I caught up with Aaron Dignan for breakfast at the Soho Grand Hotel in New York. Aaron is the CEO of the digital consulting firm, Undercurrent. Aaron is, however, no ordinary consultant. The first line of his bio explains that he “dressed up like a super hero for 180 straight days of the first grade, which marked the beginning of his life as an iconoclast, observer, theorist, and performer”.
Over coffee and French Toast, we chatted about complexity theory, the many strange but important lessons of ants and bees, the dangers of innovation departments, Artificial Intelligence and the enduring power of networks.
Mike Walsh: I'm here today in New York in the SoHo Grand Hotel and I'm joined with Aaron Dignan who's the CEO of Undercurrent. It's good to see you again Aaron. I have to be honest; I know we were meant to catch up originally in Lafayette. I love this place. I particularly love that they not only give you breakfast, but they give you french toast as a side.
Aaron Dignan: French toast as a side. You always want to have optionality in breakfast so you can have a bit of everything.
Mike Walsh: Last time we caught up we were actually in the Bahamas which I think I significantly warmer than icy cold New York today.
Aaron Dignan: Yeah, that was a great reprieve.
Mike Walsh: Tell me a little bit about your journey. Because Undercurrent is, I think, one of the world's foremost digital strategy companies. You took quite an interesting path to get there, didn't you?
Aaron Dignan: Yeah, it was completely circuitous. We started the business as digital strategy, but even before that I worked in psychology and brand. I actually went to school originally for molecular biology, thinking I was as going to be a research scientist or a doctor. I looked at the industry, and was really unsettled by the lack of progress, the controls, the regulation - all the things that looked like maybe that market was not going to be a place where I could control my destiny.
I took a big step back and decided to major in psychology which is something I always felt very comfortable with, and basically turned my education into a research project about why certain brands were so deeply embedded, so relevant, so engaging with people and other brands were not.
Why was it that a brand like Jet Blue had fans, and a brand like American Airlines really didn't - other than maybe for people that were trapped in a loyalty program?
I did an enormous amount of reading. I had many conversations, reaching out to people in the early days of blogging on the web. Writing a blog that nobody read, but other bloggers read. I met folks like Seth Godin and others who counselled me, and start to build up a social network around myself.
Out of that came my first consulting company which was originally called, "Limelight", but eventually was called, "BrandPlay." All we did was help brands, particularly smaller and more regional brands, but some national brands think about their identity, their values, where they were going, how they were making decisions.
I did that through workshops and strategy sessions for years - for years around the country, just cutting my teeth.
Mike Walsh: This was your, “ten thousand hours of pain", right?
Aaron Dignan: Ten thousand hours of pain, alright. Go into a Board room with ten executives and get them to agree on what they value and what their brand stands for in twelve hours’ time with no breaks. Then write it up, and make sure they agree with the write up the next day after they're sober and slept. You do that a couple hundred times, and then you have a feel for the boardroom.
I did that for a while, and then I really started to become obsessed with the fact that certain brands that were really rising to the top of the list that people wanted to be like, be around and be close to - were also technology based. Apple, Twitter, Facebook.
I met up with a couple other folks in Boulder, Josh Spear and Rob Schuham who were really thinking the same thing, and maybe even a step ahead of me. They launched, and then I ultimately joined them and launched Undercurrent. It was basically supposed to be a digital strategy company that was completely unbiased.
Mike Walsh: Why is this change happening now, do you think? Is it because inherently technology brands are more involved in our daily lives?
Aaron Dignan: Yeah, if you think about where change happens right now, it is always at the intersection of technology, culture and people.
Wherever there is a new piece of technology and people, you see enormous change. Look at cell phones. Mobile phones in everyone's pocket. The agent of change in modern culture. Some good change, some bad change.
Mike Walsh: I agree with you. I always love that nexus between technology and anthropology.
Aaron Dignan: Exactly, exactly. We started to see each of these disruptive technologies, or exponential technologies as Singularity University would call them, as a gateway to some new reality for a company and for a group of people.
