Eliminating Organizational Hierarchies with AI: The Overwhelming Speed Brought by Jack Dorsey's Shift from 'Hierarchy to Intelligence'
Jack Dorsey, who founded two S&P 500 companies, Twitter and Block, is currently conducting one of the most radical organizational experiments in history at his company, Block. At its core is the manifesto, 'From Hierarchy to Intelligence.'
In this article, we explore from the perspectives of business leaders and investors why Dorsey cut 40% of his staff and what the 'new organizational OS' with AI at its center really is.
1. The 'Hierarchy' as an Information Bottleneck That Has Lasted 2,000 Years
Dorsey re-examined traditional organizational structures from first principles. Why, in the first place, does 'hierarchy' exist?
1-1. Managers Were Nothing More Than 'Information Relays'
The role of hierarchy in organizations until now has been to manage the flow of information. However, in a game of telephone involving humans, information is lost as the hierarchy deepens, significantly slowing down decision-making speed.
'Block is currently remote-first. Slack, GitHub, documents, recorded meetings... every activity remains as a digital 'artifact.' If you place intelligence (AI) on top of these fragments of information, there is no longer a need for humans to relay information.'
1-2. Turning the Company into a Single 'Mini-AGI'
Dorsey is attempting to treat the company itself as a single 'Artificial General Intelligence (AGI).' Every employee, director, and even analyst can query the 'organizational intelligence' in real-time to grasp the situation. Such a 'fully legible organization' is the future he envisions.
2. The 'Three Roles of the AI Era' Defined by Block
What should humans do in an organization after the hierarchy has been dismantled? At Block, they are attempting to consolidate job functions into the following three simple roles.
IC (Individual Contributor: Builder/Operator) People who actually 'build' by utilizing tools and AI agents. One human augmented by AI does the work of ten people from the past. What is required here is 'judgment, taste (sense), and creativity' that cannot be replaced by AI.
DRI (Directly Responsible Individual) A role with full responsibility for customer outcomes and strategy. They assemble teams of ICs to complete projects. The required skills are pure 'ownership and accountability.'
Player-Coach People who do not just give orders to subordinates, but also work with their own hands to 'teach by example.' They are not 'bosses' in a hierarchy, but mentors responsible for improving technology and craft.
'The leadership team is expected to fulfill all three of these roles. Build yourself, set strategy, and coach those around you. That is what a modern CEO should be.'
3. 'Dorsey Mode': Shifting Decision-Making to a Circular Model
Traditional organizations were in 'Manager Mode' (pyramid-shaped), where VP-class executives acted as information hubs to make decisions. In contrast, what Dorsey is practicing is 'circular' operation centered on AI.
3-1. Customers Create the Roadmap
Traditional product roadmaps were based on the hypotheses of management. However, as communication with customers begins to take place through AI interfaces, the queries customers themselves pose highlight the features that should be built next (the roadmap).
3-2. The Most Honest Signal: 'Money'
Especially in the financial sector where Block has a competitive advantage, the movement of money is the 'most honest signal.' AI proactively anticipates this signal (Proactive Intelligence) and sends a prompt to the customer saying, 'You don't have enough cash flow to pay your rent.' This deep contextual understanding is the moat against massive competitors (Frontier Labs).
4. Behind the Scenes of the 40% Reduction: Boldness for Integrity
The background to deciding and executing a 40% workforce reduction in just three weeks was a coexistence of cold logic and consideration for people.
4-1. The 'Binary Change' of December 2025
In December 2025, when AI became capable of understanding not only prototype creation but also existing complex codebases, Mr. Dorsey was convinced. 'If we were to build the company from scratch today with the latest tools, it would absolutely not be at the current scale or structure. When we were convinced of that, we chose not to stand still, but to get ahead of the future.'
4-2. The Conviction to Overcome Fear
Mr. Dorsey avoided half-measures (10% layoffs at a time) as the 'most morale-lowering act.' Executing all at once with a generous package was, he believed, the honest path for both the employees who remain and those who leave.
Summary: Is Your Organization a 'Copy of a Copy'?
The transformation Mr. Dorsey is driving at Block offers significant implications for other startups.
'Many of today's startups are merely copies of copies. Where is your own unique perspective, your own 'taste'?'
How can you combine the powerful input of AI with your own 'judgment' to sublimate it into an 'output' that does not yet exist in the world? Only organizations that discard hierarchy and continue to refine their intelligence will be able to survive the next decade.