AI gains require companies to redesign how teams work

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 13:25

   not engaging enough experimentation yeah all right let's let's now go to the next step which is what happens uh what has to happen for us to see that widespread um change within companies where we get those big productivity gains so it's a two-parter for you one is how you know, the type of change that unlocks the full potential. What does it look like? And what do we end up seeing if companies make the moves that you suggest?

2. 13:54

   So there's no one move, right? It's about thinking about structural change, which takes years for a lot of organizations to do. And so examples of things that I'm seeing on a sort of structural level, very common situation is pulling apart organizational teams that exist too. So called disbursement, you pull out your best senior engineer, put them a subject matter expert and a marketing or strategy person, and then have them do like impossible projects. Like I just spoke to a company that went from a $200 million data migration plan for their old, you know, old mainframe data to they renegotiate to a $20 million plan just a few months ago. And the CTO is thinking like, well, maybe I can do this for $2 million in a couple months, like real noticeable change, but it involves literally pulling apart teams and thinking about what do

3. 14:38

   we want to do in recessing projects from the beginning so how does a t how does a team typically change so because because individuals are now starting one of the other things we're seeing companies is a dissolving of company boundaries right so coders are doing design work designers are doing coding work product managers are doing everything so part of what's going on is how do you reassign roles that way some companies are assigning everyone the role of builder right and that's that's what they're doing with with ai um but other organizations i see are trying to think about how do we take teams of highly talented people these people are already getting returns from ai put them together give them really hard challenges to do high token budgets and seeing how far they get and if they fail which happens some of the time then how do we learn something

4. 15:21

   from this formally rather than just burning tokens and sending them off into the air is that so different from the way that companies function today yes i mean most organizations do not have are not doing far exploration work and especially in organizational design and form. So the 40% of the advantage of American companies in the 20th century came from better management according to paper by Rafael Sadoon and other people from Harvard. And we used to do a lot of exploration of organizational form, right? Companies were experimenting all the time with how to organize themselves, how to get work done. I mean, a large part of the story of the 20th century was the story of American manufacturing and firm organization transforming. That has not happened as much in the last 30 years. People use outside vendors, like, you know, the SaaS vendors will

5. 16:06

   tell you how to run part of your business, use consultants, and your R&D is focused on your customers or outcome. So, a lot of organizations have very little muscle memory left of organizational change. So it is actually pretty rare to see organizations play with fundamentally re-dividing how work operates, how roles operate, what mandate people have to get work done. I mean, that doesn't feel like normal operation of business to me.