The traditional corporate orgiagram, a decent triangle of electricity with managers at the top and junior worker at the base, is subjected to a quiet revolution thanks to AI.
In Moderna, HR and Tech now live under the same roof, which is monitored by a chief people and digital officer. At another AI-First health company, a team of 10 software engineers was replaced by a unit of three people who monitor AI agents. In Amazon, layers of the middle management are moved out in the direction of a wider pressure in the direction of a slim, AI-capable structure.
AI is not just a new tool for modern workplace. It is quiet how companies are organized.
Let’s call it “great flattening”.
While managing directors run for the integration of AI in their business activities, the entry roles disappear, the management layers of thin and traditional team roles are disappearing. In the Fortune 500, middle management takes hits, as well as the entry-level workers, but even with the C-Suite, new performance dynamics play when the old pyramid structure of company life begins too flat.
Tech bosses were interested in promoting a vision in which AI automated the work of the work and cuts out the administrator and at the same time flourishes soft skills and creativity. Or, as Satya Nadella from Microsoft expressed at the beginning of this year: “I think with AI and work with my colleagues.”
While the utopian idea of a world without tasks such as the processing of Excel table calculations or the searching of files sounds theoretically great, what does an AI-First organization actually look like in practice?
A Ki flattening
A central topic of organizations that choose “Ai-First” structures is a kind of “flattening” of the corporate structure, which essentially fewer layers of management monitoring, the removal of junior or support roles and growing dependence on AI systems for tasks that were once treated by human employees.
It can also mean the breakdown or the fusion of traditional team structures.
For example, Pharmaceutical company Moderna Recently, its technology and personnel departments summarized a single function and appointed a chief people and digital technology officer to monitor both teams. According to the Wall Street Journal, the move was partly driven by the company’s partnership with Openai and the company, which differs in AI to cope with things like HR support and some junior roles.
At Consulting Giant McKinsey, the company uses thousands of AI agents to support consultants with tasks such as building decks, to summarize research and to check the logic of the arguments. In addition, around 40% of the company’s sales now come from the advice of AI and related technologies.
“If you are an AI-First organization, you can use these AI agents to largely carry out a large part of the execution work of organizations,” Nick South, Managing Director and Senior Partner of Boston Consulting Grouptold Assets. “And when we organize our processes and our delivery processes for this AI homeland, the role of people is different.”
This is partly due to the fact that the type of individual jobrolle changes when the tasks are automated by AI tools or arguments.
“Our Jobrolle are deconstructed because some tasks could be taken on by AI and others could be new, the importance or function of the jobs,” said Eva Selenko, professor of occupational psychology at the Loughborough Business School. “You may need less a role, but this person takes on a different function of a different thing.”
This does not mean that entire jobs are replaced, but this could mean that the roles of employees become more diverse and take on tasks outside their normal area of responsibility or even their usual team. Jobrolle are deconstructed when the tasks are automated, and their importance for the organization changes, said Selenko. As a result, strict departments can blur between teams.
Mix all of this with a few AI agents who perform autonomous work and the traditional orgiagram looks dramatically different.
“Now we are moving to this flat network of Human teams who supervise AI agents,” said Rob Levin, partner at McKinsey & Company.
“In early examples, we see that a customer company that builds up an agent factory that supports several business work flows can be managed by around 50 to 100 AI agents of only two or three people,” he said.
In an example, Levin said that a healthcare company had replaced a traditional 10-person software development team with many smaller three-member units. These consist of a product owner, a software engineer who can effectively demand the AI coding tools, and a system architect that ensures integration into the wider technical ecosystem of the company.
However, this type of important structural changes is easier to implement in smaller organizations or startups than in larger companies with more complicated structures.
The need of the middle manager
One of the possibilities that companies, especially in the tech sector, have tried to simplify and flatten out their structures for the AI age, is to lower the employees at the management level. The CEO of Palantir, Alex Karp,, for example, announced the winning call on Monday that he intended to take over 500 roles from his 4,100-person employees. He called it a “Crazy, efficient revolution. “”
Middle managers have taken a lot of flak, especially Big Tech-COS like Andy Jassy, who said that Middle Manager can hinder speed, property and innovation, especially in connection with AI-controlled organizational changes.
