Future Shock: The scary rise of the exponential organisation

Salim Ismail says we ignore the likes of Uber and Airbnb at our peril.

Business speakers are often stimulating, sometimes boring. Often entertaining, sometimes worthy.

Rarely is a speaker overwhelming. But listening to Silicon Valley strategist and entrepreneur Salim Ismail is just that – overwhelming.

Ismail is an Indian-born Canadian, a successful entrepreneur and angel investor, and a former head of Brickhouse, Yahoo's internal new products incubator. He spent 10 years working in Europe restructuring large organisations, and is now the founding executive director of Singularity University, an organization with the modest ambition “to educate, inspire and empower leaders to apply exponential technologies to address humanity’s grand challenges”.

Ismail spends a lot of time these days on the speaker circuit, promoting his message around “exponential” organisations and technologies – ones growing not in a linear fashion (for example, 10% a year), but exponentially (doubling each year).

I left his talk this week with an overactive right amygdala – the fear-inducing part of your brain which sends you running when you hear a lion in the bushes.

Ismail’s vision of a future dominated by exponential organisations is awe-inspiring, overwhelming – and scary.

Think constantly competing against Uber or Airbnb, with their almost unimaginable growth trajectories.

Or think being an oil producer up against the plummeting cost and availability of solar energy, which Ismail predicts could deliver 100% of our energy needs by 2038 – and not too long after that render electricity almost free.

Ismail believes our political, education and health systems – and many of our companies – are woefully incapable of adapting to this new exponential world.

On the other hand, he is an inveterate optimist.

“Technology is an amazing driver of progress, so the positive implications are huge,” he says. These include the possibility that we will move from a world of “haves” and “have nots” to a world of “haves” and “superhaves”.

And a future where we won’t need to spend much time at all working. Or killing each other on the roads.

The sensors on Google’s driverless car cost $300,000 a car six years ago, Ismail says. They cost $75,000 two years later and $1,000 today.

And the car has driven a million miles and just had its first accident.

“My four-year-old son will never get his driver’s licence,” he says.

Ismail identifies 10 qualities that exponential organisations possess, but reckons the most exponential companies only have eight or nine of them, and a company might get away with just four.

The other good news is most organisations either can’t or don’t need to throw their whole structure away – but do need to start innovating around the edges. He recommends companies set up a “black ops” team of their most unmanageable employees and send them off to do disruptive stuff. It’s a model Apple has used successfully.

He also says there’s never been a better time to be an entrepreneur, particularly an entrepreneur on the edge of the world.

“In the past few centuries it was a huge advantage to be a big country. Now it’s a huge advantage being a small country, because it comes down to the mindset.

“Are you ready?”

My advice is listen to Salim Ismail yourself. Unsurprisingly there are plenty (though perhaps not exponential numbers) of places on the web where his talks are recorded, including Radio New Zealand, where he spoke to Kathryn Ryan this week.

Or this talk last year:

Just bring a damp cloth for your amygdala.

Salim Ismail is author of Exponential Organizations: Why new organizations are ten times better, faster, and cheaper than yours (and what to do about it).