Rethinking organizational design in the age of agentic AI

Date:

Amid rapidly growing adoption of enterprise-level AI agents, there’s a disconnect emerging between ambition and execution. 
Although 85% of organizations say they want to be agentic within the next three years, 76% say their current operations and infrastructure can’t support that change. They cite a lack of readiness across people, processes, and workflows. 
The sticky tape problem
The challenge is that many organisations are often layering AI agents onto existing operations, rather than reimagine the operating model and how work will need to be rewired, explains Prasun Shah, global CTO for workforce consulting and chief AI officer at PwC UK Consulting. “They’re embedding AI employees into what is a human operating model,” layering on AI agents to existing workplace structures when “this is like adding sticky tapes to parts of an operating model that is breaking.”
Doing so may be preventing organizations from unlocking the full value agentic AI offers, creating circumstances where disillusionment can quickly creep in. That full value lies in agents’ capacity to execute entire workflows with limited human input. They can coordinate complex tasks, make independent decisions, adjust to changing conditions, and iterate performance. 
In early proving grounds that span customer service, HR, and sales, it’s already estimated that AI agents could accelerate business processes by as much as 30% to 50% and low-value work time by 25% to 40% when deployed at scale. But with this capability comes greater complexity and the need for an enterprise-wide change.

Growing the AI vocabulary 
Enterprise agentic AI platform Ema describes this change as agentic business transformation (ABT), a term it coined last year in partnership with HFS Research, in an attempt to plug what it sees as a gap in the existing lexicon about AI agents, and to provide enterprises with a new framework with which to think about their own adoption of the technology. 
“None of the existing vocabulary captures the full scope of the change,” explains Ema CEO and founder Surojit Chatterjee. “Digital transformation was about moving from paper to software. AI transformation was about adding artificial intelligence to existing processes. Co-pilot is about AI assisting in various human tasks. But ABT is something categorically different: It’s the integration of AI agents into the fabric of the organization.” 
For Shah, the dedicated term (ABT) “helps drive the need to redesign an organization in its entirety: its operating model, its workflows, decision rights, and performance management systems.” He emphasizes that “everything that’s needed to ensure those agents are actually active participants in value creation, rather than just point tools or productivity aids.”
According to Ema, ABT encompasses three core pillars: an organization’s technology stack, its workforce, and the metrics used for success. 
AI agents as connective tissue
The first pillar of ABT is the technology stack. “Your existing tech stack was designed for human-operated, application-centric workflows,” says Chatterjee. “It needs to be reconsidered when the actor is an AI agent operating at machine speed across multiple systems simultaneously.”
 As AI agents are integrated into an organization, enterprises will need to pivot from a set of linear processes and steps, to rewiring work in a very different way, explains Shah. That’s because the value in AI agents isn’t as another layer in an existing technology stack but as a connective tissue, he explains, moving between or across layers to coordinate a high-level task or retrieve and interpret data from multiple discrete applications. AI agents can create “a true competitive differentiation for an enterprise” by making decisions based on this capacity to contextualize, he says. “That is where the next battleground will be.”
To build this connective tissue, leaders need to adapt their technology stack to surface higher quality decisions from AI agents, prioritizing access to multiple datasets and applications simultaneously to develop tacit knowledge. “Organizations that make this architectural shift become genuinely more adaptive,” says Chatterjee. “When a new business requirement emerges, you don’t wait six months for a software vendor to build a feature. You configure an AI employee using natural language and connect it to the systems it needs. The time from business to production workflow drops from months to days.”
The workforce, redesigned
As AI agents are deployed for more use cases, enterprise leaders must consider what this means for dynamics across their workforce, the second pillar of ABT.
Workforce structures today deviate little from the hierarchical model of the early days of industrialization. To maximize efficiency and scale, processes are standardized, tasks are clearly delineated between strategic business units (SBUs), and employees progress up through an organization based on their capacity to optimize output from teams below them. But with AI agents that can execute, coordinate, and optimize tasks—often without managerial coordination—the lines of that established hierarchy become blurred.
In a workforce that blends AI agents and human employees, managers will be freed up from many execution-based tasks but take on new responsibilities associated with managing hybrid teams. Managers “will need to be able to manage issues around trust, explainability, psychological safety, and even status dynamics” to navigate new tensions that could arise in a hybrid workforce, says Shah.
The impact of agentic AI on existing workforce structures goes far beyond the management layer, too. McKinsey predicts that by 2030, three-quarters of current jobs will require redesign, upskilling, or redeployment, and organizations will need to act swiftly to amend recruitment, retention, and remuneration. 
From output to outcome
Success metrics are the third and final pillar of ABT. 
As AI agents assume greater ownership of core enterprise processes, taking on collaborative roles alongside human employees, traditional workforce metrics that focus on activity or output—such as calls handled or reports filed—no longer make sense. 
“When you add AI employees into the workforce, activity metrics become meaningless or actively misleading,” says Chatterjee. “An AI employee can handle a thousand customer interactions in the time it takes a human to handle ten. If you measure success by interactions handled, you’ll conclude the AI is working brilliantly while missing whether any of those interactions actually drove customer satisfaction, retention, or revenue.” To correct this, enterprises must develop a new set of metrics that focus on outcome rather than output. That is, metrics on the broader benefits or changes achieved, rather than individual deliverables. 
For example, when one of Ema’s large enterprise customers overhauled its own metrics, switching from tool metrics like cost per query and AI accuracy, to outcomes like the percentage of contracts reviewed without human escalation, the measured ROI from agentic AI tripled within two quarters. The changes meant “this customer stopped building point solutions in high-volume, low-complexity workflows and started deploying AI employees where the outcome value was highest,” says Chatterjee.
Integrating new metrics may also require a complete reconfiguration of reward and talent management processes, as well as accountability and ownership within organizations, points out Shah. In human-AI teams, for example, although ethical and fiduciary responsibilities will likely remain with human employees, operational accountability will become significantly more diffused to reflect the systemic role of AI agents.
This change will raise new questions that senior leadership teams will need to wrestle with, Shah adds. They’ll need to consider: Who is accountable when an AI employee makes a mistake? What happens when AI and humans disagree? What guardrails should be erected to safeguard customers? 
Laying the groundwork for systems-level change
Systems-level change is gradual. These are complex lines of inquiry that experts continue to grapple with. But in kickstarting internal dialogue about the core pillars of ABT—the workforce, the technology stack, and the metrics by which success can be gauged—leaders can lay the groundwork for an enterprise better poised to embrace AI agents at a systems level and start to close the gap between their ambition and execution. 
This content was produced by Insights, the custom content arm of MIT Technology Review. It was not written by MIT Technology Review’s editorial staff. It was researched, designed, and written by human writers, editors, analysts, and illustrators. This includes the writing of surveys and collection of data for surveys. AI tools that may have been used were limited to secondary production processes that passed thorough human review.

