Block's CTO reveals a counterintuitive lesson: reorganizing from a GM-based structure to a functional one (where all engineers report to one org) was the key to their AI transformation. This structural change had a greater productivity impact than any specific AI tool they implemented.

Don't think of AI as replacing roles. Instead, envision a new organizational structure where every human employee manages a team of their own specialized AI agents. This model enhances individual capabilities without eliminating the human team, making everyone more effective.

Block is re-architecting its entire business by treating all functions—from payments to HR—as a collection of capabilities. These are unified and accessed through a central AI agent middleware layer (Goose), orchestrating workflows across previously siloed product and corporate functions.

An effective AI strategy pairs a central task force for enablement—handling approvals, compliance, and awareness—with empowerment of frontline staff. The best, most elegant applications of AI will be identified by those doing the day-to-day work.

AI tools reduce the communication overhead and lengthy handoffs that traditionally separated product and engineering. By streamlining the path from idea to code, AI makes the combined Chief Product and Technology Officer (CPTO) role more viable, enabling a single leader to manage both functions effectively.

Contrary to the popular bottoms-up startup ethos, a top-down approach is crucial for speed in a large organization. It prevents fragmentation that arises from hundreds of teams pursuing separate initiatives, aligning everyone towards unified missions for faster, more coherent progress.

Block restructured from divisional GMs to a functional organization (Engineering, Product, Design) across all brands. This creates a single shared roadmap and forces alignment, enabling cross-unit collaboration that was difficult when incentives were siloed in separate P&Ls.

The key to driving AI adoption at Block was leadership by example. CEO Jack Dorsey and CTO Danji Prasana use their internal AI tool, Goose, daily. They argue this hands-on approach provides more insight into organizational workflow changes than any top-down mandate or analysis of industry reports.

To transform a product organization, first provide universal access to AI tools. Second, support teams with training and 'builder days' led by internal champions. Finally, embed AI proficiency into career ladders to create lasting incentives and institutionalize the change.