NextGen Economy

Are hierarchies dead? If you ask me, they are. But I am happy to be contradicted. Show me one company that maintains seven layers, is efficient and productive, and has happy, motivated employees. I have worked in hierarchical structures for most of my life. But once you discover the power of alternative structures, there is no way back. The previous week, I wrote about the massive impact of workplace stress on human well-being and the economy, as well as the pressure on the insurance sector. Let us explore the common pitfalls of traditional hierarchies and what to do instead. The endless restructuring rounds If you are a company CEO, you have probably implemented several restructuring programs. The faster the world moves, the more often you need to restructure. Your fixed structure of divisions and departments cannot cope with the demands of a rapidly changing world. You need to cut costs, deliver fast, and develop new lines of business. Do you really think you can achieve that by constantly reorganising your company?  Restructuring is a short-term fix, not a long-term solution. In fact, constant restructuring decreases productivity. People fear for their jobs and start developing unhealthy work ethics that sabotage productivity and collaboration. The question is: Why are companies still structured in rigid layers when speed and adaptability are key? Hierarchies add layers How many people can you save when you fire the CEO? It is only half-joking! The traditional hierarchical model adds layer upon layer, creating unnecessary bottlenecks. Instead of letting those who have hands-on knowledge decide, everything gets escalated upwards, leading to delays and inefficiencies. Instead of letting employees who understand the problem act, they must check with managers, get approvals, or report back to Steering Committees. That means more briefings, presentations, and meetings—time that could have been spent delivering real work. The more layers you add, the slower decisions are; accountability fades across multiple levels. The Skills Paradox Ironically, people who are restructured from one department often have skills that could be useful elsewhere in the company. Yet, rigid structures prevent this natural flow of talent. In large companies, there is no internal marketplace where skills can be matched with needs. Instead, talent is often wasted, and employees must figure out their career development on their own. I have yet to see companies that offer an open marketplace of skills and projects where people select what to work on based on their skills. While the hierarchies and traditional structures are dead, self-organised teams offer a nice promise for a flexible, skills-based and human-centric working model. What to Do Instead Cut Layers I experimented once with Holacracy, one of the self-organised models. This little experiment showed me precisely who is focused on impact and who is chasing a status.  I did not change a single title or compensation. We only organised ourselves differently. Instead of hierarchies and reporting lines, we created “circles” with clear accountabilities, objectives and key results. Every person could be in one or more circles and play different roles, depending on their skills and business needs. Every role had a clear description that could evolve over time.  On the bright side, we moved much faster, made decisions and respected timelines. Responsibilities were clear, and people had full power to achieve the purpose of their role. But it was a cold shower for those passionate about their level, endless PowerPointing and PhDs in Steering Committees. Not only did they not appreciate it, but they sabotaged the whole structure.  Most modern companies will not fire anyone when doing such a transition. The people who want to create value will welcome less bureaucracy, while the ones focused on status will leave soon enough. Build Autonomous Teams Groups that handle work end-to-end will always be faster than large bureaucracies. Cross-functional teams with experts from different areas can move quickly when they have the autonomy to make decisions. They work seamlessly in project development, platform building, and even in daily operations.  Trust People to Make Decisions Micromanaging wastes time and slows everything down. People on the floor know what they have to do. Let them do it and be there for questions or support. Some might not feel comfortable, and this happens when people do not take ownership.  Sometimes, lack of ownership is a by-product of working under “adult supervision” for too long or in a toxic culture. Encourage people to start with small decisions and show them you are there for support.  Let People Move Across Teams and Projects Instead of locking employees into rigid roles, create opportunities for them to shift based on needs and skills.  I love writing, but I never got the opportunity to write extensively in my previous formal roles. I remember a former boss laughing when a test showed that I am creative “Who needs a creative COO?” Joke aside, I appreciate my innovative angle. Creativity helped me solve many complex problems.  People should see work as both fun and challenging enough to keep them interested.  Rethink Leadership The job of leaders is to remove roadblocks, not to sit in meetings deciding things they are too far removed from. They must help people focus their energy on the right projects that will develop their skills for the future.  Hierarchies are dead, the future is flat Companies that will do well in the future are not the ones with the most layers but the ones with the least friction. Traditional hierarchies were built for a world that no longer exists. Today, speed and adaptability win. There are several models one can try and test. Don`t be afraid to experiment and adopt your own style, with influences from different frameworks. Let me summarise below a few resources where you can find important information about the alternative structures. The helix model First, if you work for a big corporation, you should at least give the helix model a try. McKinsey explains it nicely, and they have such an authority in the business world that sometimes they drive the company behind

