AI is changing organisations. Is your organisational design keeping up?

AI may be transforming what organisations can do, but technology alone will not determine who succeeds. In the first session of FWB’s 2026 NXD Development Programme, Phil Le-Brun, Executive in Residence at Amazon Web Services and co-author of The Octopus Organization: Thriving in an Age of Continuous Transformation, explored why organisational design, leadership and culture may prove just as important as the technology itself.

The conversation around artificial intelligence has moved quickly.

For many organisations, the question is no longer simply what can AI do? Increasingly, it is: how do we create an organisation capable of using it well?

Understanding this difference is important.

AI is making it possible to move from idea to execution at a pace that would have been difficult to imagine only a few years ago. But while the technology has accelerated, many of the structures, governance processes and management practices surrounding it have not.

As Phil told participants in FWB’s NXD Development Programme:

“AI is showing the flaws up in organisations faster than we’ve ever seen them before.”

The challenge for Boards, therefore, is not simply to oversee the effective adoption of a new technology. It is to consider whether the organisation itself is designed to take advantage of what that technology makes possible.

When execution gets faster, organisational friction becomes clearer

AI has dramatically reduced the time and resources required to create, test and develop ideas.

Phil illustrated this with a simple example. On the morning of the session, he and his co-author had spent around an hour building an entire business workflow system for their book.

In many organisations, he argued, the technology would not be the constraint.

The organisation would.

“In most organisations, we’d spend six months putting that through governance committees to see whether we should do it in the first place.”

That creates an important question for Boards and leadership teams. If the cost and speed of execution are changing, are the organisation’s structures and decision-making processes changing with them?

Phil’s view was that this shift places greater, rather than lesser, importance on people:

“There’s a premium on imagination in organisations, and a premium on human ingenuity and judgement. AI is making humans more important, not less important.”

For Boards, this reframes the AI conversation. Technology capability matters, but so does the environment in which people are expected to use it.

Don’t automate a process that shouldn’t exist

One risk organisations face is using AI to make existing processes marginally faster without first questioning whether those processes remain necessary.

That can produce efficiency without transformation.

As Phil put it:

“What we see time and time again is organisations applying things like AI to processes which shouldn’t even exist in the first place. Why would you automate something which shouldn’t exist?”

The distinction is between optimising and reimagining.

Rather than asking how AI could make a process 10% more efficient, organisations can ask a much bigger question: if we were designing this process today, with the capabilities now available to us, what would it look like?

For a Board, that means challenging management not only on the number of AI projects underway, but on the problems those projects are actually intended to solve.

Are they improving an existing process because it is valuable? Or simply because it already exists?

Clarity before technology

Throughout the session, Phil returned to three interconnected organisational characteristics: clarity, ownership and curiosity.

Clarity gives people an understanding of what the organisation is trying to achieve. That allows them to take greater ownership of outcomes. Greater ownership, in turn, encourages curiosity and experimentation.

For Boards considering AI strategy, the first of these is particularly important.

An organisation can invest significantly in technology while remaining unclear about its purpose, priorities and the outcomes it is trying to achieve.

Before asking where to deploy AI, there is a more fundamental question: what are we trying to make better?

Phil encouraged leaders to think not only about what AI might change, but what will remain constant.

What will customers still value in five or ten years? What are the enduring needs the organisation exists to meet?

“Knowing who you are as an organisation is critical before you start throwing technology at a problem.”

This becomes increasingly important when the number of possible AI applications can feel almost limitless.

Technology can accelerate activity. It cannot decide which activity matters most.

Focus becomes a leadership discipline

The ability to do more does not necessarily mean organisations should attempt to do everything.

Phil described organisations launching hundreds of AI initiatives which make little meaningful progress but are never closed down because they might eventually deliver something.

That makes prioritisation a critical leadership discipline.

In his words:

“Being focused says, this is what we really should be doing, not just what we are capable of doing.”

This is an important challenge for Boards.

Oversight should not simply focus on whether an organisation has an AI strategy or a sufficiently large portfolio of initiatives. Boards can also ask whether leadership has made clear choices about where AI can create meaningful value.

