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For years, companies have been flattening their organizations and cutting down middle management. Weeks after slashing his staff by 40%, Jack Dorsey, CEO of payments company Block, foresees middle management\u2019s complete extinction.\u00a0<\/p>\n
In an essay published Tuesday, coauthored with Sequoia advisor Roelof Botha and titled \u201cFrom Hierarchy to Intelligence,\u201d Dorsey questioned the conventional wisdom of widely used organizational structures.\u00a0<\/p>\n
\u201cAt Sequoia, we see that speed is the best predictor of startup success. Most companies are focused on AI as a productivity enhancer. Few are focused on the potential of AI to change how we work together,\u201d they wrote.\u00a0<\/p>\n
In February, Block laid off 4,000 employees, or about 40% of its workforce. Dorsey made his reasoning clear: \u201cWe\u2019re already seeing that the intelligence tools we\u2019re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company,\u201d he wrote in a Feb. 26 X post.<\/p>\n
Dorsey and Botha are rejecting what they see as 2,000 years of hierarchical organizational structures, starting with the Roman army, that relied on middlemen to \u201croute information, precompute decisions, and maintain alignment across a complex organization,\u201d thereby slowing the flow of information. They argue companies today are still running on the same system.\u00a0<\/p>\n
\u201cMost companies using AI today are giving everyone a copilot, which makes the existing structure work slightly better without changing it,\u201d they wrote. \u201cWe\u2019re after something different: a company built as an intelligence (or mini-AGI),\u201d they wrote.\u00a0<\/p>\n
Block is not the only company that wants to axe middle management. In November, Amazon cut 14,000 corporate employees to \u201creduce bureaucracy\u201d and \u201cremove organizational layers.\u201d Months before the layoffs, Amazon CEO Andy Jassy said the company is cutting \u201cwell-intentioned\u201d middle managers who \u201cwant to put their fingerprint on everything\u201d to allow employees to move faster and give them more ownership over their work. Meta\u2019s AI team now has a 50-to-one employee-to-manager ratio following the company\u2019s crusade against middle managers in recent years.\u00a0<\/p>\n
Their vision for a new organizational structure<\/p>\n
Dorsey and Botha proposed companies need both a \u201cworld model\u201d of their operations and a strong \u201ccustomer signal.\u201d Simply put, they believe companies need a way to record and track all decisions, discussions, plans, problems, and progress to build an ever-evolving \u201cworld model.\u201d This system would replace the role of managers, who relay information across an organization. The second part of their plan is even more straightforward: Follow the money to determine the model\u2019s success.<\/p>\n
\u201cMoney is the most honest signal in the world,\u201d they wrote. This approach may work particularly well for Block because it can track buyers through Cash App and sellers through Square in real time, and AI can process that information faster than humans.\u00a0<\/p>\n
\u201cThe traditional road map, where product managers hypothesize about what to build next, is any company\u2019s ultimate limiting factor,\u201d they wrote. \u201cIn this model, customer reality generates the backlog directly.\u201d\u00a0\u00a0<\/p>\n
If you\u2019re wondering where Block\u2019s remaining 6,000 employees sit in this new model, Dorsey and Botha have an answer for that: the edge, or \u201cwhere the action is.\u201d On the edge of their new system, people will be able to sense things the model can\u2019t perceive, such as cultural context, trust, intuition, and \u201cthe feeling in the room.\u201d What makes their proposal more than just a database is how humans will interact with it and use it without needing a chain of command, they wrote.<\/p>\n
\u201cWe\u2019re not making this decision because we\u2019re in trouble,\u201d Dorsey wrote in an X post on the day he announced the layoffs. \u201cOur business is strong.\u201d<\/p>\n
The company reported a gross profit of $2.87 billion in Q4, up 24% year over year. Block\u2019s shares rose about 3% immediately after the pair published the paper on March 31, but have fallen slightly in the days since. Over the past year, the company\u2019s stock has fallen 9%.\u00a0<\/p>\n
\u201cBlock is in the early stages of this transition,\u201d Dorsey and Botha wrote. \u201cIt will be a difficult one, and parts of it will likely break before they work.\u201d\u00a0<\/p>\n
#Jack #Dorsey #Roelof #Botha #middle #management #obsolete<\/p>\n","protected":false},"excerpt":{"rendered":"
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