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What are exponential companies? Learn more about this concept

What are exponential companies? Learn more about this concept

In 2014, the writers Salim Ismail, Yuri van Geest and Michael S. Malone published a book that introduced the term “Exponential Organizations”. This expression refers to the great impact that a given enterprise profile has on the market in which it operates. Exponential companies can generate disproportionately higher results when compared to traditional businesses.

In general, the growth rate of these organizations is ten times faster than that of their competitors. All this is possible due to the fact that these business models use, in a strategic and efficient way, technological innovations based on market demand and needs. Are you interested in this topic? In this article, we will talk about the main information about exponential companies. So read on!

What are the impacts that these companies have on current businesses?

Exponential companies have had a significant impact on the services market. They are more efficient, faster and have a lower operating cost. From the perspective of Salim Ismail, it is possible to analyze this form of business in 4 Ds:

  • digitization;
  • disruption;
  • demonetization;
  • democratization.

Why do exponential organizations have an accelerated growth?

The main factor that contributes to the accelerated growth of exponential organizations is the ability to plan a service of total relevance to the consuming public, having technology as an ally in the structure and development of the business. With this, companies such as Netflix and Uber managed to achieve a great evolution of their brand by introducing new ways of offering common services based on agility, accessibility and low cost.

How does an exponential organization differ from traditional companies?

The main characteristic of traditional organizations is that they operate in a linear manner, having a stable amount of resources, while the new enterprises operate as a scalable business model. This is because they work with something that they can reproduce repeatedly and on a large scale, obtaining a high productive gain.

There are also other differences related to the form of production. In this sense, the older models commonly adopt ineffective strategies in terms of market acceptance and comprise a rigid structure of production and service provision. In a different way, exponential organizations aim to meet a certain type of need, creating new forms of service in order to increase the attraction of the consuming public.

What can be expected for the coming years?

It is possible to foresee a favorable scenario for the mastery of exponential models in various branches of services, such as entertainment, transportation, media, etc. This fact, on the other hand, will make the duration of certain enterprises difficult due to the competitive disproportionality and the reach of production in traditional ways. Therefore, in order to succeed, the entrepreneur must pay attention to the current forms of services of their field, always seeking to adapt to new trends and demands of the consuming public.

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