Search+HBR ExclusiveNewSynopsisAI’s true productivity gains require redesigning organizations, not merely adding AI to human-centered systems—much like factories once had to redesign around electricity. Current productivity estimates underestimate AI because they assume task automation within existing structures. Real gains come from restructuring data into machine-readable formats, exposing systems through APIs, and eliminating silos so agents can work across domains. As AI reduces coordination and cognitive limits, human roles should shift from execution to ownership and verification—defining goals, making value-based judgments, and ensuring accountability. With proper safeguards, agent-first organizations can achieve transformative, not marginal, improvements.When electricity first arrived in factories, managers didn’t redesign their buildings. They simply replaced the central steam engine with an electric motor and kept the system of belts, pulleys, and shafts that distributed power throughout the facility. The result was marginal improvement at best. It took decades for manufacturers to realize that electricity’s true potential required tearing down the old multi-story factories (built tall to Harvard Business Review 14 mins read, Last Updated: Jul 17, 2026, 05:44:00 PM ISTGift this Story to your friendsFONT SIZEAbcSmallAbcMediumAbcLargeSAVEPRINTCOMMENTContinue reading with one of these options:Limited AccessFreeLogin to get access to some exclusive stories & personalised newslettersLogin NowUnlimited AccessStarting @ Rs120/monthGet access to exclusive stories, expert opinions & in-depth stock reportsSubscribe NowETUh-oh! This is an exclusive story available for selected readers only.Worry not. You’re just a step away.What’s Included withETPrime Membership