Exponential Atlases: A Metaphysical Approach to the Organizational Rapid Growth

According to Greek mythology, Atlas held up the sky on his shoulders. Nowadays, the term atlas refers to “a book of maps or charts” (1). In this paper, the term is used in both senses. On the one hand, the purpose is to understand the conditions favoring – hold up – the birth and the evolution of exponential organizations. On the other hand, the goal is to draw a concept map that allows us to identify the interactional dynamics among the actors involved in this evaluative process. In other words, first I'll try to know who “holds up the sky” (static interpretation), and then we will see who “lives in it” (moving interpretation). The idea is that disruptive innovation mediates the relationship between environmental/organizational features (conditions) and exponential growth (phenomenon). So far, little consideration has been given to the favorable conditions that can allow organizations to become exponential. This paper aims to pave the way for future systematized research on the ExO’s genesis and development.


Exponential Organization: Definition and Its Relevance in the Current Socio-Economic Context
The theme of exponential organizations (ExOs) has emerged in recent years, mainly thanks to the work of Salim Ismail (2013) and his colleagues at Singularity University (2). From his point of view, "An exponential organization (ExO) is one whose impact (or output) is disproportionally large -at least 10x larger -compared to its peers because of the use of new organizational techniques that leverage accelerating technologies".
The idea of an organization that grows exponentially was inspired by Kurzweil's Law of Accelerating Returns, which is well explained in the homonymous essay of 2001. In this work, Kurzweil points out that technological change is exponential and not linear, as we normally would think. He forecasts that "we won't experience 100 years of progress in the 21 st century -it will be more like 20,000 years of progress". Since technology is growing rapidly (Hauer, 2018), organizations must adapt to this new situation and manage it just as quickly (Cao et al., 2018, Kahn, 2018. Therefore, explaining an ExO's success is not sufficient to observe technological growth dynamics, but is necessary to focus on the features an organization must have to become exponential. Organizational success is mainly based on information technologies (Yunis et al., 2018;Zhang & Li, 2018;Iacovone et al., 2017;Bourke & Crowley, 2015) and innovative organizational models (Gronum et al., 2016;Spieth et al., 2016;Philipson, 2016). However, as we will see, other elements, together with these, make exponential growth possible. We are in the age of digitalization (Ianos & Oproiu, 2018;Jansen & Jeschke, 2018) and dematerialization (Mykolayivna & Sergiyovych, 2015;Kallis, 2017), two phenomena that significantly affect our society and our way of life. These phenomena have dramatically changed the way we buy products and services as well as the way we live our relationships; the way we work; and, ultimately, the way we build our future. Until a little over a decade ago, it was almost impossible to imagine giving up many of the physical experiences we normally had. We don't need to physically move to go to the bank, to visit a friend or a museum, or to shopping. This is the era of immateriality. Today's most successful companies are those that manage such immateriality or that offer access to it. In this scenario, understanding the Internet's relevance is easy.
For this reason, an accurate analysis of the ExO conditions cannot ignore the importance of public investments in technological infrastructures. Regarding these issues, Mariana Mazzucato (2013)     Since these elements are made available largely by the State, the relationship between economic environment and disruptive innovation can be interpreted by highlighting public investments' role in innovation. For example, public basic research's importance has been emphasized in the pharmaceutical industry, where there is no shortage of evidence about the relationship between academic research and industry innovation (Toole, 2012). According to Salter and Martin (2001), there are three main methodological approaches to publicly funded scientific research's benefits: econometric studies, surveys and case studies. These researchers maintain that each of these methods has limitations; therefore, measuring academic research's economic impact remains problematic. Nevertheless, we can understand public research's role by observing collaboration between academia and industry. The State, indeed, not only supports university R&D, but also offers funding for university-industry collaborative research (Berman, 1990). Thus, public intervention's importance in highly innovative contexts is undeniable. This kind of support's impact is felt in a great variety of private industry performance outcomes: industry and economy-wide economic performance, new drugs, formation of new companies, direct increases in employment, increased stock of useful knowledge, and skilled engineers' and scientists' training (McMillan & Hamilton III, 2003). We could say that the State's presence is important for two main reasons: creation and diffusion of innovation. If public-supported university R&D is important for the creation process, the diffusion process cannot do without public infrastructures. This second aspect of the external scenario grabs scholars' attention in different ways. According to Bivens (2012), "public investment by federal, state, and local governments builds the nation's capital stock by devoting resources to the basic physical infrastructure, innovative activity (basic research), green investments, and education". Public infrastructures are critical to firms' performance and, more generally, to economic growth (Morrison & Schwartz, 1996). The public sector is present at every stage of the innovation chain, from basic research to commercialization (Salandra, 2018;Liang & Liu, 2018) and its spending favors the emergence of new markets and sectors, including the Internet (Mazzucato, 2015). The most obvious proof that public investments are crucial for this kind of organization is the fact that most ExOs could not operate without the Internet.
The economic environment is not the only source of the disruptive innovation. The regulatory environment must also be considered. Different types of regulations can influence innovation in various ways (Blind, 2012). Generally, in the literature, three types of regulations are discussed: economic, social and institutional. In this study, I consider more relevant the first one. From the viewpoint of economic regulation's impact on innovation, one of the most important issues is competition regulation policies. The basic rule emerging from the extensive empirical evidence is that competition increases organizations' incentives to innovate, but only up to a point. When the competition gets too intense, companies prefer to imitate rather than innovate (Aghion et al., 2005). The Uber case is helpful in identifying the relationship among regulation, disruptive innovation, and ExOs. Indeed, Uber's presence disrupted the traditional taxi services scenario. In some countries, this ExO's growth has been facilitated by a favorable -or, at least, non-hostile -regulation system. In contrast, in other nations, Uber continues to face many obstacles, represented by regulatory systems protecting the traditional market balances. According to Larry Downes (2013), this is proof that "innovation and regulation don't mix."

