Rewired, Ungrounded
So there I was...
This morning it was a gentler rain, the kind Texas gives you as an apology after the flood watch, and I got my mile in the pool before the sky could change its mind. I am glad I did, because the rest of my day is offsite meetings, the long kind, where the coffee is burnt by ten and the afternoon runs on goodwill. So the reading happened early, towel around my neck, and it was a big one: McKinsey's new piece on why the AI winners are the companies that rewire their organizations, built on their Rewired framework. It is long, it is data-rich, and it is very good at what it does. It also has a hole in it you could drive a truck through, and I want to walk you through both halves of that sentence, because both halves matter.
First, the credit, because the piece earns it. McKinsey's argument is that AI advantage does not come from the technology, it comes from the operating model wrapped around the technology, and their numbers make the case hard. Only 21 percent of companies have fundamentally redesigned their operating models around AI. The top performers, the ones getting five percent or more of their earnings from AI, are three times more likely to have pursued that redesign, and twice as likely to have redesigned the workflow before selecting the tool. Meanwhile roughly 79 percent of organizations skip the workflow decomposition step entirely, and transformations run primarily as technology programs fail more than 80 percent of the time. The case studies are real: Freeport-McMoRan lifting copper production 10 percent at its Bagdad mine with machine learning, Emirates Global Aluminium documenting 120 million dollars of impact and a 170 percent return after training thousands of its people first, Toyota compressing a planning process by more than 80 percent through redeployment rather than layoffs. If you have read me for a week you know I believe all of this. Buying the tool is not the transformation. The organization is the transformation. On that, McKinsey and I are singing the same twelve bars.
Now the hole. I read the piece twice, the second time specifically hunting. Risk: not addressed. Ethics: absent. Responsible AI: absent. Compliance, safety, the person who checks the machine's work before it moves money or touches a customer: absent. The word governance does appear, twice, and here is the remarkable part. Both times it appears as the villain. Companies "add governance processes, matrix structures, and layers of management," and organizations respond to AI by "adding review layers, governance processes, and oversight," which the piece treats as an unfortunate reflex, coordination overhead to be engineered away. Six elements in the framework, five of them about the operating model, and not one of them about who answers when the rewired machine is wrong.
They named the framework Rewired, so let me take the metaphor seriously, because I have opened up enough walls in my life to know what is actually in there. When an electrician rewires your house, the glamorous part is the new capacity: the bigger service, the new circuits, the outlets exactly where you want them. But a real electrician spends half the job on things that add no capacity at all. The breaker panel. The ground wire. The GFCI outlets near the water. The inspection at the end, where somebody who did not do the work looks at the work. None of that makes a single lamp brighter. Every bit of it exists for the day something goes wrong, because in an electrical system, as in an organization, something always eventually goes wrong. Nobody stands in their kitchen complaining that the breaker panel is slowing down the electricity. A house rewired for double the power with no breakers and no ground is not a faster house. It is kindling with a mortgage.
And here is what worries me about the reflex this article both describes and, I think, quietly encourages. When a company reads that review layers are overhead, guess which layers go first. Not the ones protecting the executives who commissioned the study. The first chairs out of the room are the quiet ones: the risk reviewer who asks the annoying question, the compliance person who slows the launch by a week, the one voice in the meeting whose whole job is to speak for the people who are not in the meeting, the customer, the regulator, the person the algorithm will decline tomorrow. Those chairs look exactly like coordination overhead on an org chart. They photograph exactly like friction. And an organization that optimizes them away will genuinely move faster, in the precise way a car moves faster once you remove the brakes, right up to the first curve.
Let me be fair to McKinsey, because the honest version of this post requires it. Plenty of governance in big companies really is theater: approval chains nobody can explain, reviews that review nothing, sign-offs that exist to distribute blame rather than prevent harm. Tearing that out is not recklessness, it is hygiene, and the piece's instinct that layers accumulate like plaque is correct. But the fix for bad brakes has never been no brakes. The fix is brakes engineered as carefully as the engine, review that is fast because it is designed, not absent because it was inconvenient. The companies in that winning 21 percent have rewired the value-creating half of the operating model. The ones still standing in ten years, I would wager, will be the ones who rewired the judgment half too, and I notice the framework that could tell us how has not been written into this one. Five of six elements about speed. Zero of six about conscience. That ratio is the article's real finding, and it was not the one they meant to publish.
So here is my question for you this morning, before I disappear into a conference room until dark. Your organization is somewhere in that rewiring right now, whether you ordered it or not. Walk the new wiring in your head: the faster decisions, the compressed layers, the workflows redesigned around the machine. Now find the breaker panel. Find the ground wire. Find the chair whose job is to say stop.
Are they in the blueprint?
Or did somebody decide, quietly, in a meeting you were not in, that they were friction?
Source: The operating model advantage: Why AI winners are rewiring their organizations, McKinsey
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