The document outlines ten observations about digital transformation, emphasizing the importance of technology adoption, creativity, and the inevitability of change. It highlights the need for organizations to adapt their methods and designs to remain relevant and competitive in a digitally disrupted landscape. The insights draw on examples from various industries, illustrating the critical question of user engagement and the necessity of taking action to foster innovation.

1. BY @MIKEARAUZ, PARTNER AT
ON
THE NATURE OF
DIGITAL
TRANSFORMATION
10 OBSERVATIONS

2. 1. TECHNOLOGY IS
A SCIENCE,
BUT GETTING PEOPLE
TO USE IT IS AN ART.
BY @MIKEARAUZ, PARTNER AT 2

3. According to Margaret Gould Stewart,
Director of Product Design at Facebook, it
took the designer over 280 hours to perfect
the redesign of the Facebook “like” button,
a small but vital element of the social web
that is seen on average 22 billion times a
day across over 7.5 million websites.
Source: http://blog.ted.com/2014/03/19/three-lessons-for-designing-for-the-whole-
world-margaret-gould-stewart-at-ted2014/
BY @MIKEARAUZ, PARTNER AT 3

4. THE DIFFERENCE BETWEEN
PROMISING AND LEGENDARY
DEPENDS ON INTUITION,
CREATIVITY, AND TASTE.
THE BEST TECHNOLOGY
COMPANIES
IN THE WORLD FIND WAYS TO
BALANCE THESE FORCES.
BY @MIKEARAUZ, PARTNER AT 4

5. 2. OUR INABILITY TO
PREDICT THE FUTURE
DOESN’T MAKE IT ANY
LESS INEVITABLE.
BY @MIKEARAUZ, PARTNER AT 5

6. In 2004 it was difficult to predict whether
Friendster, MySpace, or Facebook would
be most successful. Looking back, it turns
out that the true measure of your wisdom
wasn’t whether or not you bet correctly,
but rather whether or not you bet at all.
BY @MIKEARAUZ, PARTNER AT 6

7. EMBRACING POSSIBILITY
INSPIRES EXPLORATION AND
ACTION.
QUESTIONING POSSIBILITY
OFFERS THE SKEPTICS A
CHEAP AND DANGEROUS
EXCUSE FOR DOING NOTHING
AT ALL.
BY @MIKEARAUZ, PARTNER AT 7

8. 3. EVERYTHING CAN BE
DISRUPTED.
BY @MIKEARAUZ, PARTNER AT 8

9. Tesla barely made it out of their start-up
phase, but now they’ve got the safest car
ever tested, the best rated car ever by
Consumer Reports, and they’re blowing
other auto stocks out of the water. Just
because the car business is hard, doesn’t
mean it can’t be completely transformed by
a former software engineer.
BY @MIKEARAUZ, PARTNER AT 9

10. DIGITAL DOESN’T RESPECT
BOUNDARIES.
REGARDLESS OF THE
INDUSTRY, DIGITIZATION WILL
UNCOVER INEFFICIENCIES AND
CREATE VALUE.
BY @MIKEARAUZ, PARTNER AT 10

11. 4. “ARE PEOPLE USING IT?”
IS THE ONLY QUESTION
THAT REALLY MATTERS.
BY @MIKEARAUZ, PARTNER AT 11

12. WhatsApp was acquired by Facebook for
$19 billion (that’s roughly 1/3 the market
cap of Ford Motor Company). For those
who are baffled by the size of the deal, look
at the number that matters: as of
December 2013, WhatsApp had over 400
million active users per month (the
population of the United States is roughly
313 million).
BY @MIKEARAUZ, PARTNER AT 12

13. WELL-INTENTIONED EXECUTIVES
BUILD A GAUNTLET OF
QUESTIONS, INTENDED TO
ENSURE SUCCESS, THAT END UP
KILLING INNOVATION.
YOUR JOB AS A BUSINESS
LEADER IS TO ANSWER THIS
QUESTION FIRST, AND FAST: ARE
PEOPLE USING IT?
BY @MIKEARAUZ, PARTNER AT 13

14. 5. TRYING SOMETHING
COSTS LESS THAN NOT
TRYING ANYTHING.
BY @MIKEARAUZ, PARTNER AT 14

15. In 2009, Jack Dorsey’s friend James
McKelvey, a artisan glass-blower, went
to their local Techshop and a month
later had a working prototype of what
would eventually become Square, the
disruptive payments company now
valued at over $8 billion.
BY @MIKEARAUZ, PARTNER AT 15

16. THE COST OF INACTION IS
HIGHER THAN YOU THINK.
IT’S ONLY A MATTER OF TIME
UNTIL SOMEONE DISCOVERS
THE BREAKTHROUGH
SOLUTION THAT WILL DISRUPT
YOUR BUSINESS.
BY @MIKEARAUZ, PARTNER AT 16

17. 6. YOU CAN’T CHANGE
WHAT YOU DO
WITHOUT CHANGING
HOW YOU DO IT.
BY @MIKEARAUZ, PARTNER AT 17

18. “We had to think about if we’re going to be
in a business that’s changing that quickly,
how do we avoid institutionalizing one set
of production methods in such a way that
we can’t adapt to what’s going to be
coming next.
…because as useful as they are in the short-
term in the long-term they really end up
hurting you a lot.”
Gabe Newell, co-founder and
CEO at Valve, in an interview
with the Washington Post,
January 2014:
BY @MIKEARAUZ, PARTNER AT 18