What are the organisation’s genuine priorities? Which problems matter enough to solve? And, equally importantly, what has the organisation consciously decided not to pursue?

From permission to ownership

AI also raises questions about where decisions are made.

Organisations often talk about empowering employees while maintaining approval structures that make genuine autonomy difficult.

Phil offered a simple analogy:

“We trust adults to drive cars on roads with some rules and guardrails… We don’t have a governance committee sitting in the back of the car judging every action.”

The principle is not removing governance. It is creating the right governance.

Clear purpose, defined boundaries, and appropriate guardrails can let decisions be made closer to the people with the information and expertise to make them.

This distinction becomes increasingly relevant as AI tools and agents become embedded into everyday work.

The traditional choice between speed and control may no longer be as binary as it once appeared.

Phil argued that organisations can increasingly build more governance into systems themselves, allowing them to set clear boundaries while enabling people to move faster.

“It used to be a case of, do you want to be safe and compliant, or do you want to be fast? You can do both now.”

For Boards, this creates an opportunity to examine whether governance mechanisms are genuinely managing risk — or inadvertently creating additional risk through delay, complexity and unnecessary decision-making layers.

Leadership is changing too

Perhaps the most significant implication is for leadership itself.

As organisations become more decentralised and technology gives individuals greater capability, leadership becomes less about controlling every decision and more about creating the conditions for good decisions.

That requires leaders to provide context, clarity and guardrails; to coach rather than direct; and to model the behaviours they expect from others.

AI literacy is part of that.

Phil posed a deliberately straightforward question that NXDs could take back to their own Boards:

Did your CEO, COO or CIO use AI yesterday?

If senior leaders are talking about becoming an AI-enabled organisation without personally engaging with the technology, the disconnect will quickly become apparent.

As Phil said:

“If you’re a leader out there saying, ‘we’re going to become an AI-enabled organisation’, and you’ve never used AI, people are going to see through that very quickly.”

For NXDs, technology literacy is therefore moving beyond oversight of areas such as cyber security and compliance. Increasingly, Boards need enough understanding to challenge how technology is being used as a strategic asset.

Pointing the rocket in the right direction

Phil described AI as “rocket fuel” for organisations.

It is a useful analogy because rocket fuel provides enormous capability — but capability without direction is not a strategy.

“AI’s a fuel. It’s the rocket fuel for your organisation, just like electricity was in the Industrial Revolution. The question is: where are you pointing the rocket?”

That may ultimately be one of the most important questions for Boards.

AI can increase speed, automate activity, and expand what individuals and organisations can achieve. But none of those things determines the destination.

That remains a human responsibility.

For Boards and NXDs, the opportunity is therefore bigger than overseeing another technology implementation. It is to ask whether the organisation’s purpose, priorities, structures, governance and leadership are evolving quickly enough to take advantage of what AI makes possible.

Because the organisations that benefit most from AI may not simply be those with the best technology.

They may be those best designed to use it.

About the NXD Development Programme

This article draws on the first session of the 2026 NXD Development Programme, “What is the Role of the NXD in Rethinking Organisational Design for AI-Driven Success?”, with Phil Le-Brun, Executive in Residence at Amazon Web Services and co-author of The Octopus Organization: Thriving in an Age of Continuous Transformation.

Now in its seventh year, the NXD Development Programme is delivered by FWB Executive Search in partnership with the University of Edinburgh Business School. Designed for both experienced Non-Executive Directors and those developing or aspiring towards an NXD portfolio, the programme explores the challenges and opportunities shaping today’s Board agenda.

Each year, the programme is developed in collaboration with leading academics, Chairs and Non-Executive Directors, combining current business school thinking with the practical experience and skills required around the Boardroom table. Sessions are interactive and designed to encourage participants to learn not only from expert contributors, but from the experience and perspectives of one another.

The 2026 programme runs from September to December, with six two-hour online sessions exploring organisational design and AI, ESG and sustainability, the global AI revolution, cybersecurity, Board effectiveness and geopolitical literacy, alongside an in-person session in Edinburgh on 3 December.

Registration remains open for upcoming sessions, held online every two weeks until early December.

Find out more about the NXD Development

Programme Register for upcoming 2026 sessions