Delete the step first
and give the agent whatever survives.

On April 13, 2018, with Model 3 production far behind plan, Elon Musk answered a Wall Street Journal reporter on Twitter: “Yes, excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated.” The same day, TechCrunch carried what he had told CBS about the Model 3 line: “we had this crazy, complex network of conveyor belts….And it was not working, so we got rid of that whole thing.”

Three years later, walking the SpaceX site in Texas with the YouTuber Tim Dodd, Musk gave the best example from that period. Fiberglass mats sat between the Model 3 battery pack and the floor pan, and the robot that placed them was choking the battery line. He first tried to make the robot faster, then simplified the gluing, and only then asked what the mats were for. The battery safety team said noise and vibration. The noise and vibration team said fire safety. Tesla then built one car with the mats and one without, put a microphone in each, and nobody could hear a difference. The mats were deleted, and with them, in Musk’s words, “this two million dollar robot cell,” according to the Starbase tour video.

That robot was at least visible. It sat on the line, it slowed production, and the CEO ended up living next to it until someone asked the right question. The AI version of the same mistake is quieter. An agent that resolves invoice exceptions costs a few cents a document and never jams anything. It clears the mismatches so fast that nobody sees them pile up, and the pile was the only sign that a step upstream should not exist. Most companies buying agents today start at the last step of Musk’s method, and AI is the first technology that makes starting there cheap enough that nobody is ever forced to go back.

$2M

Robot cell Tesla bypassed once a test showed the mats it placed did nothing, per Musk on the Starbase tour, 2021.

18.4%

Average invoice exception rate in accounts payable, per Ardent Partners, January 2026.

80%

Share of Claude Code’s system prompt Anthropic removed for its newest models, with no measurable loss on its coding evaluations.

Musk’s five steps only work in order

On the same tour, Musk laid out the process he wants SpaceX to “implement rigorously.” Step one is to make your requirements less dumb. Step two is to try very hard to delete the part or process. Step three is to simplify or optimize. Step four is to accelerate cycle time. Step five is to automate. He was blunt about which step people reach for first: “possibly the most common error of a smart engineer is to optimize the thing that should not exist.” And he admitted the Model 3 line was his own case of running the list backwards: he automated, accelerated, simplified, and deleted last.

Two rules inside the first two steps matter more to a COO than the list itself. The first is that every requirement “must come with a name, not a department,” because a department cannot be asked why a rule exists and a person can. Otherwise, he said, you obey a rule an intern made up two years ago. The second is a test for whether you deleted enough. If you are not adding something back in about 10% of the time, you are not deleting enough. His reason: “the bias tends to be very strongly towards let’s add this part or process step in case we need it.”

Office work has the same bias, with less friction against it. A second approval, an extra field on a form or a weekly report gets added after one bad quarter and never removed, because nobody’s job is to remove it.

An agent makes the backward order cheap and quiet

Two things make the backward order more tempting with AI than it ever was with robots.

The first is cost and visibility. Tesla’s robot cells cost millions and slowed a line the whole company was watching, so someone had to ask what they were for. An agent costs a subscription and runs inside software nobody looks at. Step five is also the only step a vendor can sell you. Nobody invoices you for deleting an approval.

The second matters more. Exceptions are how a broken process shows itself. In accounts payable, an exception is an invoice that does not match its purchase order or receipt, and the average AP department sees one on 18.4% of its invoices, according to Ardent Partners. Ardent calls exceptions the biggest single reason AP benchmarks are not better, and puts the average cost to process one invoice at $9.84. Every exception has a cause upstream: a buyer who issued a PO with the wrong unit of measure, a vendor master record with two addresses, a price nobody updated after the contract changed.

When a clerk handles those exceptions, the queue grows, the clerk complains, and somebody eventually goes upstream to fix the PO. When an agent handles them, the queue stays empty. The cause stays in place, the agent keeps getting paid to clear its effects, and the dashboard reports a fast, cheap process. Michael Hammer made the same point about Ford’s payables department in HBR in 1990, a case I walk through in an earlier note: helping the clerk investigate mismatches faster was the weaker choice, and the better one “was to prevent the mismatches in the first place.” An agent is the most efficient investigator of mismatches ever built.

Accounts payable, run in Musk’s order

Here is the method on one process. The company is an illustration, and no client is behind it: a 700-person maker of commercial HVAC equipment, with a few thousand vendor invoices a month. Invoices arrive as email PDFs. A clerk keys them into the ERP and runs a three-way match against the purchase order and the receiving record. Mismatches go to an exceptions queue. Invoices over $5,000 need two approvers. Payments run once a week. The proposal on the CFO’s desk is an agent that reads invoices and resolves exceptions.

