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Introduction

At the start of the 2000s, Nokia was the undisputed leader of the mobile phone industry. The company controlled roughly 40% of the global handset market, held the title of Europe’s most valuable company, and built a reputation for nearly indestructible devices. To put this in perspective, Apple’s share today is 20%.

For millions of people around the world, a mobile phone was simply a Nokia. I even had one….a company-provided phone…I was “high class”.

Yet within a decade, that dominance vanished.

The fall of Nokia is often mischaracterized as a story of technological failure or managerial incompetence. In reality, it was something far more instructive. Nokia had talented engineers, enormous scale, and deep industry knowledge. What it struggled with was recognizing and responding to a platform shift that was reshaping the entire industry.

The company that mastered the era of hardware phones was suddenly competing in the era of software ecosystems, ushered in by devices like the iPhone and platforms such as Android.

What followed wasn’t an overnight collapse, but a gradual erosion driven by strategic drift, cultural rigidity, and the difficulty large organizations face when the rules of competition change.

Nokia’s story is not just about a phone company that lost its way. It’s a case study in how even the strongest market leaders can miss the moment when their industry fundamentally changes.

Let’s dig in.

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The Rise: Operational Excellence at Scale

Operational Mastery

Nokia’s rise to global dominance was not the result of a lucky product cycle or a temporary market advantage. It was built on operational excellence. At its peak, Nokia operated one of the most efficient supply chains in the consumer electronics industry.

The company could design, manufacture, and distribute new handset models at a pace competitors struggled to match. Nokia also cultivated deep relationships with mobile carriers worldwide, ensuring its devices were widely distributed and heavily promoted across Europe, Asia, and emerging markets.

For those not aware, Nokia was founded in 1865 as a pulp mill and is headquartered in Finland.

Equally important was Nokia’s rapid hardware iteration cycle. The company released dozens of device variations tailored to different regions, price points, and customer preferences. This allowed Nokia to dominate both premium and entry-level segments simultaneously.

Combined with an unmatched global distribution scale, these capabilities made Nokia extraordinarily effective in the hardware-driven era of mobile phones, where success depended on manufacturing efficiency, carrier partnerships, and product reliability.

Brand Equity

Operational strength alone does not explain Nokia’s dominance. The company also built one of the most trusted consumer technology brands in the world. To millions of consumers, a Nokia phone represented durability, long battery life, and reliability. The devices were known for surviving drops, lasting days on a single charge, and simply working when people needed them.

In an era before app stores and mobile ecosystems, those attributes were exactly what consumers valued most. A phone was primarily a communication tool, not a computing platform or a way to post on Facebook. Nokia understood the market perfectly. Its products were simple to use, dependable, and widely available. As a result, the Nokia brand became synonymous with the mobile phone itself in many parts of the world.

Timing

Nokia also benefited from extraordinary timing. The company’s operational model and product strategy aligned perfectly with the mass global adoption of mobile phones throughout the 1990s and early 2000s. As billions of people around the world purchased their first mobile device, Nokia had already built the manufacturing capacity, distribution networks, and carrier partnerships necessary to scale quickly.

In many ways, Nokia was the ideal company for the feature-phone era. It was engineered for scale, efficiency, and reliability. Qualities that defined the first phase of the mobile industry’s growth.

But the strengths that made Nokia dominant in the hardware era did not prepare it for what came next. The industry was about to shift from devices to platforms, and Nokia’s organization was not built for that transition.

Why Nokia Lost the Smartphone War

They Misread the Shift from Hardware to Software

It’s common to hear that Apple Inc. killed Nokia. The reality is more nuanced. When the iPhone launched in 2007, it wasn’t simply a better mobile device. It represented a fundamental change in what a phone was becoming.

The iPhone introduced a model built around software, developers, and digital services. The device was merely the entry point to a broader ecosystem, one that included applications, content, cloud services, and a continuously evolving user experience.

Apple was not just selling phones; it was building a platform that developers and customers would build their digital lives around.

Meanwhile, Nokia continued optimizing the variables that had driven success in the feature-phone era: hardware quality, device variety, manufacturing scale, and carrier distribution. In effect, Nokia was still playing a hardware margin game, while Apple, and soon after Google with Android, were playing a platform control game. Those are fundamentally different strategies, and the platform strategy ultimately reshaped the industry.

Internal Culture Became Defensive

The strategic miscalculation was compounded by internal dynamics that made adaptation more difficult. Postmortems and interviews with former executives later revealed that, during this period, Nokia’s culture had grown increasingly defensive and risk-averse. Managers were reluctant to surface bad news, and critical feedback often softened as it moved up the organizational hierarchy.

This phenomenon is not unique to Nokia. It frequently occurs in dominant firms that have experienced prolonged success or where leaders don’t react well to bad news. Past victories create confidence, but they can also create organizational inertia. Leaders begin to trust the systems that previously produced results, even when market conditions are changing. Over time, that inertia slows decision-making precisely when speed and clarity are most needed.

The Symbian Trap

Technology choices also played a significant role. Nokia’s primary operating system, Symbian, had been designed for an earlier generation of mobile devices. While powerful in some respects, it had become complex, difficult for developers to work with, and architecturally outdated compared with emerging smartphone platforms.

Rather than decisively rebuilding around a modern software foundation early on, Nokia attempted to evolve Symbian through incremental improvements. This approach consumed valuable time while competitors advanced rapidly. By the time Nokia partnered with Microsoft in 2011 to adopt the Windows Phone platform, the ecosystem battle had largely consolidated around Apple’s iOS and Google’s Android. In platform markets, late pivots are rarely successful, because developers and users tend to converge around a small number of dominant ecosystems.

Strategy by Compromise

Finally, Nokia struggled with the strategic trade-offs that disruptive change requires. The company attempted to balance multiple priorities simultaneously: protecting its profitable feature-phone business, maintaining strong relationships with mobile carriers, and managing internal divisions that favored different technical paths.

The result was a series of cautious, incremental decisions at a moment when the market was undergoing a nonlinear transformation. Instead of fully committing to a new model, Nokia tried to evolve its existing one. That strategy works in stable markets, but disruptive shifts tend to reward bold transitions and punish incremental responses. By the time the scale of the change became undeniable, the competitive landscape had already been reshaped.

What Leaders Can Learn

Dominance Breeds Blindness

One of the most important leadership lessons from the rise and fall of Nokia is that market leadership can quietly distort decision-making. Success builds confidence, but it can also create powerful blind spots. Organizations that dominate their industry often develop strong internal beliefs about why they are winning. Over time, those beliefs harden into assumptions.

Those assumptions produce predictable patterns: confirmation bias in strategy discussions, risk aversion around disruptive ideas, and internal politics that protect existing business models. The organization begins optimizing what already works rather than questioning whether the rules of the market are changing.

For leaders, the critical question is not whether the strategy is currently working, it often is. The real question is far more uncomfortable: What assumption in your business, if wrong, would collapse your strategy? The companies that survive major industry shifts are the ones willing to interrogate those assumptions early.

Platforms Beat Products

Nokia mastered the economics of the product era of mobile phones. Its advantage came from supply chain efficiency, device variety, and global distribution. But the smartphone revolution changed the nature of competition. Success was no longer defined by who could build the best handset; it was defined by who controlled the ecosystem around the device.

Companies like Apple Inc. and Google understood that the smartphone would become a software platform, supported by developers, services, and continuously improving user experiences. Apple focused on user experience and ecosystem integration, while Google built a massive developer network through the Android platform.

The lesson is that when markets shift from product to ecosystem, from transaction to experience, from device to platform, the capabilities required to win change dramatically. Organizations that continue optimizing yesterday’s advantage often find themselves competing in the wrong game

Culture Determines the Speed of Adaptation

Another lesson from Nokia’s decline is that strategic failure is rarely caused by a lack of intelligence. Large organizations are filled with capable leaders and talented engineers. The issue is usually organizational courage.

When internal cultures discourage dissent or slow the flow of bad news, leaders lose the ability to see threats clearly. Critical market signals arrive late, decisions take longer, and strategic adjustments become incremental when they need to be decisive.

This connects closely to a broader leadership principle: urgency is not about moving faster; it’s about confronting reality earlier. Organizations that surface uncomfortable truths quickly can adapt before disruption becomes irreversible. Those who delay recognition often find that the window for meaningful response has already closed.

Cannibalize Yourself First

Perhaps the most enduring lesson from industry disruption is that incumbents must be willing to challenge their own success. When a new model threatens an existing revenue stream, the instinct inside large organizations is often to protect the legacy business for as long as possible.

But disruption rarely waits. Companies that survive major shifts are usually those willing to reinvent themselves before competitors force the change. That can mean launching products that undermine existing revenue, separating teams to pursue new models independently, or redesigning incentives to reward internal disruption rather than protect the status quo.

The companies that fail tend to defend what made them successful. The companies that endure are the ones willing to replace it.

What Is Nokia Doing Now?

A Different Company Than the One That Dominated Phones

Although its handset dominance collapsed, Nokia did not disappear. Instead, the company underwent a significant transformation. In 2014, Nokia sold its mobile handset business to Microsoft, marking the end of its era as a consumer mobile device leader.

That transaction closed the chapter on Nokia’s role in the smartphone wars and allowed the company to focus on a different segment of the telecommunications industry.

Today, Nokia operates primarily as a telecommunications infrastructure and network technology company rather than a consumer electronics brand.

Focus on Network Infrastructure and 5G

Nokia’s modern business centers on building and supporting the networks that power global connectivity. The company provides 5G network equipment, fiber and broadband solutions, cloud networking technologies, and enterprise private networks used by telecom operators, governments, and large enterprises.

In this role, Nokia competes with major infrastructure providers such as Ericsson and Huawei. Instead of selling devices to consumers, Nokia now focuses on the systems and software that allow communications networks to operate and scale.

This shift also reflects the industry’s broader movement toward software-defined networking and integrated digital infrastructure, where network intelligence is increasingly managed through software rather than purely hardware-based systems.

This transformation reflects a deliberate effort to focus on areas where Nokia’s engineering expertise and telecommunications heritage remain highly relevant.

A New Brand for a New Business

In 2023, Nokia unveiled a refreshed corporate brand identity designed to reflect this strategic shift. The new branding signaled that the company no longer sees itself as a consumer phone manufacturer but as a network technology company helping build the infrastructure of the digital economy.

The story of Nokia, therefore, is not simply one of decline. It is also a story of reinvention. The company survived one of the most dramatic industry disruptions in modern technology, but it emerged as a fundamentally different business than the one that once dominated the global mobile phone market.

Conclusion

The story of Nokia is often told as a cautionary tale about technological disruption. But the deeper lesson is not about technology at all. It is about how organizations respond when the rules of their industry change.