What does social networking mean to a company? What does AI mean to a company today? There's always an answer, but it's a little bit out of reach and there's a little bit of a hesitancy to engage with that, so we started there = with how to change things. That said, we have since migrated and navigated to a different business model altogether. Anyway, that was the core idea. It was to be this unbiased consultant partner that didn't have a vested interest in any future. You just needed to tell truth and then figure out what to do about it.
Mike Walsh: When you look at it, what kinds of problems are at the intersection of technology and culture? You can't really be a traditionally structured consulting organization. These are the kinds of problems that a McKinsey, an Accenture, a Deloitte, would have some difficulty getting their minds around?
Aaron Dignan: Right. If you look at the history, if you read, "Lords of Strategy", to "The Firm", and get to the history of consulting, it came out of an accounting prowess. "Let's look at the numbers and what do they tell us? How can we change the business to improve performance?" Then it migrates into all manner of pricing, strategy, M&A, etc.
At the core of that is this belief that you can have an approach, a framework, a model, a thing that works and lasts, and that you can replicate. You hire MBA's. You get them to use the same slides, they fill in the blanks. That doesn't work when you don't know what's going to happen next. When you're trying to figure out what might happen to a company like PepsiCo, which was one of our first big partners. Who knows? There's so many possible disruptions that could occur. Crowd funding, crowd sourcing, health and wellness issues, globalization.
Mike Walsh: This is a wicked problem, right?
Aaron Dignan: Yeah. It's a wicked problem. It's a big hairy, nasty ...
Mike Walsh: Which is a problem you don't understand until you've already solved it?
Aaron Dignan: Yeah, it's complexity. It's complexity science. You can engage with complexity with a rigid model, which means it's really difficult to scale. Because now you have to hire people that can handle wicked problems. Now you're looking for people that are equipped with the skill set to say, "We don't know what the answer is, but we know how to approach problems that don't have an obvious answer.
Mike Walsh: Right. McKinsey and Deloitte and these type of consulting companies would traditionally hire engineers because they thought in a very mechanistic way.
Aaron Dignan: Right.
Mike Walsh: If that was the model for that type of consulting, what type of people do you generally look for to have more natural intrinsic capabilities?
Aaron Dignan: I think we're looking for recovering engineers. We're looking for people that have some real understating of what it takes to make something, to do something. An entrepreneur, an engineer, a maker, a doer. Also someone that through that process has learned the humility of uncertainty - the humility of how things may change, and how rapidly. Frankly, just as systems thinker. If you think about the design school, and systems thinking and complexity science - we're looking for people that come more bathed in that, in that understanding. Rather than the, "I know how to design an airplane wing so that it creates the Bernoulli effect."
Mike Walsh: Right. When I look at the way you structure your business, you've used a lot of techniques and methodologies that come from the software world, agile methodologies, holacracy. Can you talk a little bit about some of the unusual ways that you've approached your own internal culture?
Aaron Dignan: Yeah. What's interesting is when you engage with these problem types, and when you're not clear about exactly what it is that you do, which is a good thing in the beginning, but difficult as you scale - then you're building for change. You're always building for change.
In the very beginning, we did things like no one would sit at any one desk for more than ninety days. Then we would rotate desks, but we were still bound in this idea that you had a desk. It was a step in the direction of constant change, but we hadn't yet made the decision that, "What a second. Why do we need desks at all?"
Every single piece of the business operation has been through that interrogation over the last eight years. It's, "We should keep financial information private." "Why?" "Because that's what most companies do when they're private." Maybe we shouldn't. What's the value? What's the value of opening it up? Maybe we should sell whatever people want to buy. Or maybe we shouldn't. Maybe we should be very rigid about having a very clear focus and put people in a box.
In the last two years we've used holacracy as a way to give the power of that changing and that editing to the employees themselves. Now, instead of me thinking up those ideas, everyone is thinking up those ideas and testing them.
Mike Walsh: Are you just being contrarian?
