Over the next three years or so, large-scale non-tech enterprises will face a convergence of pressures unlike anything seen in decades. A near-horizon point is fast approaching, one that will define whether these organisations evolve or disappear. This event horizon is not just about adapting business models or upgrading technology; it’s about reinventing how the business operates, organises, and performs.

In this article, I’ll explore the challenges facing large-scale legacy businesses and what leaders must do to survive the accelerated changes.

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The Era of Constant Transformation

All businesses are now operating in a permanent state of transformation. Every function, process, and decision is under pressure to evolve in response to AI, market volatility, and rising efficiency demands.

The problem isn’t just change, but the volume and velocity of the change required. The sheer amount of “new” is overwhelming leaders. Traditional management playbooks, built on stability, controlability, hierarchy, and linear planning, no longer work in a world of exponential technology and nonlinear market shifts.

What leaders cannot do is freeze; a wait-and-see approach is no longer viable. Every day spent delaying transformation increases the gravitational pull of organisational inertia, the slow, steady force that traps legacy businesses in decline.

In a recent conversation with one of the most insightful business minds of our time, we discussed this tension through a simple metaphor: two cogs.

The first is small but fast, representing the visionary leader who sees the future clearly and understands the urgency to change. The second is large and slow, representing the organisation itself, including its systems, processes, bureaucracy, and legacy technology. When the fast cog meets the slow one, friction builds and can break apart a business..

What once gave large enterprises their advantage — legacy knowledge, infrastructure, physical presence, brand, scale, stability, reputation, people, processes — now threatens to sink them with all that immovable cost burden.

Whereas an AI start-ups with 100 employees are valued higher than a century-old business with 100,000, the signal is clear: agility+AI now outweighs history. Large enterprises must reinvent themselves completely and not in a decade, but within a few short years.

The danger is existential: transform and risk breaking the business in the process, or don’t transform and face certain decline.

The challenge for leaders is this: half their costs and half their people, whilst doubling their profit by tearing down their existing business and rebuilding it from the bottom up. Not easy. Made harder due to a range of other additional challenges.

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The Pressures Converging on Legacy Businesses

Economic Instability and Margin Pressure

Persistent inflation is reshaping cost structures. The era of cheap capital and predictable input costs is over. Rising prices for materials, labour, and logistics continue to squeeze margins, forcing difficult trade-offs between price increases and cost reduction.

At the same time, geopolitical volatility from regional conflicts to trade realignments are making global supply chains more fragile and planning horizons shorter. Efficiency also has to be balanced with resilience.

The Technology Imperative

The next three years could mark the AI inflexion point. Generative and numerical AI models, automation, and advanced analytics are transforming every sector. For non-tech enterprises, this presents both a breakthrough and a barrier:

• Legacy systems must be modernised before AI can be effectively integrated, a costly but unavoidable investment.
• Cybersecurity will become a core business risk, not just an IT issue. The weaponisation of AI by threat actors will redefine risk management.
• Strategic AI adoption will separate leaders from laggards. Those who use AI to reimagine value creation, not just cut costs, will dominate.

Delay equals decay. Those who fail to evolve will be crushed by slow decision cycles and outdated operating models.

Workforce and Capability Challenges

The skills gap is widening faster than it can be filled. As automation accelerates, the demand for AI fluency, data literacy, and adaptability will far exceed supply.

At the same time, the workforce is transforming. Humans and AI agents will increasingly work together, requiring new models for workflow design, performance management, and ethics.

The organisations that win will stop hiring for existing skills (which will date too quickly) and start building them in their people themselves, investing in reskilling, AI application, and V-A-C (see below) leadership development.

To resource that process, businesses will need to remove all the non-V-A-C activity and all the people who can’t or are unwilling to contribute effectively.

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What’s Likely to Happen Next

The next few years will amplify divergence:

• Leaders will embed AI and automation strategically, aligning them with business value and performance. They’ll move beyond efficiency to innovation, customer experience, and new revenue creation.
• Laggards will remain burdened by legacy systems, misaligned effort, and underdeveloped talent, or they will leak talent from their business. Their costs will rise faster than productivity. Their market share will erode quietly, then suddenly.

