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08 08 18

ExO Orgs

Recognizing & Overcoming the Corporate Immune System

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ExO Works

3 min read

Sometimes, the biggest hurdles to implementing exponential strategies and disruptive innovation come from within—via an organization's own immune system.

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For most modern organizations, growth through change is a slow, challenging, and demanding process. More often than not, the primary driver of this resistance is an element that, to date, has played a key role in the survival and success of the organization in question: the corporate immune system.

What Is the Corporate Immune System?

Not unlike the human body, from the minute an organization, business, or community is born it begins to develop its own unique immune system. This helps keep it on-track and focused on what makes it successful. Smart companies learn to reduce waste and optimize resources. This makes incremental improvements to the core business very attractive.

It’s much harder for large organizations to take bold risks at the edge—but these risks are where the potential to unlock new markets and truly move the needle on revenue, customer satisfaction, and share price reside.

If we look at Amazon.com as an example, their Prime membership and Prime Day are core innovations that drive many more e-commerce transactions. Amazon Web Services (AWS), however, is an Edge initiative that now delivers more than half of the profits to the parent company.

For of most corporations and businesses, this organizational immune system is the primary force responsible for resisting disruptive innovation and hindering the implementation of the key attributes needed for exponential growth and long-term success. It’s what stops most companies from creating something as big as AWS.

“The most important function of the corporate immune system is to protect the core activities of the organization (developing services, products, solutions, etc.) because these have been proven to help the organization to grow. If these activities are being challenged, a first reaction is resistance, which is fully understandable."

PAUL EPPING - PARTNER, PHILIPS HEALTHCARE TRANSFORMATION SERVICES; EXO WORKS COACH

Despite the ability of an organization’s immune system to protect the Core business, this same system can easily slip into “hyperdrive” when faced with game-changing new realities like emerging technologies and exponential thinking.

4 Tips for Navigating Corporate Immune Systems

Once a company has decided to reconfigure the corporate immune system and implement disruptive innovations via something like an ExO Sprint, there are several key tactics that we've found to be effective:

  1. Buy-in starts with the CEO. If you’re in the process of completely revolutionizing an organization’s business model, gaining support of the C-Suite is vital. The best way to start is (usually) at the top—with the CEO.

  2. Build out, not up. Instead of trying to carve a place for a new exponential division or business within an organization’s existing structure, establish a place separate from the existing structure. Ideally, the new emerging division will be able to function independently of the established corporate structure and systems. You’ll also need different metrics—growth and engagement come before revenue and share price—and compensation structures.

  3. Embrace the change-makers. Seeking and amplifying the players within your organization who are already responsible for encouraging change and innovation is key. Providing them with an environment that breaks down the established rules, hierarchies, and social constraints can generate astounding results.

  4. Invest for the long-term. Amazon Web Services started as an internal project in 2000, and they only released it to the public in 2006. Even then, it took a few years to gain real traction. Now, in 2018, it’s a monster that owns 30% of the market. It’s very difficult for successful companies to have that kind of patience—but that’s often what it takes to disrupt a market.

Insights From the ExO Ecosystem

Through their experiences as participants in the larger ExO Ecosystem—as well as their professional experiences in their chosen fields—members of the ExO Ecosystem offer some of their thoughts on dealing with organizational immunity.

“[The Corporate Immune System] is not good or bad. It is a response to a stimulus according to a template or learned pattern that exists in any complex system. What we need is for the immune response to react against the appropriate things and not against innovative/different things just because they are different or strange. We want a correct immune response to change and innovation.”Kent Langley - Chief Scientist, ExO Foundation
“If you consider the normal daily life cycle of an organization, the immune system is a necessary mechanism to protect against threats from outside and inside. That said, if change is necessary and in-progress, the corporate immune system can be a major obstacle.”Tunc Noyan - Founding Partner & Strategic Advisor, ValuesBox Ventures; ExO Ecosystem Member
“There’s an art to balancing a commitment to new transformative projects and not losing sight of what has made the organization successful. One way to manage this balancing act is committing to both internal/core transformation projects and external/edge transformational ventures. Another way of doing this is strongly incorporating 'growth hacking' and 'experimentation/iteration' mindsets into the core values of the organization.”Cesar Castro - Co-Founder and Core Team Member, Fluid Blockchain Accelerator; ExO Ecosystem Consultant
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