Internal Scenario Conditions
To understand the ExO's emergence is not enough to focus on what happens in the external environment. It is also important consider the organization's contribution to its growth. In general, a firm can purchase or develop a disruptive innovation or an innovation that could be disruptive. In both cases (purchasing or developing), the organizational capability is important. Organizational capability could be defined as the "ability and capacity of an organization expressed in terms of its human resources, physical and material resources, financial resources, information resources and intellectual resources."(3). This myriad of meanings reveals the complexity of the internal scenario conditions. Capabilities are important because they allow us to fill the gap between our intentions and the outcomes we are able to achieve (Dosi et al., 2001). In his 1994 paper, Collis recognizes three categories of organizational capabilities. The first category is the ability to perform a firm's basic functional activities; the second category is the capacity to create dynamic improvement in a firm's activities; the third category is the firm's ability to develop novel strategies before competitors do (Collis, 1994). In other words, organizational capability is the sum of the things that the organization knows. This definition is perfectly consistent with the idea that organizational capability is the result of an "integration of knowledge" (Grant, 1996). This concept is undoubtedly effective, but alone is not enough to represent the complexity of the concept that I'm trying to highlight. Thus, it may be useful to interpret organizational capability as the set of resources that an organization has accumulated over time (Lun et al., 2016) and that, in a given moment, can be used to achieve a ijbm.ccsenet.org International Journal of Business and Management Vol. 14, No. 4;2019 competitive advantage. In the present work, the organizational capability represents the following: financial capabilities, physical resources, information resources, HR capabilities, marketing capabilities, structure, culture, strategy, R&D, and any other element the organizational actions are based.

