Today, our guest is Charles Araujo. He’s the founder of the Institute for Digital Transformation. He’s a speaker and the author of three books. This episode is Work Minus Roboticness. Hi, Charlie. How are you?

I am great. It’s a pleasure to be here with you.

And also with you. You do a lot of speaking on topics that are very important for us and for our audience. So, we’re very thankful to have you on the show. Why don’t you start off just telling us a brief overview of all the different types of things you do?

I’ll try to keep this brief. I’ve been doing this for a really long time so it’s hard to condense it, but at my core, I’m an IT guy. I ran technical operations for a billion dollar healthcare firm 20 some odd years ago and then really spent my career advising large enterprises mostly as they went through these very transformative journeys. Along the way, I ended up giving the speeches on a speaking tour in New Zealand. I ended up giving a talk for something called the Digital Disruption Conference. It was hosted by the Auckland University of Technology, the US Embassy, and it was like the business elite of New Zealand, of Auckland. Those were all very academics and tech startups and a lot of smaller companies and what have you, and it forced me to step back and ask how all these forces that I’ve been researching and writing about and talking about how they’re actually affecting the broader world outside of IT. That’s what led me almost six years ago now to start focusing on digital transformation. But it was really before it was this big buzzword and I was really just recognizing that we’re entering this time in which the fundamental ways that organizations are structured, managed and led, were in fact changing. That’s been the focus of my work since then. As I’m sure we’ll talk about, it’s led me down a couple of paths to a couple macro trends that I’m following. That’s really where I put all my energy now.

So, we are in April of 2020 right now, recording, so everyone knows what that means. We are in the midst of this lockdown with COVID-19 going on. A lot of people will flippantly say, hey, we piggybacked into the future of work a lot faster than we were going to. What’s your take on that? Is this just a blip on the screen? Is this something where we’ve entered an alternate reality that we weren’t ready for? Or how do you feel like this crisis is pushing us towards the future?

Clearly not a blip, a little bit of the alternate reality, and we definitely weren’t ready for it. Somebody, who I need to find out who said this because I can’t remember now, but somebody called this the greatest work from home experiment the world has ever seen. I think that really sums it up. This is an area that I’ve been focused on and following for a long time. One of the great resistors has been that we can’t send our people home. We need our collaboration. We need this sense of community. We need all these reasons why we couldn’t break this barrier. As someone who’s worked from home for over 20 years, it’s always rung hollowed to me. But there was this inertia, this resistance to it. And overnight, not only did that get undone because we had to send people home or most people to work from home, all those excuses have fallen away, because we’ve proven it. We had to. We’ve all had to function this way. And so, I’ve been writing about this quite a bit over the last several weeks that it is absolutely not a blip. What I think we’re going to see is that when we do come out of this, and we’re going to come out of this, I don’t know what the new normal looks like but offices will reopen, some degree of normalcy will return. But when people go back to the office, they’re not going to keep working the way they used to work. This experience is going to change cultures, change the way people look at the way they interact, the way they collaborate. So, I think this is most definitely not just a blip that we all suffer through and then life goes back to normal.

When we think about the future of work, what is one way that you feel like that we’ve just converted things digitally just in the meantime without really deeply understanding what it means to have digital transformation?

What’s interesting about this is that this has been bubbling for a very long time in that most of the way organizations are structured, managed, and led today are really artifacts of the industrial era, this time. So, I mentioned these two macro trends that I’m following. One is called the primacy of the customer. We’ll skip that one for right now. The other is called the primacy of the algorithm. During the rise of the industrial age, what this was was about producing a mass product for a mass market. If you’ve seen the show like “Mad Men” or done any research on this, it was all about this optimization. How could we take this mass product and deliver it as efficiently as possible to a mass market? That’s how we created value throughout the industrial age. The very beginning, the industrial barons needed a way to produce products in a highly reliable, highly consistent, highly efficient manner. What they really needed were robots. We didn’t have robots 150 years ago. So, what did they do? They basically created robots out of us humans. And so, if you look at our hierarchical models of the way organizations are structured, if you look at our educational systems, even our government regulations and policies, we’re all basically all built around this idea of creating human robots. What is interesting and what has been transpiring over the last 10 or 15 years is that technology is now reaching this point that anything we can reduce to an algorithm we’re going to automate. Tongue in cheek, I say the robots are coming back for their jobs. It means we’ve been in this slow transition where it’s fundamentally that the nature of what it means to work in an organization is changing because of the fact that we can now automate so much and that certainly started within big organizations, but it’s now trickling down. I run a small organization and we are automating everything, from a marketing standpoint, from an operational standpoint, receipts are being scanned and all of these things that we used to have to do manually, we’re now automating. It’s fundamentally changing the nature of the work we do. I think that all this that’s happening now is just accelerating that and it’s bringing it to a head. But this has been happening for a while.

