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If you cannot think in an exponential way – you’re toast!

A few years ago, IBM conducted a survey among CEO’s around the world which found that creativity is the most important leadership quality.

As far as I know this research has not been repeated or replicated.

I wonder why?

Well I have a new prediction.

I believe that Exponential Thinking (which includes creativity) is the most important leadership skill today (and tomorrow).

Why you may ask?

Here are a number of reasons.

1. The most important is the rise of exponential technologies.

Just consider the rise of AI, IoT’s, Virtual Reality, Big Data, Machine Learning to name a few.

All of these have been driven by Moore’s Law which basically states that the number of transistors in a circuit effectively doubles every 2 years.

And it’s not only that exponential technologies are accelerating rapidly but they are all interconnected which further drives growth.

For example, the Internet of Things generates big data which in turns makes algorithms more accurate which leads to greater usage of AI etc.

2. The expansion of Exponential Competitors

According to Salim Ismail (et al.) in his book Exponential Organisations (2014, pg. 14);

‘Youtube went from a startup funded by Chad Hurley’s personal credit card to being purchased by Google for $1.4 Billion, all in less than 18 months.’

Exponential Competitors (i.e. startups) do not respect incumbents strengths, size or heritage.

They want to disrupt entire industries.

And with greater access to funding through accelerator programs for example, they can grow rapidly.

Which leads to the next point.

3. The emergence of an Exponential Mindset

Startup Competitors now have expectations that they can grow exponentially.

They can point to Google, Facebook Uber, Airbnb as evidence of what can be done.

In athletics, for example, competitors believed that the 4 minute mile could not be done until Roger Bannister achieved this feat then runner after runner broke this barrier – almost at will.

As Mark Bonchek, (HBR, How to Create an Exponential Mindset, JULY 27, 2016) notes:

‘To create exponential value, it’s imperative to first create an exponential mindset.

The incremental mindset focuses on making something better, while the exponential mindset is makes something different.

Incremental is satisfied with 10%.

Exponential is out for 10X.’

4. Consumers are demanding exponential leaps in value

I think that consumers today are not satisfied with a tiny incremental change here and there.

They are comparing consumer experiences across categories and industries.

If Amazon for example can deliver a product around the world in record time – why can’t you?

If Apple produces beautiful products – why can’t you?

Exponential Thinking vs Linear Thinking

Now for leaders trapped in linear, local, incremental thinking these 4 exponential drivers present a major problem.

It’s what I call the exponential gap (see the diagram above).

The gap can be a exponential threat or growth opportunity.

But what it will require is exponential thinking.

It’s the most important leadership skill.

No ifs or buts….

Leaders have to escape the linear thinking trap and learn how to think in an exponential way.

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