ExO Sprint
Ready to implement the ExO model in order to transform your business and achieve exponential results?
There's no question that Exponential Organizations are the businesses that succeed the most in this age of exponential technologies, but let's be honest: Implementing the ExO model is not an easy task. Without the right process in place, many challenges—including your company's own immune system—will conspire to prevent your organization from achieving the transformation you desire.
In this section, we will describe how to run the 10-week ExO Sprint—step by step and week by week. After running the ExO Sprint, not only will your business be resistant to disruption, it will also be in a position to leapfrog current innovators and take a leadership spot within your industry. Or even invent a new one!
Challenges to Transformation
Applying the ExO framework to an existing organization is not easy, and you face a number of challenges on your way to transformation. In the following pages, we describe these challenges and outline how running the ExO Sprint process in full enables you to address them.
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, as mentioned earlier, 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. Examples include:
Product as a service
A system that allows consumers to buy less and rent more. A good example is Uber, which users call on only when they need a car. Uber is able to leverage an abundance of both drivers and clients to provide its service.
Sharing economy
People rent out unused resources, which encourages sharing and cuts down on waste. In the case of Airbnb, for example, individuals lease homes or rooms they are not using. Airbnb is able to leverage an abundance of places to rent.
Platform
Online software that connects and automates the processes between consumers and producers. An example is 99designs, an online graphic design marketplace that allows someone looking for a design (e.g., a logo) to post a request and have designers compete for the job. 99designs accesses an abundance of designers in order to offer its clients a wide range of designs.
Ecosystem
Beyond platforms, ecosystems connect different services and solutions to offer comprehensive value to the members of the ecosystem. Recently, emerging ecosystems have been extending the platform model.
Successful global companies are building their own ecosystems, within which a number of companies exist. Not all of these companies have clear business models, but all contribute value to the ecosystem. For example:
- Google built its own ecosystem by creating entities such as Gmail, Google Maps, and Google Drive.
- Facebook built its ecosystem by buying entities such as Instagram, WhatsApp, and Oculus.
The real challenge is discovering the right business model for a certain organization or industry. Or—even more difficult—the right shape and configuration of the ecosystem for a given organization or industry.
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. (We are sure everyone can relate to this.)
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.
The ways in which an organization introduces innovation tends to magnify the immune system problem. Organizations often ask external consultants what needs to be done to achieve transformation. Or they invest in or buy external startups to integrate into the main body. Either way, the organization's immune system will attack any and all initiatives.
Why? Because the corporate immune system reacts to whatever it considers foreign DNA.
IT'S ALSO ABOUT PEOPLE TRANSFORMATION
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. As an issue, this one 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.
Why? By definition, early stage disruptive businesses don't even have a clear business model. As a result, the focus isn't on efficiency but rather on searching for the right model. As Steve Blank said, “A startup Is a temporary organization searching for a scalable and replicable business model.”
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, of course, 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.
ExO Sprint Approach
The ExO Sprint has been designed to address all of the above challenges and offers practical solutions and suggestions for tackling each.
The processes outlined in this book are a culmination of the authors' experiences running innovation and transformation projects for the past 15 years, initiatives that have involved more than 200 innovation consultants who have provided invaluable feedback.
In addition, the ExO Sprint has been successfully applied across a variety of industries and to many companies worldwide, including Procter & Gamble, Stanley Black & Decker, HP Inc., and Visa.
By running an ExO Sprint, organizations will discover the right business model, which will then enable them to connect to abundance. They will also be equipped to manage the corporate immune system's compulsion to block innovation and change, learn how to implement the right innovation-oriented methodologies, and use a learn-by-doing approach to build internal capabilities within the organization.
All in just 10 weeks!
DISCOVER THE RIGHT ABUNDANCE-BASED BUSINESS MODEL
The outcome of an ExO Sprint is a set of ExO initiatives that will both improve the existing business model to make it more adaptable to external industry disruption and generate next-generation organizations that have the potential to lead their industries.
NEUTRALIZE THE CORPORATE IMMUNE SYSTEM
To prevent a corporate immune system attack, have existing employees design and execute the transformation process rather than bringing in outside consultants. Allowing employees to come up with their own ideas will ensure implementation of the resulting initiatives, thus reducing the immune system response.
Another way to mitigate the immune reaction is to implement incremental innovation (initiatives that maintain the existing business model) within the company and develop all disruptive initiatives (those that involve a new business model) outside the company.
SUPPORT PEOPLE IN THEIR TRANSFORMATION EXPERIENCE
An ExO Sprint is an intensive experience and generally entails asking people to work in a completely different way than they are used to operating. During the course of an ExO Sprint, participants will need to engage with new tools and disciplines. They will also be required to validate imperfect ideas with clients, develop those ideas in the face of limited information and a high level of uncertainty about next steps, and prepare prototypes within days.
Our experience has shown that ExO Sprint participants embrace the experience … eventually. It may, however, take the entire process for them to get there. As a result, it's important to be aware that participants will go through an intensive process, one that—although it will change their mindset forever, and for the better—will require psychological support, both from the company's leadership team and the staff running the ExO Sprint.