Organisational re-design

Businesses will move from the pyramid to the diamond shape due to AI, and then to the narrow diamond model, with the support of advanced AI, due to the need for fewer and fewer people.

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Moving AI application from efficiency to growth

The adoption, experimentation and efficiency phase with AI is ending. The next wave is about enterprise-wide integration to unlock growth.

AI will become embedded in decision-making, forecasting, and customer targeting and insight. Success will depend on Commercial and Responsible AI — governance, transparency, and ethical assurance, balanced with data-driven innovation and commercial growth.

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The Consequences of Inaction

For businesses that fail to adapt, the consequences will be severe:

• Eroding margins as inflation and inefficiency compound.
• Declining competitiveness as agile peers move faster and cheaper.
• Talent flight, as top performers seek clarity, innovation, and purpose elsewhere.
• Reputational and compliance risk from unethical or insecure AI use.

Put simply: the next three years will define the next decade. Those who act decisively will create new forms of value and capability. Those who hesitate will fade into irrelevance.

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The Leap to Hyper-Transformation — and what leaders need to do

For leaders navigating this horizon point, technology alone won’t save the business. The true differentiator is how effectively an organisation can align its people, performance, and AI agenda in real time.

This is where Arrival’s Value-Aligned-Contribution (VAC) organisational performance model becomes essential.

For large-scale businesses to deliver sustained performance and growth, not only do they need a winning strategy and access to the market with winning services or products to succeed, they must also fully maximise all of their people’s contributory value.

VAC integrates principles from systems theory, organisational alignment, and behavioural economics. It assumes that contribution, when aligned with value, acts as a unifying mechanism linking structure, culture, and strategy into a self-reinforcing system of performance.

The Value-Aligned-Contribution Performance Model emerged from 20 years of observing a persistent disconnect between organisational strategy and people’s actual ability to contribute to it effectively. Traditional performance models, from KPIs to OKRs, measure outcomes but not alignment or contributory value. VAC was developed to fill this conceptual gap: it connects the human impulse to contribute with the structural and strategic mechanisms that enable sustained performance.

It aligns every role, project, team, and activity directly to the business’s strategic priorities, ensuring that every person’s effort drives measurable outcomes.

It does this through three simple but transformative aspects:

1. Value: Indicates the quality, impact and depth of the contribution. Often through the performance, insight, commercial and growth lens. But also what is critical and which outcomes matter most to the business right now — growth, margin, cash, innovation, or risk? What are the priorities and focus that we want people to contribute to will define the value.
2. Aligned: In this regard, it references how the business is set up and the organisation's architecture is designed, as well as how accurately people’s contributions are aligned with what the business wants and needs strategically. By narrowing and focusing the business to its strategic performance agenda and focus,  the business increases the likelihood of funnelling people’s focus, contributions and efforts toward the strategic priorities. It also indicates how aligned people’s contributions are to the strategic focus of the business.
3. Contribution: Is where everyone in the business is set up and able to contribute effectively, and likewise, the business is set up and able to assess, and where applicable, unlock and scale the contributions from all of their people?

When these three dimensions are applied consistently, leaders can immediately see where the organisation is aligned and where it is not, and who is creating real value and where energy is being wasted.

VAC creates clarity. It translates strategy into contribution and contribution into measurable performance. It gives leaders a real-time map of alignment, enabling precision cost management without damaging capability.

As AI reshapes work, VAC becomes the human alignment system that ensures technology accelerates performance rather than amplifies confusion. It connects strategy → structure → culture → contribution — the full operating chain of transformation.

Leaders who apply VAC will be able to:

• Eliminate non-aligned work and redirect resources to value creation.
• Accelerate transformation without destroying performance.
• Build trust and engagement by clarifying contribution expectations.
• Understand who can contribute value, and who cannot.
• Move from people cost to people value — at scale.

In short, VAC is the bridge between human potential and digital transformation.

Final Thought

The next three years represent an event horizon for legacy enterprises. The world is moving from incremental change to hyper-transformation, and the pace will only accelerate, and if different organisational cogs cannot align on speed, tempo and capabilities, the business is likely to come apart.

Technology will be vital — but alignment will be decisive. Those who connect their strategy, systems, and people through our VAC model or equivalent will transform with focus, pace, and confidence.

Those who don’t will simply run out of time.

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