This point is beautifully argued in lots of different sources, and is clearly a pillar of AGI.
How to Create a Mind:
The lists of steps in my mind are organized in hierarchies. I follow a routine procedure before going to sleep. The first step is to brush my teeth. But this action is in turn broken into a smaller series of steps, the first of which is to put toothpaste on the toothbrush. That step in turn is made up of yet smaller steps, such as finding the toothpaste, removing the cap, and so on. The step of finding the toothpaste also has steps, the first of which is to open the bathroom cabinet. That step in turn requires steps, the first of which is to grab the outside of the cabinet door. This nesting actually continues down to a very fine grain of movements, so that there are literally thousands of little actions constituting my nighttime routine. Although I may have difficulty remembering details of a walk I took just a few hours ago, I have no difficulty recalling all of these many steps in preparing for bed - so much so that I am able to think about other things while I go through these procedures. It is important to point out that this list is not stored as one long list of thousands of steps - rather, each of our routine procedures is remembered as an elaborate hierarchy of nested activities.
Human Compatible: TODO get exact quote. It was something along: life goal: save world from hunger. Subgoal: apply for some grant. Sub-sub-goal: eat, sleep, take shower. Sub-sub-sub-goal: move muscles to get me to table and open a can.