Nokia did many things right. It built world-class operations, created enormous brand equity, and scaled globally faster than almost any hardware company of its era. For years, those strengths made it nearly unstoppable. The problem was not that Nokia lacked intelligence or talent. The problem was that the company continued optimizing a model that the market had already begun to abandon.

Meanwhile, companies like Apple Inc. and Google recognized that mobile phones were becoming something different: software platforms connected to ecosystems of developers, services, and experiences. By the time that shift became undeniable, the competitive landscape had already been rewritten.

For leaders and operators, the real takeaway is this: the strategies that create dominance rarely survive the next industry transition. Markets evolve. Technologies change. Business models shift. The question is not whether disruption will occur; it is whether organizations will recognize it early enough to respond.

The companies that endure are not always the smartest or the largest. They are the ones willing to question their own success, challenge their assumptions, and reinvent themselves before the market forces them to.

Because in business, the greatest risk is rarely failure.

It is believing that yesterday’s winning formula will still work tomorrow.

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Sources

Insights and perspectives in this newsletter are informed by leadership research, technology industry analysis, and historical reporting on the mobile phone industry, including:

Harvard Business Review. Case analyses on the rise and decline of Nokia, organizational inertia, and the challenges incumbents face during platform shifts

The Economist. Reporting and analysis on Nokia’s collapse in the smartphone era and the strategic implications of the iPhone and the rise of the smartphone ecosystem

McKinsey & Company. Research on digital platform competition, ecosystem economics, and how industry leaders respond to technological disruption

Benedict Evans. Technology industry analysis on mobile platform dynamics, ecosystem competition, and the strategic implications of Android and iOS platform growth

Yves Doz & Keeley Wilson. Strategic analysis of Nokia’s rise and fall and the organizational dynamics behind its decline (Ringtone: Exploring the Rise and Fall of Nokia in Mobile Phones)

Ben Thompson. Platform strategy analysis and commentary on the transition from hardware-centric competition to ecosystem-driven technology markets (Stratechery)

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Introduction

A sense of urgency is one of the most frequently requested and least understood leadership traits.

Most organizations claim they want it. Leaders talk about it constantly. Job descriptions call for it. Performance reviews reference it. Strategy decks demand it. And yet, very few teams actually operate with urgency in a way that produces real progress.

That’s because urgency has quietly been redefined. It’s been confused with speed. With busyness. With pressure. With noise. With “everything is a priority” energy.

None of those things are urgency.

When I was in the military, we had a phrase that captured the difference perfectly:

Smooth is fast. And fast is smooth.

It sounds like a contradiction until you live it. But what it really means is simple: when you’re disciplined, clear, and controlled, you move faster overall. When you rush, thrash, and try to “go fast” by force, you create mistakes, rework, and friction, which slow everything down.

That’s exactly what most leaders miss about urgency.

True urgency is not about moving faster; it’s about moving decisively. It’s not about doing more, it’s about doing what matters now. And it rarely feels chaotic when it’s real. In fact, the best examples of urgency often feel calm, focused, and slightly uncomfortable because they force trade-offs most leaders prefer to avoid.

I learned this lesson early in my career, long before I had an executive title.

As a young leader, I was part of an organization facing a clear operational issue, one that everyone agreed needed fixing. Meetings were held. PowerPoint decks were built. Follow-ups were scheduled. The problem was discussed endlessly, with a constant refrain of “we need to move faster.”

Weeks passed. Then months.

What struck me wasn’t a lack of effort. People were busy. Calendars were full. Emails were flying. What was missing was ownership. No one was willing to make the call that would create friction. No one wanted to be the person who said, “This is the decision, this is the path, and this is what we’re stopping to make it happen.”

That’s when it clicked: the organization didn’t lack urgency; it lacked conviction.

Later, in environments where urgency actually existed, whether in high-stakes operational settings or during periods of real transformation, the behavior looked very different. Fewer meetings. Clear owners. Short timelines. Explicit trade-offs. And leaders who understood that urgency is not created by pressure from the top, but by clarity, trust, and decisiveness at every level.

Most leaders don’t get urgency wrong because they don’t care. They get it wrong because they mistake motion for momentum, and urgency without direction is just noise.

And noise, no matter how loud, rarely moves anything forward.

Let’s dig in.

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False Urgency vs. Productive Urgency

Many leaders believe they are creating a sense of urgency, but they often instill anxiety instead. False urgency is loud, feels intense, and creates motion, but it rarely leads to real progress.

You can quickly identify false urgency by noting the following signs:

• Everything is labeled “priority one.”

• Meetings increase, not decisions.

• Timelines shorten while the scope remains unchanged.

• Teams stay busy, but outcomes do not significantly improve.

• Leaders ask for updates instead of taking decisive action.

False urgency is reactive and feeds on fear: fear of missing targets, fear of being questioned, and fear of slowing down. Over time, it trains teams to focus on activity rather than impact.

In contrast, productive urgency looks very different. It is quieter, more deliberate, and far more effective.

Productive urgency begins with clarity. Leaders must clearly communicate what is important now, what can wait, and what is not important at all. This clarity is both rare and powerful.

It requires ownership: one person is accountable for the outcome rather than a committee or a working group. Progress is actively owned, not just reviewed. Productive urgency also demands trade-offs; something must be stopped, postponed, or deprioritized. Without trade-offs, what appears to be urgency is merely a performance.

Productive urgency is reinforced through decisions, not reminders. Teams feel urgency when leaders make real choices that demonstrate seriousness, rather than simply stating, “This is urgent.”

Here’s a simple test to consider: If nothing is being stopped, delayed, or declined, then there is no true urgency, only activity.

High-performing teams understand this intuitively. They do not rush everything; instead, they move quickly on the few things that truly matter and deliberately slow down on everything else. This is not a lack of urgency; it is discipline.

Two Case Studies: When Urgency Works and When It Doesn’t

Case Study 1: The Pitfall of False Urgency

A mid-sized services organization identified a decline in customer retention and labeled it “urgent.” In response, leadership created task forces, scheduled weekly meetings, and built dashboards to monitor progress. Updates were requested constantly.

However, no decisive action was taken. No one was authorized to change pricing, service levels, or account structures. Each proposed solution required cross-functional alignment, and every review raised new risks. As a result, timelines slipped quietly, justified as “getting it right.”

After six months, customer churn had not improved significantly, yet the organization was exhausted. The real problem was not a lack of effort; it was avoidance. The expressed urgency came through pressure and process rather than ownership and trade-offs. The organization was constantly busy but made no tangible progress.

Case Study 2: Effective Urgency in Action

In contrast, another organization faced margin erosion in a core business line. Leadership recognized this as a priority, but not a panic.

They assigned a single executive with full decision-making authority and set a 90-day timeframe. Three options were outlined from the start, including walking away from unprofitable work.

Within weeks, leadership made visible trade-offs: they exited contracts, narrowed project scopes, and reallocated resources. While some stakeholders were unhappy with these decisions, the team moved forward.

By the end of the quarter, margins had stabilized, and confidence returned, not because everyone agreed but because the organization saw decisions being made and respected them.

The key difference wasn’t intelligence, resources, or a sense of urgency. It was leadership. One organization mistook busy activity for progress, while the other used clarity, ownership, and accountability to create genuine urgency.

Why Leaders Accidentally Kill Urgency

Most urgency failures are not cultural problems. They stem from leadership behaviors, often well-intentioned, that quietly smother momentum.

Here are the most common ones.

1. Confusing Inclusion With Consensus

Leaders want alignment. That’s reasonable. But many organizations drift from input to permission. When every decision requires broad agreement, urgency dies. Teams learn that waiting is safer than acting, and escalation becomes a substitute for ownership.

Urgency thrives when leaders are clear about where input is valuable and where a decision will be made regardless.

2. Rewarding Risk Avoidance While Demanding Speed

Organizations often say, “Move fast,” while punishing mistakes harshly. That contradiction is not lost on teams.

When the cost of being wrong exceeds the cost of being slow, people delay every time. They add analysis. They request one more review. They wait for cover.

Leaders don’t create urgency by demanding it. They create it by protecting decisive action when outcomes are imperfect but directionally correct.

3. Treating Prioritization as a Messaging Exercise

Many leaders believe urgency is established when priorities are communicated. It isn’t. Urgency is established when leaders act in accordance with those priorities:

• Resources are reallocated.

• Meetings are canceled.

• Pet projects are paused.

• Senior leaders visibly shift their time.

When stated priorities don’t change behavior, teams correctly conclude that nothing is actually urgent.

4. Solving the Same Problem Repeatedly Instead of Making the Hard Call

One of the clearest signs of a lack of urgency is repetition. If the same issue appears in reviews quarter after quarter, it’s rarely a capability problem. It’s a decision problem.

Urgency demands finality. Not every decision will be perfect—but unresolved decisions quietly drain momentum far more than imperfect ones ever will.

5. Believing Urgency Is a Personality Trait

Some leaders assume urgency is something you either have or don’t. That’s a mistake.

Urgency is not a temperament. It is a system of clarity, accountability, and consequences. When those are present, urgency emerges naturally. When they aren’t, no amount of motivational language will create it.

How Leaders Create Urgency (Without Creating Burnout)

Real urgency is not something leaders demand. It is something they design.

The most effective leaders don’t rely on speeches, slogans, or escalating pressure. They build environments where urgency is the natural outcome of how decisions are made, work is structured, and accountability is enforced.

Here’s what that looks like in practice.

1. They Make Time Horizons Explicit

Urgent organizations are clear about when something matters.

Leaders distinguish between:

• What must happen now

• What must happen next

• What can wait

Without this clarity, teams default to treating everything as immediate, and eventually, nothing is. Urgency is created when leaders are precise about timing and unapologetic about sequencing.

2. They Assign Single-Point Ownership

Urgency does not survive shared accountability. High-performing leaders assign one accountable owner for outcomes, not updates, not coordination, not facilitation. One owner.

That owner has the authority to make decisions, escalate constraints, and move forward without waiting for universal agreement. When ownership is clear, momentum follows.

3. They Force Trade-Offs in Public

Nothing signals urgency faster than visible trade-offs. Leaders who create urgency say things like:

• “We are pausing this to finish that.”

• “This no longer makes the cut.”

• “We’re narrowing the scope to move now.”

These decisions are uncomfortable. They disappoint some stakeholders. And they make urgency real. If leaders are unwilling to disappoint, urgency will remain theoretical.

4. They Decide at the Right Altitude

Urgency dies when decisions sit too high or too low. Great leaders push decisions down to the lowest level capable of making them, while pulling only the irreversible or high-risk calls up.

This balance accelerates action without sacrificing quality. Teams move faster because they are trusted and because they know when escalation is truly required.

5. They Reinforce Urgency Through Consequences, Not Words

What leaders tolerate defines the pace of the organization. Deadlines that slip without consequence teach teams that timing is optional. Priorities that change weekly teach teams to wait things out.