USE SEARCH-ORIENTED INNOVATION METHODOLOGIES
The ExO Sprint supports the use of search-oriented innovation methodologies—Blue Ocean Strategy, Customer Development, Lean Startup, and Design Thinking—in combination with traditional management methodologies.
SUPPORT LEARNING BY DOING
Running an ExO Sprint is a learning experience. Participants will learn about the principles, the process, and the outside world as they complete the weekly assignments. Their mindset will shift as they practice and refine new methods of working, communicating, and forming ideas. As a result of their experience, members of a completed ExO Sprint will serve as ambassadors in implementing ExO principles throughout the organization.
LEVERAGE EXTERNAL TALENT
While using the organization's employees is crucial to circumventing the corporate immune response (in addition to many other benefits), involving outside coaches and advisors in the ExO Sprint maximizes the value of the outcome by drawing on external input and knowledge.
FINISH IN 10 WEEKS
In order to cement new habits among the participants, the ideal time span for the ExO Sprint is 10 weeks.
ExO Sprint Structure
The ExO Sprint is conducted in three main phases, each with sub-components.
| PREPARATION PHASE | EXECUTION PHASE | FOLLOW-UP PHASE |
| Focus on making sure all needed elements are in place before beginning the 10-week process. | The ExO Sprint is a 10-week process. During this phase, participants generate ideas and develop a set of ExO initiatives designed to transform the organization—and even the industry. Two streams run in tandem throughout this stage: The Core Stream is focused on innovation—adapting to external industry disruption without changing the existing business model (so as to avoid triggering an immune system reaction). The Edge Stream is focused on disruption—on creating the next generation of organizations (new businesses outside of the existing organization), which will eventually lead the industry. Both streams are coordinated for a coherent and comprehensive outcome. |
The resulting ExO initiatives are implemented. Some will be set up within the existing organization, others on the edge (i.e., outside the organization). |
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DISCOVER DISRUPT BUILD LAUNCH |
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Note that the 10 weeks that comprise the core of the ExO Sprint are designed in such a way that the team generates as many ideas as possible during the first half of the ExO Sprint, with the second half dedicated to the most promising initiatives. This follows the innovation best practice of generation/synthesis. |
ExO Initiatives (Core vs. Edge)
The outcome of the ExO Sprint will be a set of ExO initiatives that will transform the company into an Exponential Organization, or even a set of them.
As outlined before, the ExO Sprint entails two different work streams: The ExO Core Stream generates initiatives to adapt the current organization to external industry disruption, while the ExO Edge Stream generates initiatives that will disrupt the market by launching new Exponential Organizations.
During the 10-week process, ExO Sprint participants will come up with a lot of different ideas, some of which will result in initiatives. In this section, we explain how to differentiate between ExO Core Initiatives and ExO Edge Initiatives. We will also describe some of the subtypes to help ExO Sprint participants better understand the implications of each kind of initiative in order to achieve the best possible results.
You can differentiate between the two types of ExO initiatives—Core and Edge—by asking and answering one question. You will then be able to differentiate among the different subtypes of ExO Core/Edge Initiatives by asking and answering a second question.
The first question you must to ask in order to differentiate between ExO Core Initiatives and ExO Edge Initiatives:
Is the ExO initiative a new business model?
If the answer is yes, and this new business model is disruptive (i.e., it challenges how the industry or current organization works) and scalable (it can reach a global scale quickly), the project will be an ExO Edge Initiative. Note that if the business model is different but not disruptive/scalable, even though the initiative might not result in an Exponential Organization, you can still develop it as an ExO Edge Initiative. The important thing is not to build anything within the current organization that uses a different business model. That, of course, will trigger the corporate immune system to attack.
If the answer is no, and the initiative is in line with your existing business model, the project will be an ExO Core Initiative. There are several ways to improve the existing business model, including launching a new product or service (with the same business/revenue model) or improving the current service or operations of the company by applying exponential technologies and/or ExO attributes.
The second question you must ask in order to differentiate between the different types of ExO Edge Initiatives:
Does it leverage the current organization's assets?
If the answer is no, the initiative is a Pure Edge Initiative, meaning it will become an independent Exponential Organization whose growth will not be constrained by the original organization's (or other, similar organizations') assets or size. An example of an ExO Pure Edge Initiative would be an Airbnb-type business launched by an existing hotel chain, since this new platform wouldn't leverage existing assets, instead relying on those of others (i.e., private owners' houses and rooms).
If the answer is yes, the initiative is a Linked Edge Initiative and will maintain a relationship with the main organization (and perhaps other, similar organizations), leveraging some of that organization's assets, such as existing clients, facilities, physical assets, and data. An example of an ExO Linked Edge Initiative might be a hotel chain that launches an online portal similar to Hotels.com, offering available rooms to Internet users. The new company, operating at the edge of the parent organization, could then use its platform to team up with competitors and offer their rooms as well.
When it comes to ExO Core Initiatives, the question to ask in order to differentiate among the different types:
Is it a replicable and saleable initiative for other organizations?