Jassy is currently pursuing a flatter corporate structure at Amazon by increasing the relationship between individual employees to remove layers and to rationalize the decision -making.
However, experts told it Assets Organizations should not count medium -sized managers yet.
“An obvious possibility (from flattering organizations) is that it will cause a kind of management thinning,” said Tristan L. Botelho, Associate Professor of Organizational Behavior at the Yale School of Management. “If AI reduces the coordination pollution, it could reduce the role of middle management, the task of which was previously to establish these connections.”
While the AI could possibly change the work of medium -sized managers, Botelho does not expect them to disappear completely.
“I don’t think that medium -sized management will be deleted. I think it will only redefine how managers think about their role in the organization,” he said. “One thing that I often talk about with managers … If this kind of idea is that AI will be integrated into the organization, should … build their skills as a manager.”
Soft skills are also becoming increasingly important in the AI age, with medium -sized managers operating important HR functions. The employees still have to be managed and a workforce still has to work with empathy or organizations to lose their best artists.
“There is a human side of things,” said Stella Pachidi, a senior lecturer in technology and work on the King’s Business School. “It is not sustainable to only have a boss as an algorithm, it will not work in the long term.”
In contrast to the large tech narrative, some experts say that the management class is expanded in traditional organizational structures if automation replaces work at a low level.
Nick South from BCG told BCG Assets These tasks at the execution level, which are normally at the end of the org diagram, is the first on the chopping block due to AI agents, while the management or “orchestration” level is growing into complexity and importance.
“On the orchestration layer, this must be greater than today … There will be a critical human part of which it is about ensuring that all of this stuff does things,” he said.
“If you think about a classic Middle Manager profile, it is a kind of general manager. But what these people will need in the future is a combination of adequate AI competence to manage a human-agile workforce, as well as the core knowledge of logic, understanding of ethics, rhetoric and communication skills, so that you can communicate with others with others. “So these orchestration roles will be quite complex.”
The new C suite
While middle managers and employees of the beginners may feel the main load of the AI burden, these changes go straight up.
AI is already changing the performance dynamics in the C-Suite and creates new, powerful jobs at the management level. According to a 2023 Foundry study on AI Priorities, 11% of medium to large companies have already appointed someone as “Chief Ai Officer” (CAIO), while another 21% are currently being recruited for the role.
According to Linkedins 2023 report about AI at workCompanies with a AI position around the world had more than tripled in the five years and grew by 13%compared to 2022.
Alex Connock, Senior Fellow at the Oxford’s Business School at the University of Oxford, has observed the growth of these roles first -hand.
“Although it was perhaps relatively rare when we introduced our AI for business programs a few years ago, we now have many people … in our executive courses with the title of Chief Ai officer,” he said Assets. “It is the new mainstream. The interest exceeds all levels from 20-year-old students to experienced managers. ”
While there are some debates about whether these roles will pass the test of the time, for example, Experts said The executive level is not immune to the fact that these roles can lack a clear purpose or authority.
South said that the increase in some of these roles could also be a symptom of our immature with AI and not a direct need for this work, but the C-Suite still has to assume new responsibilities in AI.
“People are pretty nervous to miss the boat,” he said. “I think it will be interesting to see how it develops over time … If things settle, how different will that be the classic chief data officer?”
But here is a new “responsibility in the C-Suite … to think about our competitive landscape, where the potential sources of the disorder are, how we protect our sources of advantage. These are C-suite questions, and it would be a mistake to think if we set a chief AI officer, we somehow leave this with you.
While AI is supposed to disturb all organizational levels, Selenko found that management structures probably protect those from too much turbulence.
“In an influential administrative structure, those who are partially feasible in the work of Top of a AI will not give up.
