Corruption reflects a predatory, extractive mindset

The central idea is this: corruption isn’t just embezzlement or outright fraud. Eric argues we’ve allowed the word to become far too narrow. Our grandparents would have recognized corruption as any transaction that violated the purpose of the thing in question, whether it was illegal or not. And by that broader definition, he proposes that anyone who finds a way to make money without creating value is engaged in corruption.

Even worse, when people benefit themselves financially by destroying value created by founders, employees and community members this is corrupt predation (See also, Bill Lazonick’s huge body of work on this topic).

Once you accept that definition, you start seeing it everywhere. PE firms that benefit themselves by hollowing out the companies they are supposed to revitalize (Toys R Us, bankrupt; Red Lobster, on life support; Radio Shack, gone; Hudson’s Bay Company, dismembered after 300+ years; Kmart, gone; Party City, Sears, and the list goes on…).

Eric describes what he calls financial gravity as an invisible force that acts on organizations the way gravity acts on physical objects. It doesn’t care whether you believe in it. It just pulls. And as our economy has become more and more financialized, that gravitational pull toward extraction and value destruction has become stronger and stronger. The mechanism, as he puts it, is a law of nature. But which values ittransmits? Those are a policy choice, and we can change policy choices if we wish to.

Sol Price, FedMart and the Cost of Financial Gravity

To illustrate how this works, Eric opens with a story I absolutely loved: the largely forgotten legend of Sol Price, who is widely considered the father of modern retail. Sol built FedMart in San Diego in the 1950s with a simple but radical conviction, that he was a fiduciary to the customer, not to shareholders. That implied low prices and high wages. When his competitors ran loss-leader promotions, Sol would literally post their Sunday circular ads in his own stores and tell customers to go buy it cheaper down the street. Because he saw that as his job.

This made FedMart very popular and wildly successful. Success and value, as Eric and I discussed, attracts predators. Once the company went public, the gravity started pulling. Despite his best efforts, an investor group wrested control from him and Sol was eventually locked out of his own office. They literally changed the locks to the office one evening. Then the German Chain that purchased the companyproceeded to drive FedMart into liquidation in seven years, all in the name of profit.

But Sol didn’t retire. He took two weeks off, leased the office upstairs from his former office at FedMart, and started over. He built the Price Club. One of his protégés from FedMart was Jim Sinegal, a former stock boy who’d risen to become an executive. Sinegal quit in protest when Sol was fired, then joined him at Price Club, and eventually started his own company with Sol’s blessing. A few years later, the two companies merged to form Price Costco. A few years after that, they dropped “Price” from the name and the company became simply, Costco.

Yes, that Costco.

Today it’s a $400 billion public company that still caps its margins at 14%, still pays high wages, and still operates by Sol Price’s original fiduciary ethos. Jim Sinegal, that stock boy turned founder, once said he hadn’t learned a lot from Sol Price. He’d learned everything from Sol Price.

A “governance fortress”

So why has Costco endured when FedMart was destroyed? Costco’s valuation certainly makes it an attractive target and one could easily see how looting the assets and goodwill it’s built up could turn someone a tidy profit in the near term.

The reason, in Eric’s words, that it endures is because it was built with a governance fortress. Unfortunately, if you create a super valuable asst, people are going to try to steal it from you and without robust governance they may have an opening.

So the first foundational element is basic compliance. Making sure we follow the rules, making sure no laws are broken, making sure there’s no self-dealing.

Purpose is the second dimension and maybe the most important. It used to be that you couldn’t set up a company without specifying what purpose it served the public – if you organized a railroad, that’s what it was for, to run trains from New York to Chicago, say. Today, company charters are set up to allow the firm to do anything legally permissible and that creates a huge opening for predators to argue that any profits thus created belong to the shareholders. By the way, incorporating as a “B” corp for a specific purpose simply restores the way incorporation used to work.

The third dimension is coherence. To what degree is everything internally aligned around that purpose? Betraying the mission unfortunately happens all the time. When a private equity firm takes over your favorite restaurant, you can taste it in the food. The ownership structure of a company has a certain taste to it. That’s how pervasive this problem is.

The last dimension is what I call integrity. Integrity means both as it would with a person, the ability to make and keep a promise, but also structural integrity. To what degree can an organization be bullied or pushed off course by outside forces?

That blueprint — and what it actually looks like in practice, from public benefit corporations to foundation-controlled companies like Novo Nordisk and IKEA — is the heart of what we get into in this episode. We also talk about the Vectura case (this one will make your jaw drop), the mechanics of how financial gravity transmits values unconsciously through organizations, and why Eric believes the era of shareholder primacy is already over — not aspirationally, but factually.

This conversation is well aligned with my personal goals of figuring out how we can come together to bring capital and production into harmony, perhaps with a Golden Age in mind. I was thrilled Eric was able to join me. The episode drops on the book’s official launch day, May 26, and I’ll be with Eric at his launch party in New York. Watch out for news!

Warmly,

Rita

This week’s guest on the Thought Sparks Podcast is Jennifer Moss, author of Why Are We Here? Creating a Work Culture Everyone Wants, and someone who has spent years on the front lines of this question: literally interviewing Uber drivers, CEOs, military leaders, and frontline workers to understand what’s really going on beneath the surface of our workplace malaise.

The purpose gap is bigger than you think.

Jennifer shared research from McKinsey showing that roughly 85% of senior executives feel they’re living in alignment with their purpose on a regular basis, while only about 15% of frontline workers feel the same way. And the troubling part is that leaders make policy decisions based on their own experience of work, not the actual experience of the people they’re leading. The return-to-office debate is a perfect example. As I said to Jennifer (and I’ll stand by it): if you’re a CEO, the office is a pretty great place. Your jokes are funny, people bring you coffee, you feel the energy of the place. Go home, and your spouse is asking you to take out the garbage. The office is clearly superior! But that’s not most people’s reality.

Hope is not soft. It’s a strategy.

This was the reframe I didn’t expect. Jennifer opened her book with hope as a foundational element, and I’ll admit my first instinct was a bit skeptical. Hope feels personal, internal, not something you can operationalize. But she made a compelling case, drawing on cognitive hope theory and her interviews with military leaders, that hope is about goal-setting and goal-achieving. It’s measurable. It’s buildable.

And critically, it’s what you need before you can ask people to do anything ambitious. She also drew an unexpected connection to fertility rates with the research showing that when journalists asked people why they weren’t having children, the most consistent answer wasn’t economic. It was: I don’t feel hopeful about the world I’d bring them into. Hope, it turns out, is a macroeconomic variable.

Purpose washing and the real importance of friendship at work

Jennifer pushes back on what she calls purpose washing which is the idea that every employee should be deeply moved by the company’s mission. The truth, she says, is that for a lot of people, purpose at work shows up through friendship, rituals, community, and the sense of a job well done. Citing Robin Dunbar (of the Dunbar number), she made the point that the workplace used to be the village, and as that village disappears, we haven’t replaced what it provided. Her prescription isn’t a new mission statement. It’s lunch together. It’s actually knowing your colleagues.

There was also a wonderful thread running through our conversation about dematerialization — which, as you might expect, I couldn’t help but weigh in on. When work is intangible, it’s harder to feel the satisfaction of having made something. Jennifer had interviewed Martin Seligman, who made the point that humans derived meaning from work when it was tangible and immediate. You fixed your roof, youfelt good. We’ve moved so far from that that our brains are struggling to compute the shift. This resonates deeply with what I’ve been thinking about for my new book. The psychological dimension of a dematerializing economy deserves a lot more attention than it gets.

And on AI: Jennifer had some pointed things to say about the current moment. She noted that by most measures, AI has not yet moved the needle on productivity or GDP, and yet we’re displacing workers and undermining trust at the very moment we need people to engage with new technology. I offered the analogy of factories and electricity: it took 40 years for factories designed around steam power to fully give way to factories designed around electricity. The early adopters of electricity-first design did dramatically better, but the bulk of legacy infrastructure took decades to turn over.

We’re doing something similar with AI. We’re inserting new capabilities into old processes and then wondering why the ROI isn’t there.

This is a rich, warm, and genuinely practical conversation. Jennifer’s book is one you can open to any page and find something actionable — which, for a book about workplace culture, is a meaningful achievement.

The full episode drops on May 19. I hope you’ll give it a listen.

Warmly,

Rita

Content originally published by Fast Company

This is a strategic inflection point for management thinking. It will have a major impact on the entire ecosystem through which serious management ideas travel from researchers to the people who run organizations. That ecosystem was already fragile.

Winner-take-all Dynamics

Sloan Management Review and similar journals were classic two-sided market propositions. They offered management ideas to subscribers, pulling in advertisers along the way. The scarcity factor was that only such journals had access to top faculty, even as faculty had relatively few major mainstream outlets to promote their ideas. SMR, in particular, focused on evidence-based research and incorporated citations.

While the basic value proposition hadn’t changed, the world around it did. Today, ideas flow through blogs, thinkers’ own web sites and massive numbers of books (I’ve written about the peak book hypothesishere). The scarcity factor of its content went essentially to zero, and when that happens, people’s willingness to pay evaporates.

SMR’s departure leaves Harvard Business Review as a winner with network effect dynamics. If HBR is where the readers are, that’s where other ecosystem partners want to be. It will now be essentially thedominant institutional journal seeking to get research ideas into the hands of practicing managers. HBR (which I am delighted to say has published a fair amount of my work) faces its own pressures. As a must-have platform, it often must reject worthy ideas. It needs credibility with “C” level executives. Without a peer playing the same translation game, those pressures intensify. The management field needs more venues doing serious practitioner-facing work, not fewer.

The Research-Practice Gap Was Always Major

There is an enormous, largely invisible, backlog of management problems that research has effectively solved, but whose solutions have never made it into organizational practice.

Just to take a few examples, we know, with considerable empirical confidence, how to design incentive systems that don’t destroy intrinsic motivation. We know that most large-scale change initiatives fail not because of strategy but because of implementation dynamics that are entirely predictable and manageable. We know that diverse teams outperform homogeneous ones under conditions of complexity and we know specifically why and how to structure them to realize that advantage. We know a great deal about how cognitive biases distort resource allocation decisions at the top of organizations, and we have tested interventions that meaningfully reduce those distortions. We know that organizations and communities pay a terrible price for offering bad jobs. We know that many workplaces are literally causingthose in them to suffer terrible health outcomes.

None of this knowledge is secret. It lives in journals, in working papers, in the syllabi of good business school courses. What it largely doesn’t do is reach the CFO making a capital allocation call on Tuesday morning, or the division president trying to figure out why her transformation initiative keeps stalling. The translation layer between “what research knows” and “what practitioners do” has always been thin and underfunded. SMR was one of the few institutions explicitly committed to that translation. Now it’s gone.

The Incentives Were Broken Long Before This

The design of business school incentive systems are partly to blame. The incentive structures in research universities has for decades pointed faculty away from practitioner-facing work. Tenure and promotion are determined by publications in top academic journals: outlets with tiny circulations, peer reviewers who are other academics, and editorial standards that actively discourage the kind of narrative accessibility that helps ideas travel.

Publishing in SMR — despite its genuine rigor, its MIT imprimatur, its global reach among senior executives — counted for relatively little in most tenure cases compared to a placement in a top-tier academic journal that approximately two hundred specialists might read. This reflected a conscious set of choices about what kind of knowledge production universities would reward. The result, over time, was a faculty increasingly optimized for talking to each other and decreasingly equipped, or motivated, to talk to the people whose organizations their research was nominally about. Imagine a medical doctor not keeping up with discoveries in their fields, or someone studying engineering not understanding the materials that might be used to design a bridge!

SMR existed in the gap that this incentive structure created. It depended on scholars who cared enough about practitioner impact to invest time in writing that their departments wouldn’t necessarily credit. That’s a fragile foundation — and it grew more fragile as the academic labor market tightened and junior faculty had fewer and fewer degrees of freedom about where they put their energy.

If business school leaders want to bridge these gaps, they would make journals such as MIT Sloan matter in promotion decisions. Of course, with the advent of agentic AI and the reshuffling of management structures, their hands may well be forced to change what gets recognized and promoted.

“For every complex problem there is an answer that is clear, simple, and wrong”

This quote, attributed to H. L. Mencken, reflects a broader issue. The dean’s letter frames the closure of SMR as a response to “broader shifts in how audiences engage with management ideas.” He’s not wrong about the shift. But there’s a subtle and important conflation happening: the shift in how audiences consume content is being used to justify a change in what kind of content gets produced. That has potentially serious consequences.

Short-form video and social-first content are extraordinary at spreading ideas that have already been simplified. They are almost useless at developing ideas that are genuinely novel and complex. For example, my work on the need for companies to behave like habitual entrepreneurs, if they hope to survive for the long term, has taken (so far) five books (with one more on the way), lots of HBR and SMR articles and multiple interactions with large numbers of stakeholders. It cannot be reduced to a LinkedIn carousel. Action points coming from short-form outlets without essential context are mostly useless, and conceivably even dangerous.

The closure of SMR doesn’t mean demand for serious management ideas disappears. It means that demand gets met by whoever has the biggest platform and the fastest content engine. Increasingly, that means AI-generated synthesis, influencer-driven frameworks with little empirical grounding, and the management consulting firms that have always been happy to position their proprietary models as received wisdom. One major institutional referee is leaving the field, and if a journal with so much credibility and backing can’t thrive, it suggests that the market for management ideas is fundamentally changing.

