A key tenet of building Autonomous Business Modules is to utilize Goal-Driven Architecture. Having worked with several businesses to improve their operations over the years, I feel confident saying none of them are set up for success in an autonomous future. Literally none of them will get to the point of having a mostly autonomous business by doing the things they have traditionally done.
To quote Marshall Goldsmith, “What got you here, won’t get you there.”
This is the case for every business that has not utilized (knowingly or unknowingly) the principles of Goal-Driven Architecture alongside Autonomous Business Modules as an intermediate point.
The Problem With Current Automation Strategies
There are several reasons why current automation efforts fail. Perhaps the most surprising is that even when a planned automation goes live, it doesn’t usually deliver extra profits. That may surprise you to hear. How could a business possibly automate ANY operation and not reap some form of additional profits?
The Theory of Constraints developed by Eliyahu Goldratt can explain this. Goldratt explains how operations are only improved profitably when a bottleneck is reduced or removed. And, in fact, if you locally optimize some other area that isn’t a bottleneck, you may actually make things worse.
Let’s think about this in terms of a simple analogy: a one-person restaurant that serves pizza. Let’s pretend we only care about 2 steps in this restaurant’s process: making the pizza and cooking it. Let’s say there is one employee who builds the pizzas and has two pizza ovens to put them into. You might think that if you wanted to up the output of this one-person operation that you should add more people into the mix. Maybe you even make sure that they are working the whole time to “maximize their effectiveness.”
Although this might sound reasonable, it could make things much, much worse if the person is not the bottleneck.
Let’s pretend it takes an employee 10 minutes to prepare a pizza and 30 minutes to bake it. If there are only 2 pizza ovens, the pizza oven is the bottleneck. One employee can make 2 pizzas in 20 minutes, put those in the oven, and make the next two pizzas and have 10 minutes of waiting time. If you ask that employee to “maximize his effectiveness” he will make 3 pizzas for every 2 that get cooked.
At the end of a long day, you’ll have all these uncooked pizzas that essentially are wasted profits, despite having “maximized” the pizzamaker to their fullest. Goal-Driven Architecture would help us determine that the goal is to make, bake, and sell pizzas, not simply to build as many as quickly as possible.
The other major problem with current automation strategies is that they are just trying to streamline the current processes.
That by itself isn’t bad. In fact, assuming it takes into account the Theory of Constraints, it could only improve things.
But, what happens if the operation itself isn’t best? What happens if an entirely better way of doing things is out there, but it looks nothing like your current way of doing things?
If you have something fundamentally off in your processes that will keep you from being fully autonomous, then you’ll never be able to get there. It would be kind of like trying to be an arm wrestling champion without any arms.
If you’re missing some key element, it doesn’t matter how good your strategy is, or how smart your people are, you will only get there by changing.
What is Goal-Driven Architecture and How Is It Different?
Rather than trying to locally maximize some small part of a larger operation, we should consider the business goal first.
A good business goal will directly tie to increasing profits. There are a ton of different ways that could happen. You could do it through decreasing costs, increasing margins, creating a new product line, boosting sales, or some other metric. You could also further splinter any one of those to get more granular in your focus as well, so long as you can directly tie it back to profits.
For example, perhaps for generating sales you have a lead generation aspect, a sales presentation, contracts, and onboarding. Depending on the business, automating any one of those could directly show a rise in profits. In the end though, profit is the bottom line.
Once you have a goal with some level of value in mind, come up with ways to tackle this problem. Of course, consider what you already have in place, but also keep in mind that you may have to completely scrap your current processes to achieve your end goal.
Let’s take lead generation as an example:
Many large organizations employ Sales Development Reps (SDRs). These SDRs may be given contacts, or they may have to dig them up on their own. They oftentimes simply call down the list trying to reach a prospect able to purchase their company’s products or services and set an appointment for an Account Executive (AE) to present the company offerings and close the deal.
It is not uncommon for these appointments to be the bottleneck in the sales process. But, if you were determined to not look at other ways to generate leads, you could only make so many improvements to the SDR’s process. Maybe you devise a way to score the leads first so good prospects are called at the best times. Maybe you get an auto-dialer so the SDRs can save time dialing. Maybe you invest in training them to improve their rates by a few percentage points.
But, then what? This process could never be fully autonomous. But, this isn’t the only way to generate leads. Maybe you set up paid ads to send prospects to a pre-recorded webinar. Maybe you utilize a cold email system that finds, verifies, and personalizes emails that leads to the prospect setting an appointment on their own. Maybe you utilize a content creation, distribution, and lead capture platform. Those ideas, and many others, could eventually become autonomous business modules.
Goal-Driven Architecture Requires First Principles Thinking
Aristotle created the idea of first principles thinking. Thinking from first principles is essentially getting to the most very basic fundamental truths and not making any assumptions.
First principles thinking has become famous recently with Elon Musk applying it to SpaceX. Musk looked at all the most costly parts of spaceflight. He found that costs were largely due to rebuilding rockets for each flight and for the rebuilding requiring parts whose prices were controlled by suppliers who charged a lot of money.
Musk deduced that he didn’t need to rebuild an entirely new rocket each flight and could reuse the boosters. For parts that couldn’t be reused, he decided to look at the price of scrap metals and the price of what suppliers were selling parts for, and calculated the difference between the two. That number determined whether they should build the part themselves or not. In some instances, there were nearly identical parts sold to non-space companies for much cheaper, and he’d get those and spruce them up a bit. As a result, the cost of space flight has come down almost 90% from where it was previously.
Although the term didn’t exist at the time, Musk was applying Goal-Driven Architecture as well. He looked at profits and determined that the costs were out of control. When looking at costs, he focused on the cost of the rocket itself. His goal was to build a rocket as inexpensively as possible. Reusing parts and cutting out entrenched suppliers were not part of any other space program out there, yet that ended up being the way he decided to go, and he could directly tie each improvement back to profits. He obviously doesn’t have an Automated Business Module here, but he definitely made the most of his Goal-Driven Architecture and successfully built whole new processes from the ground up.
So, what does this have to do with your business?
Well, with first principles thinking, we know that profits are the most important thing for a business. Therefore, operations that influence profits most are the ones you should look to improve upon. But, when you identify those processes, what is the actual end goal of that process? Find that goal, then pretend you’re scrapping your entire current processes.
If you had to build a brand new business around this single process from the ground up, what are all the ways you might go about it? What are ways that are as close to being digitally automated as possible? And, in the places where you believe that you still need people, what are those people doing exactly? Can you get granular, quantify it, and automate part of it?
The most fundamental processes every business will have are:
- The acquisition of customers
- The fulfillment of what was sold to those customers
Besides those two things, virtually everything else is flexible. Don’t even assume that your current product or service line must stay. Instead, consider Clayton Christensen’s “Jobs to be Done” for determining what customers actually came to you for. They don’t actually care about your product or service. They “hired” your product or service to do some job in their life that provides them value. How else might you go about doing that for them, perhaps even in a better way? How can this new way potentially be fully automated on your end after its creation?
Answer these and you will be well on your way to Zero-Touch Operations and Infinitely Scalable Systems.