Urgency is reinforced when leaders:

• Hold timelines firm

• Close loops decisively

• Address delays directly

• Reward follow-through, not heroics

Consistency, not intensity, is what sustains urgency over time.

Conclusion

A lack of urgency is rarely a workforce problem. It is a leadership signal.

It signals unclear priorities. Avoided decisions. A fear of disappointing stakeholders. A system that rewards safety over progress. None of those are fixed by asking people to “move faster.”

Urgency is not created through pressure. It is created through clarity, conviction, and consistency.

Teams move with urgency when they trust that decisions will stick. When ownership is real. When trade-offs are honored. When leaders act the same way on Friday afternoon as they do in Monday morning meetings.

The best leaders understand this instinctively. They do not manufacture urgency. They remove the obstacles that prevent it. They decide. They focus. They commit.

And in doing so, they give their teams permission to move. If your organization feels busy but stuck, the answer is not more intensity. It is better leadership.

Because when urgency is real, it doesn’t feel frantic. It feels inevitable.

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Sources

Insights and perspectives in this newsletter are informed by leadership research, management literature, and industry analysis, including:

• John P. Kotter — Research on real vs. false urgency, decision velocity, and the leadership behaviors required to sustain momentum (A Sense of Urgency, Harvard Business School Press)

• Harvard Business Review — Analysis on decision paralysis, consensus culture, and why organizations struggle to translate activity into action

• McKinsey & Company — Studies on decision effectiveness, organizational speed, and the impact of clear ownership and trade-offs on execution outcomes

• Amy C. Edmondson — Research on psychological safety, accountability, and how trust enables decisive action without burnout (The Fearless Organization)

• Bain & Company — Findings on founder-led organizations, forced trade-offs, and the relationship between decision clarity and performance

• Andy Grove — Management frameworks on decision altitude, leverage, and operational discipline (High Output Management)

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Introduction

Customer service in the past did not feel as broken as it does today. It’s almost as if companies are trying to see who can provide the worst service. It’s terrible.

Early in my career, I worked on the strategy and launch of a new call center from the ground up. The work was not glamorous. We focused on “best practice” fundamentals: how quickly calls were answered, whether issues were resolved the first time, call handle time, and whether customers felt helped when the interaction ended. That discipline mattered. The center went on to win Best New Call Center in its category, not because of technology, but because of clarity around ownership, processes, and outcomes. We cared about what the customer experienced. The Center was not viewed as a cost center but as a differentiator in growing the business.

Later, I worked with a software company whose purpose was to do something that now sounds obvious: connect phone, email, text, and chat into a single view of the customer. Provide real-time intelligence on the customer experience and identify where that could be improved. At the time, that capability was novel and powerful. It allowed organizations to see customers as people, not just isolated tickets. Demand for that capability was so strong that the company was ultimately acquired.

In both cases, customer experience was viewed and treated as a differentiator. Leaders invested in it. Systems were designed to support judgment. Technology existed to enable better service, not avoid it.

That mindset feels increasingly rare today.

Customer service is now one of the most frustrating parts of doing business, not because problems are harder to solve, but because organizations have optimized service for efficiency rather than resolution. AI was supposed to improve this. Things would move faster. Costs would come down. And the customer experience would improve.

The logic was compelling. Machines don’t get tired. They don’t lose patience, call in sick, or leave for competitors. With enough data and training, AI could answer questions instantly, resolve issues consistently, and scale service without friction, faster service, happier customers, and leaner operations.

What customers are getting today instead feels very different.

They’re trapped in automated loops. They repeat themselves. They struggle to reach a human (if at all) when the issue actually matters. Too many interactions end without resolution or clarity.

This didn’t happen because AI is incapable. It happened because leaders misunderstood what customer service is for and how to apply the technology, and they’re still getting it wrong.

Let’s dig in.

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Customer Service Is a Moment of Truth, Not a Transaction

People do not reach out to customer support when things are working as expected. They reach out when something breaks, when money is at risk, when time has been wasted, when expectations were missed, or when they truly need help. These moments are rarely neutral. They are emotional. They are stressful. Sometimes they are urgent.

In those moments, customers are not looking for speed alone. They are looking for judgment, empathy, and accountability. They want to know that someone understands the situation and is willing to own the outcome.

Those qualities aren’t technical features. They’re leadership behaviors, embedded or neglected through systems.

And when those behaviors are missing, the damage goes well beyond lost revenue.

Consider Air Canada. Its chatbot told a grieving grandson that he could retroactively apply a bereavement fare after purchasing full-price tickets. That information was wrong. When the airline refused to honor the refund, a tribunal ruled Air Canada liable for the chatbot’s misinformation.

The airline’s defense? The chatbot was a “separate legal entity,” responsible for its own actions.

This wasn’t a technology failure. It was a leadership failure, an attempt to outsource judgment, empathy, and accountability to a system without owning the outcome.

AI Entered Through the Wrong Door

Instead of starting with the customer’s experience, most organizations began with internal economics. The dominant questions were not “Where does AI improve trust?” or “Where does automation actually help customers?” They were “How many contacts can we deflect?” and “How much labor can we take out?”

From that framing, the outcome was predictable.

AI was positioned as a gatekeeper, the first line of defense between the customer and a human being. Escalation paths were buried. Human judgment was treated as inefficiency rather than value. Customers were encouraged to rephrase their questions rather than resolve problems.

On paper, efficiency improved. Dashboards lit up with shorter response times and lower volumes. In reality, trust eroded.

Organizations invested $47 billion in AI initiatives in the first half of 2025.
Yes, $47 billion.

Yet nearly 90% of that spend produced minimal returns. Not because the models failed, but because the implementations did. Projects collapsed under compliance constraints, organizational fragmentation, and the messy reality of customer interactions that don’t neatly fit into decision trees.

A recent example makes the risk concrete.

Cursor’s AI support agent, “Sam,” fabricated a completely fictional policy stating that developers were limited to one device per subscription due to “security features.” The policy did not exist. The hallucination spread quickly across developer forums and social channels, triggering subscription cancellations and a viral backlash before the company could intervene.

The damage wasn’t caused by AI making a mistake. It was caused by deploying AI as an authority without guardrails, ownership, or accountability.

Automation Scaled Broken Service Models

Many customer service organizations were already fragile before AI arrived. Knowledge bases were outdated. Policies were rigid and internally focused. Frontline employees lacked the authority to resolve issues end-to-end. Ownership was fragmented across teams and systems.

AI learned those systems exactly as they were.

When you automate a broken process, you do not create efficiency. You create faster failure. You remove friction for the organization while increasing friction for the customer, and you do it at scale.

Speed became the wrong proxy for success. First-response times dropped. Throughput increased. Contacts per agent declined. These metrics looked impressive in executive reviews.

But speed is not resolution.

A fast answer that does not solve the problem is worse than a slower one that does. Customers do not remember how quickly you responded. They remember whether you took ownership, whether the issue was resolved, and whether they felt respected in the process.

AI optimized for motion. Customers needed progress.

What makes these failures especially damaging is the emotional context in which they occur. When an AI delivers false information with confidence, it does more than fail to resolve the issue. It violates trust at the exact moment trust matters most. And the consequences rarely stay contained. Broader research continues to show that customer support depends on empathy, nuance, and situational judgment, capabilities that AI still struggles to replicate reliably.

But where do we go from here?

The Real Failure Is Leadership, Not Technology

In many AI-driven service systems, escalation is deliberately buried, treated as an exception, a breakdown, or a last resort. Customers are pushed toward articles they’ve already read, asked to rephrase questions they’ve already asked, or offered partial answers that sidestep the real issue.

That design choice sends a clear message, whether intended or not: the system exists to manage customers, not to help them.

Leaders also underestimated the psychology at play. Customers tolerate automation when the stakes are low. But when money, fairness, or time is on the line, they want agency. They want discretion. They want a capable human who can exercise judgment.

AI struggles in these moments not because it can’t generate language, but because it lacks lived context. It cannot truly assess fairness. It cannot recognize when bending a rule is the right thing to do. And it cannot be held morally accountable for the outcome.

The result is not always immediate backlash. More often, it’s quiet disengagement. Customers stop calling. They stop complaining. They stop giving the company the benefit of the doubt.

They leave later.

At its core, this is not a technology failure. It is a leadership failure.

What leaders underestimate is that customer service is where brand promises are tested in real time, where strategy meets reality.

The organizations getting this right are not abandoning AI. They are redesigning how it is used. They make escalation fast and obvious. They define clear boundaries between automation and human judgment. And they hold leaders accountable not just for efficiency, but for resolution quality and customer confidence.

Most importantly, they accept a difficult truth: some interactions should never be optimized purely for cost.

The real value of AI is not replacing human judgment, but amplifying it. And consumers understand this intuitively. A majority still prefer human engagement for customer support, not out of resistance to technology, but out of disappointment with how AI has been deployed. The issue isn’t that customers don’t want automation. It’s that they don’t want to be abandoned by it.

88% of contact centers use AI-powered solutions, but only 25% have fully integrated automation into daily service operations, indicating a gap between deployment and effective use.

Swedish fintech Klarna made a very public push to automate customer support with AI, claiming its systems could replace the equivalent of hundreds of human agents. However, customer satisfaction dropped, and service quality suffered, prompting leadership to pivot: rather than eliminating human support, Klarna began reassigning internal staff (engineers and marketers) into customer support roles, acknowledging that AI had been over-relied on and underdelivered for complex customer interactions.

What Leaders Should Do Now

Fixing customer service in an AI-enabled world does not require abandoning technology. It requires changing how leaders think about responsibility, judgment, and success.

The result of getting this wrong is already clear: 53% of consumers actively dislike or hate AI-driven service interactions. I am one of those. My experience has been less than stellar.

However, I am not giving up. In my own business, we are utilizing AI thoughtfully, approaching it from the customer/client perspective and working backward. So what can you do as a leader in your organization?

First, redefine what “good” looks like. If your primary service metrics are speed, deflection, or cost per contact, you are measuring the organization’s convenience, not the customer’s outcome. Add metrics that reflect resolution quality: first-contact resolution, repeat contact rates, escalation effectiveness, and post-resolution confidence.

Second, make escalation a feature, not a flaw. Audit your service journey and ask how hard it is for a customer to reach a capable human when the issue actually matters. If escalation paths are hidden or delayed, redesign them. Remember, the value of AI is in enhancing human capability, not in always replacing it.

Third, clearly separate what automation should handle from what it should not. AI excels at low-emotion, repeatable interactions. It performs poorly when discretion, fairness, or empathy are required. Draw that boundary explicitly.

Fourth, empower frontline teams with real authority. If escalation only leads to another script or another handoff, trust erodes further. Variability in judgment is not a defect; it is often the cost of genuine service.