There’s an irony worth noting: MIT Sloan is shutting down a publication in the name of reach and relevance at precisely the moment when AI is making it easier than ever to produce and distribute long-form, research-grounded content cheaply. The problem was never that rigorous ideas couldn’t find an audience because SMR’s digital readership was substantial. The problem is that sustaining an editorial institution requires organizational commitment that goes beyond traffic metrics.

So what happens now? We can expect that independent voices, publishing on their own Substacks and podcasts, and potentially executive education programs, become more important as the institutional middle ground hollows out. That’s both an opportunity and a risk: we can expect more diversity of voices, but less quality control and less shared vocabulary across the management field. The gap between academic research and management practice, which SMR existed to bridge, will widen. And the organizations on the wrong side of that gap — the ones whose leaders never encounter the research that might help them — will keep making the same avoidable mistakes.

Sixty-seven years is a long run. MIT Sloan Management Review shaped how generations of managers thought about strategy, innovation, leadership, and change. The right response to its closure isn’t nostalgia. It’s to ask, with some urgency, where the future high-impact management ideas will come from and how they will be disseminated.

That conversation has gone on for years, all the way back to management thinker Peter Drucker. With the disruption that is on the horizon as we enter an era of agentic AI and dematerialization, perhaps thetopic will be revisited with renewed urgency.

Quick, when I say “annual budget,” what emotions does that invoke? All too often it’s somewhere in the neighborhood of dread and disinterest. In most companies, it’s pretty dysfunctional. But what would you do if you could prove that the months-long ritual that consumes thousands of hours of time and generates hundreds of PowerPoint decks, was actually destroying more value than it created?

At Bayer, one of the world’s great 160-year-old life sciences companies, that question got a radical answer: they just stopped doing it. In 2024, a process that involved five thousand people, started in June or July, and ran all the way to December was simply eliminated. As my guest tomorrow put it, about three percent of that process was actually useful. The other ninety-seven percent? Bureaucracy perpetuatingitself.

Building the Organization of the Future with Dynamic Shared Ownership

Tomorrow’s episode of the Thought Sparks Podcast is one I’ve been wanting to publish for a while, as it is a master class in courageous organizational change. My friend and colleague Michael Lurie is a formerMcKinsey partner. While there, he spent some 20 years perfecting a collaborative, anti-bureaucratic system that goes together with his ideas about the tasks in front of leaders (visionary, architect, coach and catalyst – VACC).

Michael is now the Chief Catalyst at Bayer, putting him directly in partnership with their CEO, Bill Anderson, specifically hired to turn around the troubled company. He’s been one of my intellectual sparring partners for years. We used to meet every two weeks with others in a small group to imagine what the future of organizations might look like. What makes Michael’s work so remarkable is that he’s now actually building that future inside a 160 year-old, ninety-thousand-person company operating across 120 countries.

The system is called Dynamic Shared Ownership (DSO). It involves breaking organizational silos into small teams, changing the organizational clock speed to operate on 90 day cycles and providing far more autonomy to those teams operating at the “edges” of the organization, a concept I’ve been suggesting is going to be increasingly important.

Does it work? When I first heard the performance numbers, I made him say them again.

The US Pharma organization, consisting of eighty to ninety customer teams, was growing at three to four percent a year. After DSO? Fifteen percent in 2024. Then they repeated it in 2025. That’s thirty percent cumulative growth in two years versus the five or six percent they’d historically have expected. A product team working on a drug called Nubeqa set an aspiration to hit just under a billion euros of revenue in 2025. They hit it by June. In another example, one manufacturing site cut costs by forty percent, improved quality, and watched employee engagement jump from twenty-five percent to seventy-five percent in two years.

Limiting the Return on Politics

We also get into something I’ve been arguing for years but have rarely seen actually executed: severing the link between hierarchical reporting relationships and compensation. Michael’s “Professional Homes“ model emphasizes skill-based career paths that sit entirely outside the line management structure. It’s one of the most thoughtful solutions to the return-on-politics problem one often encounters. When your raise doesn’t depend on making you look good to your boss, everything changes.

We also talk about strategy — what it means to push strategic thinking down to every team of eight or ten people, and why Michael believes the promise of DSO is creating thousands of entrepreneurial businesses that can also leverage the resources of a major enterprise. That framing connects directly to questions I’ve been exploring in my own work on what it takes to compete in an era of continuous disruption.

Stories of Permissionless Innovation

What I was struck by was how well the DSO system fits with what we know about how human creativity can be unleashed. If teams are offered agency (control), provided the chance to develop mastery (learning and growth) and connected to a larger mission, they can do astonishing things.

As Michael tells it:

Almost every week I hear just extraordinary stories. One that comes to mind is that of a customer team in Bangladesh growing at forty percent last year compared to ten percent previously. They think of themselves really as a business. They asked: as a business, what can we do to change the way our customers think about us? Their customers are smallholder farmers — many of them subsistence farmers in a developing economy.

The innovation they came up with was to create a football match (soccer, for American audiences) where one team was named after one of their products and the other team was named after another. They organized this match with uniforms bearing the product logos. Five thousand farmers and their families turned up. The brand awareness created and the product inquiries that followed were just one of several things this group of eight or ten people on the customer team innovated to turbocharge their growth as a little business. This was a group of people who had never done anything like this before. Just genius.

And there’s Michael’s observation about what he sees almost every week as he travels around Bayer’s global operations: a team of frontline manufacturing workers in overalls, standing in front of a screen displaying their key outcomes and metrics, having a completely sophisticated conversation about quality, speed, and economics. “There was no difference,” he said, “in commitment, expertise, seriousness, or dedication than you would see at the most senior levels in a leadership team.”

Bye Bye Bureaucracy

What I’m appreciating about this story is that when you remove the bureaucratic overhead that was actually preventing people from thinking, they think.

There is so much more in the episode than I can include in a short note. It’s hugely instructive.

The episode drops tomorrow, Tuesday May 5th. I hope you’ll listen — and I’d love to hear what it sparks for you.

— Rita

Did you know that the category-creating “Mrs. Meyer’s Clean Day” cleaning products were named after an actual Mrs. Meyer? Moreover, that she happened to be the mother of the company’s founder? Both true. Tomorrow, my podcast episode with her will be released, and I have to tell you it was a rollicking conversation.

So, on April 28th — which also happens to be the publication date of her new book, I Bottled My Mother: The Mrs. Meyer Story — Grit, Grime, and Growing a Business — my conversation with Monica Nassif goes live on Thought Sparks. And I wanted to give you, my Substack subscribers, a few reasons to tune in.

Monica is the entrepreneur behind two iconic household brands, Caldrea and Mrs. Meyer’s Clean Day. She was the first to see the opportunity in creating a new category – cleaning products without horrible chemicals and bad-for-you ingredients, all in the name of keeping things spic-n-span. What I found just as fascinating as the brand story is how strategically she built it.

Testing assumptions and Eureka moments

A point she emphasized over and over was the importance of getting at the story behind the story for entrepreneurs. She coaches them now, and commented that they often don’t think the idea all the way through. For example, if you want Target to sell your stuff, what stuff will they take off the shelf to make room for yours?

The concept for her brand came from what she describes as a Eureka moment. She was standing in front of a wooden pallet of garish cleaning products in an Atlanta store, thinking: what if this whole category could be like Aveda is in cosmetics? That single insight convinced her that it was a powerful enough idea to launch a company.

But whoa, she knew a lot about building brands, but didn’t know anything about building products. But she knew how to figure it out. As she recounts:

“I don’t know how to put liquids in bottles, but I knew Minneapolis was a rich town for that because of 3M, Ecolab, Minnetonka, Inc. Aveda, so there were a lot of people here who knew how to do that. So, I said to the guy who cut my hair, I said. Hey Mick, do you know anybody who knows how to put liquids in bottles? He goes, oh, I cut the hair of a fragrance consultant. I’ll set you up with her. So that was a fortuitous meeting. So I go see her and she kind of opens up this world to me…through her I met a manufacturer, a contract filler west of Minneapolis, and they used to do all the hair care for Revlon hair care products. So, I finally made a connection with them and I had this business plan, this PowerPoint, dummy bottles. I went out and showed her, and she, I’ll never forget, she leaned back in her chair and she goes:

“You’ve cracked the code. I’ve been waiting for someone to figure out this category and you did it. I’ll help you. So that was huge.”

Isn’t that a great story about making your own luck? I have to say, I never knew there was an actual occupation called fillers.

She then needed a chemist, someone who could create the actual product. The first couple she approached thought the idea was just bonkers, and turned her down. But eventually she found a fellow believer who began experimenting with different formulations, which she’d put into test bottles and run around to all of her friends, begging them to try the products out. Then they’d get feedback and on it went.

From Caldrea to Mrs. Meyer’s

Eventually, they launched what was a high-end brand, Caldrea, which was picked up by likeminded retailers like Restoration Hardware. But despite its success, she was uneasy. “Someone’s going to knock us off. I just, Iknew that 80% of all household cleaning products were sold at the mass level, at the Targets, the Whole Foods. And I thought, you know, if we don’t knock off ourselves, someone’s going to, and I’m not about to let that happen. We worked too hard. We got a great concept. The customer was really resonating to our idea that you could clean your entire home in one fragrance. So I wanted to take advantage of where the real volume was when I came to this type of product.”

Her mother had a role to play in that decision as well. Monica gave her a gift of some of the Caldrea items, which her mom liked, but thought they were too expensive. “I could never afford this. You need to make something for me.”

She deliberately cannibalized her own premium brand to create Mrs. Meyer’s before anyone else could do it to her. There’s a phrase her old boss used that she’s never forgotten: “Saw off the branch you’re sitting on, because it forces you to reach for the branch above you.”

What a great example of transient advantage thinking!

She walked away from distribution deals that didn’t let her brand block her products together on the shelf — even when cash was tight and any order felt like a lifeline. She pulled herself out of Target before Target could pull her out, preserving the relationship and eventually returning on much stronger terms. And she used a Williams-Sonoma private label deal as both cash flow and category validation — getting a better-resourced retailer to prove her concept for her.

None of these are textbook moves. They are the instincts of an entrepreneur.

Thanks, Mom!

Then there’s the book’s namesake: Thelma Meyer, Monica’s actual mother. One of nine children, raised during the Depression, running a household like a drill sergeant and a garden like a philosopher. Monica describes her as “the original Earth mother,” and the brand she built is essentially a tribute to those values — reuse, repurpose, care for what you have.

Mrs. Meyer is 93 and, according to Monica, is currently outworking her daughter on the book promotion circuit. I believe it.

This episode is equal parts business school case study and deeply human story about what it takes to build something from nothing, and then let it go.

I Bottled My Mother publishes April 28th. The episode drops the same day. I hope you’ll get to enjoy both.

Dear subscribers,

This week’s Thought Sparks Podcast episode is one I’ve been looking forward to for a long time. Teresa Amabile — emerita professor at Harvard Business School, creativity scholar, and a dear friend of many years — has turned her rigorous research lens onto one of the most consequential transitions any of us will face: retirement.

Her new book, Retiring: Creating a Life That Works for You, is unusual for a book about retirement, in that it doesn’t focus so much on the financials of preparing, but on how your life looks life after you’vepulled the trigger on the decision. Teresa and her co-authors conducted over 215 long-form interviews — some running as long as three hours — with 120 people, including a core group of 14 “stars” they followed longitudinally from the lead-up to retirement through the first years of living it. The result is the closest thing to an evidence-based map of this transition that anyone has produced.

Here are some of the highlights.

The progress rinciple, and what happens when work ends

Teresa’s last big project was The Progress Principle, a study based on nearly 12,000 daily work diaries that found the single biggest driver of people’s wellbeing, motivation, and creativity on any given day is simply making progress in meaningful work. Even tiny forward steps matter enormously.

That finding led directly to the question she couldn’t stop thinking about: What happens when meaningful work ends? For people in corporate careers (unlike us academics, who can keep writing into our eighties if we want) retirement means the work doesn’t just slow down but stops entirely. She told me her husband jokes that she couldn’t retire until she finished the research because she wanted “an evidence-based retirement.” That’s Teresa in a nutshell, and this episode has her fingerprints all over it.

The four tasks: Why success in retirement is a job in itself

One of the most surprising findings from her research is that successful retirement is a process that requires real effort. Teresa describes four tasks everyone navigating this transition should be prepared to engage with:

1. Making the decision. The “when” turns out to be harder than almost anyone expects. Teresa shares the story of one participant — a high-achieving executive she calls Irene — who made and unmade her retirement decision four years in a row. What was really holding her back? An identity question she hadn’t yet named: People still respect you while you’re working. Maybe not so much after. Once she could see that clearly, she could act on it.

2. Detaching from work. The practical checklist — the HR paperwork, the laptop return, the ID badge — is the easy part. The psychological detachment, especially from a professional identity built over decades, is something else entirely. We hear about Jay, a consulting firm partner who technically retired but kept doing contract projects for nearly five years because his identity just wouldn’t shift until he finally cut the cord completely.

