How AI Is Rewriting The Corporate Org Chart

0:00 Hello everybody. thank you for being here and I'm really happy to be here. but I have a pop quiz for you. What are the two letters in the English alphabet that you are most tired of hearing? You passed. AI. I am too and I do search in this. So, but you know what? We're going to talk about it anyway. >> >> Listen, I think one group of people that are not tired about hearing it are your investors. And that's a really real thing.

0:35 So, we are going to talk everything about AI and how it's rewriting the org chart. I'm Deepa Vyas and I'm the global head of data and AI executive search at ZRG Partners. Probably heard me in in the intro at the the elite recruiter. I try to be really honest with no fluff advice on my social media because who wants to hear all that corporate BS jargon. So, that's what we're here for and we're going to talk about the org chart and how it's being rewritten and and what it why it really matters to this particular audience. So, I get to be on the side of AI where it's about the people, not the models. And I have not only a front row seat, but I am at the table talking about which companies are hiring in the space, who they're quietly not hiring, and how the org chart is being rewritten while you and I are talking about AI.

1:34 So, let's start with the scorecard. there's a particular reason why I I put this on here for you to understand. 10 years ago, well, FactSet always had all of the they would track how many times AI was being said on these earnings calls, right? 10 years ago, a handful of technology companies were saying the word AI. Okay, did it matter? Sure. But, Q4 2023, when ChatGPT came out, it started to appear 110 times.

2:11 And just this past year, in Q1 and Q2 of this year, it was on two out of three earnings calls. So, no matter what you say about the hype, 15.7% of companies that actually said AI Sorry, two out of those three companies that I was talking about, they're up 15.7% versus 8% of the companies that were not saying AI. That's real pressure for a CEO of any of these public companies to have an AI story.

2:47 But, what I want to talk about is that not only does a CEO need to have an AI story, that means it's your AI story. Because who owns the org chart here? It's all of us, right? In our respective roles. So, I want to talk a little bit about this particular topic from two lenses. One, the organization lens. So, let's talk about that. We saw a lot of doomerism headlines about 116,000 cuts in AI.

3:18 And I want to talk about this number, but I want to talk about what the org structure looked like and what it's going to look like after AI has kind of rewritten it. Traditional org structure is bottom rung, then you have ICs, managers, and a few leaders at the top. What AI is doing is squeezing that. What I'm really worried about are the two boxes in red, which we're going to talk about in just a minute.

3:47 But, you see this headline number right here, 116,000? It's scary. And what's scary about that is that I want to be really clear about headline versus what's really happening. When you hear those numbers, you're automatically thinking or your workforce is automatically thinking, "Holy cow, a robot has now walked into the room, sat in my chair, and has replaced me." Has that happened?

4:18 Have any of you been replaced by a robot? Have any of your team members been replaced by a robot? Okay. So, the doomerism headlines, which I think, look, they're they're fair and unfair. That number represents companies that are investing in AI. They're investing in data centers, they're investing in tokens, they're investing in talent. So, they have reallocated the number that's being spent on payroll, and they're investing it in AI.

4:48 We don't know what the results are yet. So, I want to be really conscious of that. But, what do we do about this squeeze that's happening? And we're going to talk about it from how orgs look at it and how the talent looks at it. That bottom rung, Gen Z, they are underwater by 20%, okay? What this number actually means is that we didn't go and fire 20% of Gen Z in the workforce.

5:25 We just didn't actually hire them. Okay? And that's the scariest part because if we don't hire that bottom rung, who's going to run your company in 2035? Right? Because remember that middle layer that I was talking about, those poor little managers? They are being squeezed, and they're trying to tell that organizations are saying, "Hey, do more with less. You now don't have the bottom rung of resources, but use AI."

5:57 Right? And I will talk about the org chart, cuz I want to be fair to what this topic is. The org chart is being rewritten with AI in mind, and so you are going to see new boxes on your org, chief AI officers, chief data and AI officers, AI forward deployment engineers, AI agent operators. We were talking back in the green room about like, "Oh, you know, what do the new role of today is? We need a Gen Z person coming in and managing agents."

6:33 So, they need the EQ and the wherewithal to have management and leadership skills, but they're going to be managing a robot or a model. Right? And so, that's what our expectations are in this market. So, I'm going to talk about it from the talent lens, and I started to kind of allude to this in terms of what what we're What are we expecting these young people to come in with? Right? We're expecting them to have a AI in conjunction with sort of the non-experience that they that they don't have on their resume.

