Most leaders think they have a people problem. Or a culture problem. Or a change management problem.

I think it's a physics problem. And most leaders are solving for the wrong one.

For a hundred years we built companies the way we built factories. Centralized control. Tight commands. Predictable outputs. That logic worked because the rate of change was slow enough that a small group at the top could see far enough ahead to actually lead from the center. The plan could survive the year because the year looked a lot like the last one.

Some things still need that logic. Your security posture. Financial compliance. Decisions that carry real regulatory weight. Systems where the inputs are stable and the outputs need to be uniform. Control is exactly right there. I'm not arguing against that.

But your competitive response doesn't live there. Your go-to-market doesn't live there. Your ability to absorb what's actually happening in your industry in real time and do something about it, not there.

There's work out of Stockholm Resilience Centre that intrigued me. They've spent decades studying why some biological systems survive major shocks and others collapse. The two biggest predictors aren't size or resources. They're diversity, (meaning variety of responses available), and redundancy, (meaning multiple parts that can perform the same function when one fails). Strip those out in the name of efficiency and you build something that looks lean right up until the moment it breaks.

That maps directly to organizations.

Egon Zehnder tracked 28 global machinery companies over five years. Every single decentralized one posted positive market-cap growth. About a third of the centralized ones did. Same industry, and macro environment. Different organizational physics.

McKinsey's work on agile transformations tells the same story. Average gains of 30% across efficiency, customer satisfaction, employee engagement, and operations when companies redesigned to push decision authority toward the edges. Their framing is worth noting: "agile organizations respond like a living organism."

This is the part I think most execs are genuinely underestimating right now.

AI capability is compounding on a timeline measured in months or weeks. Your org chart was designed a last century pace of change.

Command-and-control works by predicting the environment and then optimizing for it. When the environment changes faster than you can predict, every approval layer becomes a tax on your ability to respond.

Decisions that needed six signatures and by the time they had them the window was gone. Talent that walked because they could move faster somewhere else. Projects that died in committee because nobody had the authority to just go.

McKinsey's most recent AI work puts it plainly: in an AI-native enterprise, speed is the defining organizational advantage. That speed doesn't come from longer chains of command. It comes from pushing authority to the edges where the information actually lives.

Most leadership teams are optimizing for control when they should be optimizing for conditions. The difference is whether you're trying to predict the right answer at the top or building an organization where good answers can emerge from the people closest to the problem. Those are not the same thing. And right now, one of them works and one of them doesn't.

Pushing authority to the edges isn't the same as losing control. It's recognizing that the information needed to make good decisions usually lives with the people closest to the work, not the people furthest from it. Your job as a leader isn't to hold every decision. It's to make sure the people making decisions are connected, informed, and pointed in the same direction.

The leaders who figure this out are going to look like they got lucky when the AI transition accelerates. They're not going to be lucky. They're going to have built organizations that can actually move.

The ones who don't are going to lose the trust and confidence from their leadership because they couldn’t adapt quickly enough.

Until next week,

—Jared

Text Me: 314.806.3912

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