When coordination gets cheap, org charts get expensive

Most business owners I work with have the same nagging feeling in the background.

“We’ve got good people. We’re growing. Customers keep coming back. But everything still feels harder than it should.”

And when you poke at that feeling for five minutes you usually find the same culprit: coordination.

Not strategy. Not effort. Not talent.

Coordination.

It’s the weekly meetings that exist purely because everyone is slightly out of sync. It’s the “quick call” that turns into twelve people trying to remember what was decided last month. It’s the project that stalls because one person is waiting on another person who is waiting on someone else who is on leave. It’s the sales spreadsheet that doesn’t match the operations spreadsheet that doesn’t match what’s actually happening on the floor.

That mess has a cost. Not the cost you see on a P&L line, but the cost you feel in the business every day.

And it usually shows up as key person risk. The business starts relying on a few humans to keep everything stitched together. Often it’s the founder. Sometimes it’s the ops manager who has not had a proper holiday in five years.

Here’s the part that matters.

For a long time, the whole point of building a company was that it was the cheapest way to get complicated work done. Instead of constantly hunting for people, negotiating terms, explaining context, checking the work, resolving disputes and stitching everything together, you brought it inside. You hired employees, created roles, built a hierarchy and ran it like a machine. The machine wasn’t perfect, but it was usually cheaper than trying to coordinate everything through the open market.

That’s the old deal.

The new deal is that AI is turning coordination into a commodity.

Think about what used to make “outside” expensive. You had to find the right specialist, explain your context, agree on scope and terms, coordinate handoffs, check quality, keep momentum and make sure nothing fell through the cracks.

That was the tax you paid for using contractors, partners and external providers. It’s why many businesses just kept hiring internally instead, even when it created bloat and complexity. At least the work was “under one roof”.

Now look at what’s happening.

Search and shortlisting is faster. Drafting a scope of work is faster. Turning messy notes into a clear brief is faster. Producing first drafts is faster. Checking outputs against a standard is faster. Creating status updates is faster. Documenting decisions is faster. Keeping a project moving is faster.

The “tax” on working with people outside your business is getting smaller, and it’s shrinking fast.

That means something uncomfortable for a lot of leaders: the firm is no longer automatically the most efficient container for work.

Not because employees are bad. Not because loyalty is dead. Not because culture does not matter.

Because the overhead of internal coordination has become visible, and the tools to coordinate externally have become ridiculously good.

If you want a simple way to picture it, think about freight forwarding.

A forwarder can move a container from regional Victoria to a distribution centre in Singapore without owning a single truck, forklift, ship or warehouse. The magic is not assets. It’s the orchestration layer. Clear documentation, clear handoffs, defined standards and relentless follow up when reality changes.

That model works because coordination is the product.

For years, most SMEs couldn’t reliably operate that way with knowledge work. The friction of briefing, tracking, checking and aligning external specialists was too high. It was often simpler to hire someone and bring the problem inside.

AI is strengthening that coordination layer.

Briefs get drafted properly. Dependencies get tracked. Exceptions get flagged. Updates get written without someone spending half their day chasing people for status.

Suddenly, the cheapest way to get work done is not always hiring another person and adding another layer. It’s building a strong core that can orchestrate a flexible ecosystem without losing control.

So what does that mean for the kind of businesses you and I care about, especially high growth family owned SMEs?

It means the next competitive advantage is not “having more people”. It’s being able to orchestrate work with less friction than your competitors.

The organisations that win will look less like a pyramid and more like a hub. A strong core with clear decision making, clean data, simple processes and proper standards, surrounded by a flexible ring of capability that can scale up and down without the business grinding itself to death.

But, and this is the bit people miss when they get starry eyed about the “networked future”, you do not get this for free.

If you do not have clarity inside the business, AI will not magically create it. It will just help you move faster in the wrong direction.

If your processes are tribal knowledge, if your data is a mess, if expectations live in someone’s head, if quality is subjective, if decisions are made in hallway chats, then a fluid talent ecosystem will chew you up. You’ll end up with half finished initiatives, a pile of invoices and everyone blaming everyone else.

So the practical question is not “will AI replace companies”.

The practical question is: which parts of your business must stay in house, and which parts can be executed outside, without losing control?

As a starting point, keep a tight grip on the work that genuinely differentiates you, the work that touches core data, customer trust and compliance, and the work that requires deep context, judgement and accountability.

Be far more flexible with repeatable work that is well defined, work you can measure against clear standards, throughput work where speed matters more than ownership and specialist capability you only need in bursts.

Then do the unsexy part, because this is where the leverage is. Write down how you work in practical playbooks. Standardise inputs and outputs at the handoffs between roles or teams. Clean up your data so people stop arguing about whose spreadsheet is right. Define what “good” looks like so reviews are fast and objective. Put a real governance cadence in place so decisions are made once and recorded properly.

If you do that, you can scale without needing to keep adding layers of coordination overhead.

And this is where boards and founders should really pay attention, because this is both risk and value.

When coordination is expensive, businesses compensate by using people as the coordination layer. A few key people become the router for decisions, the translator for priorities, the fixer of exceptions and the keeper of all the context.

That works, right up until it doesn’t.

A business that only functions through a handful of key people is not a scalable organisation. It’s a heroic one. Heroic businesses can grow, but they are brittle. They are expensive to run. They are hard to sell. They are hard to hand over. They also tend to trade at a discount because buyers can smell key person risk a mile away.

If you use AI to strengthen the coordination layer properly, you get a different outcome. The business becomes easier to run, easier to scale and easier to transfer. That is not just an operating model upgrade. It’s a value upgrade.

That is the opportunity sitting in front of us.

Not “AI will change everything” in the abstract.

But the chance to stop building organisations that are forced to be big, and forced to be hero driven, just to get work coordinated.

If you are leading a growing SME right now, this is worth thinking about before you default to your old move of hiring more people to paper over friction.

Because the businesses that get this right will move faster, run leaner and reduce key person risk, while everyone else is still arguing about why they need another project manager to manage the project managers.