of flagship Android phones, tablets, and accessories.
Organizations that want to not only survive but thrive in the Exponential Era will have to embrace disruptive change and discontinuity. As uncomfortable as this may seem to companies with traditional business models and behaviors, with the right support from the senior management team, and the right shared values and frameworks, organizations can develop behaviors and cultures that embrace change. We see this type of culture in relative newcomers, like Facebook, where employees are told to “break things,” or Google, where employees can dedicate a portion of their time to work on projects of their choosing. Google is proud to disclose an extensive list of products and services that they decided to shut down. The website “killedbygoogle.com” lists 190 of these products and services as of this writing, and you can see a sample list in Table I.1. These shutdowns are not considered failures, but instead, they are indispensable experiments that guide Google in its never‐ending pursuit of what they refer to as “moonshots,” an attempt to create game‐changing products and platforms.
But it is not only newcomers like Facebook and Google that are capable of developing change‐centric cultures. As we have discussed, older, more entrenched organizations can also develop such cultures, albeit, in the cases of IBM and Microsoft it required a change at the CEO level.
Experimentation is an integral component of SPX. We believe that in response to fast changes in technology, organizations must implement small projects that are iterative in nature, and that run continuous short cycles. However, experimentation is not sufficient – it is just one aspect of exploration. We also believe that in order to identify business inflection points, organizations need to conduct research long in advance.
By using Artificial Intelligence to uncover new insights from patent databases, companies can identify leading indicators of emerging technologies that may have a future impact on their business. We will cover this topic in detail in Chapter 4 where we discuss the Predictive Analytics component of SPX.
To summarize, SPX provides leaders a clear methodology for innovation in the Exponential Era. Specific tools and guidance are included for a number of critical aspects of innovation: Ideation, as well as deep analysis, prioritization based on both risk and reward, market trends and competitive insights, fast iterations for both prototyping and commercialization, and knowing when to quit and when to stay in the game. This is all built upon a foundation of culture, behaviors, and executive engagement. Our goal is to help organizations embrace a process and mindset that deal effectively with continuous disruption and chaos. The word “continuous” has often been used within the context of continuous improvement and operational efficiency. Operational efficiency is not in the scope of SPX. We are also not interested in addressing incremental improvements. Instead, our focus is on disruptive changes, and the use of the word continuous is to emphasize a distinction between the iterative nature of SPX versus the discrete nature of traditional strategic planning.
How This Book Is Organized
Several books and articles have been written about the Exponential Era, albeit, they may refer to it by a different name, such as the 4th Industrial Revolution. Even though much has been written about the changes that are occurring during this period, we felt that there was a gap in providing business leaders with a robust, well‐thought‐out, and effective methodology. One that not only can create clarity around these changes but also develops an actionable plan for benefiting from the opportunities and for mitigating the risks unearthed in this era. That became the impetus for our efforts in developing a new methodology for strategic planning and in describing it in this book.
The book is organized into three sections. In Section I we provide the context for the realities of the Exponential Era. We explain why it is so difficult for people to understand the nature of exponential growth. The gradual nature of the early stages of the exponential curve can be deceiving. We struggle to see how quickly exponential growth accelerates once it gets past the inflection point. These inflection points are so difficult to foresee that many large and successful companies have completely missed them, with disastrous results. We describe how Gordon Moore, co‐founder of Fairchild Semiconductor and CEO of Intel, published in a 1965 paper his observations about the doubling of the density of integrated circuits every 18–24 months, and his projection that this would continue for decades. The overarching principle behind Moore's observation, that computing capacity would continue to double every couple of years, still holds today, albeit, through unanticipated means of innovative materials and new technological approaches. This exponential growth of computing capacity has been one of the foundational forces driving the Exponential Era.
In Chapter 2, we discuss megatrends that are being shaped by the convergence of technology platforms. We describe several of these technology platforms, including Artificial Intelligence, Blockchain, Internet of Things, Biotechnology, and others. We discuss how the convergence of these platforms is creating trillions of dollars in economic value and generating unforeseen possibilities for business disruption and transformation. One example is how IoT and 5G combined to create a new ecosystem of superfast hyperconnected sensors and devices, allowing us to monitor and proactively deal with a vast number of situations, from weather changes to the spread of diseases.
In Chapter 3, we depict the types of organizations commonly found in the Exponential Era. We tell the story of several companies whose inability to intercept changing horizons led to their demise – we call them Flash Boiled Frogs. We show how emerging companies that took advantage of inflection points quickly grow to billion‐dollar valuations – the Disruptive Unicorns. We define Fast and Furious Gazelles, companies of all sizes that are able to grow very fast. We also describe large established companies – the Dancing Elephants – that use ambidextrous capabilities to simultaneously manage exploration and exploitation, jumping from one S‐curve to the next. And of course, we could not leave out the Dominating Gorillas, companies that are achieving overwhelming dominance in every sector of the exponential economy.
Section II is about how organizations can deal effectively with the realities of the Exponential Era by following a robust methodology that challenges the current thinking in strategic planning. In Chapter 4, we introduce this new methodology we call SPX and describe how it differs from traditional strategic planning processes. Then we get into the heart of the methodology. In Chapter 5, we explain how to listen to