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Subscribe

spot_imgspot_img

Popular

More like this
Related

Newsom’s unbalanced budget faces strong pushback for spending cuts. Will lawmakers back him?

Gov. Gavin Newsom’s proposed state budget is drawing mounting...

CA colleges try to improve online classes

A person wearing a blue shirt and glasses is working on a laptop at a kitchen table, with books and school materials scattered around, in the corner of a kitchen in a home. In the background, a framed painting hangs directly above the person as they work, while in the foreground is a view of a kitchen cabinet.
A person wearing a blue shirt and glasses is working on a laptop at a kitchen table, with books and school materials scattered around, in the corner of a kitchen in a home. In the background, a framed painting hangs directly above the person as they work, while in the foreground is a view of a kitchen cabinet.
Student Tina Rocha sorts through her classwork at her home in Stockton on May 7, 2026. Photo by Larry Valenzuela, CalMatters

Online college classes can be impersonal, isolating and disengaging. But with high demand among their students for online learning, California’s community colleges and universities are trying to find better online teaching practices.

As CalMatters’ Adam Echelman explains, about 40% of all community college classes are online. Online courses enable students, especially those who are part- or full-time workers, to complete their degree while juggling jobs, caretaking responsibilities or other obligations.

But taking these courses also requires “self-directed learning skills,” including a “very high level of self-time management,” said Di Xu, a professor at UC Irvine’s School of Education. 

  • Xu: “In an in-person environment interaction happens naturally. But in an online environment, especially asynchronous, that opportunity needs to be embedded. Otherwise, the student will feel very lonely.” 

Students prefer online courses, and they’re less costly for colleges to offer than in-person ones.

Rebecca Ruan-O’Shaughnessy, the director of program and strategy at College Futures Foundation and a former executive at the California Community Colleges Chancellor’s Office, said schools need to adapt. Some new approaches she cited as promising include shortening the length of classes or trying to integrate adults’ work experience since so many online students have jobs.

To address some of the shortcomings of online foreign language courses, Julia Simon, a professor of French at UC Davis and the chairperson of a task force on languages for the university, is considering creating a set of conversation classes.

Simon said students who take online courses miss out on opportunities to practice speaking. Once students enter UC Davis, they’re unprepared, she said. But since “we can’t make them repeat courses they’ve already had,” Simon said, a conversation class could be offered as remedial education to help students catch up.