3. Exploring and experimenting. This is the task that separates the people who flourish from those who struggle. Teresa shares the cautionary story of Lawrence, who had good intentions — Habitat for Humanity, teaching project management at a local college — but when retirement actually arrived, he didn’t make a single phone call. Further, he and his wife had moved to be near their grandchild, not realizing that this meant leaving behind meaningful relationships with friends and the normal routines and distractions they had built up over the years in their community. They drifted into inertia, then eventually into destructive alcoholism. Things came to a crisis when their family staged an intervention, threatening to cut off all ties between them and their beloved grandchild if they didn’t address the issues. Rocked by this, then went into rehabilitation and fortunately the story ends well. They achieved sobriety, rebuilt relationships, and enjoyed their fiftieth anniversary, but their inaction and inertia took them right to the brink of what could have been disastrous.

4. Consolidating a retirement life. The fourth task is making deliberate choices among the things you’ve experimented with and settling into a rhythm. It sounds straightforward, but Teresa describes participants who were five years into retirement and still felt unsettled because they hadn’t managed to make certain fundamental decisions about their lives.

The identity question: bridging and building anew

For high-achieving people, professional identity isn’t just a job title, but often a load-bearing wall. So how do you restructure without the whole thing collapsing?

Teresa describes two mechanisms she observed in the people who navigated this best. One is identity bridging: carrying some essential piece of who you’ve been across the transition in a new form. One retired executive became chair of his church’s board of trustees and led a major capital campaign. He wasn’t leading a company anymore, but he was leading and his hard-won skills had a new home.

The other mechanism is recovering an identity that work had crowded out. Jay the consultant became a passionate hot-rodder in retirement which he’d loved in his twenties that his career years had left no space for. Through that community, he built more genuine friendships than he’d had in decades of corporate life.

One thing companies still aren’t doing

We talked about the organizational dimension of all this, and I found Teresa’s observation to ring true. To the extent that companies provide any support for their retirement-ready populations, they tend to begin and end with financial planning workshops. Almost none offer any preparation for the psychological, relational, and identity dimensions of the process. One thing nobody seems to be thinking about is that we’re on the brink of a tidal wave of baby boomer retirements. That’s a lot of tacit knowledge about to walk out the door. By being more proactive about the human side of retirement, companies might well find it gives them an advantage in helping valuable talent taper off and bring along the next generation.

The company models that worked best treated retirement as a transition process, not an event. One organization Teresa describes allowed employees to sign an 18-month contract to work three days a week, paid for four, before officially retiring. People loved it — and so did the companies, because the knowledge transfer was planned for rather than left to chance.

And then there’s Teresa herself

When I asked Teresa about her own surprises since retiring about 18 months ago, her answer wasn’t what I expected. She planned her book tour, the talks, the podcast circuit. What she didn’t plan — and what’s now occupying at least as much of her time — is that she’s become a democracy activist, using her writing and teaching skills in a direction she never anticipated. It’s a perfect illustration of her own finding: be forward thinking about planning your framework, and then life can fill in new things.

The full conversation is rich with stories, specific tools (including the visual “life maps” that are one of the most practical things in the book), and advice that applies whether retirement is twenty years away or already in progress.

I think you’ll love it.

— Rita

The Thought Sparks Podcast episode with Teresa Amabile drops tomorrow, April 21, anywhere podcasts are found. Teresa’s book, Retiring: Creating a Life That Works for You, is available now, and her team offers resources, exercises, and life map examples at retiringbook.com.

I don’t use the term “fan girl” lightly, but I’ll make an exception for my guest on tomorrow’s episode of the Thought Sparks Podcast: Vivienne Ming.

Vivienne is a computational neuroscientist, entrepreneur, and author of the new book Robot Proof: When Machines Have All the Answers, Build Better People. She’s spent thirty years at the intersection of human and machine intelligence, and her take on AI is unlike anything you’ll hear from the usual chorus of either utopians or doomsayers.

If everything humanity has ever learned is essentially free on your phone, what’s left for us? Vivienne’s answer: everything we don’t know. The unknown is infinite — and that’s where humans become irreplaceable.

It turns out your grandmother was right – it isn’t what you know, it’s who you know and how

We’ve historically organized hiring, education, and career development around the idea that expertise is what sets people apart. You know things. You have skills. You have credentials. That’s how you create value.

Vivienne’s research — built on data from 122 million people — refutes this assumption. At Guild, an education benefits platform where she served as chief scientist, her team looked at what actually predicted who would be great at a job. Not adequate. Great. Skills and knowledge barely showed up.

What did instead? Social intelligence. Perspective-taking. The ability to understand why other people do what they do. These qualities predicted the quality of code written by software developers just as strongly as they predicted deal volume for salespeople. Writing software, it turns out, is a social enterprise. You’re doing it with people, for people, and the people who understand people do it better.

Now fast-forward to the AI era. A recent paper — replicated by an independent research group — found that the people who get the most out of AI are disproportionately high in perspective-taking. The same quality that makes us better at understanding other people makes us better at using AI. We’ve spent decades believing that knowing things and being an expert was a differentiator, worthy of higher pay and appreciated for its scarcity. Now, the knowing part is in everyone’s pocket. What remains and what turns out to have always mattered, is the deeply human ability to forge relationships and understand others.

Automators, validators, and cyborgs

This sets up Vivienne’s three-way framework for how people actually engage with AI.

Automators hand the question to the AI, take the answer, and submit it as their own. They don’t do worse than the AI, but they don’t do better either. As Vivienne says, “Here’s the golden rule of AI tutors: if they ever give students the answer, they never learn anything.” Citing some research published by Anthropic, she notes that “people using Claude Code got worse at coding. They were better when they used it, but they got worse — worse at understanding the problem, worse at strategic thinking around coding.”

And she points out, “When you offload your cognition into the machine, not only do you not learn while you’re doing it, your cognition atrophies. And it goes beyond just traditional straight cognition. If you offload your emotional stability, your trust, your social skills to a machine, then you have a serious problem.”

Validators do the work of forming a hypothesis — and then ask the AI to confirm it. The AI obliges enthusiastically. These people actually do worse than the AI alone, because they’ve used a powerful tool to reinforce whatever they already believed.

Then there are the cyborgs — a small group (perhaps 5% of the population) who treat AI as a genuine intellectual sparring partner. They go back and forth, push back, get challenged, revise. You can’t easily tell which ideas came from the human and which from the machine. This group consistently outperforms both humans and AI working alone — and remarkably, it holds even when they’re using small open-source models. The difference isn’t the AI. It’s the human capital they bring to the collaboration.

Productive friction

This might be my favorite concept from the whole conversation. Vivienne argues we’re selling AI entirely wrong. “Efficiency, efficiency, efficiency” is the pitch — but if AI just handles the routine work without engaging you on the creative, you don’t get less routine work. You get more. The goal, she says, should be using AI not to make our work easier, but to make it harder in the ways that make us better. She even used this philosophy to write the book itself — prompting AI to be her “worst enemy,” finding every flaw in her argument, rather than a collaborator who tells her she’s brilliant.

There’s also a remarkable personal story woven through all of this. Vivienne’s path from a childhood in John Steinbeck’s California, through homelessness in the ‘90s, to joint appointments at Berkeley and Stanford, to literally wiring an AI into someone’s brain via cochlear implants — it’s the kind of journey that makes everything she says about resilience land with particular weight.

Tomorrow’s episode is timely, provocative and, true to the spirit of the podcast, should spark your thinking! Have a look or listen and consider buying her book.

Treating People The Way Bill and Dave Did

You’ve heard me talk about Carlota Perez’s framework explaining the process of technological revolutions. Every great surge of innovation eventually launches an irruption and installation phase, dominated by financial speculation and casino capitalism, and eventually a deployment phase, where the benefits of new technology flow broadly into the economy and society, a new golden age, if you will. The turning point between those two phases requires, among other things, capital being redirected away from financial manipulation and toward genuinely productive work.

My guest is Dave Whorton, co-author (with the legendary Bo Burlingham) of Another Way: Building Companies That Last and Last and Last, and founder of the Tugboat Institute.

Dave was inspired by his high school years working at Hewlett Packard when the company, with it’s “HP Way” defined what a good company looked like for a generation. As he says, “What I learned from the people on the manufacturing line at Hewlett-Packard was about Dave and Bill, and they talked about them with such reverence. It was all stories of how they treated people; it wasn’t about anything else but how they treated people. There were legendary stories inside HP for many, many years about how those two treated people.”

Eventually he moved into venture capital, with a career at the iconic Kleiner Perkins during the dot-com frenzy. He helped launch some iconic companies himself, and then in a moment of reckoning, looked at what venture capital had become and realized that what he was doing wasn’t building anything that lasts. His dream of creating a latter-day Hewlett Packard hadn’t been realized and what he was doing certainly wasn’t fulfilling that dream.

Finding Evergreen companies

Inspired by the ambition of Jessica Herrin to build a company with a 30-year growth trajectory that would generate billions and positive affect the lives of millions of women, he wondered if there was, indeed, another way.

He’d heard of two companies, the SAS Institute and See’s Candies that had become successful large companies without venture or investment funds, were beloved by their employees, and built solid and enduring relationships with their customers. He began looking for more. Through word of mouth, he found them. Eventually, they became members of what he came to call the Tugboat Institute, symbolism for the steady, invisible, but incredibly competent tugboats that keep things moving without drawing attention to themselves.

These were businesses that were purpose-driven, funded from their own cash flows, with no interest in going public or being sold. They were building something meant to outlast their founders. He started calling them Evergreen companies.

What makes them relevant to the bigger economic story I’ve been telling? Nearly everything, as they are living demonstrations that companies that nurture their people, care about their communities and share resources fairly can also be immensely successful.

Contrarian practices

These companies share their financials openly because they trust their employees to help. This is in complete contrast to Whorton’s previous experience, where he was steeped in Silicon Valley’s culture of closely-guarded numbers and strategic opacity. The Evergreen companies emphasized full transparency. If an employee saves a dollar of expense, that’s a dollar of real profit, and people can only help if they can see the scoreboard.

Their leaders invest in people for the long haul, running apprenticeships and multi-year rotations that have nearly disappeared from the more conventional corporate landscape. This compounds human capital the way Warren Buffett compounds financial capital. One company in Dave’s network has been operating for nearly 300 years (Ben Franklin was an early customer!) and today it makes advanced filtration systems for SpaceX rockets.

On talent, consider what Radio Flyer CEO Robert Pasin shared when Tugboat Institute members visited the company’s beautifully converted Chicago factory: most of their permanent employees come through their summer internship program. As Dave tells it, Pasin walked members through his onboarding frameworks, values documents, and process maps — and invited everyone to photograph everything and plagiarize freely, just remove his logo. And then shared his learning about his leadership pipeline, in which most of his people came through the internship program. As he says, “you can do all the interviews and assessments you want, but there’s nothing like watching a bright person work for ten to twelve weeks to really know what you have.” About fifteen member companies adopted the practice after that single visit.

Financially conservative

Evergreen companies, as Arie DeGeus initially found in his amazing study of “Living Companies” carry little to no debt. Rather than the tax-minimizing capital structures taught in our esteemed business schools or the extractive practices that are the hallmark of much private equity investing, leaders in these companies want to have a cushion against hard times. This is also strategic – if they have money in the bank when the next downturn hits, they can make acquisitions for rock-bottom prices and hire talent that would have been unaffordable otherwise.

We also get into some signature practices of our financialized economy: the 1982 SEC ruling that made stock buybacks legal (before that, it was considered market manipulation), the perverse incentives that rewards executives for driving up their own option values, and the asymmetry that lets private equity load portfolio companies with catastrophic debt at zero personal risk to the general partners, while the founder of a small evergreen risks her personal funds, sometimes even her house.

LLC’s rather than C Corps – an idea whose time is coming?

Today, the default path for company formation and growth is seldom questioned: incorporate as a C Corp, take angel money, set yourself up for venture capital, then an Initial Public Offering (IPO). That infrastructure — cap tables, investors, boards, quarterly earnings pressure, the whole governance apparatus — is taken for granted as the best way to organize a company’s people and resources.

But what happens if we make an LLC the default?

What if every company were an LLC, owned entirely by its members? No outside investors, no board in the traditional sense, ownership shared among the people doing the work, risk borne by the owners who also share in the gains. The complexity of public-company governance exists to protect outside shareholders — remove the outside shareholders and most of that machinery simply isn’t needed.

I asked Dave “why don’t we have these as the norm rather than the publicly traded company with investors howling every quarter?”

To which he responded, “In part because there’s such a powerful ecosystem that financially benefits from the current model. The valuation firms, investment banks, wealth management firms, venture capitalists — if the world was solely evergreens, there wouldn’t really be a role for them. As a tremendous amount of capital flowed into venture capital and private equity during the era of zero interest rates, there were in any one year ten times more funds raised than was actually invested in the first forty years of venture capital combined — just to give you a sense of the explosion.”

But think about it – once zero interest rates go away, energy becomes expensive and in which AI and dematerialization are collapsing the capital requirements for building real businesses, the LLC-as-the-norm might not be a radical idea at all. It might just be catching up to reality.

The power of role models

As I reflect on the malaise that seems to be hanging over many of our modern corporations, I found the conversation with Dave both stimulating and hopeful. If, as many, including Carlota Perez, believe, we are headed for a massive AI-fuelled bubble crashing, it will be vital to have examples of alternatives to the financialized modern corporation. Members of the Tugboat Institute might well offer shining examples.

I’ve known Johan Roos for close to thirty years. We first crossed paths when he was developing LEGO Serious Play with his colleague Bart Victor — a concept that turns out to unlock something profound about how humans think and communicate together. Since then, Johan has served as Global Chief Academic Officer at Hult International Business School, been a driving force behind the Peter Drucker Forum, and continued developing sharp ideas about leadership, strategy, and what it means to be human in organizations.

