Krivkovic said that over the past decade, companies have added at least one organizational layer between the CEO and the front line in their management structure. McKinsey is reportedly developing a new leadership strategy for the AI era, and the message is clear. It’s time for businesses to cut back on extra layers of management. As businesses incorporate AI agents into their workflows, consultants are exploring how they can be used to “eliminate waste,” according to a Business Insider report.
Alexis Krivkovic, a senior partner at McKinsey & Company, said on a recent episode of the McKinsey Podcast that there is “real hope” that AI can help companies streamline their organizational structures. He said AI will give company leaders “superhuman control over a greater scope, allowing companies to flatten their structures and move processes faster.”
How AI can help companies reduce layers
Krivkovic said that over the past decade, companies have added at least one organizational layer between the CEO and the field in their management structure. All have two to three additional levels, she added.
“It’s not only expensive, it slows down companies from a decision-making standpoint because it just means there’s more people and more layers that someone has to consider before making a decision,” she said.
She noted that AI can be used to facilitate decision-making and connection points. Krivkovic said AI agents can automate the work of departments such as human resources, finance and legal. It also helps reallocate resources to other parts of the business, she added.
The rise of the “Great Flattening”
Other companies are considering similar ideas. Technology industry leaders say AI-driven systems have the potential to change the way managers work, especially as digital workers become more prevalent.
IBM senior executive Muhammad Ali said companies may need new systems to manage AI tools alongside human employees. “There will be systems to manage these things. There will be systems to put up guardrails,” he said.
Experts are calling the AI-related changes in the workforce the “Great Flattening.” The BI report quotes Eno Reyes, Factory’s chief technology officer and co-founder, as saying, “Organizational charts will probably start to condense and become more flat horizontally.”
