Being small and isolated is a plus, not a minus, says strategist

Aaron Dignan has a mission: to help businesses survive and thrive in the new digital environment. The actual mission statement of his organisational design and strategy business, Undercurrent, is to "help ambitious teams and organisations to discover the courage and capabilities to do the impossible".

For many of his clients, the "impossible" is to stay ahead of competitors that may not have even existed two years ago.

Dignan's New York-based firm assists many of the world's largest companies - the likes of GE, American Express, Hyatt, PepsiCo and Ford - which have found their large, complex organisational structures to be a liability in the face of constant change.

He's even been happy to evolve his own business, after starting eight years ago as a digital strategy firm advising companies on the implications of 3D printing, big data, mobile technology and social media.


"What we learned is even if we knew the implications, the companies we were talking to weren't able to change fast enough and actually the issue was just how do they metabolise this change and how they can be that big but still move fast.

"So that became our new problem that we fell in love with."

The solution came from two sources: the complex adaptive systems of nature and technology such as ant colonies, the immune system and the internet, and the new generation of successful companies such as Google, Tesla and Amazon, built from scratch around a new operating model.

It requires a new understanding that the world is about uncertainty instead of predictability, says Dignan. For a legacy business that has sunk a lot of time and energy into its current model, is this a challenging place?

"It is, because it suggests what is current and normal and the way we do things might be under threat and it also suggests that people who are maybe comfortable doing things one way have to get uncomfortable to try and do it another way."

So how do these businesses play catch-up? Dignan says his philosophy is not about spending large amounts of money on changing your business; it's all about speed.

"If you're competing with start-ups or you're competing with incumbents that are bigger than you, what can you be faster at?

"What is it you can learn at a rate of speed that they can't learn at, for whatever reason; maybe it's money, maybe it's they're too big, maybe they're not in that market, maybe it's they don't know how to think about it, because if you do the math on being a 2 per cent faster learner every month, in two years you're the dominant player."


He admits it's both simple and difficult at the same time and says achieving that successfully will come down to hiring the right talent.

Usually big companies have eight managers for every two "makers", a ratio that needs to be flipped. Makers outnumbering managers means time is focused on faster learning from quick turnaround projects rather than lots of talking.

"That whole idea of people trying things at lower fidelity and learning faster feels artificial for big companies used to grand announcements and big sponsorships and putting their name on the side of a building.

"It's somehow beneath them that they would just try an experiment; or they don't have the capability, they can't reach just 1000 customers, they can only reach a million." And it means giving authority to these makers to make on-the-spot decisions, says Dignan, who suggests starting with a single project.

"The instinct is to put it on projects that are not important; we've learned through practice this isn't the best way to spread these practices so we do fight for projects that are at least important in the organisation, that have some meaning, that people get excited about.

"There's some battle to get a good project in your hands, so once you've won that battle on a few they carry some weight when they work."

Typically there may be push-back, people keen to preserve the status quo and a little bit of "wow, this seems like a lot of work", says Dignan. "The only thing that will be more challenging than that will be filing for bankruptcy."

Dignan was brought to New Zealand by Spark Digital, formerly Gen-i, to speak to its management and customers. Many of the questions he fielded were the same as an American business audience would pose - how do we transition and where do we start? - but one question was different: what does it mean for New Zealand businesses being based in a small, isolated country?

"My honest answer was I think it is just a huge advantage. The world is more connected than ever so there's no reason that great ideas can't be born in New Zealand and serve the world, and I think Xero is a perfect example of that." As increased automation signals the demise of the 100,000 person company, that's a "gift" for small New Zealand companies.

"You'll be able to transition, execute and change the quality of execution ... for those customers in a timetable that American companies can only dream of."