His new book is called Human Magic: Leading with Wisdom in a World of AI. We recorded a conversation for the Thought Sparks podcast, and I thought I would share some of the timely and topical ideas from that conversation.

The Central Question

Johan’s book opens with what he calls “our choice”, and he means that quite literally. Not the choice of policymakers or technology companies, but the choice each of us makes, every day, about how we relate to AI tools. The question is: are we using these technologies to amplify what’s distinctively human, or are we allowing them to quietly erode the capabilities that make us irreplaceable?

In one kind of future, AI strengthens our judgment, sharpens our creativity, enriches our communication, and deepens our capacity to collaborate. That’s amplification. In the alternative, we gradually delegate our thinking, the questioning, the sense-making, until the muscles atrophy. That’s erosion.

The process isn’t dramatic: the erosion is subtle and incremental, and you won’t notice it happening. Each time you accept an AI-generated summary without really reading it, each time you let an algorithm decide what’s worth exploring, each time you send the LLM-drafted email without bringing yourself to it – small choices, quietly compounding.

As a metaphor, you can take the elevator or the stairs. If you always take the elevator, eventually you discover you can’t climb the stairs. The capability doesn’t disappear all at once, but it just gradually isn’t there when you try to call on it.

Toward Practical Wisdom

Human magic manifests itself in what Johan calls “practical wisdom”, which allow people to exercise wise and appropriate judgment in uncertain situations. Four erosion mechanisms threaten this capacity. The first is automation bias, in which algorithmic confidence displaces situational perception. It’s sort of like following the GPS even if you suspect it is taking you over a cliff. The second is rule dependence, in which procedures eliminate discretion and are fundamentally stupid – in that they were designed for a situation that is no longer appropriate. The third is the loss of skill building, in which AI-smoothed pathways eliminate the struggle through which judgment develops, with all of its exhaustion and feedback loops. Finally, we have moral outsourcing, where diffused accountability enables avoidance of ethical ownership.

Practical wisdom draws on five foundational human properties.

Curiosity. Socrates famously told a young mathematician that perplexity — genuine confusion — is the true beginning of philosophy. When AI gives us polished conclusions in seconds, we can lose productive struggle and genuine learning.

Creativity. There’s a big difference between sharp creativity that leads to breakthroughs and vast amounts of AI slop. Leonardo da Vinci’s remarkable ability to blend art and science led to breakthroughs in areas as diverse as flying machines and armored vehicles, as well, of course, as producing art that influenced generations.

Critical Thinking. When an AI can spit out a confident sounding answer, it’s all too easy not to dig beneath the surface to see why it came to the conclusions it did. Getting out of the habit of looking for multiple sources, finding complex supporting data and making sure assumptions are documented and tested can be dangerous.

Communication. Here, Johan suggests we prepare with AI (research, structure arguments, stress-test your reasoning), then perform without it — full human presence, devices off.

Collaboration. Some human groups created shared consciousness, a deep form of “heedful interrelating.” Using AI instead of deep dialogue, shared trust and a common purpose can erode this capability.

Where are new human skills going to come from?

Gutting junior talent to capture AI efficiency gains may be storing up serious problems. Junior employees aren’t just doing tasks, but are building judgment through apprenticeship. The work of building proficiency by doing, getting feedback, doing again is irreplaceable. You cannot shortcut it.

Organizations that thinned out their junior ranks in 2023 and 2024 are starting to discover unintended consequences. There are parts of even junior jobs that AI can’t do, so that work migrates onto more senior people’s desks. The mentoring that made senior roles meaningful evaporates. We may well be building a wisdom gap that no amount of AI can fill.

Johan put it well: we overestimate the short-term consequences of technology and underestimate the long-term ones. This is one of the long-term ones.

The good news, and this is Johan’s insistence throughout the book: the erosion is not inevitable. It is a choice. A daily choice, made in small moments, in how we use these extraordinary tools.

Use the elevator when you need to. But climb the stairs too.

Dear friends,

In the frenzied world of corporations buying emergent companies in their hundreds, and consultancies trying to differentiate themselves in the face of AI-induced desperation, we at Valize and the Rita McGrath Group would like to offer a template. It’s readily usable for any situation in which head-scratching numbers are being bandied about for tiny tech or consulting firms by aggressive larger firms. Even better, sleepy incumbents who want to sprinkle a little of that AI fairy dust over their established offerings.

In a perfect season for strategy theater, without further ado, let us introduce Vezzlax & Kroznick Advisory partners (V&K) which is being acquired by MC (use your imagination), henceforth (MC).

FOR IMMEDIATE RELEASE APRIL 1, 2026

Vezzlax & Kroznick Advisory Partners Joins [MC] Family of Integrated Knowledge Solutions

Strategic combination creates end-to-end capability across the full insight-to-impact continuum. Proprietary models and unique data make this an irresistible strategic combination.

NEW YORK — [MC] today announced the successful completion of its acquisition of Vezzlax & Kroznick Advisory Partners (”V&K”), a boutique provider of bespoke strategic advisory and curated organizational wisdom experiences. The transaction, terms of which were not disclosed, meaningfully accelerates [MC]’s transformation into a holistic human capital value orchestration ecosystem from its previous incarnation as providers of certified public accounting services.

“In today’s environment of profound and cascading uncertainty, organizations cannot afford fragmented insight delivery,” said David Jones, Global Managing Partner, Capability Acceleration & Client Futures at [MC]. “Now that we have fully digitized 50 years of our historic microfilm data, we are confident that V&K brings an unparalleled depth of curated intellectual content assets. We are excited to leverage those assets across our 47-country footprint to drive measurable behavior change outcomes for our clients’ talent populations. This is not simply an acquisition. It is a convergence.”

V&K will be rebranded as [MC] | V&K Strategic Knowledge Solutions, a Center of Excellence within the firm’s newly constituted People, Performance & Possibility practice. All legacy V&K engagements will be migrated onto [MC]’s proprietary integrated delivery architecture, SynergyIQ™, over a 36-month transformation horizon, ensuring continuity of experience while unlocking significant platform synergies and eliminating redundant value chain activities.

The combination creates what [MC] described in internal materials as “a through-line from strategic intent to on-the-ground human behavior change at enterprise scale.” This is a gap that [MC’s] clients have been whining about for some time, as in “why is it that you say we’ll have seamless customer service and yet I get 52 invoices for the same engagement that come from 12 different profit centers?”

“We are thrilled to be joining a global network that shares our passion for impact,” said a senior V&K representative. “Together, we will be able to serve clients at a scale and with a comprehensiveness — and, frankly, a resource base — that simply wasn’t possible operating independently. We see this as a tremendous opportunity for all stakeholders across the value ecosystem. We’re pretty happy with the premium [MC] was prepared to offer for our AI-enabled choice architecture system as well.”

[MC] noted that the acquisition reflects a broader strategic imperative to consolidate fragmented knowledge assets in an era of accelerating disruption. Additional acquisitions are anticipated.

[MC] is a global professional services firm operating across 47 countries with more than 32,000 professionals dedicated to creating sustainable competitive advantage for the world’s leading organizations from our roots in massaging…uh…analyzing company numbers. [MC] does not comment on the specific methodologies underlying its proprietary frameworks, nor on the precise meaning of “convergence” as used in this release.

Media Contact: Gloria Evans | media@[MAJORCONSULTANCY].com | tel (347) 244-9000

Dropping Tuesday, March 31 — but you’re getting this first.

If you’ve been wrestling with how to think about AI — genuinely excited by its possibilities, but nagged by a quiet unease you can’t quite name — this week’s episode is going to land for you.

My guest is Johan Roos, a longtime friend and colleague, former Global Chief Academic Officer at Hult International Business School, and one of the original minds behind LEGO Serious Play. He’s just published a new book called Human Magic: Leading with Wisdom in an Age of Algorithms, and our conversation ranged far and wide.

Here’s the central question Johan poses — and it’s deceptively simple: are we using AI to amplify what makes us distinctively human, or are we letting it quietly erode those very capabilities? He calls these our “five Cs” — curiosity, creativity, critical thinking, communication, and collaboration — and he makes a compelling case that these are precisely the muscles we’re at risk of letting atrophy. As I put it in our conversation: it’s a bit like always taking the elevator. Convenient, efficient — and eventually, you realize you can no longer climb the stairs.

What I found most striking was how far back Johan goes to make his argument — all the way to Cicero, the Socratic dialogues, and classical rhetoric — and how relevant it all feels in 2025. He also draws a sharp distinction between what he calls “algorithmic citizenship” (increasingly delegating judgment to the machine) and “professional citizenship” (deliberately practicing your human capabilities). That framing alone is worth the listen.

We also get into the future of business schools, the question of who really gets to make these choices about AI, and what it means for leaders navigating organizations right now.

This one goes live on Tuesday, March 31 — and as a Substack subscriber, you’ve got the heads-up ahead of the crowd. Stay curious.

Incredibly, when you think about it, US-based venture capital has remained structurally unchanged for half a century. The well known model revolves around the 10-year fund lifecycle, the 2-and-20 fee structure, and the relentless push for growth and outsized returns. Decisions are made in mysterious ways and are known to be full of bias against founders who don’t fit a certain mold. But even as rivers of investment flow into anything touching AI, there may yet be an ironic twist to come.

Venture investing involves optionality and power laws. Very few investments will generate any returns at all, but the sector is premised on the idea that within any portfolio there will be just a few startups that will enjoy a spectacular exit, through an initial public offering or by being acquired by a deep-pocketed established firm. VC’s are betting on their ability to sniff out the rare winners amidst a sea of potential startups. But in many ways, it’s a terrible business – by some accounts 95% of the industry’s total returns are generated by less than 5% of its firms. Nonetheless, venture capital is firmly planted in the economy and in the public consciousness as the way that innovations get funded and businesses grow.

For many entrepreneurs taking venture capital money is seen as a badge of honor and a financial boost for quick growth. Nonetheless, there are any number of complaints that founders have with regard to their investors, ranging from misguided expectations to unwanted advice to egregiously unfair business practices with respect to the equity and control that the firms extract. So why turn to a venture capitalist? Mainly because there were issues that no founder could address on their own or with capital that was ready to hand.

The logic of venture capital was always premised on scarcity. Capital was scarce. Technical talent was scarce. The infrastructure to build, test, and distribute a technology product was scarce. VCs existed to bridge those gaps — to provide the resources a promising team needed before the market could prove them right. In exchange, they took equity, board seats, and influence over strategy. It was a reasonable bargain, forged in the conditions of the 1970s and refined through the personal computer, internet, and mobile revolutions.

AI is dismantling every one of those scarcities.

The Collapsing Cost of Creation

Consider what it actually costs to start a technology company today. A founder who five years ago needed $2 million and eighteen months to build a minimum viable product can now do it alone in six weeks for the cost of a few cloud subscriptions. Tools like Cursor, Lovable, and Replit, powered by large language models, have compressed the software development cycle so dramatically that technical co-founders — long considered mandatory — are increasingly optional. One solo founder, Maor Shlomo, built an AI startup called Base44 entirely alone, reached 300,000 users and $3.5 million in annual recurring revenue, and sold it to Wix for $80 million in cash — in six months.

That is not an outlier story. It is an emerging template. Indeed, 80% of companies that go public do so without venture funding. More than half of successful startup exits last year were achieved by solo founders. The minimum viable team for building a significant technology business has dropped to one.

When the cost of creation falls this far, the fundamental value proposition of a venture capitalist — we will give you the money to build in exchange for a commitment to give us your first born — starts to lose its grip. You do not need the money any more to get to a first product, a real user base, or even meaningful revenue. What you need money for is distribution, sales, and scale. And those needs arrive much later in the company’s life, at which point the founder’s negotiating leverage has increased dramatically.

Capital at the Extremes

Where investment dollars are flowing in the economy resembles a barbell. At one end, an unprecedented concentration of capital in a handful of AI infrastructure companies — OpenAI, Anthropic, xAI, Databricks — that require the kind of compute investment that resembles project finance more than traditional venture backing. These are not startups in any meaningful sense; they are capital infrastructure projects, and they are absorbing the majority of venture dollars. 41% of all VC money invested in 2025 went to just 10 startups, according to Pitchbook.

At the other end are thousands of small, capital-efficient AI application businesses that need very little money and generate meaningful returns quickly. Cursor reached $500 million in annual recurring revenue with fewer than 50 employees, and is now up to about $2 billion. Midjourney, the AI image generation company, crossed $200 million in revenue with roughly 40 people and has taken no venture funding at all. A 28 personstartup called Gamma’s founder, Grant Lee, actively rejects invitations from potential VC’s. These businesses do not need — and in many cases do not want — a VC on their cap table and their board.

The middle is collapsing. The classic venture model of Series A, B, and C rounds funding a startup’s progression from idea to scale is becoming less relevant for a growing category of businesses. AI-powered companies are reaching profitability earlier, growing faster, and requiring less capital at each stage. Industry analysts report that AI startups are reaching $1 million in annual revenue up to four months faster than comparable SaaS companies were reaching the same milestone just a few years ago.