What are some of the more surprising things you feel like a fall under that primacy of the algorithm that maybe some people aren’t aware of are happening now or will happen in the very near future?

I have in this email journal or digital journal called Your Digital Future, and in the initial set, I talk about this primacy of algorithm. I have an exercise to take what you do on a day-to-day basis and start writing down all the tasks you do. Then seriously ask yourself whether or not it can be reduced to an algorithm. When people do that, it’s almost shocking to them. I’m a knowledge worker. I’m a creator. And yet, if when I do that, go through that exercise, how much of what I do, even today on a day-to-day basis, is in fact algorithmic? Now, the technology is not all the way there yet. But if we start projecting forward, how much time do we spend things like scheduling meetings? How much time do we spend on things like all of our accounting and expense reports, and blah, blah, blah? You name it, we spend a tremendous amount of time. I think the surprising thing is how little time we actually spend creating, doing things that actually are using our brain in a way that is taking full advantage of it. I think that’s actually the most surprising thing because we’re going to find that it is a ton, and this is the scary part because there are some people that that’s their entire job. Everything they do is in fact something that’d be reduced in an algorithm. And for those people, I think they need to be very aware of this and very concerned. For most of us, or for a lot of us anyway, it’s a mix. It’s a matter of how do we split that. The challenge, though, I think that my long winded answer here to your question, the thing that may be also surprising is how much relative values so many of us put on those routine things. I’m as guilty as anybody of this. I’ve always been a to-do list checklist guy. I love checking things off. The easiest thing to check off are those highly routine things that we can do easily.

But it makes us feel like we’re working, right?

It makes us feel like we’re accomplished. My system I use gives me a little star if I check three things off in a day. It’s like I want that star. It’s a silly thing. I think the surprising fact is that as we start going through this process in earnest, it’s actually going to create this, one, a wealth of opportunity, but also this weird anxiety and pressure because the easy to do things are going to start falling away.

Well, here’s something for you. I feel that I want that star feeling. I want to feel productive. What’s your opinion? Do you feel like that’s human nature on a very base level? Or is that holdover from that creation of robots, robotic humans that you were talking about before?

That’s a great question. I think the answer is both. Certainly, even the whole movement more recently around gamification is this highly entrenched idea that we can incent people by giving them, like when I had a dog, she’s now since passed away. But we got her about 15 years ago, and she’d been abused and she didn’t want to eat. And my son, who was just very small at the time, would create this little trail of kibble from the living room all the way to the dog bowl to try to teach her that it was okay and it was safe. Well, that’s the management methodology that organizations have used, that we can get people to do what we want them to do if we give them little pieces of kibble that they have to follow to lead them down the path we want them to go down. I think that there’s certainly a part of that where we are societally trained. Even if you go all the way back to our educational systems, it was the rare class that basically said learn all semester, at the end, we’re going to have a test, a final, and that’s going to be your grade. Most of it was a whole series of little kibble in the form of little exercise assignments you get to do and you got your little stars. We’ve been trained that we want that immediate feedback. So, I think part of it is entrenched, but part of it, part of the reason that gamification works is that we are also biologically programmed to want that, to want the interaction. And you and I, I know we’re only releasing this in an audio format, but we had this video going and part of the why is that if I say something interesting, your face is going to change. And that gives me that instant gratification of, hey, I did something good. I think it’s a mix of both of it. Part of the challenge, I think, for us, when we’re talking about this act of creation is to find those small little moments of response to keep us going when we’re eliminating all the quick checkboxes.

I feel like it’s related to our education system. We’re built to get those rewards that we see. There are people who exist outside of that who are doing unique things in education. So, it’d be interesting to see studies on that and how people respond to those things. But I think it goes back to another point that you make, too, about that we’re really optimizing the work world for efficiency still, and we’ve reached a limit in how efficient humans can be. We’re in that struggle period where it’s not really working to make ourselves even more robotic, and we’re finding that we are quite bad at it, actually. And the robots are getting much better at it. So, we have to make that change. So, what’s the opposite of optimizing for efficiency, you say optimizing for creativity. So, tell us more about that.

