AI creates over-efficiency. Organizations must absorb it

AI doesn’t just increase productivity: it creates *over-efficiency*.

Individuals and small teams can now generate decisions, options, and initiatives faster than existing organizations were designed to legitimize, coordinate, or absorb. The bottleneck has shifted from execution to governance.

When surplus productive capacity accumulates without an absorption layer, organizations don’t gradually adapt. Historically, they freeze: tighter rules, centralization, bans, decoupling.

We saw a similar reflex during COVID: when systems couldn’t absorb shock locally, they shut down globally.

What seems under-discussed is absorption: not "how fast can we produce" but how many decisions, options, and changes an organization can metabolize without defensive closure.

Two mechanisms seem relevant but under-theorized: (1) small, local process changes that redistribute coordination and decision load; (2) continuous skill and role shifts, as people reposition around what still needs to be decided, maintained, and legitimized.

I’ve been trying to think about this as a kind of "conduction" problem, how human decision-making and legitimacy flow alongside generations, AI and people.

If you’ve seen organizations handle this well (or fail badly), I’d be curious: what actually lets systems absorb AI-driven over-efficiency without reverting to control, ranking, layoffs or shutdown?

6 points

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eriam

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13 hours ago

3 comments

skeam ・ 10 hours ago

The mechanism (1) and (2) you've identified are tackling governance. If less people are producing, more people can decide. Flattening hierarchy or redistributing the decisional power seems to be one way to lift the governance bottleneck.

Interestingly, human society is also a system that has been hugely impacted by sudden innovations increasing the production efficiency, each leading to an observable redistribution of power.

So, will the best performing companies 10 years forward be the ones flattening hierarchy as much as possible?

  • eriam ・ 10 hours ago

    Well the way I see it is that it's more a matter of what if more people are producing more efficiently but from the organization standpoint it's not apparent, it's a kind of DDoS on governance and decision, and a fast one.

    Now I don't see how flattening hierarchy could cure this. Decisions must still be taken for example for utilities and any other complex system and people must work so we need role shifts and we need process changes effective and apparent for organizations otherwise thay won't benefit and suffer from the shock.

    The analogy with COVID was also a kind of what if: could we have an economic confinement if efficiency gains are collapsing the economy ?

    • skeam ・ 9 hours ago

      Flattening makes the vertical path faster even if the company has already optimized there, for instance, if 5% of someone work requires approval, and this person produces 50% more in a day, the 5% to be approved is suddenly way larger, this is one of the over-efficiency side effect that caught my attention.

      But it does not remove the horizontal coordination that high-stakes changes require (legal, finance, security, etc), so in a sense I agree, it doesn't totally cure decision making DDoS, but it helps.

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      The COVID analogy is interesting, so your assumption is that companies will struggle to make profit because they'll operate changes to handle over-efficiency and these would lead to high financial losses?