Aaron Dignan: Maybe a little.
Mike Walsh: Or is it more like you're just trying to be a bit more emergent about responding to issues as they turn up?
Aaron Dignan: I think it came from an instinct or an intuition about being contrarian. That whatever the way that things are being done now can't be the best way. How can we believe that we've fully achieved what's possible in humanity?
I have a knee jerk reaction to any dogma that leads me ask, let's try a different way. Just because I'm "in charge", doesn't mean that I know a better way. It doesn't mean that I can see all the complexity of the system.
That, combined with the desire to try other things has led to a, "Let's give it away. Let's create. Let's find the few things that we are sure of, and that we want to make certain. Let's own those at the top. The purpose of the business, the vision, the values to some extent. Let's let everything else be a little bit more open, and that's been the experiment.
Mike Walsh: This has been a microcosm for a bigger idea that you call the Responsive Organization, right?
Aaron Dignan: Exactly, exactly.
Mike Walsh: In a nutshell, what is the Responsive Organization, and why is it so important right now?
Aaron Dignan: If you think about a time of rapid change versus a time where things didn't change, it's really this debate between uncertainty and certainty. Between what you know and what you don't know.
Because of the rate of change in the world now, there's more uncertainty, there's more complexity. That means that you have to engage in problems in this new way that we were talking about. What we noticed is that when we looked at companies that were doing really well in the 21st century, a Tesla, or a Google, or a Facebook, and we looked at organisms and examples from science and nature that also do a really good job under stress and volatility - that still change and adapt quickly like complex adaptive systems - we came across ants or ...
Mike Walsh: Slime mold.
Aaron Dignan: Yeah, slime mold. Love that one.
Mike Walsh: We're going to come back to slime mold.
Aaron Dignan: They use a very different play book. They use a play book that values things differently than what we value in traditional business. We've created the Responsive Org Movement as a way to hold up these two modes or modalities in contrast to each other.
Not to say that one is always right and one is always wrong, but to say, "There's a new set of skills that we need as organizations and individuals that will allow us to prioritize some things that we're not comfortable with over some things that we are." Putting adaptivity ahead of efficiency, which is very contradictory to the traditional Wall Street, market wants.
Mike Walsh: Yeah. This is very appealing as a philosophy, but how do you retrofit this to a big organization with massive corporate antibodies, structures, org charts and a very aggressive HR department?
Aaron Dignan: It's difficult. We work on that puzzle every day. That's our big hairy problem now. What we've learned is that individuals still make up those companies, and individuals by and large are very engaged and excited and motivated by these ideas.
So, if you can get individuals to try it - to put it on, take it for a spin, use it in a project basis on a team basis, on a P&L basis - it does catch. It's not a harder way to work. It's an easier way to work in this environment, it's just hard to change. For us, it's really been a hearts and minds game. One head at a time, one team at a time.
Mike Walsh: When you go into a big corporation, is really your goal to recruit a few cheerleaders and start a pilot project? How do you start that chain reaction?
Aaron Dignan: We've learned the hard way that we do need some kind of support from the top. Because if you're trying to break a power structure you need power. We do definitely look for that sponsor that gets it and that wants to empower their team and go faster. For us, that seems to be the thing that is catching with the Senior Management teams is you can go faster.
For them, they see the pressure; they feel the pressure, so they know that speed of iterations, speed of innovation, speed of connection all matters. You want to go faster, here's how to go faster without breaking the car. That's the gateway.
From there, we're looking for project teams that have important visible, critical projects on their plate. Not some skunk works in the corner. Now some little project that no one's going to notice. We did that, that didn't work because nobody cares.
Mike Walsh: If it's called "The Innovation Department", you're already suspicious?
Aaron Dignan: Not interested. I want to work on the new compensation strategy. I want to work on the product that has to get out the door or else you're going to miss the year. We try to find one or two of those marquee projects, but still a project, and let that team work in a new way, and let that team organize in a new way. Then when the results become clear, then we start to spread that.