The Gatekeeper Premium

There is a deeper challenge for venture capital, one that goes beyond deal economics. For decades, VCs served as gatekeepers to a network of resources that founders couldn’t access on their own: introductions to enterprise customers, relationships with talent recruiters, connections to co-investors, and the credibility signal of a prominent firm’s backing. That access premium justified the equity cost.

AI is eroding that premium too. Machine learning tools can now identify potential customers, analyze competitive landscapes, surface talent, and predict market opportunities faster than any junior associate. Founders can use AI to understand their own metrics deeply, identify the right investors for their stage, and run their own due diligence on potential partners. The information asymmetry that once made VCs indispensable — they knew things founders didn’t — is flattening.

Some prominent investors have acknowledged this openly, arguing that the future of venture will involve smaller teams using better tools rather than massive platforms with armies of analysts and associates. The VC firm of 2030 will look less like a financial intermediary and more like a high-powered advisory network, one that adds value through judgment and relationships in conditions of genuine uncertainty rather than through capital deployment and information advantages.

What Survives

None of this means venture capital disappears. The frontier AI companies — the ones building and training foundational models — require capital at a scale that no bootstrapped founder can self-fund. Anthropic’s most recent funding round was $30 billion and valued the company at $380 billion. These investments look less like early-stage venture and more like the kind of patient, infrastructure capital that once built railroads and power grids. They will continue to attract large allocations.

And there will always be categories of business where scale still confers advantage — where network effects, regulatory moats, or capital-intensive physical infrastructure mean that a well-funded incumbent can overwhelm a lean competitor. In those sectors, the traditional venture model retains its logic.

But the universe of businesses where that logic applies is shrinking. Every year, more categories of valuable economic activity become accessible to small, capital-light teams with AI leverage. Every year, the assumption that you need millions of dollars and a VC’s blessing to build something significant becomes less defensible.

The last venture capitalists will not be the ones who ran out of money. They will be the ones who ran out of founders who needed them.

I recently sat down with Sangeet Paul Choudary for my podcast, and it was terrific to chat with someone who looks at the world in a very complementary way to the way I see things. Sangeet just won the Thinkers50 award for strategy, and if you pick up any of his books you’ll easily see why. He’s also one of those people who can connect seemingly unrelated things in ways that aren’t obvious.

Many of you will know Sangeet from Reshuffle, his systems-level examination of what AI means for strategy, the economy, and your career. (If you haven’t read it, the core provocation is this: thinking about AI in terms of the tasks it can perform is entirely the wrong frame. You need the systems perspective. Full stop.)

But here’s a benefit to your subscribing to this newsletter: a first glimpse into Sangeet’s next book, which isn’t out yet. It’s called Unfair Advantage, and the thesis is sharp enough to leave a mark.

From playing the game to changing it

The argument Sangeet makes — and it resonates deeply with what I’ve been working on — is that virtually all the major strategy frameworks developed from the 1970s through the early 2000s were built for a world where the structure of industries was stable. In that world, you faced operational uncertainty: demand fluctuations, supply shocks. But the basic playing field? Fixed.

We no longer live in that world.

Sangeet calls what we face now structural uncertainty — meaning that the boundaries between industries are no longer static. With AI, you can train a model in one industry and port it to another. Scarcity collapses. Value migrates. The whole playing field becomes contested.

And that invalidates a lot of the assumptions about conventional strategy. Take the idea that scale conveys an advantage through learning curve and experience curve effects (looking at you, BCG growth/share matrix!). When you’re in a world where Maor Shlomo, an Israeli entrepreneur created a business, Base44, on his own in 6 months and sold it to Wix for $80 million, tell me what scale even means? So too with the beloved 5-forces model for competitive strategy – when players are both buyers and suppliers, when rivalry isn’t contained within one industry, and when the potential for new entrants is everywhere, where do you even start?

In a stable world, the winning move was positional — occupy an attractive position in an attractive industry, throw up entry barriers if you can, build competences to defend it, and optimize within the rules. Today, the dominant way to win isn’t to play the existing game better. It’s to change the rules of the game for everybody else.

That’s the strategic shift of our era, as I’ve been writing about a good deal. We’re going from the logic of mass production to a logic of digitalization, as Carlota Perez has long said.

The Apple example that reframes everything

One of the most illuminating moments in our conversation was Sangeet’s retelling of how Steve Jobs used the iPod as a calculated move to migrate value across industries. With the 1999 advent of Napster, record labels were suddenly faced with the reality that peer-to-peer file sharing meant that my record collection could be yours at the click of a button. The label executives freaked out. This inadvertently created an opening for Apple. Apple had already opened a “digital jukebox” – iTunes – in 2001, and introduced the iPod, which could allow you to carry iTunes (10,000 songs) in your pocket around the same time. But the real structural change came in 2003, when Jobs negotiated an agreement with 5 record labels that allowed iTunes to legally sell individual songs for 99 cents each. The labels, facing an existential crisis, reasoned that something was better than nothing, which is what they were getting from the vast and growing market for pirated music.

Jobs basically commoditized music (and ended up giving most of that ninety-nine cents back to the record labels). But he moved the value into the device ecosystem, by selling the iPod (remember, the thing was $399 when it was first introduced). But he wasn’t done there. When the iPhone was ready, he commoditized the iPod itself by turning it into an app. Every bit of value he’d accumulated transferred seamlessly into computing, which then reshaped cameras, GPS, maps, and more.

This isn’t a story about cannibalization. It’s a story about value migration — and it requires a completely different strategic lens to see it clearly. As Sangeet put it: if a competitor had viewed what Jobs was doing through the old product-cannibalization framework, they would have missed what was actually happening entirely.

To me, what made Apple remarkable was that, by any conventional management logic of preserving a position, managers would have fought tooth and nail to protect the iPod. It was a wildly profitable franchise. The organizational immune system should have killed the iPhone before it launched. That it didn’t — and that Apple had actually been quietly experimenting with the touchscreen interface on the iPod Touch long before the iPhone existed — is a masterclass in benefiting from transient advantage.

Where our thinking converges

Regular readers will know I’ve been developing the idea that as AI makes it possible for small teams — even individuals — to create enormous value, the rationale for large monolithic corporations starts to erode. What you get instead may be knitted-together ecosystems, each piece doing one specific thing exceptionally well. How do you talk about the value delivered to you by the iPhone ecosystem, with its tightly integrated platforms of software and hardware? The very concept of the firm or even of competitive advantage may no longer be fit for purpose. We may genuinely need new vocabulary.

Sangeet’s idea is that when the playing field itself is up for grabs, the entities that win are the ones who shape it, not the ones who merely optimize within it. The rule-setters and the rule-followers diverge. That’s the split we’re watching happen in real time.

Coming up: Sangeet, Aidan McCullen, and me

One more thing for subscribers: Sangeet and I are also going to be joining Aidan McCullen on his podcast, so there will be more of this conversation to come. Aidan has a gift for drawing out the deeper patterns, so I expect that will go in some interesting directions. Watch this space for the release date – it will be on The Innovation Show.

In the meantime — if you haven’t read Reshuffle, now is the moment. Because Unfair Advantage is coming, and you’ll want the foundation.

Thanks for being here. This is exactly the kind of conversation I built this community for. Please feel free to elaborate in the comments!

Warmly,

Rita

Content originally published by Fast Company

The oil markets are rattled. Iran’s closure of the Strait of Hormuz—through which a fifth of the world’s oil flows—have sent prices toward $90 a barrel, with Qatar’s energy minister warning they could hit $150 within weeks. Energy analysts are invoking “the mother of all disaster scenarios.” Commentators are drawing comparisons to the 1970s. The mood is grim.

But here is an uncomfortable question worth contemplating: What if expensive oil is not a catastrophe, but an inflection point that finally aligns economic incentives to address critical issues that decision-makers in the global economy have been ignoring for decades?

That is the argument that economic historian Carlota Perez has been making for years. And right now, with oil shocks back on the front page and the energy transition stalling under political headwinds, her framework urgently deserves renewed attention.

Technology Revolutions and Their Discontents

Perez, whose landmark work Technological Revolutions and Financial Capital traces the long waves of capitalist development from the Industrial Revolution to the digital age, argues that we are living through a pivotal transition. Each great technological revolution—steam power, railways, steel, automobiles, information technology—follows a predictable arc: an installation period of financial speculation and infrastructure-building, followed by a deployment period in which society learns to use the new technology productively and broadly, with a dramatic reduction in income inequality and shared prosperity as a result.

We are, she argues, at exactly that inflection point with digital and green technologies. The installation phase—the dot-com boom, the shale revolution, the explosion of platform companies—is behind us. What comes next, if societies make the right choices, is a potential “golden age” of broad-based prosperity, grounded not in the extraction of physical materials but in the creation of knowledge, services, and sustainable production.

The catch? Getting from here to there requires making the old paradigm less attractive. And that is precisely where expensive oil comes in.

When High Prices Are the Point

For Perez, the relative price of energy and materials is a steering mechanism for the entire economy. Cheap oil has historically facilitated mass production, long supply chains, suburban sprawl, disposable goods, planned obsolescence and carbon-intensive industry. It has made the incumbent model—stuff-intensive, energy-hungry, globally fragmented—far more economically competitive against alternatives.

Expensive oil changes that calculus. It accelerates the relative attractiveness of dematerialized products and services: software over hardware, streaming over shipping, local services over global supply chains, energy efficiency over energy consumption. It makes renewable energy, which has near-zero marginal fuel costs, look dramatically better against fossil alternatives. It incentivizes the kind of circular economy thinking—repair, reuse, and redesign—that the green transition requires.

Perez is explicit that she is not celebrating energy poverty or global supply disruptions. She is arguing that a world of persistently higher resource costs is more likely to generate the innovation incentives, the policy seriousness, and the investment reallocation needed to build a fundamentally different kind of economy—one that employs more people in high-value services, invests in intangible assets, and goes easier on the physical environment.

The Irony Playing Out Right Now

The Atlantic’s Roge Karma has noted a bittersweet irony in the current moment: no president has done more to throttle clean energy development than Donald Trump, yet the oil shock his Middle East policy may be triggering could inadvertently accelerate the energy transition more than any amount of climate regulation would have. Columbia’s Jason Bordoff agrees: prolonged oil crises have historically been the most reliable forcing functions for energy diversification.

This is exactly what Perez would predict. Market signals, when they become undeniable, do what policy debates often cannot: they change behavior at scale. The 1973 oil shock sparked the first serious wave of energy efficiency innovation. The 1979 crisis accelerated it. Both produced more lasting change in energy consumption patterns than any amount of exhortation.

The difference now is that the alternatives are genuinely ready. Solar, wind, and battery storage have achieved cost curves that were unimaginable even a decade ago. Digital tools enable service-based business models at scale. The knowledge economy infrastructure—broadband, cloud computing, remote work capability—exists. What has been missing is urgency.

The Dematerialization Dividend

Perez’s vision for a green golden age is not a story of austerity. It is a story of transformation—from an economy organized around the production and movement of physical things to one organized around knowledge, care, creativity, and sustainability.

In this model, employment grows in services: healthcare, education, software, design, arts, and personal services that are inherently local, relatively low in energy intensity, and high in human value. Manufacturing does not disappear, but it becomes cleaner, more automated, more circular. Supply chains shorten. Urban environments become more livable. The pressure on ecosystems from extraction and waste declines.

None of this is automatic. Perez is clear that the transition to a golden age has never happened without deliberate policy choices—about financial regulation, industrial strategy, and the distribution of productivity gains. The installation phase always ends in a speculative crash and a moment of reckoning. We have had ours, arguably more than once. The question is whether the crisis of the moment becomes the impetus for genuine transformation, or simply another disruption to be muddled through.

What Business Leaders Should Take From This

For executives and strategists, the Perez lens suggests a reframe. The instinct when oil prices spike is to treat it as a cost problem: hedge the exposure, cut the energy-intensive activities, lobby for relief. That is the wrong frame if the signal is structural rather than cyclical.

The right question is: what business models become more viable in a world of persistently expensive physical inputs? Which of our activities depend on cheap energy in ways we have never fully noticed? Where are the opportunities in dematerialization—in selling outcomes rather than products, in building local rather than global, in investing in human capability rather than physical throughput?

Companies that used the 1970s oil shock to rethink their operations—Japanese automakers being the canonical example—did not merely survive the crisis. They redefined their industries. The companies that treated it as a temporary inconvenience found themselves structurally disadvantaged for decades.

The Uncomfortable Conclusion

None of this is to minimize the real human costs of energy price spikes. Households and small businesses that cannot easily absorb higher energy costs need support. Transition assistance is a genuine policy imperative. And geopolitical instability in the Middle East carries risks that go well beyond energy markets.

But for those thinking about the longer arc—about what kind of economy we are building and how we get there—the current moment may look, in retrospect, less like a disaster and more like an inflection point. A moment when the costs of the old model finally became undeniable, and the alternatives were finally ready.

When social psychologist Jonathan Haidt published The Anxious Generation in March 2024, his core proposal—that children should be kept off social media until at least age 16, with tech companies bearing the burden of enforcement—was treated by many as aspirational, even quixotic. The tech industry dismissed it. Libertarian critics called it paternalistic overreach. Skeptics questioned the evidence base.

That was then.

In barely two years, Haidt’s “radical” idea has become something close to a global consensus—a textbook example of what political scientists call the “Overton Window”—one that’s shifted at extraordinary speed.