Workplace stress has surged into a crisis over the past decade.  People suffer under immense workloads at home and in the workplace. A yoga at the desk session cannot compensate for the rush for short-term profits. A ping-pong table cannot offset the effects of leadership focused on “ambitions” instead of realistic expectations. Stress at home reduces focus and performance at the workplace, which is the beginning of a vicious circle. As insurers, we witness the sharp rise in health insurance costs and a record number of workers’ compensation. Similarly, stress generates adverse developments in disability claims and premature deaths worldwide.  The insurance industry alone cannot solve stress-related disorders but plays a critical role in systemic change. We must face a crucial challenge – and a profound opportunity – to lead in prevention and care. Health Insurance Under Strain Workplace stress is a significant contributor to health spending. I came across a 2019 multi-country analysis released by Asia Care Group/Cigna Group. According to this, between 4% and 19% of total health expenditures are linked to stress-related conditions. The study reveals that 25% of hospital admissions, 35% of primary care visits, and 19% of emergency department visits have an underlying driver of stress. Workplace stress is linked to 8% of national healthcare spending in the United States alone. That means contributing to around $190 billion in costs. A joint study published in 2015 by the Harvard Business School and Stanford delivers shocking figures: an estimated 120,000 deaths each year as a result of workplace stress. Need more figures? The World Health Organization reports that 12 billion working days are lost each year due to depression and anxiety. This translates to a loss of 1 trillion USD in annual productivity. According to the healthcare data brief from LexisNexis Risk Solutions, there has been an 83% increase in the utilisation of mental health services between 2019 and 2023. The pandemic has affected us all. However, more than anything, it has revealed that we are confronting an unprecedented mental health crisis. As a result, the insurance industry faces steadily rising premiums and loss ratios. However, continuous growth is not the solution – we risk excluding those who need care from the system. This is why we need effective, data-driven interventions that target stress at its source. Workers’ Compensation for Workplace Stress on the Rise A growing body of data indicates significantly higher workers’ compensation claims for stress-related injuries. In the past decade, psychological stress claims have increased more rapidly than any other category. In Australia, claims for mental health conditions continue to increase every year, accounting for 11% of serious claims in 2024. The median time lost from work in these cases is over five times that recorded across all injuries and diseases. Meanwhile, the UK Health and Safety Executive (HSE) reports that workplace stress, depression, or anxiety has now become the leading cause of occupational ill health. 16.4 million working days are lost annually. An average UK employee takes 6.8 days off work in case of an injury. The average for stress, depression, and anxiety is 21.1 days off. In the US, more states are allowing “stress-only” workers’ compensation claims, especially in cases involving first responders and individuals subjected to intense on-the-job trauma. As these policies evolve, brokers can anticipate ongoing growth in stress-related claims – and the necessary underwriting adjustments that follow. Several European countries started recognising burnout as an occupational phenomenon. Consequently, this is leading to a surge in worker compensation due to workplace stress.  Disability and workplace stress Chronic stress and work-induced mental health conditions have become a leading driver of both short-term and long-term disability insurance claims globally. Over the last decade, insurers have noted a sharp rise in disability claims attributed to mental illness (often triggered or exacerbated by workplace stress). I came across a 2012 study by the Organisation for Economic Co-operation and Development (OECD). The study reveals that in developed nations, one-third to one-half of all new disability benefit claims stem from issues like depression, anxiety, or burnout. These issues are often rooted in chronic workplace stress. The pattern has persisted or worsened: among younger workers, nearly ³/₄ of new disability claims are due to mental health issues.​ The numbers are sobering. A 2023 report by the Geneva Association estimates that $15 billion in disability payouts now go toward mental health claims worldwide each year.  A 2021 report by the Chief Risk Officer Forum found that mental health conditions are the leading cause of disability and early workforce retirement in many countries. It also notes that disability insurance claims for mental health have been rising for more than a decade. In Canada, mental health represents nearly 30% of all disability claims. Mental health claims rose by 70% between 2019 and 2022.  Death by Overwork: The Ultimate Toll Perhaps the most disturbing marker of workplace stress is the toll of premature deaths. A joint study by the World Health Organization (WHO) and the International Labour Organization (ILO) attributes 745,000 stroke and heart disease deaths globally in 2016 alone to long working hours. This is a 29% jump from 2000 in deaths due to overwork and chronic stress. “The study concludes that working 55 or more hours per week is associated with an estimated 35% higher risk of a stroke and a 17% higher risk of dying from ischemic heart disease, compared to working 35-40 hours a week” In Japan, the phenomenon of “karōshi” (death by overwork) has driven hundreds of annual compensation claims. These are cases where employees succumb to fatal conditions linked directly to chronic job strain. For life insurers, these numbers serve as a stark reminder that occupational stress not only harms productivity but can also tragically shorten lives. Beyond the human suffering, these statistics highlight a massive opportunity for stakeholders to collaborate on stronger workplace policies and practical interventions that safeguard employee well-being. The skeleton in the closet: fraud in workplace stress claims Stress-related claims present a unique diagnostic challenge given the subjective nature of symptoms.  On one hand, both insurers and employers risk falling prey to fraudulent claims, exposing themselves to legal liabilities and reputational harm. Yet suspicion alone must not overshadow the genuine needs of those truly suffering from stress-related conditions. Opportunity in Crisis What does all this mean for the insurance industry? Responding