Fifth, hold leadership accountable for service outcomes, not just efficiency. What leaders measure signals what the organization truly values.

Conclusion: The Real Test

Customer service is no longer just an operational function. It is one of the clearest expressions of leadership a customer will ever experience.

AI did not ruin customer service. It revealed the trade-offs leaders were already making between cost and care, efficiency and ownership, and automation and accountability.

The organizations that will win over the next decade will not be the most automated. They will be the most intentional. They will understand where technology belongs and where people still matter most.

Because when something goes wrong, and eventually it always does, customers are not asking whether your system is efficient.

They are asking whether you are worth trusting. Are you?

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Sources

Insights and data in this newsletter are drawn from publications and reporting, including:

• Gartner — Customer preference and switching risk related to AI in customer service; difficulty reaching human agents as a top concern

• Gartner — Self-service resolution rates and limitations of automated support

• Academic research on algorithm aversion and customer resistance to automated decision systems

• Human–computer interaction studies on empathy gaps in chatbot-based service

• Industry analyses on AI deployment failures in customer experience (McKinsey, CMSWire)

• Public polling on declining trust in automated and AI-mediated digital interactions

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Introduction

Every organization claims that accountability is important, but few actually design systems to support it. Too often, accountability is confused with delegation. Leaders assign tasks, hold status meetings, and expect results, only to find that outcomes fall short, decisions stall, and ownership feels fragmented. When this happens, the root issue is rarely a lack of effort or intent; instead, it often stems from delegation that lacks a clear definition of accountability.

At the leadership level, accountability is not about imposing tighter control, raising expectations, or increasing reporting. It is a system that must be intentionally built, reinforced, and modeled.

Delegation involves handing off tasks, while accountability assigns ownership of outcomes. When leaders delegate without clearly defining ownership, success criteria, and decision-making authority, responsibility becomes diluted. Teams may remain busy, but their results can become inconsistent. When accountability falters, it is typically not because individuals don’t care; rather, it is because leaders have failed to create an environment where accountability can succeed.

The distinction between simply delegating work and intentionally designing for accountability is crucial in determining whether execution improves or quietly deteriorates.

For instance, in a fast-growing business I worked with, leaders delegated tasks aggressively to keep up with growth. However, execution slowed because accountability did not scale with the increased workload. The solution was not more oversight; it was establishing clear ownership of outcomes.

Delegation moves work. Accountability moves outcomes.

Let’s dig in.

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Accountability Starts with Ownership, Not Oversight

High-performing organizations do not depend on constant oversight; instead, they thrive on clear ownership. Accountability arises when individuals understand what they are responsible for, how success is measured, what trade-offs they are allowed to make, and when they can take action without needing permission.

When ownership is ambiguous, organizations often resort to endless alignment meetings, diffuse responsibility, and common phrases like, “that’s not my job.” This makes leadership reactive rather than proactive, spending time addressing conflicts rather than driving results. In contrast, clear ownership speeds up decision-making, and in competitive markets, this advantage becomes significant.

You Don’t Get Accountability Without Standards

One of the most common breakdowns in accountability occurs when leaders ask individuals to take ownership of outcomes without clearly defining the standards by which those outcomes will be judged. In such environments, accountability becomes performative, discussed frequently but applied inconsistently.

Accountability cannot exist without explicit expectations. Effective accountability systems are built on clearly defined metrics, agreed-upon success criteria, and transparent reporting. These standards must be established before execution begins, rather than being applied retroactively once results are known.

When expectations exist only in someone’s mind or shift depending on the audience or the situation, accountability becomes subjective. Performance discussions can become politicized, leading to a loss of trust. Teams often find themselves spending more time explaining results than improving them. Strong leaders eliminate this ambiguity by establishing shared standards that apply consistently across the organization.

When standards are clear, performance discussions become factual, consistent, and fair. Leaders can focus on decisions, trade-offs, and improvements rather than interpretations. This is how accountability transitions from being a leadership aspiration to a repeatable operational discipline.

Metrics Are the Language of Accountability

Accountability cannot exist without data, but not all data promotes accountability. Vanity metrics and activity metrics create movement without delivering real outcomes. True accountability relies on outcome-based metrics that directly connect efforts to results.

The most effective organizations focus on a small set of key measures that answer three fundamental questions: What does success look like? How are we measuring it? How often are we reviewing it? These metrics are defined in advance, regularly reviewed with discipline, and used to guide decisions rather than justify past performance.

When metrics are transparent and consistently reviewed, accountability transforms from a personal responsibility into a cultural norm. Results are discussed openly, gaps are identified early, and conversations center on course correction rather than explanations. Leaders spend less time debating numbers and more time deciding on next steps.

In this environment, metrics are not punitive; they are empowering. They provide clarity, reinforce ownership, and enable teams to act swiftly with confidence.

Accountability Is a Leadership Obligation

Here’s the hard truth: accountability cannot be delegated if leadership does not model it. This means that leaders must take responsibility for missed commitments, be transparent about trade-offs, hold their peers accountable, not just their direct reports, and make decisions they are willing to stand behind. When leaders consistently model accountability, it spreads throughout the organization. However, when they avoid accountability, it diminishes, no matter how many dashboards or meetings are in place.

When leaders model accountability, it cascades. When they avoid it, the organization follows.

We have witnessed the consequences of confusing delegation with accountability. In the case of the Boeing 737 MAX, tasks were delegated extensively, but accountability for safety outcomes was divided, resulting in catastrophic consequences. In contrast, companies like Netflix incorporate accountability into their operating models. They grant leaders the freedom to act while ensuring clear, unmistakable ownership of outcomes.

Accountability Enables Scale

As organizations grow, informal alignment often deteriorates. What is effective at $10 million may not work at $50 million, and what is successful at $50 million might fail at $100 million.

At larger scales, accountability needs to be structured, measured, and reinforced through clear governance and a consistent operating rhythm. Organizations that scale successfully focus on designing better accountability systems rather than imposing more controls. These systems enable leaders to act more quickly, make more informed decisions, and maintain alignment without hindering execution.

Few organizations demonstrate this better than General Electric during its most successful growth years.

General Electric’s ability to scale effectively over the decades was not due to tighter controls or constant oversight; rather, it stemmed from a thoughtfully designed accountability system.

Under Jack Welch’s leadership, GE established clear accountability through explicit ownership, well-defined standards, and a disciplined operating rhythm. Leaders were granted the autonomy to manage their own businesses, but the expectations were clear, and performance was rigorously reviewed. The implementation of Session C talent reviews, stretch targets, and regular operating reviews ensured that accountability was not merely assumed but actively reinforced.

What made GE successful was not just the act of delegation. While tasks were distributed, ownership of outcomes remained transparent. Leaders were not only aware of their responsibilities, but they also understood how their success would be measured and how frequently results would be evaluated. Accountability flourished because it was integrated into the leadership system, rather than relying solely on individual efforts.

Conclusion: The Bottom Line

Accountability isn’t about creating pressure; it’s about clarity. It involves understanding who is responsible for what, how success is defined, and how progress is measured without any ambiguity or political complications. When accountability is well-defined, execution improves, trust grows, and leaders can focus more on building rather than chasing.

This clarity is essential for organizations to grow intentionally, sustainably, and with confidence.

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Sources

Insights and data in this newsletter are drawn from publications and reporting, including:

• Accountability vs. delegation in leadership: Harvard Business Review; MIT Sloan Management Review; McKinsey Quarterly.
  (Harvard Business Review, MIT Sloan, McKinsey)

• Leadership accountability and decision rights: Bain & Company RAPID framework; McKinsey decision-making research; BCG organizational design insights.
  (Bain & Company, McKinsey, BCG)

• Ownership, standards, and execution discipline: Patrick Lencioni (organizational health); Roger Connors & Tom Smith (The Oz Principle); Verne Harnish (Scaling Up).
  (Jossey-Bass, Wiley, Gazelles)

• Metrics, operating cadence, and execution: Kaplan & Norton (Balanced Scorecard); Andy Grove (OKRs); John Doerr (Measure What Matters).
  (Harvard Business School Publishing, Grove Books, Portfolio)

• Accountability at scale and growth-stage breakdowns: Harvard Business School case studies; Stanford Graduate School of Business; MIT Leadership Center.
  (Harvard Business School, Stanford GSB, MIT)

• Executive and market context: Wall Street Journal; Financial Times; The Economist.
  (Wall Street Journal, Financial Times, The Economist)

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Introduction

Throughout my career, I’ve experienced the power and risks associated with brand equity. I helped lead a company through a complete rebrand, and earlier in my career, I had just joined Accenture during its historic transition from Andersen Consulting.

Those experiences taught me that brand equity isn’t a logo or a color palette. It is the trust, recognition, and meaning customers lend you. And when that bond breaks, the financial and reputational damage is real. We’ve seen it play out recently: Cracker Barrel reversed a $700M modernization push after a logo change sparked outrage, and Bud Light lost its top spot in U.S. beer sales after a values-signaling misstep reshaped the market.

The same story has played out before: Tropicana lost 20% of sales in weeks after a packaging redesign, Gap scrapped its new logo within days after a customer revolt, and Facebook’s shift to “Meta” remains a live case study in equity impact.

These are not just marketing blunders. They are reminders that brand equity is a rented asset, one that leaders must build deliberately, protect fiercely, and manage with discipline. In this, I’ll share the framework I’ve used to think about brand equity and the playbook leaders can lean on when meaning, symbols, or values come under fire.

Let’s dig in.

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What Brand Equity Really Is

Brand equity is one of those concepts that sounds abstract until you see it at work. It is the extra value customers give you: recognition, trust, and mental availability. It is why Apple can charge hundreds more for a phone with nearly the same hardware as its competitors, or why Costco’s Kirkland label can outsell national brands, because people believe in what the name represents.

Two of the most practical ways leaders have learned to make sense of brand equity come from marketing scholars David Aaker and Kevin Keller.

Aaker’s model says brand equity is built through five pillars: loyalty, awareness, perceived quality, associations, and proprietary assets (things like trademarks or distribution agreements). These are the levers a company can deliberately pull to strengthen its brand. For example, when you keep customers coming back, build awareness through marketing, or ensure your product is seen as reliable, you are compounding equity.

Keller’s framework, known as Customer-Based Brand Equity (CBBE), examines it from the consumer’s perspective. His “pyramid” illustrates how brands evolve from a simple identity (people know you exist) to meaning (people understand what you stand for), to responses (they like and trust you), and finally to resonance, where customers advocate for you, defend you, and refuse to switch. Think of Harley-Davidson riders tattooing the logo on their arms: that is resonance.

And this is not just theory. Equity shows up in the numbers. Perceptions of brand value can significantly impact stock prices within a single trading session. Companies with deep equity can take a hit, whether it is a bad quarter or a PR stumble, and recover faster than weaker competitors.

