AI's Impact on Organizational Structure

The rise of artificial intelligence (AI) is significantly impacting the workforce. As AI becomes more sophisticated, it can automate more tasks than humans once did. However, it is essential to remember that AI is not a monolithic force. There are different types of AI, and they have different implications for the workforce. Some types of AI, such as chatbots and customer service robots, are designed to augment human workers by automating repetitive or time-consuming tasks.

The impact of AI on the workforce will vary depending on the industry. AI will likely lead to the automation of job tasks in some sectors, such as manufacturing and customer service. AI is more likely to create jobs in other sectors.

Newer companies, such as those in the technology industry, are likelier to adopt AI than traditional companies. This is because newer companies are more likely to be willing and able to take risks. They are also more likely to have the technical resources to invest in AI technology.

As AI becomes more widespread, newer companies will likely continue to have a smaller workforce than traditional companies. This is because AI will allow newer companies to automate more tasks and do more with fewer employees. We saw a similar change in organizational structures with the advent of the Internet. Before the Internet (see below), companies required larger workforce headcounts to produce or provide services. Companies like Google, Facebook, Amazon, and Microsoft could scale with almost half of the workforce of more traditional companies like Berkshire Hathaway, General Electric, and AT&T.

Companies will scale faster with less headcount with the help of AI. An example of this in the past was Instagram which was acquired for one billion dollars (cue Dr. Evil voice) by Facebook and had only 13 employees. With AI, the creation of an "augmented organization" will occur. This organization scales using AI to augment roles and tasks across the organization. You will start to see more organizations scale revenues and grow with even fewer employees at their peak than illustrated below. There will be more Instagrams than General Electrics.

Here's how organizations will be able to scale with AI:

• AI can automate tasks. AI can automate many of the tasks currently done by humans, such as customer service, data entry, and even some forms of creative work. Companies will need fewer headcounts to do the same amount of work.

• In some cases, AI can process information faster than humans and work 24/7 without getting tired or bored. This means that AI can do more in less time, increasing productivity and efficiency.

• AI augmentation can save companies costs and help employees to reduce or remove repetitive lower-value tasks to focus on more high-value tasks, thus having a larger impact on the business.

Of course, only some agree that AI will lead to some tasks and roles being automated. Some experts believe AI will create new jobs that we cannot imagine today. However, AI will majorly impact the workforce, and preparing for the coming changes is essential.