1. Question every requirement, and put a name on it. List every rule the process follows and write next to each one the person who owns it today. Who set the $5,000 threshold for a second approver, and why does an invoice that already matches an approved PO need one? Why does the company wait for an invoice at all from vendors whose PO and receipt already agree? Why do 40 general-ledger codes get assigned by hand when the monthly report uses 12? The rule we use: a requirement with no current owner who will defend it goes on the delete list. Some requirements will have strong owners. Segregation of duties stays. The call-back to confirm a vendor’s new bank details stays too, because business email compromise cost US victims $3.0 billion in 2025, according to the FBI’s IC3, and that is how most of it gets in.

2. Delete. For the top vendors by volume, pay on receipt against the PO price and stop asking for invoices, which procurement calls evaluated receipt settlement. Drop the second approval on PO-backed invoices. Stop hand-coding fields no report uses. Then count the exceptions that disappeared, and apply Musk’s test: if, after a quarter, you never had to restore a single step, you were too timid.

3. Simplify. Match on the few fields that decide whether to pay: part number, quantity, price. Keep one vendor master, one intake channel for invoices and one approval path.

4. Accelerate. Move the payment run from weekly to daily. Put an age limit on every open exception and route it back to the buyer who created the PO, so the fix happens upstream.

5. Automate. Now the agent gets what survived: true exceptions, invoices without a PO, vendor questions. It is a smaller job, and easier to audit. And because the noise is gone, each exception it still sees points at a cause somebody can fix. Keep the exception rate on the COO’s dashboard after go-live, broken out by cause, so the agent’s speed never hides it.

Order-to-cash takes the same sequence. Ask who set the credit hold limit and why it is a fixed dollar amount. Delete the retyping between quote and sales order. Simplify the pricing exceptions sales can grant. Speed up cash application. Only then put an agent on the disputes that are left.

Deleting a step needs someone allowed to delete it

The hard part of steps one and two is authority. The second approval belongs to the controller, the GL codes to FP&A, the PO template to procurement and the credit limit to sales. Each owner can defend their rule, and nobody in the chain can delete another department’s step. Box CEO Aaron Levie quoted the clearest description of the result I have seen: you “‘apply AI’ on what you currently have, and you end up with faster sh*t.” I wrote about why that mandate belongs with HR and finance in another note.

So before choosing a vendor, the CEO has to give one named person the right to delete steps across every department the process touches, with a deadline and a written list of what is off limits: statutory controls, audit trail, tax. Musk’s rule works in both directions here. Each requirement needs a name, and so does the deletion.

Run the five steps again every time the model changes

Automating is also where new requirements pile up. Every agent comes with instructions, guardrails, approval prompts and a library of rules for edge cases, written to steer a model that made mistakes. Those are requirements too, and they age faster than any approval threshold. In July, Thariq, who works on Claude Code at Anthropic, wrote: “We removed over 80% of Claude Code’s system prompt for models like Claude Opus 5 and Claude Fable 5 with no measurable loss on our coding evaluations.” His explanation: “we found that we were over-constraining Claude Code.” Rules that were once needed to avoid worst cases could be deleted, and the model used context and judgment instead.

That is a lab tuning its own product, but the timing carries over. Every major model release is a step-one event for the instructions you wrote around the last one. Give each standing instruction an owner and review the set at every model change, the way you would review controls after an ERP upgrade.

This method has limits. It comes from manufacturing, where a mat either changes the noise in the cabin or does not. Office processes carry legal and control requirements that a test cannot settle, and those stay. And Tesla’s factories are heavily automated today, which fits Musk’s own reading: his lesson was about the order of the steps, with automation placed last.

What to do this quarter

Pick the one process where an AI proposal is already on the table, most likely AP, order-to-cash or customer service. Before signing, ask the vendor to price the agent on the process as it will look after deletion, and give yourself six weeks to get it there.

In week one, name one person with authority across every department the process touches. In weeks two and three, list every requirement with its owner and the year it was introduced, and mark the ones nobody will defend. In weeks four and five, delete them, simplify what is left, and measure the exception rate and cost per transaction before and after. In week six, write the agent’s brief against the smaller process, with the exception rate as a metric it reports.

Then compare the two quotes. The difference is what the company would have paid every month to run steps it should have deleted.