The leader’s takeaway is simple. Equity is not a logo. It is not a tagline. It is a system of expectations you have to meet across every product, every place, every moment in time. Break that system, and you find out quickly who really owns the equity.

Cracker Barrel: When Heritage Is the Product

This summer, Cracker Barrel took a bold step: a complete modernization, including a sleek, minimalist logo that no longer relies on the “Old Timer” image of the barrel. The redesign was meant to appeal to younger diners as part of a $700 million revamp. But the response was swift, loud, and unforgiving.

Within days, social media exploded:

“You kicked Uncle Herschel to the curb. Now you are paying the price. Own it and stop making excuses.”
“It takes away from heritage. When you're 81 years old, you kind of remember the way the place started.”

Politicians and pundits joined in. Some urged the chain to revert to the old logo, calling it “the ultimate poll” and a PR opportunity. As backlash mounted, shares plunged nearly 12%.

Just days after going live, Cracker Barrel blinked. The company issued an apology, saying, “We could’ve done a better job sharing who we are,” and then restored the classic “Old Timer” mark.

So what happened here? First, they misread the meaning market. For Cracker Barrel, that man-by-the-barrel isn’t a symbol; it is the story. The porch, the fireplace, the knick-knacks, these aren’t accessories; they’re the identity customers have embraced for generations. Stripping them out broke the emotional connection.

Second, they overlooked the risk of politicization. In today’s polarized climate, a logo isn’t just a logo; it can become a symbol in a broader cultural fight. And yes, that means backing into a controversy and having to turn on a dime.

Here’s the leadership takeaway: In experience-based categories where nostalgia is the product, symbols aren’t just branding; they are the product. Any change must be staged, evidence-based, and deeply rooted in customer meaning. Otherwise, what appears to be progress can feel like a betrayal.

Bud Light: The Aftershocks of Values Signaling

Bud Light’s 2023 controversy was more than a headline. It was a shock to the system that reshaped the entire U.S. beer market. Within a year, Bud Light had fallen from its long-held number one spot to third place, behind Modelo and Michelob Ultra (Anheuser-Busch InBev owns both brands). By 2025, Ultra’s growth kept accelerating even as the overall beer category softened, leaving Bud Light’s recovery incomplete and uncertain.

What makes this case so instructive is how the crisis spread. The problem could not be solved with one clever ad or a quick apology. The “fix” required portfolio-level adjustments: shifting dollars to Ultra, revising SKUs and pricing, and leveraging brands that had more precise positioning and momentum. Contagion in consumer markets is a real phenomenon, and leaders cannot always directly stabilize a wounded brand. Sometimes they have to defend the castle by reinforcing another wall.

Category dynamics made the situation even tougher. Beer is not a growth industry in the United States. It is flat to declining, which means lost share is far harder to win back. Competitors seized the vacuum. Modelo, supported by strong distribution and demographic trends, surged ahead. Bud Light was not just fighting to regain ground. It was fighting in a market where every inch is contested.

The third lesson is the most sobering. Crises of this scale do not return to the old baseline. They create a new equilibrium. Bud Light is unlikely to regain its former dominance because consumer habits, perceptions, and loyalties have shifted. Once the category reorganizes, the latest mix tends to stick.

For leaders, the Bud Light story serves as a reminder that values-driven actions have lasting consequences. They ripple through portfolios, reshape categories, and reset expectations. The task is not to hope for a return to normal. The task is to build a new playbook for the new reality.

Rapid Equity Erosion: Meta’s Identity Crisis

In 2021, Facebook made one of the boldest brand pivots in corporate history, rebranding itself as Meta. The move was meant to signal a future beyond social media, centered on the “metaverse,” a virtual world where work, play, and connection would merge. But instead of expanding the brand’s relevance, the change exposed how fragile brand equity can be when leaders misread what the market actually values.

For nearly two decades, Facebook had become shorthand for social connection. Its name and blue square weren’t just branding; they were cultural infrastructure. Billions of people worldwide use it daily to communicate, share, and advertise. Overnight, that familiarity was replaced by a new name few understood and a concept, “the metaverse,” that felt abstract, expensive, and disconnected from reality.

The timing couldn’t have been worse. The rebranding came amid privacy scandals, whistleblower revelations, and a decline in trust. Instead of reframing the company as visionary, it made the move look like an escape hatch. Investors fled, advertisers paused, and within a year, Meta’s market value had fallen by more than $600 billion.

The lesson: you can’t rebrand your way out of a credibility problem, and you can’t stretch your brand narrative further than your audience’s imagination.

The Leader Playbook: How to Protect and Compound Brand Equity

The best time to protect brand equity is before you need to. By the time a crisis hits, trust is already withdrawing faster than you can deposit.

1. Build the buffer.
Map your identity assets: the symbols, rituals, and founder stories people actually care about. Test what they mean to real customers. Every redesign or message has an equity price tag. Know what you’re spending before you swipe.

2. Draw your lines.
Create a values matrix that defines what you’ll speak on, what you’ll stay silent about, and where the gray areas live. Pressure-test those choices with employees, customers, and partners so you aren’t discovering your boundaries in the middle of a storm.

3. Watch the early signals.
Share of Search, sentiment velocity, and excess share of voice all move before revenue. Treat them like smoke detectors. And assume even neutral actions can get political. Scenario plan for who responds, how, and how fast.

4. When a crisis hits, act fast and act visibly.
If stakeholders believe you acted with intent or negligence, words won’t fix it; actions will. Show change, narrate continuity, and remind people what’s staying the same so they don’t feel abandoned. Utilize your portfolio wisely by reallocating funds to cleaner brands while the damaged ones recover.

5. Rebuild the moat.
After the fire, double down on distinctiveness. Flood the market with your assets: packaging, codes, and rituals. Maintain a higher share of voice than share of market for at least a year. Then codify the lessons. Put heritage assets under review, run red-team drills, and make crisis muscle part of your operating system.

Because in the end, brand equity doesn’t heal on its own. It compounds only when leaders turn every scar into a strategy.

Conclusion: The Stewardship of Meaning

Brand equity is not a possession. It is a license granted by the market renewed daily through relevance, consistency, and trust. Leaders don’t own it; they manage it on behalf of the customers who built it with their attention, belief, and loyalty.

Cracker Barrel, Bud Light, Tropicana, Gap, and Meta all reveal the same truth. When you tamper with what people recognize or believe, you are not just changing aesthetics; you are renegotiating the emotional contract that underwrites your business. The consequences show up fast in the balance sheet and linger even longer in the mindshare you lose.

For boards and operators, the imperative is discipline.

• Treat symbols and rituals like product IP. They carry economic value because they carry meaning. Protect them with the same rigor you protect patents or formulas.

• Expect permanent shifts in share after identity shocks. Market trust rarely snaps back to its prior equilibrium. Plan for the new baseline, not the old one.

• Measure leading indicators. Share of Search, sentiment velocity, and cultural relevance scores often precede revenue growth. Treat them as early-warning systems, not marketing vanity metrics.

• Govern change. Major brand or values decisions should clear the same level of diligence as capital investments. Brand equity is intangible capital, but it is genuine.

Ultimately, brand equity is the compounding interest of trust. It grows quietly when you keep promises and erodes violently when you break them. The companies that endure understand that every choice, every redesign, statement, or campaign, whether it adds a deposit to that account or triggers a withdrawal, is a crucial decision.

The most resilient brands are those that remember what their customers never forgot: equity is built over decades and lost in days.

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Sources

Insights and data in this newsletter are drawn from publications and reporting, including:

• Cracker Barrel reversal, investor reaction, and company statement: PBS NewsHour; AP; Nation’s Restaurant News; Cracker Barrel site; CBS News. (PBS, AP News, Nation’s Restaurant News, Cracker Barrel, CBS News)

• Bud Light market share shifts and Michelob Ultra momentum: WSJ; Forbes; Reuters/NIQ trend context; MarketWatch. (Wall Street Journal, Forbes, Reuters, MarketWatch)

• Brand equity theory: Keller (CBBE); Aaker components. (Duke People, ResearchGate)

• Crisis communication: Coombs’ SCCT and product-harm research. (SpringerLink, PMC)

• Predictive metrics: Share of Search (IPA/EffWorks); ESOV (Binet & Field). (IPA, maynardpaton.com)

• The Guardian

• Financial Times

• Wall Street Journal

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Introduction

Opendoor isn’t a household name for most, but in real estate and tech circles, it was once one of Silicon Valley’s brightest stars. Founded in 2014, the company pioneered iBuying, a model in which it buys homes directly from sellers, makes minor repairs, and resells them quickly. The pitch was speed and certainty for homeowners; the risk was carrying billions of dollars in housing inventory.

That model thrived in a world of low interest rates and rising home prices. But when mortgage rates spiked and the housing market cooled, the economics collapsed. At the center of this storm was Carrie Wheeler, Opendoor’s former CFO, who became CEO in late 2022. Her three-year run offers leaders a case study in navigating crisis and the limits of execution without a narrative.

What interested me in this story is that, according to Carrie, she was doing well, but stepped down on August 15th, 10 days after their recent earnings announcement. We stopped the bleeding. We restructured the business, rebuilt an exceptional leadership team, set a bold vision for long-term value creation, and reshaped the company for the future – all against the backdrop of one of the toughest real estate markets on record. We went from $1 billion in losses when I took over, to announcing our first quarter of positive EBITDA in three years this past quarter.

She was under pressure. Activist investors were dissatisfied with the company's progress and the lack of a clear roadmap for transforming Opendoor into an AI-first real estate platform. We want a comprehensive plan articulated on how she plans to take the 51-cent company she’s presided over for 2.5 years to the heights of $200/share in 3 years. We have a plan for that. Does she agree? Is she the one to take us there?

In the end, Wheeler’s departure underscores a brutal truth: survival alone isn’t enough. Investors, employees, and customers don’t just want stability; they want belief in a future worth betting on. For leaders, the Opendoor story is a reminder that numbers can buy you time, but only a compelling vision earns you staying power.

Let’s dig in.

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The Setup She Inherited (Dec 2022)

When Carrie Wheeler stepped into the CEO role in December 2022, she inherited a company in freefall. Opendoor had just reported a staggering $1.35 billion net loss for the year, including a $737 million write-down on its housing inventory, a direct result of plunging home values and the company’s exposure to unsold properties. To stop the bleeding, Opendoor executed an 18% workforce reduction, a painful move that signaled both the depth of the crisis and the urgency to preserve cash.

Making matters worse, the external environment was turning against her. The housing market, once the foundation of Opendoor’s growth, had shifted dramatically. By October 2023, the 30-year mortgage rate spiked to 7.79%, the highest in more than two decades. Demand froze, affordability collapsed, and the company’s once profitable flipping model, built on cheap capital and fast resales, was suddenly underwater.

