Shredding season is here for consulting firms. It’s time to embrace AI and eliminate waste.
As companies incorporate AI agents into their workflows, consultants are exploring how they can be used to flatten the management layer and help leaders oversee increasingly broader teams.
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.
AI has equipped leaders with “The superhuman ability to manage over a larger scope will be further enhanced, allowing companies to flatten their structures and make processes faster,” she said.
Over the past decade, companies have inserted at least one organizational layer between the CEO and the field in their management structures, she said. In some cases, there are more like two or three layers.
“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.
Instead, AI can be used to drive decision-making and connection points.
How organizations change will likely vary from industry to industry. In life sciences, “armies of agents” can accelerate innovation. At the same time, AI agents can also automate the work of departments such as human resources, finance and legal, and reallocate resources to other parts of the business, Krivkovic added.
Some people call this the “Great Flattening.” This is an AI-driven reorganization of corporate hierarchies.
“Organizational charts are probably going to start condensing to become more flat horizontally,” Eno Reyes, Factory’s chief technology officer and co-founder, told Business Insider in March.
Factory is an AI-native software development platform that builds and deploys autonomous coding agents for consulting firms like EY and enterprises like Nvidia and Adobe.
Even at IBM, which has its own consulting arm, senior vice president Muhammad Ali expects new management structures will emerge by hiring “digital workers” alongside the company’s 150,000 human consultants.
“I don’t think human administrators manage these things the same way we manage people,” Ali told Business Insider. “There’s going to be a system to manage these things. There’s going to be a system to put up guardrails.”