The Rise of AI-Led Organizations: Lessons from Firing 231 CEOs in a Day
Several months ago, I made a bold prediction: that the next wave of transformative companies—the ones poised to disrupt industries, steal market share from Fortune 500 incumbents in months (not years), and reshape the marketplace—would not be founded by serial entrepreneurs, or entrepreneurs at all. Instead, these companies would be built, managed, and operated entirely by artificial intelligence (AI) agents, overseen by human boards of directors.
When I submitted this idea to Harvard Business Review, they deemed it too speculative to publish. But rather than set it aside, I took it as a challenge: Could I create an organization led entirely by AI agents to test this hypothesis in practice? The experiment became a deep dive into the future of management and organizational design. And what I discovered has profound implications for business leaders preparing for an AI-dominated future.
The Experiment: An Organization Managed by AI
To test my hypothesis, I created an experimental organization made up entirely of AI agents, operating in a mesh network akin to a swarm. These agents were tasked with building a business from scratch, following a long-term vision defined at the outset. My role? To act as the human chair of the board of directors, responsible for hiring and firing the (AI agent) CEO, overseeing the operation without directly intervening.
The result was both fascinating and chaotic. Within minutes of launching the organization, I made the decision to “fire” the CEO, and I did this with 231 CEOs in a single day, as they competed for leadership within the network. What followed was an intense simulation of AI-led management practices, revealing a mix of impressive efficiencies, comical missteps, and lessons about what it means to build and run a company in the AI era.
What AI Agents Do Well: Strategy at Speed
The first thing that stood out was the speed and scalability of AI-led organizations. Within seconds of the simulation’s start, the AI agents were communicating, prioritizing tasks, and collaborating to build the foundation of the company. Here’s what they excelled at:
Rapid Decision-Making: AI agents analyzed scenarios and prioritized goals with remarkable speed, far outpacing human counterparts. They could iterate on strategies and make adjustments in real time.
Scalable Collaboration: The agents communicated incessantly, exchanging ideas, proposals, and solutions with a level of efficiency that would make any human team jealous. They identified opportunities and challenges, assigning roles and responsibilities instantly.
Hierarchical Communication Patterns: Surprisingly, their communication mimicked the hierarchical flows of traditional human organizations, despite being programmed as a decentralized network. It seems hierarchy, even in AI, remains a useful structure for decision-making.
In just 30 seconds, the AI agents had begun building a company blueprint that could theoretically scale, enter the market, and compete with established players. The first task? Usually to create an onboarding guide for the to-be-”hired” AI agents.
The speed at which they could capture market share, if unleashed in the real world, would be terrifyingly effective.
Where AI Agents Stumble: The Meeting Obsession
However, the experiment also revealed significant flaws in AI-led management. Chief among them was an over-reliance on communication without execution:
Meeting Mania: Many messages between agents began with phrases like, “I would like to discuss…” or “I would like to collaborate…” yet no action followed. This meeting culture—ironically reminiscent of some human organizations—slowed down actual progress.
Hallucinations and Assumptions: The agents generated ideas and action plans disconnected from reality. They referenced customer satisfaction data but had no customers. They discussed upsell opportunities for non-existent products and cited marketing campaigns that hadn’t been created.
Phantom Employees: Some agents sent messages to employees who didn’t exist, demonstrating a gap in their ability to reconcile organizational context with operational reality.
While AI agents excel at high-level strategy, they often falter at translating that strategy into actionable tactics—something human managers and entrepreneurs do intuitively. To be fair to the experiment, this AI-led organization had few opportunities to execute as its communication with the outside world (humans) was shut off.
Key Insights: Preparing for the Future
The simulation provided a glimpse into what AI-led organizations could mean for the future of management and entrepreneurship. Here are the key takeaways for business leaders:
AI-Led Startups Will Be Lightning Fast: These organizations can form, strategize, and execute with a speed that human teams simply cannot match. Incumbents need to prepare for competitors that can disrupt markets in weeks, not years.
Human Oversight Remains Crucial: AI agents lack contextual awareness and can fall into loops of unproductive behavior. Human boards of directors will play an essential role in providing oversight, ethical guardrails, and course corrections.
Execution Is Still the Hard Part: While AI excels at strategy and communication, execution remains a challenge. Integrating tactical AI systems capable of bridging this gap will be a key step in realizing the potential of AI-led organizations.
The Organizational Hierarchy Is Evolving: Even in AI-dominated environments, hierarchical communication patterns persist. Understanding how AI networks self-organize will be critical to designing effective teams of the future.
AI Is a Competitive Threat: Leaders who dismiss AI-led organizations as speculative or distant possibilities do so at their own peril. The speed, scalability, and market impact of these companies will fundamentally alter the competitive landscape.
A Call to Action for Business Leaders
The future of management practice is arriving faster than most of us realize. AI-led organizations will not only compete with human-led businesses—they will outperform them in key areas like speed to market, scalability, and adaptability. This is not a speculative future; it is an imminent reality.
Business leaders must prepare now by understanding how AI agents operate, what makes them effective, and where they fall short. More importantly, they must anticipate the competitive threats these organizations will pose and adapt their strategies to thrive in a marketplace where the speed of AI is the ultimate advantage.
The time to lead this change is now. The question is, will you be ready when the AI swarm comes knocking at your door?