Thought Piece: The end of time-based work

Hi there,

I remember the first time I witnessed the true power gap AI could create. Two teams, same task, wildly different results. What made the difference? One team embraced AI tools while the other didn't. Within just six weeks, the gap in their productivity had grown so wide it was almost uncomfortable to discuss.

That experience was a watershed moment for me, forcing a difficult realization: our traditional ways of structuring work and compensating talent are fundamentally incompatible with the AI revolution happening around us.

In Chapter 5 of "100x," I confronted this uncomfortable truth head-on. The traditional labor model—paying for time rather than outcomes—is rapidly becoming obsolete in an AI-powered world. When someone with the right AI tools can accomplish in two hours what used to take an entire day, why would we continue structuring compensation around hours worked?

This paradox creates perverse incentives. If employees are paid by the hour or through fixed salaries based on traditional workloads, what happens when AI helps them finish in a fraction of the time?

They face an impossible choice: either pretend to work at the old pace, deliberately avoid using productivity-enhancing tools, or ask for a complete restructuring of their compensation.

As I pointed out from personal experience: "We had clients who paid us retainer for varied support... Suddenly though we started noticing something sort of scary: while our client remained happy (they've been with us for over 2 years now), internally we only started burning only through $40k [of a $90k monthly retainer]."

The solution?

A fundamental shift to value-based compensation. Companies like Deloitte have already implemented such models for their AI-augmented teams, seeing a 312% increase in high-value deliverables within just six months.

Others are using hybrid approaches. GitLab and Automattic tie payouts to process improvements, while Microsoft and Google offer "innovation bonuses" ranging from 20% to 200% of base salary for high-impact AI solutions.

But this isn't just about money. The labor transformation goes deeper, challenging the very structure of how teams form and operate. In the AI era, roles become fluid, defined by outcomes rather than rigid job descriptions.

Teams assemble around specific challenges rather than permanent organizational hierarchies. A copywriter might evolve into a content strategist, using AI for ideation while focusing on higher-level creativity.

The shift also changes what we value in our workforce. Beyond technical skills, companies now prize adaptability, continuous learning, and the ability to collaborate effectively with AI. The traditional skills matrix becomes outdated almost as soon as it's published.

This massive shift won't be easy. When Future Works began transitioning to value-based compensation, the most common question was predictable: "Who decides what's the value of my work?" This fundamental question requires thoughtful frameworks, transparent metrics, and a cultural shift toward defining and measuring outcomes rather than activities.

For leaders, the message is clear: your best people are already leveraging AI to multiply their impact. The only question is whether your compensation and organizational models support them—or inadvertently punish their innovation. If you don't create systems that reward exponential contribution, someone else will and they'll take your best talent with them.

As I'd envisioned: "Your teams are organized around value creation. Junior employees, supercharged by AI, contribute at senior levels... Top performers are earning much more than with their previous salaries, and you're thrilled to pay them because their contributions drive exponential value to the bottom line."

If you want to join the next-gen digital transformation, read my new book "100x: An Executive Brief for AI-Driven Business Results." It unpacks exactly how to achieve transformational ROI with AI and provides a roadmap for revolutionizing your labor models for the age of intelligence.

Much Love,
Matt

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