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  • A REPORT OF THE 2015 ASPEN INSTITUTE ROUNDTABLE ON INSTITUTIONAL INNOVATION

    The Aspen Institute Communications and Society Program

    RICHARD ADLER, RAPPORTEUR

    MAKING THE INVISIBLE VISIBLE: REDESIGNING BUSINESS PROCESSES FOR EXPONENTIAL ORGANIZATIONS

  • Communications and Society Program Charles M. Firestone Executive Director Washington, D.C.

    2016

    Making the Invisible Visible: Redesigning Business Processes for

    Exponential Organizations

    A Report of the 2015 Aspen Institute Roundtable on Institutional Innovation

    Richard Adler Rapporteur

  • To purchase additional copies of this report, please contact:

    The Aspen Institute Publications Office P.O. Box 222 2014 Carmichael Road Queenstown, Maryland 21658 Phone: (410) 820-5326 Fax: (410) 827-9174 E-mail: publications@aspeninstitute.org

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    The Aspen Institute Communications and Society Program One Dupont Circle, NW Suite 700 Washington, DC 20036 Phone: (202) 736-5818 Fax: (202) 467-0790 www.csreports.aspeninstitute.org

    Copyright © 2016 by The Aspen Institute

    This work is licensed under the Creative Commons Attribution- Noncommercial 3.0 United States License. To view a copy of this

    license, visit http://creativecommons.org/licenses/by-nc/3.0/us/ or send a letter to Creative Commons, 171 Second Street,

    Suite 300, San Francisco, California, 94105, USA.

    The Aspen Institute One Dupont Circle, NW

    Suite 700 Washington, DC 20036

    Published in the United States of America in 2016 by The Aspen Institute

    All rights reserved

    Printed in the United States of America

    ISBN: 0-89843-644-3

    16/005

    Charles M. Firestone

    Executive Director

    Patricia K. Kelly

    Managing Director

  • Contents

    Foreword, Charles M. Firestone ...............................................................v

    Making the invisible visible: redesigning business Processes For exPonential organizations, Richard Adler

    A Blessing of Unicorns ................................................................................ 1

    Making the Invisible Visible........................................................................ 5

    Performance By and Within 21st Century Organizations: Accelerating Innovation ........................................................................... 6

    From Artificial Intelligence to Intelligence Augmentation ....................... 8

    Change and Resistance to Change: Lessons Learned .............................. 15

    Learning and Performance: Learning by Doing ...................................... 19

    Business Practice Redesign to Foster Learning ........................................ 27

    Making Change Happen ........................................................................... 31

    The Power of Modularization .................................................................. 35

    Leading the New Organization ................................................................. 41

    Conclusion ................................................................................................. 44

    Endnotes ................................................................................................... 45

    aPPendix

    Characteristics of an Exponential Organization (ExO) .......................... 51

    Roundtable Participants ............................................................................ 55

    About the Author ...................................................................................... 57

    The Aspen Institute Communications and Society Program ................. 59

    Previous Publications from the Aspen Institute Roundtable on Institutional Innovation ............................................... 61

  • This report is written from the perspective of an informed observer at the

    Aspen Institute Roundtable on Institutional Innovation.

    Unless attributed to a particular person, none of the comments or ideas contained

    in this report should be taken as embodying the views or carrying the endorsement

    of any specific participant at the event.

  • Foreword

    The annual Aspen Institute Roundtable on Institutional Innovation convenes leaders from diverse organizational perspectives to address and reframe approaches to institutional performance through innova- tion. The summer 2015 topic, “Making the Invisible Visible: Redesigning Business Practices for Exponential Operations,” challenged leaders to examine new ways of thinking about business practice redesign with the aim of becoming more adaptive and increasing organizational per- formance.

    The impetus for rethinking business practices comes from the impact of digital technologies on the way businesses operate. In previous years successful companies secured their growth by achieving economies of scale and maximizing size and efficiencies. Today’s leading organiza- tions utilize digital technologies to leverage assets, respond nimbly to challenges, and most critically, scale learning to accelerate innovation. As a result, these businesses are growing exponentially. Organizations that do not embrace this shift will inevitably fall behind.

    So how does a traditional business adjust its strategic thinking and operations in order to innovate and grow? What are the challenges it faces? This report, written by Richard Adler, delves into strategies of modularization, rapid iteration and utilizing transparent metrics, among other strategies. It features strategic anecdotes from major com- panies like Target and Kaiser Permanente, and gives insights into how corporate leaders are thinking about exponential business operations.

    These changes are far reaching, impacting nearly all industries. In the coming months, this Roundtable series will continue to explore exponential business models and investigate how the concepts can apply in governmental settings. We expect to release a supplemental report to this volume in late 2016.

    Acknowledgments I would like to thank the Deloitte Center for the Edge for being our

    senior sponsor for the Roundtable and in particular, John Hagel and John Seely Brown for their leadership, suggestions and assistance. In

    v

  • vi Making the invisible visible

    addition, we thank Richard Adler for weaving the Roundtable’s dia- logue, background readings and his own independent research into a concise and coherent report.

    Finally, I thank Sarah Eppehimer, Project Director, who managed the Roundtable throughout, and Tricia Kelly, Managing Director of the Communications and Society Program, for her review and help in producing this report.

    Charles M. Firestone Executive Director

    Communications and Society Program The Aspen Institute

    Washington, D.C. March 2016

  • Making the invisible visible: redesigning business Processes For exPonential organizations

    Richard Adler

  • 1

    Making the Invisible Visible: Redesigning Business Processes for Exponential Organizations

    A Report of the 2015 Aspen Institute Roundtable on Institutional Innovation

    Richard Adler

    “The real difficulty in changing any enterprise lies not in developing new ideas, but in escaping from the old ones.”

    – John Maynard Keynes

    A Blessing of Unicorns A striking recent development in the world of business has been the

    appearance of a growing number of unicorns. The term was first used in 2013 by Aileen Lee, founder of Cowboy Ventures, an early-stage venture fund, to describe start-up companies that reach a valuation of at least $1 billion from private investors before going public.1 At the time that Lee started talking about the phenomenon, she had identified 39 companies founded since 2003 that had met the criterion, with one company, Facebook, with a valuation in excess of $100 billion, qualify- ing as a “super-unicorn.”

    Two years later, a study conducted for The New York Times found at least 131 unicorns, with 50 more start-ups that seemed to be on a trajec- tory to reach a pre-IPO valuation of $1 billion.2 Although the majority of these promising newcomers were based in Silicon Valley, as might be expected, the rest were located across the country as well as outside the U.S. in places like China, India, the UK, Germany and South Africa. Virtually all of the emerging unicorns were based on digital and/or online technologies, but they covered many different industry sectors ranging from consumer products and financial services to healthcare and business services.

  • 2 Making the invisible visible

    Any consideration of the phenomenon of unicorns calls for a couple of caveats: first, the lofty valuations placed on start-ups may be more indicative of the optimism of investors than the reality of the market- place (as the dotcom crash of the early 2000s amply demonstrated). And, second, it is always good to remember that past performance does not guarantee future success. As one Venture Capitalist quoted by The New York Times noted, some promising early stars are likely to turn into “zombie unicorns” that fail to live up to lofty expectations and see their valuations fall as they struggle to survive. No matter how prom- ising, every start-up runs the risk of burning through the funds it has raised before reaching profitability.

    Still,