Portugal’s Microcosmos: The Future of Work in 2025

In contemporary discussions about digital transformation, artificial intelligence (AI), and the future of work, Portugal emerges as an intriguing example of how the very same institutions, people, and resources can deliver diametrically opposed results depending on the chosen organizational model. On one hand, the country achieves tremendous success in large-scale, time-bound events, from the Age of Discoveries 500 years ago, Expo ’98, Euro 2004, the World Youth Day in 2023, to its upcoming role in co-hosting the 2030 FIFA World Cup. On the other hand, Portugal regularly ranks near the bottom in productivity across Europe and the OECD. How can these two realities coexist? More importantly, what can this duality tell us about the models we choose to structure our societies and organizations, especially as AI reshapes the meaning of work?

The Functional vs. Projectized Dilemma

Historically, many organizations have defaulted to functional models, rooted in the industrial revolution’s emphasis on hierarchical efficiency and compartmentalized expertise. In a functional model:

• Departments (e.g., HR, Finance, Operations) operate as silos.
• Authority flows vertically, as in a military chain of command.
• Workers specialize in narrowly defined roles and respond primarily to one boss.

Henry Ford’s pioneering assembly lines in the early 20th century are often cited as the birth of this approach, where standardization and specialization led to significant productivity gains. The drawback, vividly depicted in Charlie Chaplin’s Modern Times, is that people can end up performing repetitive tasks, much like cogs in a machine: useful for uniform output but potentially stifling creativity and adaptability.

By contrast, a projectized model organizes resources around time-bound goals. Project teams come together, often cutting across functional boundaries, to achieve a specific deliverable by a set deadline. This arrangement:

• Encourages collaboration among diverse skill sets.
• Focuses effort on a clearly defined end goal.
• Tends to dissolve once the objective is reached.

Portugal’s success in hosting major events aligns well with this project-based mindset. Deadlines (such as the opening ceremony) are non-negotiable; clarity of purpose is high, and accountability is immediate. Under these conditions, Portuguese institutions and individuals have shown extraordinary capacity to mobilize talent and resources for outstanding results.

However, once the event ends, the standard mode of “business as usual” often reverts to a more functional, hierarchical approach. infamously summarized by the Portuguese expression “vai-se andando…” (“we keep going…”). This shift back to slower, more siloed structures helps explain why ?Portugal lags behind in sustained productivity when not driven by a single unifying goal or immovable deadline.

Where Does AI Fit Into This?

As we approach 2025 and beyond, the accelerating impact of artificial intelligence raises even more urgent questions about these organizational models. Headlines frequently warn that machines are “taking jobs” from humans. Yet one could argue that it’s humans who first mechanized labor, training each other to follow routine procedures, and thus making it easier for actual machines (or AI) to replace them. Leaders and managers didn’t intend to dehumanize work; they aimed to optimize it. But the byproduct was a framework in which human roles often resembled machine-like tasks, perfect for AI to replicate.

In a broader context, the social role of work has long been debated. Many argue that employment keeps people occupied, ensures they earn a salary, and helps them integrate into the economy. Others note that “work” in a broader sense (such as volunteering, care work, or creative endeavors) can fulfill social needs without fitting a strict employment model. Where does AI come into this conversation? If routine tasks can be automated, productivity might rise, but employment (at least in its traditional form) could stagnate or even decline. The worry for some is that higher productivity doesn’t always translate into better living conditions or security.

Indeed, several studies highlight the duality of automation: while it can boost overall economic output, it may displace specific categories of workers who lack the skills to transition to new roles. At a societal level, this displacement can erode faith in democratic processes, especially if political leaders focus on short-term appeasement instead of long-term sustainability.

The Elephant in the Room: Organizational Models Are Outdated

Despite seismic shifts in technology, many organizations still rely on structures from the early 20th century. For decades, the functional model was considered the gold standard because it aligned well with slower technological cycles. Yet in today’s world, the pace of change calls for more agile and adaptive frameworks.

Switching to a purely project-based structure might seem like a quick fix. After all, in Portugal’s case, major projects have led to extraordinary feats. Yet the project model, taken to extremes, can be exhausting. It demands a constant sprint-like pace, which can burn out human resources over time. Moreover, some domains, such as long-term research and development or regulatory compliance, can’t always be neatly packaged into finite projects.

This is where the matrix model enters the stage, a hybrid framework that combines the strengths of both functional and projectized structures. The matrix introduces three core characteristics that make it a promising alternative:

1.????? Dual or Multiple Reporting Lines: Employees report to both a functional manager and a project or product manager. This dual structure allows specialists to maintain subject-matter expertise while contributing to cross-functional, strategic initiatives.

2.????? Fluid Team Composition: Teams form and dissolve dynamically based on the needs of projects or products, leveraging expertise across departments to adapt to shifting priorities.

3.????? Complex but Flexible: Although the matrix introduces managerial complexity and blurs lines of accountability, this very adaptability can become a strength. In a rapidly changing environment, matrix organizations offer resilience, enabling companies to pivot effectively as circumstances evolve.

