The agentic organization: Contours of the next paradigm for the AI era

Source: McKinsey & Company (Sukharevsky, Krivkovich, Gast, Storozhev, Maor, Mahadevan, Hämäläinen, Durth); McKinsey article (People & Organizational Performance / QuantumBlack) · 2025-09-26

AI is bringing the largest organizational paradigm shift since the industrial and digital revolutions (see sidebar, “The evolution of operating models”). This new paradigm unites humans and AI agents—both virtual and physical—to work side by side at scale at near-zero marginal cost. We call it the agentic organization.

McKinsey’s experience working with early adopters indicates that AI agents can unlock significant value. Organizations are beginning to deploy virtual AI agents along a spectrum of increasing complexity: from simple tools that augment existing activities to end-to-end workflow automation to entire “AI-first” agentic systems. In parallel, physical AI agents are emerging. Companies are making strides in developing “bodies” for AI, such as smart devices, drones, self-driving vehicles, and early attempts at humanoid robots. These machines allow AI to interface with the physical world.

Now, the AI era is beginning to usher in the newest evolution, revolutionizing knowledge work like the previous eras revolutionized physical work, with the agentic organization bringing together humans, AI agents, and machines in the workplace of the future.

The promise of this new paradigm will depend upon the continued growth of AI’s capabilities, as well as other factors such as regulation. The length of tasks that AI can reliably complete doubled approximately every seven months since 2019 and every four months since 2024, reaching roughly two hours as of this writing.7“Measuring AI ability to complete long tasks,” METR, accessed September 2025. AI systems could potentially complete four days of work without supervision by 2027. This would be a phenomenally accelerated evolution—from an intern-level employee requiring constant supervision to a mid-tenure employee who can operate independently to, perhaps, a senior executive who can shape and drive strategies.

Organizational paradigms do coexist. But the agentic organization may offer the key for the leaders to gain a competitive advantage by building decentralized outcomes-focused agentic networks.

The agentic organization will be built around five pillars of the enterprise: business model; operating model; governance; workforce, people, and culture; and technology and data (Exhibit 1). Imagine, for instance, the bank of tomorrow: When a customer wants to buy a house, a personal AI concierge activates a series of agentic workflows to serve the buyer. A real estate AI agent suggests properties, while a mortgage underwriting agent tailors offers based on the customer’s financial profile. Compliance agents ensure that the deal adheres to bank policies, and a contracting agent finalizes agreements before another agent fulfills the loan. All these workflows are overseen by an agentic team of human supervisors, mortgage experts, and AI-empowered frontline employees. In some cases, the bank could even extend its AI-powered services into furnishing, renovations, energy upgrades, and more. The bank becomes a network of agentic teams—an agentic organization.

In the agentic era, companies will gain a competitive advantage by getting closer to customers via AI channels to offer real-time hyperpersonalization, streamlining processes to become AI-first, and building a walled garden of proprietary data as their superpower. AI-native start-ups and agentic companies can potentially disrupt industries, with a fundamentally different level of productivity (revenue per employee), cost decoupled from growth, and greater speed to market and innovation.

Banks already run mortgage and compliance processes with agent squads. Insurers are reinventing claims and underwriting, while reimagining themselves as AI-native. Telcos are using agents in customer service and beyond. One global bank’s “agent factory” manages know-your-customer processes with ten agent squads, which has helped achieve a substantial positive impact on the quality and consistency of output. Another bank has used humans to oversee squads of AI agents in modernizing its legacy core systems, enabling up to 50 percent reductions in time and effort. This is not automation as usual on top of existing processes—it’s a redesign of end-to-end processes with humans “above the loop” for strategic oversight, with potential to bring the marginal cost toward the cost of compute. Going forward, most, if not all, processes can be reimagined as AI-first, with humans and traditional IT systems selectively introduced back in the loop or above the loop.

If today’s AI is “an intern with the internet in its pocket,” tomorrow’s edge will come from the walled data gardens that the public internet doesn’t offer. Companies can outperform their competition by continuously capturing and refining unique, consented, proprietary data—such as streams of customer behavior, product usage, and sensor data—and converting them into differentiating personalized products and processes. AI can also help by accelerating the build-up of data foundations and data products, as well as data-quality improvements.

In the agentic era, how organizations are built and operate will evolve as much as the products or services they deliver. Work and workflows will be reimagined as AI-first, and operating models will evolve to flat networks of empowered, outcome-aligned agentic teams.

The operating model of the agentic era will be anchored around reimagined AI-first workflows, with humans and IT systems selectively reintroduced in AI-native design. At a European automaker and a public sector organization, squads of agents are reverse-engineering and modernizing legacy systems while humans steer and validate work. In product development, agents can gather feedback, analyze data, test features, and even run campaigns. Humans will be mostly positioned above the loop to steer and direct outcomes and selectively within the loop where human contact matters.

Traditional organizations have been built around functional silos.