Exponential Change and the Danger Zone

Understanding this curve can help avoid catastrophe.

Today’s world is defined by change. Advances in technology, consumer empowerment, and instant gratification are just some of the moving parts of life that are pushing us to a new reality. Change, at the speed of life, is the rallying cry of business and many aspects of society. And along the way, we also can hear the other cry of innovation: fail fast.

This idea of transformational speed in today’s technological word is often captured by a concept extracted from our forgotten books on math and science. The first and most common is linear growth. From marketing to our personal IRAs, this simple line is both easy to understand and to project into the future. A fixed percentage allows us to plan and establishes a clear benchmark for growth and success. For many, it’s math 101 and the basis for simple as well as complicated analytics.

But as we know, the world isn’t flat. It’s becoming an exponential world where change is a far cry from that linear dynamic. And that’s when we see the second concept from our old school textbook — exponential growth. In mathematics, exponential growth is something that grows at a rate proportional to its size. More simply stated, the larger a number gets, the faster it grows.

Let’s do a simple example. If I gave you a penny and promised to double the quantity every day, by day 30, you would have $5,368,709. It’s really an amazing transition — over a million dollars in a single month! The biggest changes in the amount occur in the last few days. If we decreased the timeline by just 10% or 3 days to 27 days, the new total would be dramatically less: only $671,088.

This is exponential change, and it comes in a variety of sizes and shapes. We often see it as traditional market dynamics like the adoption of the smartphone or a politically resonant social media post. In other words, it’s when something goes viral!

But the exponential path can be tricky. The rapid upward slope of change typically starts with a slow, smooth, and almost flat trajectory. When this curve is aligned with traditional linear growth, it can appear that the linear model is doing better than the exponential model (see the figure above). In retrospect, we can see how the exponential graph overtakes the other curve. But in real-time, that wisdom isn’t available and this early zone below linear can provoke concern and fear.

It’s this exponential danger zone that can drive today’s reactive tactics of “pivoting” or “failing fast. In these cases, the premature changes don’t allow the exponential process to play out and the results can be catastrophic. The complexities of technologically based systems today require various windows of adoption and insightful forces to kindle and support an exponential path.

Medicine and the digital health movement are typical of this dynamic. With the emergence of “end-to-end” virtual care platforms, the exponential curve is no longer a singular curve of transformation, but a series of new and existing curves that compound these complexities. While innovation may favor the lone wolf, there are also compelling arguments for integrated solutions that can incorporate issues such as network connectivity, cyber security, analytics and device management.

Speed and complexity define much of innovation. And models for innovation help us understand paths forward. Some are uncontrolled and driven by unseen and unplanned market forces. Yet others are well within our control. The path of innovation must be modulated to address existing “fear” factors and let key stakeholders understand the path and potholes that are inevitably ahead.

This post was sponsored by AT&T Business, but the opinions are my own and don’t necessarily represent AT&T Business’s positions or strategies