Naturally, new leaders don’t get to choose ideal conditions, but they also don’t get to sit out the storm either. Her mandate was clear: stabilize the business, restore investor confidence, and chart a course forward.

Reset Before Rebuild (2023)

In 2023, Wheeler’s focus shifted from bold reinvention to survival. Her playbook was straightforward: cut costs, slow the bleeding, and start rebuilding credibility with investors and employees alike.

This meant making more painful moves, most notably an additional 22% workforce reduction in April 2023, which resulted in the elimination of roughly 560 jobs. At its peak, Opendoor employed 2,816 people in 2021. The company was now 40% smaller.

The financial results reflected that pivot. Revenue collapsed 55% year-over-year to $6.95 billion, a stark reminder of how quickly the housing downturn had undercut the business model. At its 2022 peak, the company had revenue of $15.57 billion. However, and this is a key point, Opendoor has never posted a full-year profit since its founding in 2014.

Yet, there was a glimmer of progress as net losses narrowed to $275 million. It wasn’t a story to celebrate on Wall Street, but it showed Opendoor could, at the very least, buy time.

On the surface, Wheeler’s tenure showed progress: losses narrowed, costs were contained, and the company survived a brutal housing cycle. But beneath the headlines, the reality hadn’t changed.

As I pointed out, Opendoor has never turned a profit since its founding. Was this genuine progress, or simply buying time in the hope that a better market would rescue the company? Where was the Board in all of this? As leaders, we have all been in challenging situations, but was this turnaround even achievable?

Partner, Don’t Disrupt (2024)

By 2024, Carrie Wheeler shifted Opendoor’s playbook from trying to disrupt the traditional housing system to working within it. The most symbolic move came with an unlikely alliance: a partnership with Zillow, once a bitter iBuying rival. Rather than battling for dominance, Opendoor positioned itself as a platform that could integrate with agents and partners, signaling a more collaborative future.

But collaboration didn’t fix the fundamentals. Revenue slipped again to $5.2 billion, continuing the downward slide from its 2022 peak of $15.6 billion. Profitability remained elusive with adjusted EBITDA at –$142 million, and another 17% workforce reduction underscored the company’s struggle to stay lean.

The hard truth is this: you can’t cut your way to growth. Cost reductions may buy time, but they rarely unlock the future. When Howard Schultz slashed costs at Starbucks in 2008, he paired it with reinvestment in store quality and digital engagement, fueling a resurgence. Cuts cleared the runway, but a clear pivot created lift.

Opendoor, by contrast, was still searching for that pivot. The company had managed to stay afloat, but staying alive isn’t the same thing as moving forward. Without a path to profitability or a story that could rally belief, Wheeler’s strategy looked less like a setup for a turnaround and more like an attempt to stave off the inevitable. Again, I ask…where was the Board?

A Small Win, Then a Pivot (2025)

By mid-2025, Carrie Wheeler finally got the win she’d been chasing. In Q2, Opendoor posted positive adjusted EBITDA of $23 million, the first real proof that the model could actually work under tighter discipline. For a moment, it looked like her playbook had paid off.

But proof isn’t the same as promise. Investors didn’t just want a company that could grind out survival; they wanted a leader who could inspire belief, a bold narrative, the spark of a founder, not the careful discipline of an operator.

Wheeler delivered stability, but she never convinced the market she could provide growth. As mentioned, ten days after announcing the latest results, she was out. The verdict was immediate: shares jumped on news that CTO Shrisha Radhakrishna would take the reins as interim CEO, signaling Wall Street’s appetite for vision over caution.

In the end, Wheeler bought Opendoor time but not conviction. The company was leaner, its losses narrower, and its model no longer in freefall. Yet conviction, the belief that this was a business worth betting on for the long haul, never followed. That raises a more complicated question: Were the expectations placed on her ever realistic?

The board and the market were not only asking for stabilization, they wanted a turnaround story that could lift a fifty-cent stock into triple digits, and they wanted it fast. They demanded profitability and a bold new narrative simultaneously, in the midst of one of the toughest housing markets in decades.

Was that true accountability, or was it Mission Impossible? For leaders, the lesson may be that execution can steady the ship, but when investors demand reinvention at startup speed, even survival can appear to be failure.

Conclusion - Leadership Lessons

Here’s what leaders can take away from Wheeler’s run at Opendoor:

1. Context matters more than capability. You can be a strong leader and still be the wrong fit for the moment. Wheeler was steady, disciplined, and sharp on operations. But Opendoor did not just need stability; it required a bold story to convince the market that the future was worth betting on. Even the right skills can look mismatched in the wrong phase of a company.

2. Expectations must be grounded in reality. Wheeler was tasked with stabilizing a company that had never been profitable while also convincing the market that it could suddenly become a high-growth story. That may have been less a leadership challenge and more an impossible assignment. Leaders should strive for clarity on what success actually entails, and boards and investors must ensure that those goals are achievable. Unrealistic expectations can doom even the most capable leader.

3. Execution buys time, vision buys the future. Wheeler did the hard work of cutting losses and buying breathing room. But time without belief does not last long. Investors wanted more than survival; they wanted the next act. Leaders need both sides of the equation: discipline to protect today and vision to sell tomorrow.

4. Narrative is not optional. In markets this volatile, the story is as important as the numbers. Silence creates doubt, and doubt kills confidence. Wheeler discussed stabilization but never clearly outlined what came next. For leaders, the takeaway is simple: narrative is not fluff, it is strategy.

5. Exit with intention. Not every chapter ends with a win, but how you leave still matters. Wheeler stepped aside quickly, remained as an advisor, and ensured a smooth transition. Leaders may not control the outcome, but they can control the handoff, and that can make all the difference for the people left behind.

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Sources

Insights and data in this newsletter are drawn from publications and reporting, including:

Eric J. Savitz, “Opendoor CEO Resigns. The Meme Stock Is Getting New Leadership,” Barron’s, Aug 15, 2025.

MarketWatch Staff, “Opendoor’s Stock Is Rocketing Again. What Can Make It Keep Going?” MarketWatch, Aug 15, 2025.

Dominick Reuter, “Opendoor Is Surging Again After July’s Meme-Like Rally. Here’s Why,” Business Insider, Aug 2025.

Financial Times, “Opendoor Reports First Adjusted EBITDA Profit Since 2022,” Aug 2025.

Nasdaq News, “Opendoor Q2 2025 Earnings Report,” Aug 2025.

AInvest, “Opendoor: A Problem or a Cautionary Tale for Real Estate Tech Investors?” Aug 2025.

AlphaSpread, “Opendoor CEO Carrie Wheeler Resigns Following Investor Pressure, Stock Surges,” Aug 2025.

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Introduction

Note: I use client and customer interchangeably throughout.

Imagine this: your sales team lands a big new customer and celebrates, high-fives all around. Fast forward a few months: the customer slips away due to a service snafu, and everyone’s deflated. Sales is frustrated (“We worked so hard to win that deal!”) and operations is scrambling to figure out what went wrong.

The result: growth figures slide and sales often takes the blame, either for “selling a bad deal” and/or for failing to hit quarterly or annual targets that they would have achieved if the customer had been retained. If you’ve led a growth team or business unit, you’ve likely seen this play out. I know I have.

Client retention often doesn’t get the same fanfare as new sales, but it’s every bit as important to a company’s success. In this, I’ll explore why keeping clients is crucial, how good vs. poor retention impacts revenue and reputation, how client retention is measured, and what you can do to keep your hard-won customers around.

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The High Cost of Losing Customers (and the Value of Keeping Them)

Focusing on client retention isn’t just a nice-to-have; it’s a smart business strategy with profound financial implications. Consider these eye-opening facts about existing customers vs. new ones:

• It’s Cheaper to Keep ’Em: Acquiring a new customer can cost five times more than retaining an existing one. You read that right: all those marketing dollars, sales pitches, and onboarding efforts for a new client are five times pricier than simply keeping your current clients happy. No wonder retention delivers a better bang for the buck.

• Small Changes, Big Payoff: Even a tiny increase in retention pays off hugely. According to multiple sources, for example, Bain & Company and analyses of customer-relationship data, increasing customer retention by just 5% can boost profits by an average of 60–65%, depending on the industry and cost structure. Loyal customers tend to buy more over time, which drives those profit gains. Repeat customers spend ~67% more on average than new customers. They’re also more open to trying your latest products and services (about 50% more likely, studies show). All that adds up to higher revenue/margins when you keep clients coming back.

• Easier to Sell More: Existing customers are not only cheaper, they’re friendlier to your sales funnel. The success rate of selling to an existing customer is 60–70%, whereas for a brand-new prospect it’s as low as 5–20%. It makes sense that your current clients already trust you, so they’re more likely to say “yes” to that next offer. Meanwhile, a cold prospect might slam the door 9 times out of 10.

Despite these benefits, many businesses underestimate retention. One survey found that 44% of companies focus more on acquisition, while only 18% focus more on retention.

It’s like pouring water into a bucket with a hole in it: all the effort you put into winning new clients could be wasted if you're not taking care of your existing ones. Nearly half of B2B companies don’t even track their customer retention rates, which means they are unaware of a significant opportunity (or problem). The main point is that client retention deserves at least as much attention as acquiring new business.

Good Retention vs. Bad Retention: Impact on Revenue and Reputation

What happens when you retain clients effectively, and what happens when you don’t? Let’s compare the two extremes:

When Retention is Great

High client retention is a superpower for your business. For one, it leads to steady, predictable revenue. Loyal customers stick around, providing recurring sales you can count on each quarter. This makes budgeting and planning a whole lot easier; you’re not starting each month at zero. A base of committed clients can form the bulk of your profit; in many companies, the most loyal 20% of customers account for 80% of total profits.

Retention also fuels growth. Satisfied clients often expand their business with you (buying additional services or upgrades) and give referrals. Research shows loyal customers are 4 times more likely to refer a “friend”, essentially becoming unpaid brand ambassadors. They also tend to forgive occasional mistakes more easily (one study says loyal customers are 5x as likely to forgive a company’s error). And perhaps most importantly, happy long-term customers bolster your reputation. They provide positive reviews and testimonials, attracting new customers and enhancing your brand image. Think of brands known for fanatical customer loyalty like Amazon, Ritz-Carlton, or Netflix, and how their reputations benefit from armies of satisfied, retained customers. That loyalty translates into billions in repeat revenue.

When Retention is Poor

On the flip side, poor client retention is like a leaky bucket in your business. You might be winning new customers, but if they keep leaving, you’re essentially running in place or worse, falling behind. I’ve seen this happen. Losing customers hurts revenue in obvious ways: it’s revenue you had that’s now gone. But it also represents wasted acquisition cost and effort. U.S. companies collectively lose an estimated $83 billion a year due to poor customer retention and “switching” issues. If your sales team is pulling in clients only to see them churn, it’s demoralizing, and the money spent on marketing and sales gets flushed down the drain.