The Overton Window describes the range of ideas that are considered politically acceptable at any given time, ranging from unthinkable to popular and eventually to policy. Ideas outside the window—no matter how sensible—get dismissed as too extreme, too impractical, or too politically risky to touch. But when conditions change, the window can move, sometimes gradually and sometimes with startling speed, pulling yesterday’s fringe idea into today’s mainstream. That is exactly what has happened with children and social media. Politicians everywhere are now racing to get on the right side of a window that has moved decisively.

The floodgates have opened

Consider what has happened just since late 2025. Australia led the charge, enacting an outright ban on social media for children under 16 that took effect in December 2025, with monetary penalties falling squarely on the platforms—not on parents or kids. France has passed a bill banning social media for children under 15. Denmark secured cross-party support for a similar ban, expected to become law by mid-2026. Spain, Germany, Malaysia, Slovenia, Italy, and Greece are all moving in the same direction.

In the United States, where bipartisan agreement on anything feels miraculous, the Kids Off Social Media Act has attracted co-sponsors from both parties—Sen. Brian Schatz (D-HI) alongside Sen. Ted Cruz (R-TX), and Chris Murphy (D-CT) alongside Katie Britt (R-AL). Virginia enacted a law effective January 2026 limiting under-16 social media use to one hour per day unless parents opt in. Over 45 states have pending legislation.

And in the U.K., a January 2026 government consultation is explicitly considering a social media ban for children, after the House of Lords defeated the government to insert an under-16 ban into the Children’s Wellbeing and Schools Bill.

This is no longer a debate about whether to act. It’s a debate about the details.

Why the window moved so fast

Several forces converged to make this shift possible.

First, mounting evidence. Haidt marshaled data showing that since the early 2010s—precisely when smartphones and social media became ubiquitous among teens—rates of anxiety, depression, self-harm, and suicide among young people have surged across the developed world. The patterns are strikingly consistent across countries and cultures. As Haidt puts it: We “over-protected children in the real world and under-protected them online.”

Second, personal stories that broke through the noise. Australia’s ban originated partly from a mother’s letter to Prime Minister Anthony Albanese about her 12-year-old daughter’s suicide following social media bullying. At the U.N. General Assembly in September 2025, a mother’s speech about her daughter’s “death by bullying, enabled by social media” won support from world leaders across continents. Data persuades policymakers; stories move publics.

Third, the collective action problem became too painful to ignore. Haidt nailed this insight: Individual parents feel powerless against platforms engineered by billions of dollars of design expertise to maximize engagement. No single family can opt out without socially isolating their child. This is precisely why governments need to shift the responsibility to the platforms. When enforcement becomes the tech companies’ problem—not the parents’ problem—the collective action trap breaks.

Fourth, early results from related interventions are encouraging. Arkansas’ phone-free-school pilot program showed a 51% drop in drug-related offenses and a 57% decline in verbal and physical aggression among students within the first year. Results like these give politicians the cover they need to act boldly.

The strategic lesson

For those of us who study how change happens, this is a master class. An idea that seemed politically impossible in early 2024 has become politically inevitable by early 2026. That’s the speed at which Overton Windows can move when lived experience, accumulating evidence, moral urgency, and a clear articulation of the problem all align.

Note, too, where the burden of proof has shifted. Two years ago, advocates for restricting children’s social media access had to justify intervention. Today, it is the tech companies and their defenders who must explain why children should continue to have unrestricted access to platforms designed to be addictive. That reversal—the shift in who must justify what—is the surest signal that an Overton Window has decisively moved. It is further set against the backdrop of the first set of legal challenges to the platform’s business models, arguing that their designers have deliberately designed their products to be harmful to maximize their profits.

What comes next

Haidt, a professor of ethical leadership at New York University, didn’t create this movement alone—millions of anxious parents, grieving families, and alarmed educators did. But he gave it a framework, a language, and a set of actionable proposals. And now, politicians everywhere are scrambling to catch up with what parents already knew in their bones: that we handed our children’s attention, self-worth, and mental health to companies that optimize for engagement, not well-being—and that better guardrails, uniformly enforced, are essential.

The venerable business case study method got its start in 1921 at the Harvard Business School. The method became standard at the school throughout the 1920s, and since then, Harvard has a near-monopoly grip on the business, selling its cases to over 4,000 rival schools.

Cases can be useful and informative, but recognize that they aren’t reality. The companies featured typically require that the case writer submit the case to them for approval. That introduces survivor bias—whoever is still around at the time of publication gets to dictate how the narrative is told. Another issue is that the companies that are selected and held up as exemplars are subject to the halo effect. This is the tendency to believe that because a company was successful, copying its practices will create success elsewhere.

Unfortunately, the iron law of transient advantage is hard to escape. The 1995 Dell case doesn’t hold up so well. A 2002 case about Nokia centered on how the successful phone company was going to deal with the €8 billion ($9.425 billion) in cash piling up in its accounts. And don’t even get me started on the 618 (!) cases that feature the General Electric Co.

Which brings me to the decades of adulation long accorded to Southwest Airlines.

The shortest distance to just another airline

Southwest Airlines ran a Super Bowl ad this year. In it, passengers scramble through a jungle, climbing over each other in a chaotic race to grab seats. The tagline? “That was wild. Assigned seating is here.” The ad was intended (I think) to indulge in gentle mockery of the past. I found it jarring. Herb Kelleher, the airline’s colorful co-founder, would have been horrified, I think. I last met with him (over a Wild Turkey bourbon, of course) at the Strategic Management Society Meetings in 2004 and he was adamant—employees first, deep attention to details, and most importantly, fun!

The many (348!) cases, book chapters, and textbook references to Southwest cite its tightly integrated strategy—where every element reinforced every other, allowing it to be profitable in a notoriously tough business.

Kelleher’s insight was that there was a particular kind of flier, whose other option was driving—so short flights that replaced a four- or five-hour drive were attractive. That meant you didn’t have to offer meals. One aircraft type (Boeing 737s) meant simplified maintenance, training, and scheduling. Open seating enabled 20-minute turnarounds instead of competitors taking 35 minutes. That extra utilization squeezed more flights from every plane. “Bags fly free” meant fewer delays at check-in and faster boarding. Employees came first, and everybody pitched in. Pilots helped clean cabins, and gate agents jumped in wherever needed.

And even with all that, the company’s culture of having fun at work made the operational discipline feel human rather than mechanical. One of my favorite examples is a flight attendant rapping the entire safety briefing to the tune of “Ice, Ice, Baby.” Or this one—safety with a sprinkling of humor.

The takeaway

The big teaching point from the Southwest cases is that competitive advantage isn’t about any single policy. It’s about thefit between policies. Remove one piece, and the whole system weakens. Southwest has now removed all of them.

Assigned seating went into effect on January 27. “Bags fly free” ended in May 2025.The company is adding premium extra-legroom sections and tiered fare bundles.They’ve announced red-eye flights and partnerships with Icelandair. They’ve conducted the first layoffs in their 53-year history. At least they are honest—their COO explained the bag fee reversal with refreshing candor: “We need more revenue to cover our costs.”

Activist investors at Elliott Management got what they wanted. But what exactly has Southwest become? As one former loyalist put it: “There’s simply no reason to fly Southwest anymore.”

Southwest’s leadership cited research showing “8 out of 10 customers prefer assigned seating.” They also acknowledged that after fare and schedule, “bags fly free” was cited as the No. 1 reason customers choose Southwest. The problem is that when you remove that differentiator, you’re now competing on fare and schedule against Delta, United, and American—carriers with better route networks, international reach, premium cabins, and decades more experience operating their models. Like all the other airlines, we are likely to now see pitched battles for overhead space, another blow to a business model built on fast airport turnarounds.

The Super Bowl ad could be a case study in strategic confusion. Southwest is making fun of customers who were passionately loyal to what made Southwest different, while asking those same customers to believe the company’s “legendary hospitality” somehow exists independent of the operational system that enabled it.

Take lessons from case studies with caution

There’s a deeper lesson here. Case studies are snapshots. They capture what worked at a particular moment, under particular boundary conditions. What they don’t speak to is what to do when those conditions shift.

Southwest’s open seating made sense for the short-hop flights taken by their initial core customers. When the alternative was expensive legacy carriers, those customers would have been driving, were it not for Southwest. By 2024, travelers had options that didn’t exist in 1971 . . . or 1991 . . . or even 2011. JetBlue offered assigned seats with personality. Spirit and Frontier offered unbundled ultra-low fares. Delta went upmarket with better service. The white space that Southwest once occupied got crowded.

My friends Zeynep Ton and Frances Frei exchanged concerns for the culture of the airline. Frei, a professor at Harvard Business School, captured this concern: “I sure hope this isn’t a case of activist investors coming in and insisting on a set of decisions that they won’t be around to have to endure. Great organizations get built over time. It doesn’t take very long to ruin an organization.”

I’m not arguing that Southwest should have frozen in amber forever. Markets change. Customer preferences evolve. Even the most elegant strategy eventually needs updating. But there’s a difference between thoughtful evolution and abandoning your model.

Kelleher once said humility and discipline go together: “You can’t really be disciplined in what you do unless you are humble and open-minded.” He built an airline that knew exactly what it was, knew exactly who it served, and had the discipline to say no to opportunities that didn’t fit.

Southwest’s new leadership knows what investors want. Whether they know what Southwest is anymore—that’s less clear.

I recently had a conversation with Jose Marcilla that reminded me why leadership matters more than ever—and why we’re getting it so spectacularly wrong. Jose is an executive director at Novartis, overseeing Latin America and Canada, and author of Unlimited Leadership. Over 25 years leading teams across five countries, and managing through geopolitical crises, he’s distilled his experience into wisdom that starts with a damning statistic.

The Leadership Crisis Hiding in Plain Sight

“When you look at the data that every year is published, only one out of four employees are fully engaged with their companies,” Jose told me. “The amount of human capital that is lost in the organizations is massive.”

Three-quarters of your workforce is checked out—not from laziness, but because we’ve failed to inspire them or create environments where they thrive. “This reflects probably the old kind of leadership style that still exists in many organizations,” Jose said.

We’ve disrupted music, insurance, entire industries. But leadership? We’re still operating with frameworks built for a world that no longer exists.

From Tetris to Minecraft: Understanding the Generational Shift

Jose offered a compelling insight through video games. “Most of us played a game called Tetris. You have seven pieces coming, and the objective was to make a line. It was kind of predictable. When I look at my Violeta, she is now 13, Jose, eight. They haven’t played Tetris, but they play Roblox or Minecraft, and these games are open. You can go whatever you want. You can set up your objective.”

“As leaders, we were trained on a Tetris mindset, whereas the young generations are more in a Roblox kind of space,” Jose said. “Leaders need to change our algorithm.”

Young people aren’t less ambitious—they operate from a different mental model prioritizing purpose over prestige, impact over incremental advancement. The biggest risk Jose sees? “They are not taking enough risks.” Why? Organizations haven’t created frameworks allowing open-ended exploration with developmental support.

The Impossible Balancing Act (That Isn’t)

The schizophrenic demands we place on leaders—be decisive but vulnerable, demanding but empathetic—aren’t actually contradictions.

“I haven’t seen any great leader that does not have a well-balanced personal and professional life,” Jose told me. He follows the “I-We-It” framework: “The It is your job. There are two other important pillars, which is the We, my family and friends, and the I, which is the things that I like.”

“I would invite all of you to analyze in your calendar every week how much time you are spending on the It, your job, on the We, family and friends, and on the I.”

Jose does daily reflections: “A moment of reflection at the end of every day is something that I do in order to analyze what I did well and what I could have done differently.”

When leading through crises, his learning was clear: “Focus on what you can control. There are many things in the world that are outside of our control zone. It’s important for leaders to have clarity, to have a vision, and to really focus the efforts of the organization and their teams in what is within your scope.”

The Power of Breadth Over Depth

Jose attributes much of his effectiveness to breadth rather than depth. “One of the beauties of my career is the breadth, and not always the depth. In this area of machine learning, AI, the value is going to be more on the questions than in the answers, and the ability of leaders to have a breadth across all sectors is going to be key.”

Despite 25 years in pharmaceuticals, Jose spends roughly 25% of his time talking to people in other industries. “I learned a lot, and that helps me to connect the dots.”

This pattern-recognition capability—seeing connections across domains—is increasingly valuable as problems grow more complex and interdisciplinary.

The Mentorship Multiplier

Perhaps the most actionable insight from our conversation involved mentorship. “Young leaders with mentors accelerate five times their careers versus people who don’t,” Jose shared. “I have not only one but two. My invitation to all the young people is, find a mentor.”

And here’s where I added something: “Get a sponsor, you know, get somebody who’s going to talk about you when you’re not in the room. Get somebody who’s going to actively put you forward for opportunities.”

The distinction matters. A mentor provides guidance and wisdom. A sponsor provides access and advocacy. Both are essential, and neither should be left to chance or organizational assignment.

Jose’s purpose in life is to “develop leaders to impact the world.” The book itself is both a distillation of his experience and, touchingly, “a gift for my children to also understand what their dad was doing.”

Moving Forward: What This Means for Your Organization

Several considerations emerge for leaders at all levels:

Audit your leadership algorithms. Are you still operating from Tetris-era assumptions? The world has moved to Minecraft.

Implement the I-We-It framework. Examine your calendar this week. How much time went to your job, to relationships, to personal renewal? If wildly out of balance, you’re modeling unsustainability.