AI further enhances the potential of the matrix model. In this environment, AI tools can be deployed strategically where they add the most value, whether within a specialized analytics department or as part of cross-functional projects. Instead of simply automating tasks, AI augments human roles, enriching team capabilities. For instance, a marketing team might draw on machine learning insights from an AI specialist team anchored in a centralized Center of Excellence (CoE), which continuously updates and shares best practices across the organization.

By embracing matrix models, organizations can navigate the complexities of the modern era with greater agility and resilience, transforming challenges into opportunities for growth and innovation.

Revisiting the Foundations: Reflections for 2025

If we continue to sidestep fundamental questions about organizational design, we risk entrenching systems where people operate like automatons, ironically accelerating the path for AI to replace them. The core debate isn’t simply about “AI taking jobs”; it’s about how we shape institutions to either foster human-AI collaboration or perpetuate a zero-sum dynamic. Democracies, constrained by short-term political cycles, often focus on addressing immediate voter demands, while companies wrestle with balancing quarterly profits against long-term innovation. In this fragmented landscape, tackling the critical conversations that 2025 demands becomes increasingly challenging, but also indispensable.

As we approach 2025, four reflections stand out as essential to shaping a more sustainable and adaptive future:

1.????? Revisiting the Purpose of Work: AI excels at handling repetitive tasks, offering the potential to liberate human effort for more creative, strategic, and meaningful pursuits. However, this shift will only succeed if organizations are structured to value and reward these uniquely human contributions, fostering a culture where innovation thrives.

Food for thoughts: Are we restructuring our organizations to value what makes human work irreplaceable, or are we still tied to metrics that measure only what can be automated?

2.????? Retooling Education and Skills: Education systems must evolve to prepare individuals for hybrid roles where they act as both functional specialists and active contributors to cross-functional projects. These dual capacities are critical for enabling matrix models to succeed, equipping workers to navigate complex and dynamic environments.

Food for thoughts: Are our educational systems preparing future generations to thrive in a hybrid world where specialists and generalists collaborate seamlessly?

3.????? Encouraging Organizational Experimentation: Governments can play a proactive role by incentivizing pilot programs that test innovative structures. Offering tax benefits or grants to companies adopting matrix models (particularly in AI-impacted industries) could accelerate the transition to more adaptive and resilient organizational designs.

Food for thoughts: What incentives are we creating to promote structural experimentation in organizations, or are we simply waiting for change to happen on its own?

4.????? Balancing Long-Term and Short-Term Thinking: Finding equilibrium between immediate stakeholder demands and long-term transformative agendas remains one of the greatest challenges for both public and private sectors. Yet, ignoring this balance is no longer viable. In the AI era, sustainable competitiveness and social stability depend on a commitment to the bigger picture.

Food for thoughts: Will we manage to balance short-term pressures with a transformative long-term vision, or are we mortgaging the future to solve today’s crises?

As we stand on the threshold of a future shaped by AI, these reflections are not just ideas but imperatives. By addressing them with urgency and intention, we can create institutions that empower human potential, embrace technological advancements, and build a foundation for progress that extends far beyond 2025.

The Microcosmos of Change

Portugal’s mysterious ability to excel in projectized contexts delivering large-scale events flawlessly and yet struggle in everyday functional operations is more than an isolated quirk. It’s a microcosm of how organizational models can dramatically influence outcomes with the very same resources. As we approach 2025, leaders worldwide need to ask themselves: will they cling to outdated functional hierarchies, indulge in the allure of all-project structures, or explore the nuanced (and often messy) reality of matrix organizations?

In many ways, AI’s advance compels this conversation. When machines replicate routine tasks, human work must evolve, either toward the creative, relational, and strategic domains that AI cannot yet master, or toward new forms of oversight and collaboration with advanced technologies. Achieving this balance demands organizational adaptability. Matrix models, though frequently overlooked or labeled as “too complicated,” may well offer the resilient framework necessary to harness both human and machine capabilities.

Portugal’s successes and challenges show us that the same context can lead to vastly different outcomes, depending on how we align objectives, people, processes, and technologies. Rather than viewing AI as an external threat, we can see it as the catalyst that forces us to redesign our organizations, rediscover the core value of human work, and reimagine what productivity truly means. If we rise to this challenge, the conversation shifts from “machines taking jobs” to people and AI co-creating a future where both efficiency and creativity flourish, supported by flexible and adaptive structures.

Perhaps that is Portugal’s greatest gift to the ongoing global dialogue: a living example that context alone does not dictate results. It is the model - informed by leadership, culture, and collective will - that transforms possibilities into realities. As the world navigates the turbulent waters of digital transformation and AI, we should keep an eye on the Portuguese laboratory, drawing inspiration from its achievements and heeding the lessons of its shortcomings. The next chapter in this story may well hinge on whether we are brave enough to embrace the complexity of matrix organizations, and thereby lay the groundwork for a more dynamic, human-centric, and AI-augmented future.