If the answer is yes,—meaning that you could both implement the ExO initiative within your existing organization and eventually sell it to other organizations—you have an Edge Core Initiative. For example, Amazon Web Services (AWS), which is today used by companies all over the world, grew out of an internal project initiated by the company to develop a set of network services to improve its own IT infrastructure. Amazon subsequently launched AWS as a new business to address the same need in other organizations. The takeaway? ExO Core Initiatives initially developed within a company can evolve into ExO Edge enterprises that can be further developed beyond the parent organization.
If the answer is no, because the ExO initiative is specific to your current organization and implementing it elsewhere wouldn't result in a scalable business model, you have a Pure Core Initiative. An example: running a digital transformation project to digitalize all paper records. Another example: using Al-based algorithms to automate an organization's various processes.
ExO initiatives can also be new products or services developed under an organization's existing business model. Usually these new products or services, called Blue Core Initiatives, tackle new markets. In fact, launching new product or service represents an opportunity for an organization to follow a Blue Ocean Strategy (outlined in greater detail later in the book) and create new markets where competition is limited or even nonexistent. A great example is the Nintendo Wii, which moved beyond a focus on complex graphics in video games and found a new and highly profitable customer segment in aging Baby Boomers drawn by the ability to physically interact with onscreen golf, tennis, baseball, and additional gameplay.
Last but not least, note that these are simply guidelines to help ExO Sprint participants classify and shape their ExO initiatives in accordance with the individual ExO Sprint streams.
ExO Sprint Roles
During an ExO Sprint, key roles are filled both from within and outside the organization.
As noted earlier, people from within the organization are key to maintaining the DNA of the company; their presence will help suppress the corporate immune response. Remember: Organizational transformation is all about transforming the people who work for the organization.
At the same time, you'll also need to recruit people from outside the organization if you are to access the necessary knowledge and expertise required to run your ExO Sprint. As outlined before, there's no way all the smartest and most talented people in the world already work for you. As a result, you'll need to connect your project to the external community.
Leadership and Coordination
Team Members
External Support
The team running the ExO Sprint will benefit from complementary support from and access to external resources.
Setting Up Your ExO Sprint Teams
What internal resources do you need to structure your ExO Sprint teams?
If you are a
LEADING ORGANIZATION
that wants not only to transform yourself but also to transform your industry (and perhaps even create new industries), you'll need:
Two Edge teams and two Core teams, each with between four and six members. Note that you can run an ExO Sprint with more or fewer teams (e.g., one Edge team and one Core team), or with a different balance of Edge/Core teams (e.g., one Edge team and three Core teams), depending on your goals. However, experience has taught us that setting up two Edge teams and two Core teams is generally the best approach.
A project sponsor representing the highest level of the organization impacted; sponsor should have the authority to make funding decisions at the close of the ExO Sprint.
A project coordinator to provide project cohesion and manage administrative and logistical details.
If you are an
ESTABLISHED ORGANIZATION
that wants to keep your business safe by transforming it to adapt it to external industry disruption, you'll need:
Two Core teams, each with between four and six members. Note that you can run the ExO Sprint with more or fewer teams (one or even four Core teams), depending on your goals. However, experience has taught us that setting up two Core teams is generally the best approach.
A project sponsor representing the highest level of the organization impacted; sponsor should have the authority to make funding decisions at the close of the ExO Sprint.
A project coordinator to provide project cohesion and manage administrative and logistical details.
If you are an
ENTREPRENEUR
who wants to disrupt an industry by launching a new business with a goal of becoming an Exponential Organization, you'll need:
One Edge team
(made up of between four and six members) focused on a single MTP.
IT Tools Supporting the ExO Sprint
One of the primary aims of the ExO model is to increase organizational agility by implementing new technologies. The ExO Sprint is a perfect opportunity for teams to experiment with social technologies and discover their benefits firsthand.
Given the pace and intensity of the ExO Sprint assignments, teams must be able to share files and collaborate in real time. If the ExO Sprint teams are geographically dispersed, tools for virtual communication and collaboration are essential.
The experience and outcomes of an ExO Sprint reach entirely new levels with access to relevant resources and when using the right tools to support the process.
Here are some tools that can help you run your ExO Sprint more successfully and that enable teams to organize and connect.
Slack is a tool for messaging and more that can help your ExO Sprint team members share resources and easily communicate.
Main feature for the ExO Sprint:
Communication
Google Drive is a file storage and synchronization service. It allows users to store files on their servers, synchronize files across devices, and share files. Google Docs, Google Sheets, and Google Slides enable team members to collaborate on Sprint assignments concurrently.
Main features for the ExO Sprint:
Document management and collaboration
An enterprise video communications system, Zoom offers an easy-to-use and reliable cloud-based platform for video and audio conferencing, chat, and webinars across mobile, desktop, and room systems.
Main features for the ExO Sprint:
Scheduled and ad hoc video conferencing communication
OpenExO is a global transformation ecosystem that provides certified ExO staff on demand (ExO Coaches, ExO Advisors, etc.) and other resources for running an ExO Sprint. Its platform also offers tools designed to encourage team collaboration.
Main features for the ExO Sprint:
Access to certified ExO staff on demand
ExO resources
ExO tools
ExO processes
Communication
File management