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essentials | Chapter 4

The Exponential Journey

The journey to exponential growth requires minding the gaps between your new journey and the incremental “defaults” of your organization. Learn how to transform communications around four key gaps—in vision, expectations, accountability and resources—to ensure your 10x projects aren’t blocked by incremental thinking.  


Innovation curves

By nature, exponential paths start out more slowly than linear paths but outpace them later on.

This chart compares the typical curves for incremental vs. exponential innovation, with results along the left axis and time across the bottom.

You see that the exponential curve starts more slowly than the incremental one but steepens over time. Gaps between the curves can stall or derail the path of your exponential journey.

As you consider the two paths of innovation, keep in mind that you need both incremental and exponential thinking.

The goal is to become “ambidextrous” and good at both so you can use the mindset that’s appropriate to the circumstances.

Mind the gaps

Like people, organizations have a hard time thinking and operating exponentially.

Here are four places where things tend to go off track and slip back into the incremental. Don’t worry about trying to answer these questions; we’ll talk more about each gap next.

The vision gap

How can you help people see the destination (or a stop along the way) more clearly?

When you are on an exponential path, you don’t have line of sight to the goal.

It’s like sending a rocket into space. You know it’s going up, but you can’t see where it is ultimately going to go.

This poses a challenge to the incremental mindset which wants to know exactly where you are going, how you will get there, how long it will take and how much it will cost.

To overcome the vision gap, you need to help people get comfortable with moving in a compelling direction towards an undefined destination.

The expectations gap

How can you generate confidence by showing steady and predictable progress?

On an incremental journey, if you are a third of the way towards your goal, you expect to also have achieved a third of your results.

In an exponential journey, results happen slowly at first as the network effect builds. This makes people nervous, because they aren’t sure if the curve will ever bend, and they are skeptical that growth and progress are imminent.

Think back to the blocks vs. the ping-pong balls. When you’re halfway through the time it takes to build a block tower, you have half of the tower built.

At the halfway point of building a ping pong ball box, you’re still loading mouse traps. It doesn’t look like you’re making progress, because you’re still setting up the conditions for the network effect.

Exercise

Vision gaps & expectations gaps

Where are you experiencing innovation gaps in your organization?

Vision gaps:
How can you help people see the destination (or a stop along the way) more clearly?

Expectations gaps:
How can you generate confidence by showing steady and predictable progress?

The metrics gap

How can you know the network effects are building to “bend the curve”?

One reason for the expectations gap is the lack of metrics that provide guidance and accountability along the exponential journey.

Incremental metrics track progress against predefined goals. By contrast, exponential metrics measure progress towards the creation of network effects, which ultimately lead to exponential results.

You can design exponential metrics that tell you how you are doing towards creating the conditions that will generate exponential results.

One way to identify exponential metrics is to think about what the user wants and measure how well you are able to help them achieve that goal. Also consider what user behaviors are most essential for the ultimate success of the system.

Example: Amazon’s exponential metrics

Rather than focusing on traditional incremental e-commerce metrics like sales, basket size and markup, Amazon focused on exponential metrics like numbers of reviews, affiliates and members, which demonstrated success in creating conditions for the network effect Amazon was aiming for.

By watching these exponential metrics, Amazon was able to test their progress in creating the right environment for exponential growth—and demonstrate that progress to stakeholders.

Where do you feel the landscape

has changed in your business or industry?

The resource gap

How can you put resources in place now to scale quickly and affordably later?

The resource gap comes later in the journey, when the network effect starts to kick in and growth accelerates.

You can’t support exponential growth by adding resources incrementally. You can’t hire people, add servers, or develop processes fast enough. But you also can’t afford to have all this in place ahead of time.

The solution is to have the partnerships, technologies and capabilities ready to go, and to ensure that these resources are able to scale quickly.

Exercise

Metrics gaps & resource gaps

Where are you experiencing innovation gaps in your organization?

Metrics gaps:
How can you know the network effects are building to “bend the curve”?

Resource gaps:
How can you put resources in place now to scale quickly and affordably later?

Recap

By nature, exponential paths start out more slowly than linear paths but outpace them later on. 

“Mind the gaps”: Like people, organizations have a hard time thinking and operating exponentially. 

  • The vision gap: How can you help people see  the destination (or a stop along the way) more clearly?
  • The expectations gap: How can you generate confidence by showing steady and predictable progress?
  • The metrics gap: How can you know the network effects are building to “bend the curve”?
  • The resource gap: How can you put resources in place now to scale quickly and affordably later?

Go deeper

Read “To Build Your Platform, Network Your Capital” by Mark Bonchek

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