rel="nofollow" href="#ud4c27105-115c-5313-9e1e-ee5ea49fe444">Chapter 6, we illustrate how companies can generate insights by setting up and learning from experiments. In Chapter 7, we discuss how to map organizational capabilities to risks and opportunities. In Chapter 8, we show how companies can formulate and implement plans, and make prioritized, feedback‐based, data‐driven decisions about strategic initiatives. Chapter 9 is a discussion about leadership, and how to create a culture that embraces change.
We close in Section III with a single chapter. Chapter 10 provides a discussion about the impact of the Exponential Era on humanity, and how the rapid changes we are experiencing challenge our current societal structures, economics, and ethics. We reflect upon our individual and collective legacies and the world we will leave for our children.
CHAPTER 1 The New Context for Our Future
According to Dr. Albert Bartlett, Professor Emeritus at the University of Colorado at Boulder, “The greatest shortcoming of the human race is our inability to understand the exponential function.”12 In March 1996, Nicholas Negroponte, head of MIT's Media Lab and author of Being Digital expressed the same sentiment less eloquently but in a very straightforward manner: “People don't get exponential.”13 More than 20 years have passed since Negroponte's pronouncement, but that reality still holds true today. To this date, people still do not understand the power of the exponential curve. Perhaps this is a reflection of its deceiving nature, and how the exponential curve manifests itself in a way similar to a line in Hemingway's The Sun Also Rises: “Gradually, then suddenly.” Or perhaps it is a reflection of the fact that exponential is simply too difficult a concept to grasp for brains evolved to work efficiently based on the timing of circadian rhythms that function best with emotive images, and that prefer to think linearly.14
Our continued use of agrarian words to describe business activities, like “seed” (as in seed money in the venture world), “plant” (as in initiate a foothold in a market), “cultivate” (business development of a new market), “harvest” (sell), and “cash cows” (usually revenue streams that are being “milked” for remaining profits before the market collapses or is disrupted) has locked our thinking into a pattern of behaviors completely out of sync with our era. In the Exponential Era, we don't operate on circadian rhythms or agrarian time scales.
This is an era marked by the confluence of fast‐changing technologies that converge to create new ecosystems, resulting in digital disruptions at a rapid velocity. It ignores our hard‐wired primal core, leaving us slow to adapt to changes that are happening in new time scales. The technology growth that we are experiencing today does not follow linear progressions like animal migrations, growing seasons, and calculated production runs.
In the Exponential Era, having access to data and having the ability to understand the information the data is telling us is on every individual's and organization's critical path for survival. It is an era where “knowing” is becoming paramount to surviving. The traditional “have's and have not's,” which referred to one's means, have accelerated, transformed, and become “those who know and those who don't.”15 This is an era that runs on creating, harnessing, intercepting, and integrating technologies at speeds and scales never before experienced in human history.
The Future Is Not Your Brain's Priority
Our inability to relate to the Exponential Era is most pronounced when we try to grasp the fundamental construct of exponential curves. Picturing in our minds how technologies move imperceptibly across what appears to the brain as distant and slowly approaching horizons – only to be surprised as they suddenly explode in front of us at speed and volume – is one of the great mental conundrums of the Exponential Era. These explosions in the growth and the unprecedented rates of adoption of new technologies are leaving most of us unprepared and in wonder. We find ourselves trying to set our minds to a view that is capable of constantly adapting to the sudden appearance of new technologies and digitally driven transformations.
These digital transformations are the direct result of the confluence of new technologies converging to create entirely new ecosystems.16 These new ecosystems grow at velocities well beyond our primal brain's hunting mode speeds. Calculating where to launch a spear and at what speed to intercept a target remains a difficult task that takes time and practice to master. However, a computer aims, calculates range, fires, and hits a target in milliseconds, again and again.
Humans have difficulty observing and responding to the future. We have trouble extrapolating meaning or even putting energy into understanding a time period that appears to be far away. While some of us can marshal and focus our brain's processing energy on “futures,” most of us can't. In fact, very few of us can focus for extended periods on our future. The reason is fairly simple. Our brains are not comfortable with diverting energy from human self‐preservation and survival. In order to survive, we are careful with how we allocate our finite brain energy; and it is very much “in the moment!”
Research shows that our brains think that concentrating on our current self is rather more important than worrying about our future self, let alone future generations.17 The study of fMRIs overwhelmingly concludes that the energy that our brains put to our current self, relegates the future self to a much lower priority. As Jane McGonigal, director of the Institute for the Future writes: “Your brain acts as if your future self is someone you don't know very well and, frankly, someone you don't care about.”18 It seems only logical. After all, we have survived as a species for a long time by being alert to immediate threats. Our brain activity is largely occupied with operating life‐preserving processes and looking for threats and pleasures right now. This leaves us wide open to dramatically underestimating the real impact of exponential curves over time.
Exponentials Make Fools of Humans
Humans are easily fooled by exponentials. To illustrate the point, we will borrow from the famous fable of the origin of the game of chess. Legend has it that the creator of chess presented it as a gift to an emperor in India. The emperor was so impressed with the ingenuity of the game that he felt compelled to compensate the man and asked him what he would like to receive as his reward. The man humbly responded:
“Oh emperor, my wishes are simple. I only wish for this. Give me one grain of rice for the first square of the chessboard, two grains for the next square, four for the next, eight for the next, and so on for all 64 squares, with each square having double the number of grains as the square before.”
The emperor was astounded that this ingenious man only wanted a few grains of rice as his reward for such a wonderful game. Without much thought, he granted the man his wishes. It wasn't until sometime later that his treasurer came back and advised the emperor that it would be impossible to pay the man the quantity requested, as the grains of rice added up to an exorbitant amount: 18 quintillion (18 followed by 18 zeroes) to be exact, the equivalent of roughly today's entire worldwide crop for a decade.19
How could the emperor be so easily deceived? Simple. He was thinking linearly like most of us often do, while the ingenious man understood and used the power of the exponential curve. And herein lies the threat, or the opportunity, depending on your point of view. Humans tend to think linearly, but the technology changes we are experiencing now follow an exponential curve.
The