Disruptive Innovation
The adjective disruptive has acquired great relevance in managerial literature through the contribution of such authors as Bower and Christensen. In their 1995 paper, they focused on disruptive technology and its impacts on markets and on organizational processes. According to Bower and Christensen, innovations are not all equal because of a substantial difference regarding the impact that an innovation might have on a given industry.
Depending on the type of impact, an innovation can be sustaining or disruptive. A sustaining innovation is one that helps improve some aspects of a product or service that the customers already know and value. In contrast, a disruptive technology offers a very different experience that initially is found only in a new market (Bower & Christensen, 1995). Over the years, many scholars have dealt with the relationship between disruptive technologies and competition (Adner, 2002;Huang & Sošić, 2010), referring to the idea that in the early stages, a disruptive innovation is inferior to traditional technology but is appreciated by a niche market (Christensen, 1997). This niche, a bit at a time, expands until it reaches the most consumers in the market. To explain this phenomenon, Christensen (1997) uses the concept of performance oversupply, which states that when the market's needs are met, the consumers' attention begins to focus on the product's features that were initially considered unimportant. While acknowledging the importance of his work, some researchers believe that Christensen has left many questions unanswered (Adner, 2002;Danneels, 2004;King & Baatartogtokh, 2015). The terminology used within the disruptive innovation theory is judged inconsistent (Chesbrough, 2001). In this regard, the following is one of the questions researchers believe Christensen did not answer: "What are the exact criteria for identifying a disruptive technology?" (Danneels, 2004). The open issue is whether it is possible to create a framework to predict ex ante the emergence of a disruptive innovation (Doering & Parayre, 2000;Lepore, 2014). To dispel all doubts, analyzing many practical cases would be useful because the validity and generalizability of Christensen's theory have seldom been tested in the managerial literature (King & Baatartogtokh, 2015). In order to fill this lacuna, the best solution would be to follow the approach of those who integrate the Christensen's model with appropriate analyses from its critics (Govindarajan & Kopalle, 2006), considering that the expression disruptive innovation refers to not only technological products, but also business models (Christensen & Raynor, 2003;Chang & Hang, 2010). Combining these different approaches, we can synthesize the main characteristics of a disruptive innovation (DI): 1) underperforms, at early stages, on the attributes that mainstream customers value; 2) offers something new to attract price-sensitive customers; 3) moves from niche to mainstream market.
Having said this, we must consider that disruptive innovation doesn't always imply that an emerging business will replace incumbents (Yu & Hang, 2010). The three salient features just mentioned are found in the history of Waze, an ExO. At the beginning of its activity, the novelty Waze introduced was a new navigation system, which was based on sharing location information. This system's construction was made possible by leveraging the GPS sensors installed on the Waze users' phones (Ismail, 2013). At that time (2007), this innovation was inferior compared to the services Nokia offered because smartphone diffusion was still too low (first charactersitic). At a later stage, the smartphones' rapid spread and the fact that the app was free (second characteristic) led to an increased number of users. The mainstream market was quickly disrupted and Waze, derived from a niche market (third characteristic), replaced Nokia.

Exponential Organizations
The managerial literature has not showed great interest in the ExO. In fact, the only work in which this issue has been debated in a very structured way is Exponential Organizations, Salim Ismail's 2013 book. In this book, Ismail defines exponential organization (ExO) as "one whose impact (or output) is disproportionally large -at least 10X larger -compared to its peers because of the use of new organizational techniques that leverage accelerating technologies". Ismail clarifies that an ExO is not built on "armies of people or large physical plants" but on information technologies. In this respect, ExOs result from a digital data's general tendency spread. The main reason focusing on this kind of organizations is important is that ExOs are different from other organizations in many ways. These differences are manifested at different levels: strategy, structure, culture, processes, operations, systems, people and key performance indicators (Ismail, 2013).  Vol. 14, No. 4;2019 School in Lincolnshire, Oxford, and Stanford. With his Stanford's colleagues, Whittingham developed the first lithium-ion battery in the 1970s (Levine, 2015). This invention focused Exxon's attention on Whittingham and opened the way to further improvements of this new discovery. The most important improvement was made by Goodenough, who studied at Yale and Chicago and worked at MIT, Oxford, and the University of Texas. Thanks to Goodenough's discoveries, Sony released the first commercial lithium-ion battery in 1991. The lithium-ion battery (Stephan et al., 2017) , as we know it today, is the result of thousands of hours of study and research conducted in classrooms and laboratories. The government and academia have contributed to this innovation's wide diffusion. Without these contributions, we wouldn't have electric cars and Tesla wouldn't be an ExO. In the same way, without lithium-ion batteries, there would be no smartphones; and many of the most famous ExOs whose products and services are spread thanks to these batteries wouldn't exist.