Poor retention also puts a cap on growth. Instead of growing your business, new sales are merely replacing the revenue lost to unhappy customers, a zero-sum game. Take a real example: Sweet Fish Media, a B2B podcast agency, realized they had a serious churn problem. They likened it to having “a big hole at the bottom of their bucket.” New business was pouring in, but 15% of their recurring revenue was leaking out every month due to customer attrition. That level of churn is unsustainable. Imagine losing 15% of your business monthly. They took action by implementing a retention strategy and proactively engaging clients, which reduced their monthly churn from 15% to just 3% within a year.

Beyond dollars, poor retention can damage your reputation. Customers who leave often don’t do so quietly, and they voice their frustrations. Approximately 13% of unhappy customers will share their experience with 15 or more people via tweets, rants to colleagues, scathing reviews, and so on. Negative word-of-mouth can tarnish your brand, making others wary of doing business with you.

And in today’s world, one viral bad review can snowball quickly. Why do customers bail? Often, it’s service or quality issues. A remarkable 72% of customers will switch to a competitor after a single bad customer service experience. Even one slip-up, a missed deadline, a rude support call, or a product that didn’t live up to promises can send a client packing. In short, poor retention not only cuts into revenue but can create a negative feedback loop for your brand image.

And let’s not forget internal reputation and morale: if your operations team can’t deliver what the sales team sold, it creates internal friction. Salespeople get frustrated seeing their hard-won deals flame out, and service teams feel constantly in firefighting mode. There’s also the proverbial “sales sold a bad deal”. It’s not a fun environment. High churn is a symptom of deeper issues, misaligned expectations, poor customer experience, or product/service gaps that everyone in the company ends up grappling with.

How to Measure Client Retention

Client and customer retention is typically measured by evaluating how well a company maintains its existing customer base over a given period. One of the most common and effective metrics is customer retention rate (CRR), which calculates the percentage of customers a business retains from the beginning to the end of a period, excluding new acquisitions.

The formula is: CRR = ((E − N) / S) × 100, where E is the number of customers at the end of the period, N is the number of new customers acquired during the period, and S is the number of customers at the start. This gives a clear picture of customer loyalty and satisfaction.

However, many companies, especially those with high-value accounts, prefer to measure retention by revenue retention, which accounts for the monetary value of retained clients rather than just the count. This includes metrics like Gross Revenue Retention (GRR) and Net Revenue Retention (NRR).

GRR excludes upsells and expansions, focusing purely on how much revenue is preserved from existing clients. NRR includes upsells and cross-sells, showing how much existing client revenue has grown or shrunk. For example, if a company starts with $100 in recurring revenue and loses a $10 client but gains $5 in upsells from others, the NRR would be 95%. This method is beneficial in SaaS and B2B industries where client value varies widely.

Some companies also use In-Year Revenue (IYR) to measure retention against projected annual revenue. For example, if a client was forecasted to contribute $10 in revenue this year but cancels early and only delivers $8, retention is recorded as 98%. While IYR helps understand short-term revenue impact, it falls short of capturing the long-term consequences of churn, such as lost lifetime value, recurring revenue, or future growth potential.

So what do I recommend? The best practice is to use both customer retention and revenue-based retention metrics in tandem. This dual approach helps businesses understand not only how many clients they’re keeping, but also how valuable those relationships are over time. Using these two measures helps identify operational issues, e.g., heavy client churn vs. key client (high revenue or high growth potential) churn.

To help guide further, the customer retention metric is obvious; however, GRR vs. NRR:

1. Use GRR for risk management and operational health: “Are we keeping what we have?” Tells you the underlying customer health, e.g., % of revenue at risk/lost.

2. Use NRR for growth strategy and investor conversations: “Is our existing base expanding over time?” This indicates the overall growth effect, for example, where losses are partly offset by expansion.

I understand, and I wouldn’t advise “over KPI” the business, but you’ll find using Customer Retention + either GRR or NRR helpful. Run various scenarios to understand the output better and determine what works for your business.

How to Boost Client Retention: Tips and Strategies

So, how can you keep clients sticking around for the long haul? Here are some tried-and-true strategies to improve client retention:

• Deliver Stellar Customer Service: This one’s a no-brainer, yet it’s where many companies slip. Excellent service is the foundation of retention. If customers know they’ll be taken care of, they have little reason to leave. On the flip side, one bad experience can send them running. Remember that up to 72% of customers will switch brands after a single poor service incident. Don’t let that be your story. Invest in training your support and account teams to be responsive, helpful, and empathetic. Encourage a company culture that genuinely puts the customer first. We all have worked for companies with this mantra, but is it real or just lip service? When mistakes happen, and they will, address them quickly and make it right. As the saying goes, under-promise and over-deliver to exceed your client’s expectations when you can.

• Personalize the Client Experience: Nobody likes to feel like just another number. Using data and customer insights to personalize interactions can significantly boost loyalty. Whether it’s tailoring your communications, customizing product/service offerings, or simply remembering a client’s preferences, personalization shows clients you value them as individuals. About 80% of customers are more likely to do business with you if you offer personalized experiences. This could mean sending targeted content that’s relevant to their needs, offering tailored solutions, or even small touches like congratulating them on their milestones. Modern CRM tools make this easier at scale. When clients feel understood rather than sold to, they stick around.

• Implement Loyalty Programs or Perks: One proven way to boost retention, especially in B2C, but B2B can use this too, is to reward loyalty. Consider the coffee shop punch card, airline frequent flyer miles, or tech firms that offer premium support to long-term clients. These programs make customers feel appreciated and give them incentives to continue the relationship. The result is often a higher customer lifetime value and more repeat business. Get creative with perks that make sense for your business, such as discounts on renewals, exclusive access to new features, reward points, or invite-only events for loyal customers. Even a simple “loyalty discount” or declaring they are a “platinum client” at contract renewal can signal you value the ongoing partnership. It’s about saying thank you in a tangible way.

• Listen and Act on Feedback: Customers want to be heard. Providing channels for feedback surveys, feedback forms, regular check-in calls, and then acting on that input can dramatically improve retention. Why? It identifies issues before they fester into reasons to leave, and it makes customers feel involved. Crucially, if a customer voices a concern and you fix it, they often become more loyal than if no issue had occurred in the first place. There’s data to back this up: 82% of customers are more likely to trust a company that asks for and acts on feedback. So create a tight feedback loop, for example, a monthly or quarterly business review with clients to ask “How can we do better?” and share what improvements you’ve made based on past input. Also consider tracking metrics like Net Promoter Score (NPS) or satisfaction ratings to quantitatively gauge retention risks.

• Align Your Teams & Fulfill Your Promises: As highlighted, retention isn’t just the customer service team’s job; it starts with honest sales and is sustained by solid operations. Ensure your sales, product, and operations teams are aligned so that what is sold can be delivered at a quality level that meets or exceeds expectations. Nothing kills retention faster than overpromising and underdelivering. Sales teams avoid the temptation to promise the moon just to win a client; instead, set realistic expectations and then wow them in the execution. Internally, foster communication between the teams that land the client and those that onboard/serve the client. Handoffs should be smooth, and everyone should be on the same page about the client’s needs and goals. When sales and operations work hand-in-hand, clients experience a seamless journey.

• Measure and Monitor Retention Metrics: You can’t improve what you don’t measure, as the old management adage goes. Make sure you’re tracking key retention metrics as discussed previously, such as churn rate (the percentage of customers or revenue lost in a period), retention rate, repeat purchase rate, and customer lifetime value (CLV). Keeping an eye on these numbers will alert you to problems early. It’s surprising how many companies neglect this or fail to see the reality in the numbers. Set retention goals and make it a shared KPI across relevant teams. Celebrate improvements in retention just like you would a big new sale; it reinforces the mindset that keeping clients is a win.

Conclusion

Client retention might not sound as thrilling as landing a huge new account, but it is where long-term success is often decided. High retention means a strong, stable, profitable revenue base, lower marketing costs, and a cadre of happy customers singing your praises. Poor retention, conversely, can stunt your growth and give your brand and growth aspirations a black eye. The good news is that improving retention isn’t a mystery; it comes down to consistently delivering value and care to your customers. As we’ve discussed, that involves everything from excellent service and personalization to internal alignment and listening to feedback.

Business leaders should treat client retention as mission-critical. After all, you worked hard to earn your clients’ trust and business; putting in the effort to keep that trust is far easier and more profitable than finding new clients to replace the ones you lost. In the end, a focus on retention creates a win-win: customers feel valued and stick around, and you get to build a thriving business with loyal advocates. And as a bonus, your sales team won’t have to watch their victories walk out the door.

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Sources

Insights and data in this newsletter are drawn from publications and research, including:

• Will Tidey, “Acquisition vs Retention: The Importance of Customer Lifetime Value,” Hüify Blog, June 25, 2024.

• Industry Select, “41 Eye-Opening B2B Customer Retention Statistics,” Oct 16, 2024.

• Taylor Landis, “Customer Retention Marketing vs. Customer Acquisition Marketing,” Outbound Engine Blog, Apr 12, 2022.

• Ian Luck, “5 Innovative Customer Retention Examples and Case Studies,” Customer Gauge Blog, May 31, 2023.

• Mariano Rodríguez, “How Amazon Maintains over 90% Customer Retention,” Beamer Blog, Oct 15, 2020.

• Small Business Trends Staff, “Strategies to Increase Customer Retention for Long-Term Business Success,” Small Business Trends, Jul 2, 2025.

• World Economic Forum – “Hiring with AI doesn’t have to be so inhumane” (Mar 2025)

• University of Washington – Research on AI resume screening bias (Oct 2024)

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Introduction

The modern hiring process is increasingly powered by algorithms, chatbots, and automation, and many job seekers are feeling the downside. While technology has brought efficiency to recruiting, it has also created an impersonal “black box” that leaves candidates anxious and alienated.

In fact, an estimated 99% of Fortune 500 companies use some form of hiring automation today, and roughly 88% of companies use AI tools for initial resume screening. This AI-driven approach can process thousands of applications quickly, but it often comes at the cost of human touch and transparency.

As Jon Stross, President of Greenhouse, bluntly puts it, “the job market has become more soul-crushing than ever” for applicants. I have observed this phenomenon perusing LinkedIn. Post after post of individuals confused and fearful of how companies recruit today. Below, I explore the key frustrations job seekers report from ghosting to bot-like interactions and share insights from experts on how candidates and employers can navigate these challenges.