First of all, you’re 100% correct. We cannot out efficient or out optimize a robot, a machine. That is what they were designed for. That is what they are great at and we will never do that. In fact, even in the things that we do on a daily basis where we think we’re doing that, it’s actually the little inserts of creativity that make the difference. So, I do firmly believe that I think that as we reach this tipping point, and people sometimes call me a futurist. And I laugh about it because I don’t really know what the future is going to hold in terms of like giving you these hard predictions. I don’t know if this is over the next 2 years, 5 years, 10 years, 50 years, and I’m going to bet, though, it’s sooner rather than later. As this happens, and we automate more and more of what we can reduce to an algorithm, what that leaves for us as humans are effectively three things. In all my research, I tried to boil down this idea of what I say these are humanness, that humanness will be the driver of personal, of individual value, of how we create value for ourselves in our organizations. It’s going to be our humanness. I was challenged to say, well, what does that mean? What does it mean to be a human?

And I boiled it down to basically three things, and that’s creativity, imagination, and empathy. These are the three things I believe that machines either can’t do or won’t be able to do for a very long time. Or that we don’t want them to do. There are robots now that can deliver food at a restaurant, and actually, you can see this at airports where they’re doing parts of this where you have a little tablet there, no waiter comes takes your order, you hit the little tablet and you order it. I don’t know if you’ve done that, but it’s a horrible experience. I don’t want that. I like the waiter to come and tell me the special and I can ask them, I can’t decide, which do you like? I don’t know why I ask some random waiter what he likes, and that somehow is going to give me the direction of what I’m going to choose. But we do it. We love that human interaction, and it all comes down to, I boil it all down to this word empathy. But it’s the same thing with the food. I can take a recipe and turn that, that is effectively an algorithm. But the act of creating to begin with, and the finesse of the imagination, creativity of how we bring that plate, that meal to the plate and deliver it, that is an act of creativity that we don’t really want a robot to do. For McDonald’s, I could see a future where McDonald’s is 100% fully automated, a blackout operation where there’s nobody there because that’s not about creativity, and imagination, and empathy. It’s about just I need a burger and just give it to me. So, I think we’re going to see this split as time goes on. But for right now, and certainly what I’m telling my kids or anyone that will listen is that these are the things that you should be focused on if you want to have longevity. It’s like how do you bring creativity, imagination, and empathy into everything that you do.

If we’re talking to a CEO, a leader of a company that’s in this growth stage, they resonate with this, they think that you’re right, how do they build that in their own company, these three things of creativity, imagination, empathy, and yet still say, hey, we’re not there yet. We still have manual work we have to get done. So, what’s the blend you would suggest to those people?

Two things, first of all, I want to make sure I’m clear that that doesn’t mean all the optimization and efficiency work simply goes away. This is attitude. This is not replacement, meaning you still have to deliver a product or a service or a solution to the market. And you still have to do that in an optimized, efficient way. My point of all of this is that’s just table stakes. The question is what is going to differentiate you as an organization is whether or not your team embodies these characteristics. Are they, in fact, rule followers and order takers where if you don’t tell them exactly what to do, then they’re just going to sit there twiddling their thumbs. If you’ve created robots that simply only follow instructions, then you’re going to have a difficult time surviving, because the market is changing so rapidly, so dynamically, that you need this creativity, imagination, empathy infused throughout your organization so that your entire organization itself becomes agile, becomes highly adaptable. So, the question of how do you do that, well, the first is you have to break through your own historical paradigms. We all grew up in this educational system. Most of us didn’t start working starting our own business. Most of us work in large enterprises where we learned the hierarchical models and structures. And what do we do? We bring them to the organizations that we then found, or if we’re now a leader in one of these organizations we take, well, it worked there. It worked in the past. So, let’s bring it into this and try to do it. One of the things that I find so challenging is that, especially if you’re a smaller organization, doing that trying to replicate these big hierarchical models, and bureaucracy laid in management structures, totally destroys the single greatest advantage you should have as a smaller organization, and that is your nimbleness, your ability to pivot and to react and respond and lead the market. And so, I think it’s about giving them the freedom to break those chains. There’s a whole bunch of stuff. We’ve launched some workshops and some programs around that to help get people out of this traditional mindset of following the rules per se. I think part of it’s personal and individual and part of it’s organizational and structural to help lay that groundwork that people can start embracing these very human skills.