Mike Walsh: What you're really attacking, in a sense, is first principles - the mechanisms of communication and how people work. As opposed to the higher order things of what they're doing or thinking about, right?
Aaron Dignan: Yeah. It's funny, I don't get into this very much because most people don't care. It's at the end of the day it actually is all about information. It's about information science. If you think about "What is information?" Everything is information. The table is information. The formula, the algorithm you use to define your sales calls. It's all info that's either locked or unlocked.
At the end of the day what you're trying to do is increase the speed at which that information is both being unlocked, being transported, and fluidly moving around the organization, and then being digested and then turned into actions and change. You're making an information computer. Literally the word, "computer" - out of the organism. Can it compute? Can it figure out?
Mike Walsh: Which is why networks are so important.
Aaron Dignan: Exactly.
Mike Walsh: I know both of us share a common and quite perversely disturbing interest in slime mold and ants. These are essentially organisms that are both emergent, but whose resilience is based on their network based communication and protocols.
Aaron Dignan: In fact with a lot of those things, I've started to see them not as individuals but only in the aggregate. If you imagine people talking about our brains as neurons, it doesn't make sense. You wouldn't just talk about neurons, you would talk about brains. It's equally weird to talk about ants or an individual slime mold cell as a thing. An ant is not a thing by itself. It would be dead in a day. An ant is part of a brain.
Mike Walsh: It doesn't have to be homogeneous though, does it?
Aaron Dignan: No, not at all. In some cases it's very heterogeneous, but it's a system not an individual. That's actually the big challenge that we're faced with right now as we look at ways to bring this to scale. Is that human beings are very used to being individuals. We want to have it our way. We want to take advantage of the system, it's "House of Cards." Politics, cloak and dagger, individual attribution. These systems don't reward that. These systems reward a selfless participation that lets the system hum and the system think, and the system win.
Mike Walsh: What's the payoff for an individual in that mechanism? Is it the sense of purpose?
Aaron Dignan: We think it is two things. One is definitely the sense of purpose or meaning. If you're part of the right tribe with the right leader you can really change the world, and that's exciting.
The second thing is that what's good for the system isn't always bad for the individual. Unlike ants, we don't have to die when we make mistakes. What ends up happening is that experience of working there, the connections, the friendships, the kinships, the mentorship - all of that is vastly better than in the old system. Really it is a question of, "Is it perfect?" "No, but it's a hell of a lot better than the other system that was holding you down, that was limiting your growth. This is a growth environment.
Mike Walsh: One of the stories I know you tell that illustrates the distinction between individuals and systems, is the difference between ants and bees. Which is fortunately different than the story between the birds and the bees - which I think our listeners don’t need to hear. Could you maybe elaborate a little on that?
Aaron Dignan: Yeah. Bees are interesting too, and in many ways they are a complex system and they are quite adaptive. A lot of beehives divide the work. You have a drone, you have someone that's out collecting, you have the queen, you have different types of workers with different types of roles. The communication protocols among that group are a little bit different. A little bit less responsive.
Whereas ants are completely homogeneous. You look at a colony of harvester ants, they're all genetically basically identical, they're all dividing the work based on what needs to happen, depending on the information they're receiving. They did an experiment that I love. Normally patroller ants go out and see where it's safe to hunt and look for seeds would come back. Then the harvester ants go out and harvest, or I guess the forager ants.
What they found is that if they just took the pheromone off of the patrollers, put it on glass beads and just dropped the beads into the ant colony at the right pace, the ants would still come out and harvest. Because all they're actually looking for is that information, that one little signal. Not only do they look for the signal, but the rate at which it came back. They're actually looking at the rate of return as a signal for how fast they should run out and go hunt. That stuff just makes you realise that ants don't even see each other as ants. They don't even see each other at all. They just see information.
Mike Walsh: Is this potentially the theory about why bees may die out, but we're never going to get rid of those bloody ants?
