Exponential Organizations: Why new organizations are ten times better, faster, and cheaper than yours (and what to do about it)

by Salim Ismail

In a 2003 Harvard Business Review article entitled “One Number You Need to Grow,” Fred Reichheld introduced the concept of a Net Promoter Score (NPS), which measures the loyalty that exists between a provider and a consumer. An NPS can be as low as −100 (everybody is a detractor) or as high as +100 (everybody is a promoter). An NPS that is positive (i.e., higher than zero) is considered good, and an NPS of +50 is excellent. The NPS is largely based on a single, direct question: How likely is it that you would recommend our company/product/service to a friend or colleague? If you have a high NPS, then your sales function is free. If you are using peer-to-peer models, your service costs can also essentially be free. Using crowdsourcing and community ideation (such as Quirky or Gustin), your R&D and product development costs can also approach zero. And it doesn’t stop there. What we’re now seeing with ExOs—and this is tremendously important—is that the marginal cost of supply goes to zero.