Measure what matters. That one-in-four engagement statistic is a crisis. Track it, connect it to leadership effectiveness, and stop promoting people who deliver results while leaving disengagement in their wake.

Build breadth systematically. Create structures encouraging cross-industry learning and job rotation. The future belongs to leaders who connect disparate dots.

Institutionalize mentorship and sponsorship. Jose’s five-times acceleration statistic isn’t just compelling—it’s actionable evidence this should be strategic priority.

Simplify your strategy. Can everyone articulate where you’re playing and how you’re winning? If not, you have a communication problem.

The case for unlimited leadership is grounded in brutal reality: massive human capital waste, changing generational expectations, and increasing complexity. The old algorithms aren’t working.

As Jose reminded me, “People forget what you will do, but people never forget how you treat them.” That’s not just a leadership principle—it’s a choice we make every day.

References:

• Marcilla, Jose. Unlimited Leadership. Editorial Letra Minúscula, 2025.

• Jose Marcilla LinkedIn Profile

• ESADE Global Leader Talks with Jose Marcilla

Listen to the full Thought Sparks conversation: S6, E8 with Jose Marcilla

Eventually for some product categories, things come to an inflection point. That’s when individuals and groups emerge to weigh in on the “this is not OK” side of things, pressing courts and eventually legislators to take action. We saw it with “Unsafe at Any Speed: The Designed-In Dangers of the American Automobile.” This book put a young Ralph Nader on the map for making the dramatic argument that automakers prioritized style and profits over passenger safety.

As the New York Times notes, “Less than a year after the book was published, a balky Congress created the federal safety agency that became the National Highway Traffic Safety Administration — an agency whose stated mission is to save lives, prevent injuries and reduce crashes.” And despite being far from perfect, implementation of measures we take for granted today – seat belts, air bags, and crash protection features – have made an enormous difference. As the National Safety Council reports, “In 1923, the first year that miles driven was estimated, the motor-vehicle death rate was 18.65 deaths for every 100 million miles driven. Since 1923, the mileage death rate has decreased 93% and now stands at 1.38 deaths per 100 million miles driven.” Even those who were begrudging about the role of government in dictating what private companies could do acknowledge the success represented by these numbers.

So here we are in 2026 at what might well be an “unsafe at any age” moment for social media and technology companies, with the advent of the first major social media addiction trials. More than 1,600 plaintiffs, representing over 350 families and 250 school districts, are alleging social media companies knowingly designed addictive products that expose kids to danger, predatory exploitation, and self-harm. The defendants in the cases are some of the most profitable companies in history. The trial, which has begun in Los Angeles features 24 “bellwether” cases, to exemplify the harms the plaintiffs charge the companies created.

Here’s where this gets interesting. Unlike many previous attempts to rein in technology platforms, this one doesn’t go after the content (which tech companies always argue they can’t be held responsible for under Section 230 of the Communications Decency Act). Instead, the plaintiffs are arguing that the harm done by social media companies is the outcome of defective product design. Moreover, thatexecutives in these companies knew about the harmful features they were propagating and consciously covered up what they knew about the dangers of their products. It’s the same kind of argument that eventually succeeded in taming the worst tendencies of tobacco companies. They went down slugging. Indeed, companies in the tobacco and oil industries used similar techniques and in some cases the exact same scientists to downplay the risks of both smoking and climate change.

This brings us to the fascinating work of my colleague, Eric Johnson, author of a terrific book “The Elements of Choice.” In the book, he assembles a massive amount of research that suggests that how choices are presented to us makes an enormous difference in the decisions we ultimately make. This is the role of choice architecture. Here is his point: whether architected skillfully or not, with intention or not, to achieve an economic outcome or not, all choice situations are architected.

Those who understand the way human brains work and design the choice architecture accordingly can reap disproportionate benefits for themselves. This is why it is super-easy to subscribe to something and an incredible pain to cancel the subscription. Why defaults are set in such a way that they favor the company setting them. Why Google is happy to pay Apple north of $20 billion to be the default search engine on iPhones. You can watch my podcast with Eric that goes into these issues.

This idea, that of known choice architecture, is at the core of this case. The plaintiffs argue that features such as infinite scroll, auto-play videos, frequent notifications and recommendation algorithms are deliberately designed to be addictive, particularly for younger minds. Jonathan Haidt, author of “The Anxious Generation” has made a similar argument based on rising levels of mental distress among young people and has sparked a movement among many schools, families, and in the case of Australia, even governments, to ban smart phones below the age of 16.

This is where the parallels between government regulation of the auto companies and what might come out of these trials is instructive. Even as self-reported “car guys” fought against, complained about and very reluctantly went along with government requirements, the fact that the costs were imposed on all automakers uniformly meant that there was no competitive disadvantage to those who wanted to make safer products. There were also across the board benefits to users who avoided the harmful outcomes that could come from using those products. What the plaintiffs are looking for is not content moderation or a tweak here and there, but a fundamental rethink of how powerful technologies that can hijack our brains are allowed to operate in the world. The outcome will be interesting to observe, indeed.

January Events

Holidays over, and back to the classroom for sessions with a major Asian development bank, the leadership of a huge New York area hospital system and a very high-level group of Chief Supply Chain Officers. The conversations, even with this diversity of participants, all touched on the dissolution of certainty in our old word order, the increased level of unpredictability in their environments and how to remain calm, healthy and centered amidst all the chaos.

We recorded a whole slate of new episodes of the Thought Sparks Podcast, featuring authors, industry leaders, and those who are truly innovating in their fields. New episodes are released every Tuesday at 11 am EST. Episodes releasing this spring include Sylvia Acevedo, former Girl Scouts CEO and literal rocket scientist, Tomas Chamorro-Premuzic, author of Don’t Be Yourself: Why Authenticity Is Overrated (and What to Do Instead); and José Marcilla, President of the Latin America and Canada Region at Novartis.

In the News

How should European fashion leaders position themselves to manage rapidly changing US tariffs policy, and more in Vogue Business.

“Gateway” products solve challenging technical problems and demonstrate what customers are willing to pay for, but are also ripe for disruption, as I explain in Fast Company.

Thought Sparks Podcast

What a great start to the year for the Thought Sparks Podcast! This month, we welcomed Peter Cappelli and Ranya Nehmeh on the ongoing remote/hybrid/in-person work debate, Rob Siegel on systems leadership and the cross pressures leaders face, Cheryl McKissack Daniel on her family’s remarkable 5-generation legacy in the construction industry, and Neri Karra Sillaman, winner of the Thinkers50 2025 Radar Award and expert in what sets immigrant entrepreneurs apart.

Upcoming Events

HBR Strategy Seminar

On February 26, I’ll be giving the kickoff keynote at the HBR Strategy Summit, on how strategy meets the “unbossed” organization. Spots are going quickly for this virtual event – be sure not to miss out!

Columbia Executive Education

How do you drive innovation and growth, amid chaos and disruption? Leading Strategic Growth and Change, my Executive Education course at Columbia Business School, is designed to help executives spot new opportunities early, adapt strategy in real time, and guide their teams through complex transformations.

Join us for weeklong sessions running March 23-27, 2026 and June 15-19, 2026, on-campus in New York. Make sure you save your spot!

SXSW London

I’m thrilled to share that I’ll be joining in the fun at SXSW London in June! With Neri Karra Sillaman, Thinkers50 Radar Award 2025 winner and Mursal Hedayat, CEO of Chatterbox and a Forbes 30 Under 30 Social Entrepreneur, we will be delivering a panel titled Immigration as a Global Innovation Engine: Rethinking Talent, Risk & Reinvention. Stay tuned for more programming surrounding the event in London.

What today’s great leaders really do

Debates about how best to mobilize the resources of large organizations have been going on for decades. No less than management legend Lee Iacocca espoused this leadership philosophy: “I hire people brighter than me and then I get out of their way.” You can think of this as “manager mode.”

But there is an increasing chorus of dissent about whether this approach is fit for purpose in today’s dynamic and unpredictable environments. With the company growing rapidly before the pandemic, Brian Chesky of Airbnb took the well-intentioned advice he was given to adopt “manager mode” behavior, only to see his company fragment. Nothing like a pandemic to create an existential wake up call. That led to his rethinking his approach. Where he landed was not to micromanage, but to become the keeper of first principles—deeply involved in product decisions, design reviews, and strategic direction while giving teams enormous autonomy within that frame.

He sparked a huge conversation with his comments about founder mode (a phrase coined by Y-Combinator’s Paul Graham). He stresses the importance of design sensibility (congratulations, Rhode Island School of Design). Rather than the hands-off style (remember the now fairly discredited idea of management by objectives?), he argues that “Great leaders are in the details. That’s what founder mode is”.

As I was researching the leadership styles companies use to become more adaptive and “permissionless,” I too expected to find manager mode as the dominant form. Technology could do the job of what middle managers used to do, and there would be much more autonomy at the “edges” of the organization. But that model didn’t correspond to what I was seeing in many of the best performing companies. I’mthinking NVIDIA (top 5 things), Microsoft under “hands-on” Satya Nadella (not before that), Tesla, Amazon, Google, Shopify, Apple, JP Morgan Chase, Salesforce and many, many others. Even Walmart under Doug McMillon who “swears by collecting shopping carts.”

What I’ve concluded is that when the key challenge is inventiveness, rather than operations, founder mode seems to bring out the best in people. Consider Novartis, the giant pharmaceutical firm, which is “democratizing transformation.” CEO Vas Narasimhan champions an “unbossed” culture. Narasimhan has been bold about the strategic direction of the company, focusing it on innovative medicines and research. He’s present at committees in which key decisions are made. He’s also incredibly visible throughout the organization (I know very few CEO’s who are so adept at making short, relatable videos). Another effort I’m watching with great interest is Bill Anderson and Michael Lurie’s concept of “dynamic shared ownership” at Bayer, fundamentally changing the company’s operating system.

Founder mode involves creating clarity, bringing energy and establishing focus. It isn’t easy, but it offers the promise of leveraging what truly motivates people, according to Dan Pink. This is autonomy (Novartis’ ‘unbossed’), mastery (which Novartis calls curiosity) and purpose (which Novartis calls inspiration).

The Post-War Consensus Cracks

For decades after World War II, the Bretton Woods System, a remarkable institutional framework, governed the global economy. Organizations like the IMF, World Bank, WTO, and NATO created a stablearchitecture for trade, security, and economic cooperation. This consensus, which started eroding in the 1970’s, is now visibly fracturing.

The symptoms are everywhere: trade wars, resurgent nationalism, the weaponization of economic interdependence, and the emergence of competing blocs. What’s remarkable isn’t that this is happening—Carlota Perez’s theory of technological revolutions would predict exactly this kind of institutional breakdown at the turning point between paradigms—but that we seem to have no united group of leaders to help us think through the design of what comes next. And Perez would argue that to usher in a potential Golden Age we need a proactive state to guide decisions made by government and by business leaders.

In the 1940s, a visionary group called the Committee for Economic Development brought together business leaders, academics and government policymakers to grapple with the question of what the post-war economy should look like. The immediate and pressing problem they saw was that as World War II ended, so too would the war contracts that provided many companies with stable demand that allowed them to make capital commitments to production. What, its architects wondered, could provide demand after war production ended?

The answer turned out to be bets on the creation of a stable middle class and housing (basically creating the suburbs through innovations like the 30-year mortgage). This drove second-order demand for things like automobiles and appliances. The other big thing was investment in science and scientific institutions to help the US stay ahead of Russia in the Cold War. The CED helped shape the institutional framework that served us for decades. It still exists, now as part of the Conference Board.

The question is whether the sense of urgency and consensus the original CED was able to summon will create the framework suitable for our current moment.

According to Perez, we are at a turning point comparable to the 1930s—the installation phase of the ICT revolution is over, we have massive income inequality and a glut of bad jobs, financial bubbles are bursting, and all the problems have emerged: inequality, regional devastation, populist leaders channeling the resentment of creative destruction’s victims. Indeed the Brookings Institute found that 44% of the American people work in jobs in which the median pay is $17,950 (that’s 53 million people). Stunning.

What comes next could be a sustainable global golden age that does for the world what the post-war boom did for Western democracies. As Perez argues, a golden age is “a positive sum game between business and society, orchestrated by government.” But it isn’t inevitable.

The choice is ours. But we need forums for serious people to think through what institutional frameworks will enable broadly shared prosperity in a digital, green, and increasingly multipolar world. That’s definitely on my agenda for 2026.

The End of Employment As We’ve Known It

While we’re on the subject of making a living, something fundamental is shifting in how people relate to work. Gen Z workers are increasingly turning down promotions out of a sophisticated calculation that the traditional bargain no longer makes sense. The additional stress, time commitments, and political navigation required for management roles simply don’t compensate for marginal increases in pay or status.

Companies have done a terrific job of teaching their people that there is no such thing as loyalty, and now employees are returning the favor.

The digital paradigm enables entirely different arrangements. Gig work, once seen as marginal, is increasingly mainstream. The “one-person unicorn“ is no longer science fiction—individuals leveraging digital tools and AI can create value that once required entire organizations. Markets are emerging where skills are traded, projects are assembled, and traditional employment is just one option among many.Deborah Perry Piscione and Josh Dean, in their book “Employment is Dead” go so far as to argue that work will be completely reorganized.

For leaders, this means rethinking what it means to build an organization. The most effective companies will be those that can orchestrate talent across traditional boundaries—full-time employees, contractors, gig workers, AI agents—around shared purposes rather than hierarchical control. The organizational challenge of the next decade is invention of new models entirely.