Aaron Dignan: Yup, we are never going to get rid of the ants. The ants are doing great. Yeah, it's possible that the bee colony system is not adaptive enough. That they're not able to navigate this. However, it's also possible they may figure that out and actually change their method of organization based on evolution. They're certainly struggling right now, and it is interesting to note those differences, so it might be a metaphor for what we're seeing in business.
Mike Walsh: When you're looking at networks inside companies, what's the sign of a healthy internal social graph inside a business? It's got to be more than just people using Yammer or some kind of internal social network…
Aaron Dignan: Yeah. It certainly helps if they've already moved to a real time communication system, because that's speed. Being able to do that in collectives and in troupes is important. We also look for working in public. Whether it's using something like a Google Docs, or a Microsoft 365, or even just a piece of paper on the wall. Are they exposing their information in real time to each other? Or are they waiting for the perfect presentation on Friday with the boss? That difference is huge. What we look for is a little bit of knittedness or publicness.
Mike Walsh: How do you design a perfect office? You see these big companies. The first thing they do when they make a lot of money is build some super campus.
Aaron Dignan: Yeah.
Mike Walsh: Is the future of the office really a place? Or is it more of a work mode?
Aaron Dignan: I think it's both. There's a big debate right now about remote work versus in-person work. Some of the strongest most responsive companies in the world really believe in one or the other. It's really hard to untangle that bit. What we do know is that the environment sends you signals about what matters. If I see an environment that has no whiteboards, that sends me a signal about what matters and what I should do.
I work with several clients where you go into the office and you cannot find a surface to write on. The message seems to be - why would you need to write on a surface? Then you go to another office and it's the entire walls are painted in idea paint, and that sends a signal. I think space matters. I think ultimately what matters more than anything is the behaviors and practices that become habits for people, and we've been playing a lot at work with that.
Now that we're at a certain scale and we have a certain set of patterns, a new person comes in and they almost don't have a choice. They're going to end up metabolizing that pattern set.
Mike Walsh: For good or bad.
Aaron Dignan: For good or bad, yeah. Then maybe changing it a little bit in their own way.
Mike Walsh: One thing I wonder is when you take a more global perspective is how much of this is culturally ingrained? There's an argument that one of the reasons why American companies are so good at building software in general is that it's very consistent with their world view. In some ways what we're talking about is a more software driven mentality to work. Is this hard to export to other markets if you're a global country?
Aaron Dignan: I think it's very difficult to take a snapshot of the world in time right now and say that everybody's on the same page with what they value and what their culture says is the right way to do business. There are certainly cultures where a command and control mindset is still in its heyday.
Mike Walsh: Yeah, Korea for example.
Aaron Dignan: Totally. Korea, Japan.
Mike Walsh: If you imagine Samsung US, and Samsung Korea are on the same enterprise social network.
Aaron Dignan: Right right right, yeah. It's not going to be easy.
Mike Walsh: Totally different models of communication.
Aaron Dignan: Yeah. I think that's either a result of the market’s maturity state. It might be that it's going to get to that next place. Or it might be something that so deeply ingrained in the culture that it's going to be a struggle. I think we see the same thing happen on non-business sides. Like the Arab Spring.
Is everything going the right way? Is everything moving in a direction that is more egalitarian, more participatory, more open? It seems that on the long arc of history that's where we're headed, so that any culture that's not on board with that is going to have to give up a little bit of its past in order to participate in the future.
Mike Walsh: Did you feel as though the arc is a positive one?
Aaron Dignan: Not necessarily.
Mike Walsh: In some sense you could take the ant analogy and say this is a horrible model of a workplace. Where we're effectively all completely dispensable and we're responding to signals.
Aaron Dignan: Yeah. Luckily we don't have to go that far. When you measure the engagement and the workplace satisfaction of people that are working in this new way, it's higher than the other way. We don't have to debate about whether it's a more humanitarian experience. It's a better experience.
Mike Walsh: It was better than the horrible experience.
