TLDR; A few thousand years ago organizations(in the form of Empires, kingdoms etc) were created to solve the human coordination and work allocation problem. A lot have changed in how organization’s operate. During last decade this change is fast tracked by AGI.I have always been curious to understand the roots of organizations, how they started, where we are now and where are heading. In this short blog let revisit the THEN, NOW and FUTURE of organizations. What key take aways knowledge worker should take from these to adapt to future which is approaching way too fast.

THEN (3rd BC till 1900)

The earliest recorded organizations in the history date as back as 3rd Mellenia BC. Yes thats ca. 5000 years ago. From Roman empires to buzzling kingdoms of persia and South east Asia could be regarded as some of the first noted organization. They existed to solve the major problem of coordination of work, tracking and auditing them.

The Key purpose they solved was of tax collection(most of the times forcefully) from the kingdoms to fund the Wars and run the organizations.

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The Medieval Organizations from ca. 1500 AD were in the form of Religious bodies all across the globe, Various small tribes which grouped people with similar goals and purpose and various kingdoms all across the globe. In fact the Dutch East India Company—known as the VOC—was created on 20 March 1602 by the States General of the Netherlands. The spice trade prevalent at that time was the main driver of this organization. This is before we had credit system provided by banking industry etc.

The Key purpose of organizations at this time was to enable world trade, create following for particular religious sects, and invade other countries for kingdoms by gathering people with a common goal.

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The Premodern organizations evolved from Industrial age which started in British empire in 18th century. In fact, the Joint Stock Companies Act of 1844 created a formal registration system for ordinary joint-stock companies and could be termed as starting point for registered companies.

At the end of agricultural age and onset of industrial age, migration from villages to towns to work in factories happened at large scale. Very few people knew how to operate the machines and assemble lines and hence few people who got early trained on these machines became managers.
This also led to Blue collar(people opearating machines) vs White collar (early people who got trained on those machines)

The key problems these organizations solved was of pooling capital, coordinating specialised labour, controlling large-scale operations and delivering predictable output. Which was basically the coordination problem and communication problem.

To summarize Organization evolved over last 2000 years with different terms and concepts such as Joint stock company(1600s), Merchant capitalism(end of 1700s), Factory system (late 1700s), Management & Corporate Governance(1800s) to Audits, accounting, support systems and Managment consulting by end of 18th century.

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NOW (1900’s till Now)

For major part of 20th century and till now, there have been different eras when organizations shifted and changed the way it operated.

From 1900 to 1950’s Industrial era was at at its peak and the main problems solved were of Scale and Supply chain robustness. With invent of assembly lines and cheap labour coming from rural areas. Organizations strived to produce as much as possible for as little cost. Supply chains were set as often these materials were procured from very far places and different continents.

1950’s to 1990’s was the era when bureaucracy showed its ugly head. With demands and economy prospering after World war’s the production scale was amplified by abundance achievements in science, technology and replacement of old assembly lines with new.
Different departments, HR, procurement, finance etc were introduced and bought with bureaucracy. Information silos were created due to these multiple departments.

1990′ till Now Was the era of digitalization and when Software led automations, led to further to efficiency improvements. This led to organizations structural changes and fast flows of information via digital channels across the globe. Organization became more networked around the Globe & world become local village.

Last decade Pandemic also challenged the very old structure of office space vs remote space. When work started to get done without office structures(not only in technology first companies but overall).

Adoption of computers, remote work and information could be the key words for the last few decades.

During this era, the main problem faced by kingdoms or religious organizations thousands of year was replaced by working at speed, scale & connecting humans across the globe.

How thousands of people can be motivated to achieve organizational north stars, while minimizing bureaucracy and hence making coordination cheaper via technology.

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FUTURE

Things changed drastically this decade. It’s only 4 years ago when first GPT model was launched in 2022 & Changed the trajectory of how organization will be in future. The cost of tokens fell from hundereds of dollars per million token to pennies. For less then the cost of coffee a kids sitting somewhere in Africa or east Europe can spin up companies which can challenge the very existence of fortune 500 companies. (very soon).

What this lead to is Organizational Singularity*.

What It Means to Have a “Organization or be part of one?”

We’re heading into an organizational singularity. An organization is nothing but an hierarchy of people in almost same structure and departments / BU’s trying to achieve 1 thing i.e increase shareholder value. Most of these people are doing nothing but a collection of different(sometimes interdependent tasks) to achieve that.

Think about that for a second.

What is a company when agents handle 90% of these tasks? What’s a hierarchy when knowledge work is bulk solved by these model?

What’s a job when a person managing 47 AI agents instead of 12 employees? or when a person is managed by an AI agent?

When AI will manage majority of work and decisions. Who will be accountable for them? when Shit hits the fan.

This isn’t a normal oranizational shift. This is a phase change in how humans collaborate, create, and capture value.

I recently heard for companies such Klarna, Spotify and many more where not a single line of code is written by FTE’s but agents They generate it. They don’t look at code, they test functionality. The agents document themselves. And when something goes wrong, they ask the agent where it stored the files.

That’s the new normal. This is game changing and will challenge the very existence of all knowledge work and organizational set up created so far.

Soon the job will be be nothing but like an orchestra conductor who does nothing but coordinate these the FTE’s.

Another view – Cost of labour:

Imagine a Full time employee with yearly salary of 80k USD. If one divides and records each of the tasks done by him/her in different buckets. Lets say its 50 unique tasks done over a week/year.

The amount of tokens required to do similar or better tasks by an agent is 100 times cheaper. & with the time the cost is decreasing while the efficiency of agents is increasing.

Imagine a Country, society or organization when most of the tasks are nothing but token in & token out.

To conclude, i personally think Humanity is at fork roads (again).

Last fork was during the onset of digitalization. Before that it was Industrialization. Both of these trends and market shifts presented people with options:

To be early adopters, & start fiddling with these technologies, fail fast and move on.

Or be laggards and have wait n watch philosophy.

The early changes to organizational structure(During industrial and software age was slow and defined). Government, infrastructures and support systems like educational sectors organized to support the societies.

The AI change is too fast & chaotic. Leaving no time for Government to adapt to this. Way forward is to be try any of these technologies and challenge a organizatonal structure which has been there for 100’s of years (if not thousands).

Now it’s Fork due to AGI and Soon ASI. Which side will you be on?

Such a remarkable time to be alive. Isn’t it?

Love & Peace,
//Chakshu Arora

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*Organizational singularity – A point in future (very soon) and no turning back when traditional definitions of organization will not be defined by hierarchy, department, bureaucracy and workflow. It will be something which it’s not today.

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Here’s what I am reading this week.

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