7:09 What are we expecting managers to do? We are expecting managers to now have 12 direct reports, which is insane, by the way. But, we're also hiring them now to be more of a coach, right? Because all the stuff that they were delegating and all the information up, down, across, all of that stuff is now done with AI. Right? If I had Claude running on my on my computer, and I'm saying, "Hey, listen, I need these reports to go out in the morning. I need to communicate this to leadership. I need to communicate this to my team. Well, hell, I can write a little program, go to sleep, and all that stuff will be done. So, now what am I managing, right? I'm trying to coach people in that organization, which requires a lot more human judgment, critical thinking, all the EQ skills that we've always talked about, which is why managers cannot get replaced for those reasons. And that's where the talent has to really surface that value.

8:09 Because if you're scared of saying, "Hey, you know, I don't want AI replacing me." Fine. You don't have to be replaced by AI. But, if you're not working with AI, but showing your value in how you're creating value for your organization, you are going to be dead in the water, right? And then for everyone else, I would say, you know, we heard a lot of the panels talk about, you know, the job search criteria, all of the job specs that are being written and rewritten.

8:38 AI fluency is the floor. It's table stakes. If it is not on your resume, you might as well, like I I don't know what you will do in this market, because like I said, every CEO has an AI story on those earnings calls, and it matters, because everybody else cares about it, right? So, normally I always speak in like rules of three, but I had to break my own rule today for you all. you're probably saying, "Deepa, like, oh my god, you told me all of these problems." Yes, I did give you a lot of problems today about your org chart and about AI. But, what I really want you to consider as you go back to your respective organizations, whether it's tomorrow morning or Monday morning, here are four things that I really think about.

9:27 One is redesigning those entry roles with AI in mind. I want to And and and this is how I'm advising my clients as I'm in the room with them, but that bottom rung of new entrants need to understand that yes, I need to be AI fluent, but the redesign of those job specs have to be where they are not just about experience or a specific thing. You need to speak about skills and outcomes.

10:00 Because it doesn't matter how many years of experience do you have, what are the skills that you need for the outcomes that your company wants, right? And so, I think those job specs are going to be obsolete every 6 to 12 months because technology is moving so fast. So, if you were to go back to your desk as HR leaders, as CEOs, as operators, as anybody that's in hiring or firing mode, think about what skills do I need and the jobs to be done. That is how the new job spec has to be written with an AI workflow in mind, right?

10:36 The second thing is and I and I alluded to this, I think we focus less on If I hear If I hear a client tell me, "I need 7 to 10 years of experience." Well, hell, ChatGPT came out in 2023. I'm sorry, I'm not going to be able to get that for you. Yes, I might be able to get you one of those PhDs that actually created those models when they were doing neural network, you know, dissertations, but like that's one person versus all of these people you need to hire for, right? And so, we have to be really thoughtful about skills versus tenure and experience. I think we need to move away from that and have outcome-based hiring.

11:19 The third thing is I'm giving you a lot of homework, too. So, the third thing is and I find this really, really interesting. Remember the the the box that I said about managers versus the the bottom rung? Those managers, because there's the layoff story, where do you think they're going? Sorry, what's that? Some Yes. Those people what you're fighting against in your organization are not losing them to Anthropic and OpenAI. You probably lose a few of them there.

11:53 You're losing them to the company of one. Okay? That company of one wants to have a portfolio career. Where they don't have to be attached to one logo, one enterprise. They can take those skills and they can spread it across in a portfolio. That is the new gig economy. It's the portfolio career economy. And so those managers are like, "I don't I don't want to have 12 direct reports.

12:25 I can just do this and work for ABC company and I have my own hours and I have I can be remote and I can do all of these things. That's who you're hiring against right now. That is your competition in the market. So think about when you are posting that job or you have, you know, a really amazing search in your organization that's coming up, an amazing role that you want to fill, sometimes you're going to have to go beyond I'm going to hire an FTE versus I might have to hire a fractional executive because that is the market right now.

13:02 And last but not least, oh my god, they're telling me to wrap up. I'm I promise I'm wrapping up. because my fourth point, okay? The biggest thing is whether you're in leadership, you're a CEO, you're a COO, you're a CHRO, or an HR leader across the organization, you have to tell your people first about AI. There is a huge loss of trust in this market because the last thing you want is your CEO going on that earnings call and saying, "Hey, here's our AI story."

13:33 But, you haven't told your organization yet. And your organization is going to say, "What the hell? I'm being replaced by a robot." Right? So, as we close, we start from the beginning. Just talk to your people about AI. Don't be scared of it. And if you want to follow me and talk more about this, here's where you can find me. Thank you very much.