America Cedes Ground in Green Technology

While debates rage over climate policy, a quieter but consequential shift is underway in green technology leadership. The United States, which once dominated clean energy innovation, is systematically dismantling its competitive position just as the market reaches an inflection point.

The numbers tell the story. China invested close to $680 billion in clean tech manufacturing in 2024—almost as much as the United States and EU combined. Chinese companies control the supply chains for critical materials: three-quarters of the world’s cobalt refining, 91 percent of graphite processing, and 92 percent of rare earth elements. Between March 2023 and March 2024, China installed more solar capacity than it had in the previous three years combined—and more than the rest of the world combined for 2023.

Meanwhile, the European Union has pledged to mobilize at least €1 trillion in sustainable investments to finance the European Green Deal. European policy is systematically creating the conditions for clean tech manufacturing to thrive, with coordinated investments, regulatory frameworks, and private capital mobilization.

Europe may surprise us all by leaping ahead. While America debates whether climate change is real, Europeans are building the industrial base of the 21st century economy. Economics and physics suggest it’s no longer a matter of whether the energy transition will happen. The question is who will lead it, who will follow, and who will be left behind.

The Global South Breaks Out

In 2004, my friend and mentor C. K. Prahalad published a book called “The Fortune at the Bottom of the Pyramid,” which makes the point that, approached in the right way, even people of few means can become customers, alleviating poverty along the way. It was based on an earlier article written together with Stuart Hart. He offered many examples of how smart companies achieve this, and today we’reseeing many more.

Consider the story of Zeno. Founded by an ex-Tesla employee, Michael Spencer, it is now commercializing electric scooters designed specifically for developing markets—vehicles built to carry multiple people over rough terrain, at price points that don’t require a subsidy and make sense for emerging middle classes. It is truly disruptive – making what was once complex (fueling a motorcycle) easy (swap out the battery) and what was once expensive affordable. By treating ownership of the battery separately from ownership of the vehicle, Zeno’s customers can spread the battery cost over time, opening up entirely new possibilities.

This pattern will repeat across sectors. The developing world represents enormous unmet demand. Healthcare, financial services, education, agriculture, transportation—in each of these domains, the Global South presents both the need and increasingly the capability for breakthrough innovation.

This could create enormous demand, reduce migration pressures, reduce greenhouse gas emissions and create jobs in the advanced world through trade and investment.

The opportunities for disruption are immense, and Zeno is a great example.

The Strategic Imperative

The leaders who thrive in 2026 won’t be those who predict the future correctly. They’ll be those who build the capability to sense these shifts early, experiment rapidly, and adapt as conditions evolve.

What are you watching in 2026? Let’s keep the conversation going.

According to Perez, we are living through the fifth great technological revolution, following the ages of steam, railways, steel and electricity, and mass production. Each revolution follows a remarkably consistent pattern: an “installation” phase driven by financial speculation, followed by a major crash, then—if things go well—a “golden age” of broad-based prosperity. The 1990s and 2000s were our installation period as we moved from the world of cheap energy and mass production to a world of digital goods and personalized experiences. The speculative frenzy, the financial engineering, the growing inequality—all of it was textbook Perez.

Here’s the optimistic case: we are now at the turning point. The problems have surfaced—inequality, regional climate-related devastation; and populist leaders channeling the resentment of those left behind by creative destruction. This ugliness is not unprecedented. It is, in fact, the pattern. And what follows the turning point, historically, has been extraordinary: a golden age like the one the advanced world experienced in the 1950s and 1960s, when prosperity reached broadly across society and lifted workers into middle-income lives. With the wonders of AI, we have the technological capacity to extend that kind of transformation globally, and sustainably, to everyone.

Now the pessimistic case: golden ages don’t happen automatically. They require direction. After World War II, it wasn’t mass production alone that created widespread prosperity—manufacturing tripled in value but increased its workforce by only 30%. The jobs came from services, healthcare, construction, and government. The direction came from deliberate choices: suburbanization, the invention of the 30-year mortgage, the Cold War, and policies that channeled demand. Business learned during the war that mass production requires mass consumption, and government policy made that consumption possible. Businesspeople joined the Committee on Economic Development, a who’s who of thinking at the time, to outline the policies that would make a true middle class prosperous. Would that we had a body like that when the economy went into deep recession in 2008, which Perez describes as a missed opportunity to correct the excesses of the casino economy and align capital with the needs of production. We could be living in a golden age right now!

We have figured out how to navigate through the fraught, unequal, confusing and often violent period of the turning point before. In the Gilded Age, the equivalent of today’s tech billionaires controlled unfathomable wealth even as many of their workers struggled in abject poverty. Finance was decoupled from production and inequality was rampant. The original Gilded Age ended gradually, giving way to the Progressive era(c. 1890s-1920s) due to a combination of severe economic crises like the Panic of 1893, growing public outcry against corruption and inequality, and the rise of muckraking journalists, leading to demands for government intervention and reforms that curbed corporate power, improved labor conditions, and increased social welfare, with World War I solidifying the shift.

Whether we tip toward golden age or prolonged crisis depends on choices we make now. That’s what I’ll be exploring in this newsletter as we head into 2026. I’ll be looking at the early warnings, the bright shoots and the new developments that are signposted along the way, because I am by nature an optimist.

2025 Events

Reinvention Summit

April brought the Reinvention Summit in Dublin, created by Aidan McCullen, Nadya Zhexembayeva and the good people at nineyards. There were incredible insights: exclusive meetings with leaders from New Zealand, Ireland and Norway about the unique innovation opportunities that small countries have, sessions with senior leaders unpacking innovation success stories at Microsoft, and connecting with business leaders at the University College of Dublin about inflection points.

Novartis C-LAB

How do you build an “inspired, curious, unbossed” culture? This is the goal that Novartis CEO Vas Narasimhan set when he moved into the role in 2018. Over the past few years, I have been honored to be part of the Novartis’ Culture Leadership Advisory Board, or C-LAB, which brings together very senior people at Novartis, and experts in innovation, strategy, and organizational behavior. This year, we convened in Basel, Switzerland, and got these great lab coats!

Concordia

I joined the Concordia Summit for a panel on private-public partnerships discussing how building accountability and trust between the public and private sector is part of the strategic puzzle of societal issues like climate change, geopolitical instability, and the digital revolution.

Fast Company Innovation Festival

At Fast Company’s Innovation Festival, I spoke on the future of mobility featuring Sherry Sanger, the EVP of Strategy and Marketing at Penske Transportation Solutions and Heather Lane, VP of Supply Chain Strategy and Systems at Ulta Beauty. We talked about the power of AI to help customers and employees -- especially with lessons from the COVID-19 pandemic about how supply chains can wear thin.

Thinkers50

November brought the whole Rita McGrath Group team to London for Thinkers50. This year’s theme was “regeneration”, asking the question: what does it mean to build regenerative organizations, leadership structures, and growth? It was a wonderful gathering of some of the best and brightest in thought leadership, and I’m honored to have been ranked #6 in this year’s ranking of management thinkers!

The Global Peter Drucker Forum

The Global Peter Drucker Forum, an annual event dedicated to continuing the thinking of the late management thinker. We discussed what next generation leadership ought to look like: going beyond traditional control-oriented structures to unleash human energy and creativity, speed things up, and free people to pursue good ideas.

Be Woman

It’s always exciting to cross a new destination off the list: this year, one such destination was Almaty, Kazakhstan. I gave a keynote on transient competitive advantage – the need for organizations to seize new opportunities, exploit them, and turn to new opportunities – for Be Woman, the largest platform for women’s leadership and development in Central Asia. It was fascinating to learn of the reinvention and innovation happening in that region!

LSGC

A highlight of the year were my Executive Education programs at Columbia Business School, including my course Leading Strategic Growth and Change. Through 4 weeklong installments, 7 guest speakers, and 100+participants, we got insight in the strategic challenges senior leaders face, and worked to develop actionable solutions.

New Book in the Works

And through all this, in hotel rooms, on planes, trains, and automobiles, I’ve been writing a new book! It’s centered around the idea of permissionless organizations. The case studies pull from across sectors and countries from Swiss pharmaceutical giant Novartis to South Korean finance app Toss andonline platform Shopify.

Stay tuned for more insights as I refine the manuscript and on book launch events later this year!

In the news

What a year for press features, from shedding strategic light on US tariffs and the TikTok ban, to contextualizing generational differences in the workplace and highlighting fading business models. The thing is that without some kind of framework to view what’s going on, it can all seem like total chaos. It’simportant to take a systems view and look at second and third order effects. For instance, as the government pushes universities to eliminate considerations of gender in admissions, they may wipe away what is effectively affirmative action for male applications – quite unintentionally hurting white men in the attempt to eliminate DEI programs.

When US tariffs policy shift every week, fashion mergers & acquisitions look to focus on complementary brands.

I started a new article series for Fast Company: the rise of dynamic pricing, how “good enough” products disrupt their premium counterparts, and what the release of AI “actor” Tilly Norwood can teach us about spotting weak signals.

Is the billable hour still a viable business model? When AI can increasingly do the basic work of a professional services firm in minutes, how do we value the human contribution?

64% of Gen Z workers think they could be laid off in the next year, and the impact of a new generation entering the workforce.

Living companies don’t just exist to make money, and more on how Boeing, Kodak, and GE lost their way.

How do you spot inflection points, whether in your work or your personal life? I joined Hidden Brain to discuss.

Thought Sparks

Thought Sparks Podcast

What a year for the Thought Sparks Podcast! Born out of Fireside Chats which we started during the pandemic as means of connecting when we were stuck at home, the Thought Sparks Podcast has expanded to create share insightful actions, strategic ideas, actionable suggestions and innovative approaches that help organizations and leaders master the future with less fear and more confidence. New episodes are published every Tuesday at 11 am EST.

Thank you to all our guests this year for sharing their expertise across fields, asking thought-provoking questions, and broadening our horizons.

Thought Sparks Articles

Here were the 5 trends I predicted for 2025, at this time last year, including dematerialization, deglobalization, and critical demographic shifts.

The party’s over at retail giant Party City – here’s how Build-A-Bear has remained dominant despite the retail apocalypse.

Is AI coming for your job? From Microsoft to Klarna, that remains to be seen. But what we can see are signs that the AI bubble might burst, like the Internet before it.

Writing a book is no longer the guarantee of success and credibility it once was. Have we reached peak book?

Why mergers fail: everything from CEO overconfidence to taking assumptions as fact.

From Adam Smith’s time on, we’ve had the same definition of productivity. How does AI change that, and change what economic activities we find most valuable?

Amid a global pandemic, geopolitical instability, and a recession, it’s no wonder Gen Z is struggling to find their footing.

The clean energy market is reaching a historic inflection point, but the US’s historically dominant position is vulnerable.

Find Thought Sparks on LinkedIn, Substack, Medium, and the Rita McGrath Group website.\

Thought Sparks Action Points

A new addition to the Thought Sparks suite are our Thought Sparks Action Points. These are bite-size insights from my conversations with thinkers and leaders on the Thought Sparks Podcast.

Here are Action Points from some past Thought Sparks guests we saw this fall at Thinkers50:

• Dorie Clark on career reinvention and long-term thinking.

• Herminia Ibarra on leadership transitions and the shift from “know-it-all” to “learn-it-all” cultures.

• Martin Reeves on how innovation works - not through heroic inventors but through serendipitous, collective processes involving forgotten contributors.

• Morra Aarons-Mele on the productive and destructive sides of anxiety, especially in modern work and leadership.

• Scott Anthony & Paul Cobban on how DBS Bank transformed from “damn bloody slow” to an innovation powerhouse by embedding innovation behaviors throughout the organization.

• Terence Mauri on transforming disruption into opportunity.

• Tomas Chamorro-Premuzic on how organizations prioritize confidence, charisma, and narcissism over competence, humility, and integrity - traits that predict effective leadership.

Tools - Team Effectiveness Survey

Team effectiveness is the key to unlocking profit and productivity, but too often, how you achieve effectiveness eludes leaders and team members alike. (Although I’m sure anyone could identify when their team has been INeffective). In my research, I’ve found that you can gauge a team’s capability based on evidence of 5 factors.

Roles: People with the right skills and capabilities, in the right roles.

Trust: Confidence and trust in one another.

Information: Fluid and dynamic information flows.

Commitment: Mutual commitment to the team’s goals .

Psychological Safety: Comfort in speaking up.

Take this quick survey to understand our approach to Team Effectiveness. If you’re interested in team effectiveness solutions for your organization, be in touch with seth@ritamcgrath.com

Upcoming Events

Columbia Executive Education

How do you drive innovation and growth? Leading Strategic Growth and Change, my Executive Education course at Columbia Business School, is designed to help executives spot new opportunities early, adapt strategy in real time, and guide their teams through complex transformations.

Join us for weeklong sessions running March 23-27, 2026 and June 15-19, 2026, on-campus in New York. Make sure you save your spot!

Thought Sparks Podcast

2026 is shaping up to be a great year for the Thought Sparks Podcast! In the new year, look for episodes featuring Thinkers50 Radar Award winner Neri Karra Sillaman, former Girl Scouts CEO and literal rocket scientist Sylvia Acevedo, and Stanford’s Rob Siegel. Find Thought Sparks anywhere you get your podcasts!