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Playbook · AI transformation · 8 steps

AI transformation 4: Organising for AI

Reshape teams, incentives, sourcing and bets for an enterprise where machines do much of the work.

“I argued in The Nature of the Firm that the existence of transaction costs leads to the emergence of the firm.”

Start with step 1 All 75 models for strategy
  1. 1The Nature of the Firm (Transaction Costs)As AI lowers coordination costs, which work should move inside, outside, or to machines?Firms exist because using the market has costs; an activity belongs inside when organising it there is cheaper than buying it, so when those costs change, the boundaries should too.Open
  2. 2Operating Model (Standardisation and Integration)Does AI push us towards more standardisation, more integration, or both?Decide how standardised your business processes must be and how tightly units must share data; the architecture follows from that choice.Open
  3. 3Inverse Conway ManeuverDo team boundaries match the human-and-agent workflows we want?Shape your teams to match the architecture you want, and the system will follow.Open
  4. 4Cognitive LoadDoes AI take load off teams, or add another system for them to supervise?A team can only hold so much in its head; architecture should fit within that limit.Open
  5. 5Goodhart's LawAre we rewarding AI usage, such as seats and prompts, instead of outcomes?When a measure becomes a target, it ceases to be a good measure.Open
  6. 6Jevons ParadoxCheaper work creates more work. Is the operating model ready for the extra volume?Making a resource cheaper or more efficient often increases total consumption of it.Open
  7. 7Three HorizonsAre we funding efficiency, new AI-native services and options on what comes next, all at once?Manage the core, the emerging and the future at the same time, with different goals, measures and funding for each.Open
  8. 8Exit Strategy (Lock-in as a Design Input)How would we change model provider, and what depends on one vendor's behaviour?Decide how you would leave a vendor or platform before you commit, and trade the switching cost consciously against the value the dependency brings.Open