Second link (technological infrastructures-disruptive innovation-ExO).
In this section, I use the term technological infrastructures as a synonym for Information and Communication Technology (ICT). According to Van der Meer and Van Winden (2003), ICT must be analyzed from three points of view: access, content and infrastructure.
Access. Access refers to the capability to use information technologies. Globally, one of the most urgent issues to be addressed is the digital divide, which is the inequality between those who can easily use this kind of technology and those who don't have this opportunity. The digital divide refers to both individuals and organizations (Morone 1989, James, 2002Friedman & Deek, 2003), and its presence generates a strong impact on the most disadvantaged geographic areas' economic growth, with scarce or no access to ICT. In addition to the digital divide, which describes the gap in access to and use of ICT, another kind of technological inequality is the innovation divide. This second divide describes the gap in technology creation and in ownership of related intellectual property (Drori, 2010). The reasons for these inequalities can be manifold: inability to use an electronic device, lack of income, or absence of electricity or internet infrastructure. As long as these gaps increase, the possibilities for innovation diminish, both for people and organizations. A country that focuses on innovation should first focus on ICT's infrastructure and on access to it. Regarding access, however, another important element is ICT's educational aspect. According to Dìaz-Chao and colleagues (2015), ICT improves productivity only when firms and workers achieve the necessary technological competencies.
Content. Van der Meer and Van Winden define content as electronically available information, interactive services, or other content related to a specific locality. Examples of content are local newspapers on the Internet, websites providing traffic situations, and virtual communities. The concept of content has to do with communication. Creating content means to make known outside what happens within a given context. While Van der Meer and Van Winden deal with cities in their paper, we may try to extend the same concept to ExOs. Technological infrastructures are important for organizations (Dragoi & Dumitrescu, 2014) to highlight and transmit their own "content" in the form of innovations, products, services and future projects. In order to understand the importance of this component of ICT, consider whether an organization could grow exponentially if no electronic information were available about it.
Infrastructure. The importance of public infrastructure investments for economic growth has been widely debated. Some authors have argued that the lack of public spending on infrastructure in the United States has played a great role in explaining productivity's slowdown since World War II (Aschauer, 1988(Aschauer, , 1993. In other countries such as Canada, economic prosperity has been based on continually upgrading infrastructures available for goods production and trade (Wylie, 1996). According to Wylie, "goods production does not occur in a vacuum; it is part of the larger economic system that incorporates the basic infrastructure of economic activity" For this reason, innovation and economic growth require resources that go beyond the firms' production components, such as airports, highways, electric power systems, and commercial services. All these types of infrastructure are important, but electronic infrastructures are equally crucial for innovation and growth. Physical manifestations of the ICTs, electronic infrastructures (copper, coax lines, wireless networks, fiber optic lines) represent the information society's transportation system, carrying bits and bytes of information ( Van der Meer and Van Winden, 2003). To indicate these infrastructures, some scholars use other terms, such as e-infrastructure or cyberinfrastructure (Edwards et al., 2009). The more a country invests in infrastructure, the more the possibility increases for the companies to innovate and develop new solutions and new products. Consequently, an ExO's emergence is impossible in a context where the government doesn't invest enormous resources for infrastructure. The accelerating technologies that underpin their growth, in fact, cannot express any potential without the presence of physical support.
Third link (regulatory systems-disruptive innovation-ExO). The link among regulations, innovation, and organizational growth is a relatively unpredictable process. In an interesting 2014 article on Ecosystem ijbm.ccsenet.org International Journal of Business and Management Vol. 14, No. 4;2019 Insights' website, the Endeavor Insight researchers asked, "If business regulations are so important, why is Silicon Valley successful?"(5). Their focus was on two seemingly conflicting reports:

1) PrivCo's "The top 10 cities of the year for private tech acquisitions 2014"(6)
2) U.S. Chamber of Commerce Foundation's "Regulatory Climate Index 2014" (7) According to the first report, the San Francisco and Silicon Valley area had more than 280 acquisitions in 2013. The value of the companies acquired was $5.6 billion. For this reason, this area was at the top of the list. Silicon Valley had four times more acquisitions than New York City (#2) and ten times more than San Diego (#3). This finding raises these questions: How important was the California's regulatory system? Did the Silicon Valley reach first position in this ranking as a result of favorable regulations? The second report seems to say no. Indeed, in the Chamber of Commerce Foundation's ranking is a deep analysis of business regulations in U.S. cities based on many indicators, including procedures, time and costs of launching a company, and costs of conducting day-to-day activities. This analysis ranked the Silicon Valley ninth and New York City tenth. In other words, the second report's findings seem the reverse of the first report, thus raising the following questions: What is the truth? How important are the regulations? The Regulatory Climate Index (RCI) is derived from the World Bank's Doing Business (DB) ranking that analyzes the relationship between regulations and business activities since 2004. The DB's aim is to investigate "the scope and manner of regulations that enhance business activity and those that constrain it" (World Bank, 2004). Some scholars argue that countries with better institutions grow faster (Messaoud & Teheni, 2014), but these findings seem to contradict the results from the survey conducted by the Chamber of Commerce Foundation. According to Davis and Kruse (2007), "assessed solely as research project, the DB project is extremely impressive in terms of the creativity of its design, scale and rigor"; but at same time, they argue that the DB's authors should be clearer in describing some of the analyses used to generate their conclusions. Is this the reason the Silicon Valley's position in the RCI's ranking seems paradoxical?
Probably not, but many factors could be considered. If Silicon Valley doesn't stand out for its business friendliness, why have so many ExOs emerged and are emerging there? Either a link between regulations and ExOs does not exist, or the relationship between disruptive innovations and ExOs needs to be examined in depth.