Read more.


We’re bringing our voter guide to life through VotingMatters events across California this month, in collaboration with on-the-ground partners: Local news organizations, colleges and nonprofits. Our last event is this evening in Modesto. Plus, we have a DIY kit to host your own event.



Competition at the Board of Equalization

An outer view of a white and black semi-spherical dome that sits on top a white building decorated with various architectural details.
The state Capitol on March 28, 2025. Photo by Miguel Gutierrez Jr., CalMatters

We know that Californians are curious about elections at the Board of Equalization this year. Our page for that contest is drawing the second-largest audience in our voter guide, second only to the governor’s race.

That’s surprising considering the agency’s funny name and its fairly narrow portfolio in the world of California taxes. The agency had a lot more power until 2017, when then-Gov. Jerry Brown signed a law stripping it of almost all of its employees and authority.

  • Betty Yee, former state controller: “I just really do question how this board continues to have relevance.”

But we can also see that the races for the four board of equalization seats are going to be competitive. Three current lawmakers are running for open seats, and a former assemblymember is up for reelection.

  • State Sen. Tom Umberg, who is running for a seat on the board: “Although it’s not a high-profile job, it’s a critically important job, especially when we’ve got so many revenue challenges in California.”

Read more on the race here.

$25M needed to clean up polluting road

Water flows across a narrow rural road lined with dense trees and brush. A yellow road sign showing a horseback rider stands near the bend in the road, while sunlight filters through the foliage and reflects off the shallow water covering the pavement.
Flooding caused by the Tijuana River covers a section of Saturn Boulevard after a rainy day in San Diego on Nov. 21, 2025. Photo by Adriana Heldiz, CalMatters

The Tijuana River is severely polluted. When it rains, the river waters rise and flood part of Saturn Boulevard in San Diego. The part of the road the polluted waters flood exacerbates the already dire situation, spraying contaminants into the air. 

Fixing this particular situation — not solving the river’s pollution but curbing some of the negative health effects caused by the pollutants becoming airborne — would cost $25 million, reports CalMatters’ Deborah Brennan. The positive effects of the repair could be felt as soon as next year, according to San Diego County officials, but coming up with the cash will be a challenge. 

Lawmakers submitted a request in the state budget to cover $23 million, and its possible money from 2024’s $10 billion Proposition 4 could be drawn upon, as well as increasing the county sales tax. 

Read more.

And lastly: CA’s ICE ID requirement

A group of heavily armed federal agents in full tactical gear emerge from the back of an armored vehicle labeled “LENCO ARMORED VEHICLES” on a sunlit urban street. Most wear camouflage fatigues, body armor, helmets, and goggles, with visible patches reading “POLICE” and insignias from U.S. Border Patrol and Homeland Security. Some agents carry rifles and one has zip cuffs and canisters clipped to their vest. A media photographer in a press vest films nearby. Palm trees and a clear blue sky suggest a Southern California location.
Federal agents descend on MacArthur Park in Los Angeles on July 7, 2025. Photo by J.W. Hendricks for CalMatters

A federal appeals court blocked California from enforcing a law requiring masked federal agents to display identification during operations. CalMatters’ Nigel Duara and video strategy director Robert Meeks have a video segment on how the April ruling is a setback for the state’s effort to curb aggressive immigration enforcement tactics, as part of our partnership with PBS SoCal. Watch it here.

SoCalMatters airs at 5:58 p.m. weekdays on PBS SoCal.



Other things worth your time:

Some stories may require a subscription to read.


Record-setting outside money pouring into CA governor’s race // Los Angeles Times

Why Silicon Valley’s big bet on Mahan went bust // Politico

CA’s overseas voters face new barriers after Trump administration cut key program // San Francisco Chronicle

After raids, US citizens and immigrants seek millions for shootings, injuries, trauma // Los Angeles Times

CA Assemblymember Addis to protect student privacy through AB 1159 // Mustang News

The United Farm Workers built its political power around Chavez. Now it faces a reckoning // The Sacramento Bee

Bay Area braces for Trump’s tougher CalFresh rules // The Mercury News

Their meteoric rise reshaped the Bay Area and powered Silicon Valley. Is it at an end? // San Francisco Chronicle

Approximately 65% of evacuees for Garden Grove chemical threat can return home, officials say // The Orange County Register

Our house burned down but our mortgage didn’t. California fire survivors need time

When Rachel Jonas and Robert Fagnani planned their younger...

California Judges Test AI Court Assistant Without Telling Litigants When It Reviews Their Cases

Two of California’s largest trial courts are testing an...