Even as I’ve been talking with other people, I find that in my area, when I hear about large organizations around us, people are saying, well, they were already set up for work from home, they’d already been trying this for a long time, they’ve had these initiatives, where these smaller companies are the ones that are struggling to figure out how to do that, which in my mind felt opposite. It should be the big companies are the ones that are very, really rigid and can’t make these big shifts, but the small ones should be able to, which I think speaks to what you’re trying to say, too.

Yeah, well, and in part because the flip side for smaller organizations is they also often lack the resources. The work from home movement involved a lot of things like making it from a technical standpoint, making sure your systems were set up in a place that they were protected and secure that people could access, that you had people set up in such a way that they have the necessary work environment, and that can be expensive. For a smaller business, it can be tempting to simply say, I don’t want to deal with any of that. They were maybe behind the curve on that, but the flip side, though, is that I wrote an article recently about seizing this opportunity to reevaluate the way you work. I think for a lot of large organizations, that’s going to be very difficult because there’s so much inertia, so much corporate, the corporate culture is so tied into these very rigid ways of working. A smaller organization, I think has the ability to start experimenting with self organization, to start experimenting with new work groups in different ways of a synchronous modalities in terms of how they collaborate and how they exchange ideas that I think are going to be a lot harder for bigger organizations to do and I think they’re going to be the thing that make the difference as we step forward into this.

Last question I’ll ask will be about just self managed teams, distributed decision making. What’s your feel on that as we move away from treating humans as robots and try to treat them as humans? How does that change the way we manage work?

I think it changes it dramatically. I’m a huge, huge fan of self management work models. The holacracy is one specific strain of that. But I think the reason it’s important is that the hierarchical models with this heavy overburden micromanagement management layer, it was all focused on the fact that I could reduce a task to an activity to a specific set of tasks and manage it discreetly. As we start embracing the driver value as creativity, imagination, and empathy, those are a lot harder to break down that way. And in fact, what we need is a lot more flexibility. In addition, I think probably even more importantly, is the market shifts are happening so rapidly and so dynamically that if I have to go all the way up a chain of command and all the way back down again, by the time I get all the way back down again, the whole market is shifted again already, and so, I can’t respond quickly enough. This idea of self management starts giving an organization the tools to pivot and adapt much more rapidly. I think what’s interesting is even in the midst of this pandemic, we’re seeing that those organizations that had that responsive reactive culture have been able to pivot more effectively during it. So, I do think self management is going to be a really important part of this. I do think it’s a whole different way of managing, it’s a whole different ballgame. It requires, particularly from a leadership standpoint, a lot of humility, and a lot of willingness to let go of that control, and I’m a control freak so I get this, but letting go of those reins a little bit. Then I think even more importantly, of being really, really hardcore focused on what is your vision? What is your strategy? What is your mission in all of this? Because that has to be that if you’re going to be self organizing, it’s all driven by clarity in those areas. In so many organizations, they cannot begin to articulate those things, their vision, mission, and strategy, and if you cannot do that, self organization will always fail. I think there’s a big learning curve with this. But I think what we’re going to see coming out of this is that those organizations that come out more positively or those that whether they did it deliberately or formally or not automatically embraced more of this self organizational ethos. 

That makes sense. I think all of this even remote work, I think it forces a company to be a better company in how they communicate the systems they set up. So, whether it’s remote work or whether it’s self managed teams, all these things will force us to be better at understanding what is the mission? What are we trying to do here?

It’s going to force the issue anyway. And those that respond positively to it are going to come out well on the other end, and those that don’t are going to struggle mightily.

Charlie, this has been great. You did everything I always hope guests do. You helped us to redefine a lot of key terms. We’re talking about what does productivity mean in the future that’s going to change. What does management look like in the future? How can we have a better relationship between humans and machines? So, it’s a lot of great stuff. I definitely recommend everyone check out your writings and the other work that you do. Where can they go to learn about that?

Check out my website at charlesaraujo.com, and if you’d like the journal that I mentioned, it is free. You can sign up at yourdigitalfuture.net and definitely love to have you.

Yeah, absolutely. Everyone, please, go and sign up for that. Charlie, it’s been great to have you on and we appreciate you sharing your insights with us.

Thanks for having me.