It is clear that workers havemoved away from thirty-year careers with one employer to a moreentrepreneurial, freelance approach to work and career. It is also clear thatfor many the preferred place of work has moved away from the traditional officeto alternative sites of work including work-at-home and remote work. These shiftswere driven by advances in technology and social changes and were acceleratedby the pandemic.
What is not clear is why we are stillbound by an organizational form with roots in antiquity that flourished duringthe industrial revolution. In today’s postpandemic, AI agent, DOGE era we areexperiencing tension from an evolving workforce and workplace colliding with anantiquated form of organization.
Our organizations were notdesigned for a dispersed, freelance workforce and are unlikely to serve us wellas we navigate the digital age marked by exponential change and focused onadvances in AI, robotics, genetics, precision medicine, quantum computing,space exploration, and other mind-bending technologies.
While the hierarchy has beenflattened and organizations have embraced structures from functional, tomatrix, to team-based structures, at their core most are still a hierarchy offull-time employees reporting to managers incentivized by headcount growth.
It is this type of organization,overlaid with layers of bureaucracy, that has led to a bloated federalgovernment and almost universal recognition of waste and inefficiency and thehighly publicized formation of the Department of Government Efficiency (DOGE).
This form of organizationactually served us well in an environment characterized by high predictabilityand measured growth, but organizations that thrive in 2025 must be nimble andable to rapidly adapt to change as well as align with the social and careeraspirations of today’s workforce.
While a fundamental reimaginingof the organization is required, the most frequently asked questions today seemto be, “How do we get employees back to the office?” and “How do we address theworker shortage?” Starting with the wrong questions simply perpetuates thefrustration.
A more helpful question is, “Howwill we build organizations that are responsive to the workforce, especially aworkforce that includes AI agents, and is capable of processing the vastamounts of information required to thrive in a highly uncertain, rapidlychanging world?”
The leadership challenge today isabout much more than embracing the latest advances in technology, it is alsoabout embracing a new form of organization in which people and technology cometogether to achieve extraordinary results.
In the digital age the basicfunction of an organization is information processing and the basicorganizational question leaders must address is, “How do we organize to matchthe complexity in the environment?”
Traditional hierarchies generallyaren’t effective in handling complexity and rapid change. Hiring large numbersof employees with specific expertise to address today’s challenges, whether theemployees are in the office or work remotely, doesn’t position the organizationto address the rapidly evolving need for different expertise in six months or evensix weeks.
So where do we start in adaptingour organizations for today’s challenges? I am intrigued by Sam Altman’sSeptember 2024 post on X predicting that soon there will be 10-personbillion-dollar companies and that there is a betting pool with his CEO friendson when the first one-person billion-dollar company will be created.
While his prediction isprovocative and reinforces the need for a fundamental reimagining of theconcept of the organization, it does not address the immediate challenge facingmost organizations today.
Rather than starting with a one orten-person organization, we can start by thinking of organizations having asmall core of full-time employees who provide leadership, cast the vision, andare the owners of the culture. Even in a rapidly changing environment, “acompelling shared vision” and recognition that “culture eats strategy forbreakfast” are still valid.
The organization’s largerworkforce will be made up of advisors, consultants, freelancers, project teams,and fractional employees creating a fluid “organization” capable of continuallymorphing to match the speed of change and the complexity of the environment.
Add AI agents with artificialgeneral intelligence capabilities to this new workforce and the demand for anew form of the organization expands exponentially.
This is in sharp contrast totraditional organizations that hire large numbers of full-time employees, lockingthe organization into fixed cost and fixed expertise when the need isflexibility, agility, and affordability.
The new organizational form mustbe able to quickly expand or contract the size of the workforce to match growthneeds and quickly add expertise in priority areas and shed expertise in datedareas, again matching the needs of a rapidly changing, complex environment.
Some may object to this new modelbased on concerns about employees losing the “benefits” of working for traditionalorganizations, including job security, health insurance, and retirement. Theobvious response is that for many these are nostalgic memories of an era thathas already passed.
A deeper reflection raises thequestion of whether this type of employee “dependence” was ever healthy. A newform of mutuality between worker and organization functioning in a rationalmarket has the potential for a much healthier relationship.
This new form of organizationinvolves moving from thinking in terms of employees to thinking of a workforce—humanand AI—and moving from rewarding managers for headcount growth to rewarding matchingof needs with the available workforce.
Fortunately, we have an emerginghuman workforce that is ideally suited for this new type of organization. Theentrepreneurial spirit is flourishing and freelance and gig work are on therise. And technology and connectivity have enabled a completely different wayof thinking about where and how we work.
The case for this form oforganization, however, is not an argument that it is right for everyorganization or every worker in every situation. A surgery center doinghundreds of procedures a day or a battery plant manufacturing batteries or asugar beet farm growing sugar beets will not likely take on this as its primaryorganizational form, at least not in the near term.
But some parts of everyhealthcare organization, energy company, or agriculture enterprise shouldembrace this new form. And almost every startup and early-stage company, aswell as organizations whose primary product is information, should adopt themodel.
The operative questions forleaders in adopting the new organizational form are, “What is the nature of theworkforce we need to engage?” and “How complex and rapidly changing is theenvironment in which we operate?”
If the workforce is freelance andentrepreneurial, if it includes human workers and AI agents, and if theenvironment is complex and rapidly changing, we must move beyond thetraditional model and adopt this new, fluid, and adaptable form of organization.