I’ve been thinking about Conway’s Law, the idea that organizations “ship their org chart.” The seams are most visible in big tech. Google, for example, once offered nearly a dozen messaging apps instead of a single excellent one, with each team fighting for resources. The same pattern appears everywhere: companies struggle to solve problems that cross organizational boundaries because bureaucracy and incentives keep everyone guarding their turf. The issue is not the technology; it is human nature.
I caught up with an old friend recently. We met at nineteen while working for one of the first cybersecurity companies, and now, in our fifties, we both advise organizations of every size on innovation and problem-solving. We agreed that defining the technical fix is the easy part; the hard part is steering it through people and politics. When change shows up, most organizations behave like an immune system attacking a foreign antibody. As Laurence J. Peter wrote in 1969, “Bureaucracy defends the status quo long past the time when the quo has lost its status.”
Naturally, the conversation drifted to AI and how it will, or will not, transform the companies we work with. I explored this in two recent posts [1,2]. We have seen the same thing: not everyone is good at using AI. The CSOs and CTOs we speak with struggle to help their teams use the technology well, while a handful of outliers become dramatically more productive. The gap is not access or budget; it is skill. Today’s AI rewards people who can break problems down, spot patterns, and think in systems. Treat the model like a coworker and you gain leverage; treat it like a tool and you barely notice a difference.
That leverage is even clearer for solo founders. A single entrepreneur can now stretch farther without venture money and sometimes never need it. With AI acting as marketer, product manager, developer, and support rep, one person can build and run products that once demanded whole teams. This loops back to Conway’s Law: when you are the entire org chart, the product stays coherent because there are no turf battles. Once layers of management appear, the seams show, and people ship their structure. Peter’s Principle follows, people rise to their level of incompetence, and the bureaucracy that emerges defends that status.
Yet while AI empowers outliers and small players, it might also entrench new kinds of monopolies. Big tech, with vast data and compute resources, could still dominate by outscaling everyone else, even if their org charts are messy. The question becomes whether organizational dysfunction will outweigh resource advantages, or whether sheer scale still wins despite structural problems.
The traditional buffers that let incumbents slumber (high engineering costs, feature arms races, and heavy compliance overhead) are eroding. Payroll keeps rising and headcount is the biggest line item, while the newest startups need fewer people every quarter. I expect a new wave of private-equity-style moves: smaller players snapped up, broken into leaner parts, and retooled around AI so they no longer rely on large teams.
Social media voices such as Codie Sanchez highlight the largest generational transfer of wealth in history. Many family-owned firms will soon be sold because their heirs have no interest in running them. These so-called boring businesses may look ripe for optimization, because most still rely on human capital to keep the lights on. Just above that tier we see larger enterprises weighed down by armies of people who perform repetitive tasks. A modern consulting firm armed with AI could walk into any of these firms and automate vast swaths of monotonous work that keeps those businesses running. Incumbents will struggle to move that fast, trapped by the very structures we have been discussing. A private-equity buyer, on the other hand, can apply the playbook with no sentimental ties and few political constraints.
ATMs let banks cut tellers and close branches. Customers later missed human service, so smaller neighborhood offices came back. AI will force every sector to strike its own balance between efficiency and relationship.
They say history doesn’t rhyme but it repeats, if so incumbents who dismiss AI as hype may follow Blockbuster into the museum of missed opportunities. In Wall Street (1987), Michael Douglas plays Gordon Gekko, a corporate raider who uses leveraged buyouts to seize firms like Blue Star Airlines, an aircraft maintenance and charter company. Gekko’s playbook, acquire, strip assets, slash jobs, was ruthless but effective, exploiting inefficiencies in bloated structures. Today, AI plays a similar role, not through buyouts but by enabling leaner, faster competitors to gut inefficiencies. Solo founders and AI-driven startups can now outpace large teams, while private-equity buyers use AI to retool acquired firms, automating repetitive tasks and shrinking headcounts. Just as Gekko hollowed out firms in any industry, AI’s relentless optimization threatens any business clinging to outdated, bureaucratic org charts.
Across news, television, music, and film, incumbents once clung to their near-monopoly positions and assumed they had time to adapt. Their unwillingness to face how the world was changing, and their instinct to defend the status quo, led to the same result: they failed to evolve and disappeared when the market moved on.
The Ask? incumbents, you need to automate before raiders do it for you.