In 1982 Tom Peters and Robert Waterman published In Search of Excellence, in 1994 Jim Collins and Jerry Porras published Built to Last, and in 2014 Salim Ismail, Mike Malone, Yuri van Geest came up with Exponential Organizations. What do these have in common? They are examples of what Jeff Sandefer call "Business Pornography". Or what Phil Rosenzweig in The Halo Effect calls Delusion of Rigorous Research.
Books that sold by the millions pleasing the ears of people looking for instant success stories.
Exponential Organizations (ExO) makes some good diagnostics of the differences in pace and dynamics in the market. However the book is about Unicorns a fact that the authors acknowledge "Most of Lee's unicorns score well above the ExO threshold score."
A
principle in finance is that the higher the risk the higher the returns,
thus an ExO has very high returns because they have very high risks.The book misses the mark by oversimplifies the market, it doesn't say anything about the thousands who die trying to be unicorns, it has no recognition to elements of luck and opportunity. Somehow Ismail et. al. despise the old fashion business model of bootstrapping and hard-work is still valid.
In the end they come with the idea of an ExO mindset which should yield into a ExO company and X10 returns. Economically if this were true the market would be dominated by very few companies, all ExOs, or the market would be so huge that I doubt it would be sustainable.
Near the end of the book Ismail et. al. quote economist Brian Arthur: "Complexity economics is a different way of thinking about the economy. It sees the economy not as a system in equilibrium but as one in motion, perpetually 'computing' itself - perpetually constructing itself anew. Where equilibrium economics emphasize order, determinacy, deduction and stasis, this new framework emphasizes contingency, indeterminacy, sense-making and openness to change. Until now, economics has been a noun-based rather than verb-based science." What Arthur call the old economics is what Economist like Pete Boetke call "Mainstream economics" that oversimplified an emergent process, in opposition to "Mainsteet economics" that has always been dynamic. Maybe the velocity has change but markets were never static. Therefore, Ismail's ideas are not that original, successful entrepreneurs and business-people have succeeded because they understood the dynamics of their time.
