter 10 years and $ 10 Billion investedWe are now leaders in satellite communications!

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IRIDIUM MOMENTAfter 10 years and $ 10 Billion investedWe are now leaders in satellite communications!

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1975If your employee came to you in 1975 and told you he’dinvented the digital camera, what would you do?If you were Kodak, the answer was to effectively shove him in acloset and hope the product never reached the mass market.Sasson showed

first digital camera device to his bosses at Kodak.

At the time, it took50 milliseconds tocapture the imagebut 23 seconds torecord it to tape.

His bosses were unimpressed. “They wereconvinced that no one would ever want tolook at their pictures on a television set.”

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But actually everybody wanted to look at their pictures on a smartphone

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Facebook boughtInstagram for

$1 BILLION

2012

In the meantime…

3 years in business13 employees

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MARKET CAP TO 1 BILLION

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Rey Kurzweil Identifies a Right Fundamental Observation:

“When you shift to an information-basedenvironment, the pace of development jumps onto an exponential growth path, and price/performance doubles every year or two.”

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Rey Kurzweil, Singularity University co-founder

LINEAR vs EXPONENTIAL

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LINEAR vs EXPONENTIAL

Disruptive stress/opportunity

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Knee

Deceptive growth

Mead’s Law

“If the amount of computer power for a given costdoubles every two years, then the cost ofcomputing power must halve over the same period”

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Economy of Abundance

Everything that bits touch is also touched by their unique economic properties—cheaper, better. faster.

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$2.7 B (2000)

DNA SEQUENCING

$100.000 (2011) $100 (2014)

1P (2020)29

$40.000 (2007)

$100 (2014)

SCALE:

400x in 7 years

3D PRINTING

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CONTOUR CRAFTING (HOUSEPRINTING)

PREDICTED A 60% COST REDUCTION 31

$100.000 (2007)

$700 (2013)

SCALE:

142x in 6 years

DRONES

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$500.000 (2008)

$22.000 (2013)

SCALE:

23x in 5 years

INDUSTRIAL ROBOTS

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$30 kWh (1984)

$0.16 kWh (2014)

SOLAR ENERGY

SCALE:

200x in 30 years

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ENGINEERING SERVICES

IN ITALY:2015-40%

- ? % 2020

2013

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DIGITIZED(INFORMATION TECH)

DEMATERIALIZE

DEMONETIZE

DEMOCRATIZE

DECEPTIVE

DISRUPTIVE

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Peter DiamandisCo-founder of Singularity universityXPrize CEO and Chairman

Now, after 20 years,ALL of these fit in your pocket…

… and come for free on your smartphone!

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Our organizational structures have evolved mainly tomanage scarcity of people, money and assets / resources

The concept of ownership works well for scarcity.

Accessing or sharing works better in an abundant,Information – based world.

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Traditional organisational structures, designed over the lasthundred years to manage physical assets or people, are rapidly becoming obsolete.

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To compete in our rapidly changing world, we need a newkind of organsation, one that is not only able to managethis change, but also thrive on it.

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Exponential Organizations have the capability to adaptto this new world of deep and ubiquitous informationand convert it into a competitive advantage.The ExO, is in fact the appropriate commercial response

to our exponential new world.

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A traditional consumer packaged goods company takes up to300 days to move a new product from inventionto retail store shelves. This is considered blistering pace.

is an ExO in the consumer packaged goods

Industry. It accomplishes this same cycle in only 29 days.

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Founded in 2008

-1.400 Employees-500.000 listings in 33.000 cities-NO physical assets

Value: $10 BILLION

This is MORE than

Hotels and resorts-45.000 Employees-550 properties 44

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ExO = MTP + SCALE + IDEAS

MTP is the highest, aspirational purposeof the organization, capturing the hearts and mindsof those both inside and (especially) outsidethe organization.

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“Ideas worth spreading”

“Organize the world’s information”

“Make inventions accessible”

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ExO = MTP + SCALE + IDEAS

Technologies

Because The confluence of breakthrough Technologies

-BIM, Cloud Computing and 3D Printing

Crowdsourcing options

- Collaborative Commons, Internet of Things, Social Media,

- Collaborative consumption and Sharing Economy

And Crowdfunding Opportunities

create a compelling scenario for a new engineeringexponential company creation.

Why does ExO concern Engineering Companies?

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In fact hundreds of companies are now producing physicalproducts the way software produces information in the form of video, audio and text. It is called 3D printing and itis the «manufacturing» model that accompanies an «Internet of Things» economy.

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The open source design conceives the production of goodsas a dynamic process in which thousands, even millions, of players learn from one another by making things together.

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While the technology is still at the Research & Development stage, it is already clear that 3D printing of buildings will reinvent the way constructions are designedand built over the coming decades.Engineers and architects need to be prepared for this new future standard.

Today if you are not disrupting yourself, someone else is;our future Outcome is to be eitherdisrupter or disrupted.

There is no middleground.

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1) OUR MTP:“Collaborative Engineering, a revolutionfor the benefit of humanity”

2) OUR community:

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1 CEO (Chief Exponential Officer)2 Project Manager3 Procurement manager4 BIM manager 5 Information Technology Manager6 Community & Social Manager7 Staff

3) Our CORE TEAM is composed of:

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4) Our Breakthrough Idea:Thrive in zero marginal cost Engineering

5) OUR Business Model:

Lean StartUP•Immediacy•Personalization•Authenticity•Findability

6) OUR MVP (minimum viable product):

TE.x aims to cut the internal cost of engineering services by about...

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7) SCALE and IDEAS

All 10 Attributes have been implemented

8) Our “OPEN SOURCE” paradigm has been established

9) ExO attributes are evolving quickly so TE.x continuallyrevises and updates the model.

10) Our open Platform is being implemented and designedin order to facilitate peer-to-peer interactions.

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AUTONOMY

The Exponential Organization is the future for anyenterprise with a strong information component,which is, of course, every enterprise.You can enter this new world now or later.But, in the end, you will enter it.

Thank you for your attention.

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The World of Collaborative Engineering is an open source community built on collaboration, sharing, respect and transparency.

Feel free to join us on www.collengworld.com

Bibliography:

-Salim Ismail, Exponential Organizations,

2014.-Jeremy Rifkin ,The zero marginal costsociety, 2015-Chris Anderson, Free: The future of a radical price, 2009.-Rita Gunther McGrath, The end ofcompetitive advantage, 2013.-Ashlee Vance, Elon Musk, 2015.-Eric Ries, The lean StartUp, 2011-Peter Thiel, Zero to One: notes on startupsor how to build the future, 2014-Patrick Lencioni, The advantage, 2012-Ben Horowitz, The hard thing about hard things, 2014-Alexander Osterwalder, Value PropositionDesign, 2015-Clayton Christensen, The innovatorsDilemma, 2011