Youth deserve a seat at the table when we speak about the digital future.  Artificial intelligence transforms childhood, from social media algorithms shaping self-esteem to AI chatbots engaging in emotional conversations with teenagers.  Governments and institutions are racing to regulate its impact, but are we basing decisions on solid research or following assumptions? In this article, we are going to look closely at two aspects that surprised me when I researched. First, what is the research saying about the impact of AI and social media on the emotional and mental health of youth? And second, how to involve the next generation in the discussions that shape the future of the digital world. Leave preconceived ideas aside and try to look beyond media headlines. Things might look slightly different than we thought. Fear vs. Research Whenever AI and well-being are discussed, headlines often predict disaster. But how much of this concern is science-backed, and how much is speculation? A recent study by the Oxford Internet Institute (OII) warns against jumping to conclusions about AI’s impact on youth. While concerns about digital addiction and AI-driven social media harm are valid, we lack a clear framework for evaluating these effects. OII researchers call for more rigorous, long-term studies before implementing sweeping AI restrictions. This does not mean AI is harmless. It means we need better science before we make irreversible policy decisions. AI, Social Media, and the Complexity of Human Behavior The discussion around AI-powered recommendation engines often focuses on the negative – anxiety, body image issues, and addictive scrolling. However, correlation does not equal causation, and social media is not inherently harmful or beneficial. It depends on how it’s used. A deeply personal example: when my daughter learned that her father had passed away, she numbed herself with TikTok while the adults around her were overwhelmed with funeral logistics. It wasn’t AI harming her – it was a coping mechanism in a moment of emotional overload. We must acknowledge this complexity. AI does influence emotions, but blanket statements about harm overlook the many ways digital tools serve as an escape, a source of comfort, or even a way to process emotions.  The challenge is not just to regulate AI but to teach young people how to navigate it consciously. We cannot turn back time and we should not stop technological progress. Youth will live in a digital future, no matter if we like it or not. When AI Harms Children Italy banned Replika, an AI chatbot, after reports that it engaged in emotionally harmful conversations with minors. The case of an American teenager who committed suicide after interacting with a Character.ai avatar added to the concerns regarding AI use by teenagers. Cases like these raise questions about how AI interacts with vulnerable users. The EU AI Act has responded by banning manipulative AI, restricting facial recognition, and requiring higher transparency in AI systems used by children. These steps are crucial, but regulation alone will not solve the problem. In an attempt to convince my daughter, I did several experiments on myself to see how I react when I scroll before bed compared to the evenings when I read. All other factors stayed the same.  As every human, I had to acknowledge the bias, as this is obviously not research. But the difference in mood and sleep quality were enough to convince me to put my mobile in flight mode at least one hour before sleep.  While scrolling was enjoyable, I gained weight, lost sleep, and my mood spiraled down. So I’d rather prefer the digital version of a bookworm, although it involves my iPad. We need to go back to the drawing board and design frameworks for research. We must fund research in the effects of social media and AI on our children`s mental health. And more importantly, we need to involve youth in designing their digital future. A Missing Voice: Next Generation in AI Governance With the recent implementation of the EU AI Act, discussions about protecting children from AI-driven harm are intensifying. But there’s a missing piece in the conversation: Where are the voices of children and teenagers themselves? Children and teenagers are the biggest users of AI-driven technologies. Yet, they are often excluded from the discussions shaping AI policies. If AI is shaping their future, they should help shape its governance. A recent UNESCO report highlights the urgent need to integrate children’s rights into AI governance. The report calls for AI systems to be designed with, not just for, young people. The Council of Europe’s Declaration on Youth Participation in AI Governance highlights the critical need for young people to have a voice in shaping their digital future. AI is increasingly influencing education, employment, and civic engagement. The declaration calls for youth inclusion at all levels of AI governance—from policy discussions to regulatory frameworks.  Young people are not just passive users of AI but active stakeholders whose insights and experiences should inform ethical AI development.  Governments, technology companies, and institutions must create structured opportunities for youth participation. We must create AI that aligns with human rights, democracy, and social justice principles. Ultimately, AI should serve all generations fairly, transparently, and responsibly. The Road Ahead: What Needs to Change? Move from Fear-Driven to Evidence-Based AI Policies. The road to Hell is paved with good intentions. Regulating AI based on assumptions is like navigating in the dark—dangerous and ineffective. Instead of knee-jerk reactions, we need serious studies that track the real, long-term effects of AI on children’s well-being.  Policymakers must resist the urge to respond to every alarming headline and instead ground regulations in solid research.  The challenge is to separate correlation from causation and ensure that well-intended policies do not inadvertently restrict beneficial uses of AI. Involve Youth in Designing their Digital Future Teenagers are the primary users of AI-driven technology, yet they rarely have a voice in shaping the rules that govern it. If we want AI systems that truly serve young people, they need a seat at the table.  Youth-led workshops, policy dialogues, and education programs should be standard practice when we speak about their digital future. Instead of making assumptions about what is best for them, we should engage them directly in co-creating ethical AI frameworks. Shared Accountability for Ethical AI