Aaron Dignan CEO of Undercurrent. Digital advisory board of GE, AMEX, Pepsico. Partner to Fortune 100 orgs and startups. Creating Responsive companies for the 21st Century.
He starts off with a story of a 3D printer -- Design guys needed 3D printers to print prototypes. But the printer was too expensive to buy. So they made their own. MakerBots (demand got so high they were using MakerBots to print MakerBots). In 5 years they brought a 3D printer down to $2,000 (from $300,000)...MakerBots then got bought for millions by the company that they originally wanted to buy the printer from...
How can we do this in 1/2 a decade?
It's much easier to bring an idea to life today. (You can raise $ on Kickstarter, you go to LinkedIn/etc to get your team, you get your marketplace on Amazon/eBay). There's so little friction to bring something to life.
It's easier to bring a product to scale.
It's possible today to build a billion dollar business in 12 months. You can reach so many people in such a short time. The platforms are there. Scale is extremely elastic.
3 things that drive that reality:
- Moore's Law: More power on a computer chip every 18 months for the same price --double the power every 18 months. No everyone in this room has a computer more powerful than the ones that took us to the moon. This power is almost disposable. Who even knows how many megapixels the camera on their phone has now. It's plenty!
- Platforms: Products become building blocks for others. Apple, Android, etc.
- Networks: People have done the work of connecting things that were unconnected. And we can all take advantage of that. Because people built a network of cell towers, you can use it.
Uber -- they didn't invent the mobile phone, the apps, the car, etc. All they invented was this thin layer -- how do we connect supply to demand? And then push this interface out across an existing network of iOS and Android and cell towers...
Any business that doesn't know what their networks and platforms are -- they're missing it...
AirBnB -- a platform that lets you offer up your room for rent. It's difficult to decide where AirBnB ends and the world begins...the whole community becomes a part of that network. You stay in an Airbnb apartment in Paris - on the fridge, a note says to check out the cafe downstairs...It's now the first or third biggest hotel chain in the world (depending on how you measure it) -- with no real estate!
Tesla -- electric cars -- they're now building the networks of charging stations all over the world. And now Tesla is giving away their IP so anyone can build the car. But they're thinking, the value will be in the infrastructure and power game and transportation. Making platform and network decisions to grow and share in those areas.
A whole lot of companies thinking this way: Netflix (60% of Internet traffic these days!), Spotify, Google, Zappos -- trying new approaches to the way they work, the way they organize. They're experimenting.
Today - the average lifespan company on the S&P index. in 1960 you'd be on it for 60 years. Today the average lifespan is 15-18 years. For most companies that don't have that level of success -- 5 years.
It's really hard to stay big and important. The world turns a lot faster. A kid in a basement with his friends can really hose your category if they don't have that 3D printer they want.
We're up against complexity plus the urgent need to change at scale.
A ton of wisdom today in saying "We don't know." Uncertainty is the new black.
Complexity Science. Go to Complex Adaptive Systems page on wikipedia. Dozens of systems in nature that have to deal with lots of change and are incredibly adaptive. We need to build our teams to thrive in that kind of system. How to we build this into our leaders? It's a mindset shift.
Most people are in love with a 20th century mindset -- because it's comfortable. It feels safe.
Ants are pretty simple, but create a pretty complex system.
Some are exploring the core business.
Some are exploring the periphery (the new business).
Once the find something, they will coalesce around that.
When information is low, more experimentation. When info is high, less experimentation.
Most of our companies have a handful of competitors. Your immune system has unlimited enemies. It doesn't know. Uncertainty of competition. If you don't have certainty, you experiment. Every day your body produces millions of lymphocytes -- each one slightly different - to react to different pathogens. They all go out in the system. And once in awhile, one finds a pathogen. "I've got product market fit. I've got a customer." Then they get sucked into your lymph system and they make a ton more (like the VC community). Lots of volatility and uncertainty. But when there is signal, there's a lot of alignment. Your body does a budget every hour.
In a model where things are certain, you focus on profit. Where things are uncertain, you focus on purpose.
Good talent can choose where they go to work. It's not just for salary, it's gotta be about purpose. Purpose is our weapon -- to create a galvanized community of membership. If you don't have that commitment, then you won't succeed.
Hierarchies vs. Networks: Think about the business itself as a network and not a hierarchy. Break down -- need self organizing behavior so we can regroup quickly. Networks help us working in new ways. Blurring ideas of the inside and outside.
Planning vs. Emergence: Most people love a good plan. You make a plan and see what happens. Plans are lies committed to paper. Pull out the plan from last year and walk me through how it happened. The reality is: THINGS CHANGE. It doesn't mean we should scenario plan, have goals, have a sense of where we're going -- that's all good. But having to stick to the plan dogmatically is not good.
Emergence says we don't know. Let the plan emerge, using simple rules.
Let's clean the room.
1. Write a big plan for how to clean the room. But then if something changes, that plan will be useless.
2. Have one simple rule coming in the door. "If you're coming in the door, I have to trust you." The simple rule is -- leave the room as you found it. Now you can adjust as you need to.
Efficiency vs. Adaptivity
In the old model, you put your plan in place and you want to get in and out as quickly as possible. Six Sigma. Get all the defects out.
But what if things start to move and change? You need adaptivity. (Tesla built their cars to be adaptive with all the time wifi access so you can change the car on the fly -- no recalls needed).
Adaptivity is almost always more beneficial.
Controlling vs. Empowering
In a world that doesn't change very fast, control works. Send out the orders! But when things change faster, the info doesn't get back to the top quickly enough and due to complexity, that person can't know everything that's going on. There's too much. So you have to push authority out to the edge. You try to run the play, but as things change, each individual has the power to change things.
Privacy vs. Transparency
This is one of the hardest. In the old world, info is valuable if you keep it secret. People hoard info. The problem is that if you hoard it, you're making a judgement about what you think will happen -- and you might be wrong. In a transparent org, we work in public. We don't know what info people will need in order to be brilliant. Transparency about everything...
Purpose: are we in pursuit of something meaningful?
Networks: are we leveraging, growing and serving networks of people and tech?
Emergence are we planning too much and not testing and learning enough?
Adaptivity are we over-engineering things?
Empowering: are we pushing authority to the edge of the org? Is it clear who has it? The leader's job is to set the stage.
Transparency are we letting info flow? is it improving our decisions?
[Cammy: Really interesting keynote! How do we change our own ways of working and move the needle within our organizations? This is easier, clearly, at a small company that works more like a start up. How do you change this mindset in a big org?]