Aaron Dignan: Exactly. What I am worried about and what I do hear where you're coming from is that if you look at a future that's dominated by robotics, by AI. If you watch the, "Humans Need Not Apply" video on You Tube, you would see a future where actually bringing these ideas to their full fruition would mean taking people out of the equation altogether. Because why not have algorithms just doing all the work? That's a little bit scary.
Mike Walsh: There is a big debate at the moment. Everyone from Hawking to Elon Musk are saying that we have to worry about robot's and AI's as existential risks. One of the things that I've often wondered is that, "Whose jobs are actually at risk?" When you have machine learning and algorithms and monitoring software, is it the people in the warehouse who are going to lose their jobs? Is it the people in the Boardroom? Is it the middle managers? What does the workforce look like in a more AI driven world?
Aaron Dignan: I think in "Second Machine Age", the authors talk a lot about how there are tasks that are routine and non-routine, and there are tasks that are cognitive and non-cogitative. Basically their model of how AI is going to eat the world is that the routine, non-cognitive tasks go first. Navigating my car to the movie theater. That is the same every time, it's routine, it's non-cognitive. You don't have to think up some new creative answer. You look at tasks like that, then you look at Accounting. You look at Tax Law. You look at legal research.
Mike Walsh: Yes, let's get rid of the lawyers. No one's going to complain about that.
Aaron Dignan: Yeah. No one wants the lawyers, so you get rid of them. I was actually in Texas for a speech and I stopped at a truck stop. I looked at a sea of trucks. I thought, "How many of those people know that in five years’ time they're all going to be out of work?" When you do the math, Great Depression era unemployment was actually not that many people. We could very easily have that many people unemployed.
Mike Walsh: I really hope for your physical safety you didn't get on a soapbox and give that speech to all those truckers.
Aaron Dignan: I didn't, but I tell you what I do is every time I'm in a car with an Uber driver that's really nice to me, I tell them to think hard about what they're going to be doing for a living in five to ten years. Be aware of what might be coming and think about your options.
Mike Walsh: Because they are to Uber what the envelops were to Netflix.
Aaron Dignan: Yes, one hundred percent. One hundred percent, and I feel for them. I think frankly in a lot of cases this is an opportunity for people to do more meaningful work, that they're capable of doing, but they're just stuck in something menial. In other cases it might be really different and detrimental, so we have to navigate both.
Mike Walsh: What time frame are we talking about? At the moment we've got machines that have learned by watching You Tube to recognize cats or play Space Invaders. At what point do we really start to see the impact of AI in the workforce?
Aaron Dignan: To a certain extent we already are. Most people don't know that about eighty percent of the stock market is now traded by algorithms, but it is. Most of your modern global capitalist system is being run by computers already. You go to the grocery store and there used to be check out assistants, and now there's those little things you check out yourself. That's a robot, that is.
I think it will come slowly. What's interesting about exponential technologies is that they're exponential. There's literally an arc that says, "It's not very interesting. It's not very interesting. It's not very interesting." Then suddenly, "It's very interesting." I think it will be the exact same thing, so we'll see probably another two to three years, maybe four to five years of not really sure what to make of it, and then one day we're going to wake up. I have a two year old son. I'm convinced he will not have to learn how to drive. Convinced. My wife and I are, "Forget about it. Don't even worry about it."
Mike Walsh: What advice do you give your son? What do you think he should study to be well prepared to survive in this world?
Aaron Dignan: We talk about this constantly. I basically have a four block matrix. As a good traditional consultant, I've got a four block matrix - learn how to create things alone, and create things together. Learn how to solve problems alone and solve problems together. I know it sounds really reductionist, but I actually really believe that if you unpack those skills you've got a lot of what it will take to navigate an exponential, complex, uncertain world.
Mike Walsh: This is the computational thinking paradigm as well.
Aaron Dignan: Yeah. That's what we do at home.
Mike Walsh: Aaron, it's been a great pleasure seeing you again. Thank you for your thoughts.
Aaron Dignan: Absolutely. Thanks for breakfast.