Fourth link (organizational capability-disruptive innovation-ExO).
In highly innovative contexts such as the ones within which ExOs operate, organizational capabilities are particularly important. The more unique these capabilities are, the more likely the organization can gain an advantage over competitors (Eshima & Anderson, 2017;Guo et al., 2014). If we consider organizational capability as the idiosyncratic, difficult-to-copy resources available to the organization, then a resource-based view (RBV) can be very useful in interpreting this fourth link. A RBV (Penrose, 1959;Grant, 1996) helps to explain the importance of being different in turbulent and highly changeable environments. We know that disruptive innovations create a new market. From this point of view, Prahalad and Hamel (1990) were right in saying that "the critical task for management is to create an organization capable of infusing products with irresistible functionality or, better yet, creating products that customers need but have not yet even imagined". An interesting 2012 empirical study shows that the organizational ability to sustain innovation has become critical for sustaining business success and that this ability depends largely on the capability to be responsive to change (Lewrick et al., 2012). In order to generate disruptive innovation, both the ability to be different and the ability to change are important. Similarly, an ExO needs to distinguish itself at the beginning of its growth and to change in later stages when its market begins to transform.
Fifth link (Organizationational capability-rate of early adopters-disruptive innovation-ExO). As shown in Figure 1, a disruptive innovation can lead to the emergence of either a linear or an exponential organization. All four links that we have analyzed up to now could also be applied to organizations that are not exponential. A linear firm, just like an ExO, needs favorable environmental conditions and adequate wealth of organizational capabilities. The real difference between ExOs and linear organizations (LOs) is time. An ExO grows much faster. In other words, the innovation on which an ExO's growth is based spreads at unprecedented speed. ExOs reach the value of a billion dollars in just few years as a result of their innovations' diffusion rate. If we did not consider the time involved, all organizations that reach the value of one billion would be considered exponential.
In that case, no difference would exist between ExOs and LOs, and writing about this topic would not make sense. The reason for considering the rate of first adopters is simple: the higher this rate, the higher the likelihood that an organization becomes exponential.

Future Research Horizons and Implications
Consistently with the "actuality-potentiality" approach represented in Figure 1, an ExO results from a complex process involving many environmental and organizational factors (actuality), without which creating any type

Conclusions
In the coming years, we will hear more and more about Exponential Organizations. Salim Ismail and his colleagues have the credit to have revealed for the first time this theme in a systematic way. The ExOs are very different from the organizations we usually study. All of the following is dramatically different from the reality we know: the way ExOs manage human resources or the processes; the way they face the market; the way they adapt to environmental changes; the way they create new markets and affect the environment; the way they create, obtain and transfer knowledge; the way they use technologies; and the way they have socio-economic impact. The more ExOs differ from traditional organizations, the more organizational studies must to be different from traditional organizational approaches. This is year zero for organizations. Linear organizations will always exist, so the challenge is not to replace the traditional approaches with new ones but to depart from traditional approaches and build new analytical perspectives. I deeply believe that the discipline which studies a certain phenomenon must evolve at the same speed as the phenomenon studied, in order to contribute to the evolution of knowledge about changes affecting our society. Only in this way managerial science will continue being an authentic social science.
The ExO phenomenon's speed is very fast, and our understanding risks falling behind. ExOs are changing the world in an unprecedented way, and future research will represent reflection on not only these new organizations, but also our fate.