19. YOU CAN’T USE YESTERDAY’S
WAY OF WORKING TO BUILD
TOMORROW’S SOLUTIONS.
BY @MIKEARAUZ, PARTNER AT 19

20. The companies that are leading our
economy and shaping our future are
working in a completely new way.
At Undercurrent, we call these
companies responsive organizations,
defined by a new set of operating
values:
BY @MIKEARAUZ, PARTNER AT 20

21. 7. IF YOU’RE NOT
DESIGNING FOR
NETWORKS, YOU’RE
MISSING THE POINT.
BY @MIKEARAUZ, PARTNER AT 21

22. When Google bought the car navigation
app Waze for $966 million, they framed
the acquisition in terms of users, not
technology:
“This fast-growing community of
traffic-obsessed drivers is working together
to find the best routes from home to work,
every day.”
Source: http://googleblog.blogspot.com/2013/06/google-maps-and-waze-
outsmarting.html
BY @MIKEARAUZ, PARTNER AT 22

23. DIGITAL THINGS DON’T GET
USED UP WHEN THEY GET USED.
THIS IS WHY FIGURING OUT
HOW USERS CAN CREATE
VALUE FOR EACH OTHER IS
NOW FUNDAMENTAL FOR
CREATORS OF DIGITAL
PRODUCTS AND SERVICES.
BY @MIKEARAUZ, PARTNER AT 23

24. 8. INNOVATION IS
RECOMBINANT, AND
SPEED IS THE NEW IP.
BY @MIKEARAUZ, PARTNER AT 24

25. Sir Tim Berners-Lee:
“When I say I invented the web, I really
just put together the last few pieces out
of a construction kit, which had
already been made.”
BY @MIKEARAUZ, PARTNER AT 25

26. HUMANITY HAS NEVER HAD
MORE WORTHWHILE IDEAS. IT’S
NEVER BEEN EASIER TO FIND
THEM. AND IT’S NEVER BEEN
EASIER TO BRING THEM TO LIFE.
THE CHALLENGE IS WHO CAN
GET THOSE GOOD IDEAS IN
FRONT OF REAL USERS FASTEST.
BY @MIKEARAUZ, PARTNER AT 26

27. 9. YOU CAN’T ESCAPE
COMPLEXITY.
BY @MIKEARAUZ, PARTNER AT 27

28. The open-source operating system Linux
has evolved into one of the world’s most
popular operating systems with a large,
diverse and disorganized collection of
contributors, free and open access to its
source code, and constant iteration and
variation of the product.
Mostly the exact opposite of Microsoft.
BY @MIKEARAUZ, PARTNER AT 28

29. LIKE A 21ST CENTURY MIDAS,
DIGITAL TECHNOLOGY MAKES
EVERYTHING IT TOUCHES
COMPLEX.
SEEKING SIMPLICITY IN THE
FACE OF COMPLEXITY IS
SIMPLY A FASTER ROUTE TO
OBSOLESCENCE.
BY @MIKEARAUZ, PARTNER AT 29

30. AS THE INDUSTRIAL REVOLUTION
WAS DEFINED BY RADICAL
EFFICIENCY IN PRODUCTION, THE
DIGITAL REVOLUTION IS DEFINED
BY RADICAL EFFICIENCY
IN INFORMATION TRANSMISSION.
10.
BY @MIKEARAUZ, PARTNER AT 30

31. Andrew McAfee and Erik Brynjolfsson,
The Second Machine Age:
“Computers and other digital advances are
doing for mental power— the ability to use
our brains to understand and shape our
environments— what the steam engine and
its descendants did for muscle power.”
BY @MIKEARAUZ, PARTNER AT 31

32. IF YOU’RE RESPONSIBLE FOR A
BUSINESS OR INDUSTRY, AND
WONDERING WHERE THE
WEAKNESSES OR
OPPORTUNITIES LIE, LOOK
CLOSELY AT THE CRACKS AND
CREVICES WHERE INFORMATION
IS CURRENTLY TRAPPED, AND
HELP IT TO FLOW MORE FREELY.
BY @MIKEARAUZ, PARTNER AT 32

33. TO LEARN MORE
READ THE FULL ARTICLE HERE:
HTTP://MEDIUM.COM/P/9A889AA170D1
BY @MIKEARAUZ, PARTNER AT 33

34. CREDITS
None of these ideas are mine alone. They are built upon the work and great thinking of many other
people who are all infinitely more brilliant than I am. In addition to my inspiring colleagues at
Undercurrent (including Aaron Dignan, Clay Parker Jones, Bud Caddell, Jordan Husney, and others)
here are some books that I consider to be seminal:
!
• Understanding Media by Marshall McLuhan
• The Innovator’s Dilemma by Clayton M. Christensen
• The Cluetrain Manifesto by Rick Levine, Christopher Locke, Doc Searls, and David Weinberger
• Emergence by Steven Johnson
• The Wealth of Networks by Yochai Benkler
• Here Comes Everybody by Clay Shirky
• Complexity: A Guided Tour by Melanie Mitchell
• Getting Real by 37Signals
• The Second Machine Age by Erik Brynjolfsson and Andrew McAfee
BY @MIKEARAUZ, PARTNER AT 34

35. MIKE ARAUZ
Mike is a Partner at Undercurrent, a strategy firm for the 21st century.
Mike has helped leaders of global organizations, including GE, PepsiCo,
Ford, American Express, and The Bill & Melinda Gates Foundation,
understand how technology is disrupting their world and what to do about it.
Mike is available for speaking at summits and conferences, as a workshop
facilitator, and as a guest writer for print and online business publications.
Get in touch:
http://www.mikearauz.com/