Business transformation, isn't about reducing.

It's about designing the outcome first (and then start adding).

I’ve already shared my thoughts on vision and strategy. So today, let’s tackle business transformations—those big, fundamental changes to how a company operates, the ones that shake up cost structures and redefine success. You know, the stuff that keeps leadership awake at night.

Now, I’ve written before about mastery and taking a holistic view, and both come into play here. But let me offer a sharper perspective: automation isn’t just a shiny feature like a “buy” button, autocomplete, or even a ChatGPT integration. It’s more akin to designing and commissioning a new plant—complete with its own P&L impact. It’s not just about the tools; it’s about the architecture, the management, and, most importantly, the outcomes it drives.

This approach works wonders for smaller companies, but it’s especially transformative for larger corporations. Why? Because it demands a different breed of leadership—not the narrow, specialized “T-shaped” variety, but a broader, more versatile “M-shaped” mindset (mmm good content for the next article). Curious? Let’s dig in on Business transformation and automation.

Automation: A Tale of Two Strategies and the Transformation Trap

Automation is reshaping industries, offering promises of efficiency, scalability, and innovation. Yet, how organizations deploy automation often depends on their history and culture. Established corporations and startups approach this challenge differently—leading to varying outcomes. Understanding these approaches not only highlights how automation succeeds or fails but also sheds light on why many business transformation efforts fall short of delivering desired results.

Corporations, where diminishing returns come from: The Path of Reduction

Traditional companies, with decades (or even centuries) of history, often view automation as a tool to refine existing processes. The approach is bottom-up: start with the current state and systematically eliminate inefficiencies. It’s a path of reduction, aiming to make processes faster, cheaper, and more scalable. However, this method comes with an inherent limitation—irreducibility.

As corporations automate, they often encounter diminishing returns. There comes a point when processes can’t be cut further without compromising outcomes. This is because the systems they automate were never designed for automation in the first place. Historical baggage—legacy infrastructure, deeply entrenched organizational structures, and even cultural norms—prevents these companies from truly breaking free.

A Familiar Misstep: iPaq vs iPhone

At the time of the first iPhone launch, Apple had already mastered the art of user interaction through its iPod range, building a foundation of simplicity, elegance, and intuitive design. In stark contrast, competitors like HP, Nokia, HTC, and Blackberry focused on combining existing features into single devices—keyboards, resistive touchscreens, and productivity tools—before attempting to scale back and simplify. This approach, rooted in optimizing legacy frameworks, limited their ability to adapt to shifting consumer expectations.

Apple, however, took a radically different path. Instead of iterating on what already existed, it reset the thinking entirely. The iPhone was designed with a clear outcome in mind: creating a seamless, joyful user experience. Apple worked backward from that vision, adding only the featurefmts necessary to achieve it. By redefining what a smartphone could be, rather than enhancing what it already was, Apple surpassed its rivals and set a new standard for innovation.

Startups: The Path of Addition

Startups, by contrast, operate without the weight of legacy systems. Their approach to automation is top-down: begin with a desired outcome and build processes to achieve it. Rather than trimming steps, they add them as necessary. It’s a path of addition, driven by a willingness to experiment and iterate.

For startups, the question isn’t “How do we make this faster?” but “What’s the simplest way to reach our goal?” This freedom allows them to create systems purpose-built for automation, sidestepping the challenges of legacy inefficiencies.

Tesla: From Robots to People, and Back

Tesla provides a striking example. Early in its journey to revolutionize car manufacturing, the company envisioned a “hyper-automated” factory where robots would handle nearly every step. However, this vision hit a wall, as CEO Elon Musk famously admitted, “Humans are underrated.” Tesla shifted gears, reintroducing people into the production line and rethinking its processes. The result? One of the leanest, most efficient car manufacturers in history. The irony is that Tesla now uses automation more effectively than ever, precisely because it allowed humans to shape the process first.

The Business Transformation Parallel

The automation journey mirrors broader challenges in business transformation. McKinsey famously found that 70% of business transformation efforts fail—a statistic that resonates with both large corporations and startups. The reasons often come down to similar dynamics:

1. Established Companies Over-focus on Optimization: They attempt to overlay new technologies on old processes without fundamentally rethinking how they operate. Transformation becomes a surface-level change rather than a re-imagination of value delivery. A classic example is Blockbuster, which failed to adapt its model in response to Netflix because it clung to its physical-store paradigm.

2. Startups Gamble on Scalability: Startups often focus on scaling too quickly without building resilience into their systems. WeWork’s collapse is a cautionary tale—an outcome-first approach without the underlying structure to sustain it.

What Can Businesses Learn?

Whether you’re a century-old corporation or a fledgling startup, the automation journey holds lessons for successful transformation:

1. Understand Your Starting Point

? For legacy companies: Conduct a “zero-based design” exercise. Imagine your process without the constraints of legacy systems. What would it look like?

? For startups: Validate assumptions early. Don’t overdesign or over-automate before you know what works.

2. Balance Humans and Technology

? Automation isn’t about replacing people; it’s about empowering them. Tesla’s pivot demonstrates the importance of human creativity and adaptability in optimizing systems.

3. Build for Adaptation

? Transformation and automation should be iterative. Pilot new ideas, measure success, and refine before scaling.

4. Focus on Outcomes, Not Tools

? Many companies fall into the “shiny object” trap, chasing the latest tech without a clear sense of how it adds value. Start with the end in mind: what problem are you solving?

5. Learn from Failure

? Failure is a necessary step in innovation. The key is to fail fast, learn fast, and iterate effectively.

Historical Wisdom for Modern Times

Even historical figures understood the balance between efficiency and adaptability:

? Henry Ford, whose assembly line revolutionized manufacturing, said, “If I had asked people what they wanted, they would have said faster horses.” His success came from rethinking transportation, not optimizing the horse-and-buggy.

? Albert Einstein’s famous quote applies equally well to automation: “We cannot solve our problems with the same thinking we used when we created them.” Automation must come with a new mindset, not just new machines.

A Call to Action: Transforming Automation into Opportunity

The automation revolution—and broader business transformation—requires rethinking the fundamentals. Whether you’re streamlining legacy processes or building systems from scratch, the key is clarity of purpose, a balance between human and technological strengths, and a willingness to adapt.

Automation isn’t a magic bullet; it’s a tool. Use it wisely, and it can transform your business into a lean, innovative powerhouse. Use it poorly, and it might simply entrench old inefficiencies under a shiny new veneer.

Choose your path: reduction or addition, optimization or innovation—and remember, the future favors those willing to challenge the familiar.

If you’re navigating the complexities of automation or struggling with a business transformation that isn’t delivering as expected, don’t hesitate to reach out. Whether you need fresh perspectives, actionable advice, or a tailored roadmap to success, let’s start a conversation and explore the right solutions for your business. Together, we can turn challenges into opportunities. Message me to connect and discuss how to unlock your company’s full potential.