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The Rise of AI and Automation in Recruiting

Recruiters have turned to AI and automation to handle high volumes of applicants and streamline hiring. Tools like applicant tracking systems (ATS) (e.g., Greenhouse, Workable etc.) automatically filter resumes based on keywords, chatbots schedule interviews or answer candidate questions, and some companies even use one-way video interviews analyzed by AI. These innovations promise faster and “fairer” hiring by eliminating human inefficiencies. In theory, algorithms can standardize evaluations and reduce certain biases.

For example, structured AI interviews that focus on skills have shown more consistent questions and less variance in quality than human interviews. One experiment saw AI-screened candidates succeed in human interviews at nearly double the rate of those selected by traditional resume ranking (53% vs 29%). Companies also enjoy practical gains: using AI for initial screening can cut hiring costs by as much as 87% in one analysis.

However, these benefits often do not feel apparent to job seekers. In practice, automation has made the hiring process feel one-sided. Candidates frequently describe today’s recruitment as a “black box”, they submit applications and then hear nothing. The human element can seem missing entirely.

Laurie Jane Roth, a technical recruiter and career coach, notes that just a few years ago hiring was more personal: “Most interviews happened in person… you weren’t just a resume, you were a person with skills, a story, and potential.” Now, she says, “candidates are first judged by algorithms, keyword searches, and online assessments before sometimes not ever speaking to a person”. In her view, the system has been designed to reject applicants rather than hire them, automated filters look for any reason to say “no,” often dismissing qualified people for arbitrary reasons.

This shift has created new pain points for job seekers across industries. Below
I highlight some of the most common frustrations candidates report in the AI-era hiring process.

Job Seekers’ Top Pain Points in an Automated Hiring Process

Top frustrations job seekers report during their job hunt, according to a 2024 survey. Nearly half of candidates cited not hearing back from employers (“ghosting”) as a major frustration, followed by issues like low salaries and unrealistic requirements.

Ghosting: The Silence is Deafening

One of the biggest complaints from candidates today is “ghosting”, when employers simply stop responding without explanation. Unfortunately, ghosting has become disturbingly common. In a recent survey of 1,000 job seekers, 44% said that never hearing back from employers is among their top frustrations. Likewise, Greenhouse’s State of Job-Hunting report found 61% of job seekers have been ghosted after a job interview, a rate that has climbed nearly 10 percentage points since early 2024.

Job seekers across all sectors share similar stories of investing hours into applications or multiple interview rounds, only to be met with radio silence. “Candidates invest many hours of their time and effort … only to never hear back,” Roth observes, calling out the lack of feedback that pervades today’s process. This abrupt silence isn’t just frustrating; it’s demoralizing. It can especially rattle early-career candidates who are still building confidence or those who haven’t actively been in the job market for years.

Why do employers ghost candidates so frequently now? Experts suggest several reasons:

• Volume Overload: With online applications and AI tools, companies receive far more applicants than they can handle manually. Over 38% of job seekers admit to mass-applying to roles (often using AI to generate resumes/cover letters), which floods employers with resumes. Recruiters simply cannot respond to everyone in a timely way, and many candidates fall through the cracks. In other words, silence may reflect an overwhelmed hiring team rather than a personal slight, but the candidate is left in the dark either way.

• Automation Gaps: Companies rely on ATS filters and automated emails, but these systems aren’t perfect. A candidate might be auto rejected by software without any human interaction, and if the system fails to send a rejection note, the person is effectively ghosted by a bot. In some cases, “ghosting” is unintentional, an email might get caught in spam, or there was simply no process in place to ensure every applicant gets closure.

• Fear of Legal Risks: Interestingly, some hiring managers choose to say nothing rather than risk an uncomfortable conversation. Career columnist Jack Kelly notes an “underlying fear that a recruiter or HR representative may inadvertently say something that can be misconstrued… so they feel safer to just not say anything” when rejecting a candidate. In a hyper-sensitive environment, silence can feel like the safest route for employers, though it’s little solace to the candidate left hanging.

Regardless of the cause, ghosting leaves a bitter taste. It’s a lose-lose situation, as career coach Adam Broda argues: “Candidates are left wondering, relationships are broken, recruiters lose trust – time is wasted. Companies MUST realize their hiring process is part of the culture they’re trying to create. If a company can’t respect the candidates… how could they ever claim to value employees?”.

In the short term, ignoring applicants might save a recruiter a few emails, but it seriously harms the employer’s reputation in the long run.

“Ghost Jobs” add another layer of frustration related to ghosting. These are job postings that appear active but for which the company isn’t actually hiring (or the role was already filled internally). According to Greenhouse, posting phantom openings has become more common: about 18–22% of jobs on its platform each quarter turn out to be “ghost jobs”, and three in five candidates suspect they’ve encountered such listings.

From a candidate’s perspective, ghost jobs are a huge time waster and feel like a bait-and-switch. In the Resume Genius survey, nearly one-third of job seekers (32%) said they were frustrated by ghost jobs, making it one of the top five job search irritants. Applying to a position that was never real can be even more infuriating than being rejected from a real one.

It’s Not Just the Bots: The Human Element Matters Too

While AI and automation catch most of the heat, let’s be honest, some of the ghosting and cold, impersonal treatment comes from actual people. Behind every “noreply@company.com” email is a team that chose not to follow up. Behind every drawn-out interview process with no closure is a human who didn’t prioritize communication.

Yes, recruiters are overwhelmed. Yes, HR teams are understaffed. But the lack of empathy isn’t just an AI flaw, it’s a cultural one. Treating applicants like disposable inputs isn’t a tech issue, it’s a leadership and accountability issue.

Empathy doesn’t require an hour-long phone call. It can be as simple as a well-written rejection email, an honest update, or a brief note of thanks after an interview. The best hiring teams blend the efficiency of automation with the emotional intelligence of real people. Candidates remember who made them feel seen, and who didn’t.

Impersonal, Bot-Like Communication

Even when candidates do hear back, they often describe the communication as robotic or lacking empathy. The use of templates and automation in messaging means applicants frequently receive canned responses, e.g. a one-line rejection email with no reasoning, or generic updates from a “noreply” address.

Initial outreach from recruiters has also become formulaic. Many job seekers have stories of LinkedIn messages clearly copied-and-pasted, or recruiters forgetting to change the candidate’s name (a giveaway that an email blast or AI tool was used). These impersonal interactions leave candidates feeling like numbers, not humans.

In some cases, candidates’ first “conversation” is not with a person at all, but with a chatbot. Companies have rolled out AI chatbots to ask screening questions or schedule interviews. While convenient, these bots can’t convey warmth or adapt to nuanced situations.

There’s no ability to ask follow-up questions or build rapport. Similarly, one-way video interviews, where you record answers for an algorithm or recruiter to review later, have been criticized as impersonal. Without a live interviewer, candidates get no feedback or encouraging nods, which can be unsettling. As one individual put it, “Fully automated processes enable robotic and impersonal experiences… hiring is about human connection, and that’s getting lost”.

Automation can even lead to tone-deaf mistakes. For example, some applicants have received congratulatory emails for advancing to the next stage, only to find it was an error by the system, there was no next stage. Others get asked to interview for a role they already interviewed for, because the left hand (ATS) didn’t know what the right hand (recruiter) was doing. These technical missteps amplify the sense that the process lacks basic respect and coordination.

The lack of empathy in communication is a common refrain. Candidates often crave a human touch, even a brief, polite note from a real person, especially at later stages of hiring. Instead, they may get auto-emails that feel cold.

When rejection comes, it’s usually boilerplate. And when candidates attempt to ask for feedback, they’re frequently met with silence or a generic response. This depersonalization leaves many job seekers feeling disillusioned with employers before they’ve even met any humans at the company.

Lack of Human Interaction in the Hiring Funnel

Closely related is the reduced human interaction throughout the recruiting funnel. Many candidates go through multiple stages (application, assessments, maybe even AI interviews) before ever speaking to a live person. In-person interviews early in the process have become rare, and even real-time phone calls are often preceded by automated filtering steps.

This matters because human-to-human contact can build trust and allow candidates to showcase qualities that don’t come through on a resume. In the past, a conversation could reveal a culture fit or passion that overrides a missing credential. Without those interactions, candidates feel they’re reduced to checkboxes.

One job seeker in marketing lamented that she only ever talked to a recruiter after being filtered by an AI assessment and completing a project: “By the time I spoke to a human, I felt like they’d already made up their mind based on some algorithm. I had no chance to truly tell my story.” That sense of helplessness is common, the feeling that decisions are being made in a black box, with no opportunity for the candidate to influence the outcome through interpersonal skills or clarifying questions.

Moreover, limited human interaction can lead to misunderstandings. A nuanced resume might confuse an ATS but would make perfect sense to a person if given the context. Without dialogue, those candidates simply get weeded out. This is particularly harmful for candidates who might not have the “right” keywords on paper but could excel if someone gave them a shot.

Finally, when interaction does occur, it may come too late. Hiring managers often meet only a tiny filtered pool of candidates. By that point, some truly excellent prospects may have been screened out by rigid automated criteria. This is a frustrating reality for many job seekers who feel they could shine if only they had a chance to talk to a human earlier.

Navigating the New Reality: Guidance for Job Seekers

Facing this automated, often impersonal gauntlet, what can job seekers do to improve their chances and maintain their sanity? While one can’t fix the system alone, there are strategies to navigate it more effectively. Career coaches and HR experts suggest the following approaches for candidates dealing with AI-heavy hiring:

• Don’t Take Ghosting Personally: First, remember that if you get ghosted, it’s usually not a reflection of your worth. Try not to dwell on it or let it torpedo your confidence. Keep your job search momentum going even while waiting to hear back. In practical terms: continue applying elsewhere and don’t “fall in love” with one opportunity until you have an offer.

• Ask for Next Steps and Timelines: To avoid uncertainty, be proactive in your interviews. When you speak with a recruiter or hiring manager, politely ask about the hiring timeline and next steps. For example: “When can I expect to hear about the next stage?” or “What are the remaining steps in your process?” Securing a clear timeline can set expectations for both sides. This makes it easier to know when (or if) to send a follow-up, and it subtly signals to the employer that you value communication.

• Follow Up Strategically: If the promised timeline passes with no word, it’s reasonable to send a gentle follow-up message. Keep it professional and short: reiterate your interest and ask if there are any updates, or if they need anything else from you. Experts suggest waiting 1–2 business days after the expected response date for the first follow-up, then perhaps another ping a week later if needed. After a couple of attempts, it’s usually best to move on gracefully if you still get no response. Persistence can pay off, but use your judgment, one or two check-ins are usually enough.

• Leverage Personal Connections: In an era when online applications vanish into a void, networking is more crucial than ever. It might feel old-school, but tapping your connections can help you break out of the algorithmic pile. Attend industry events (even virtual ones), join professional groups, and let your network know you are job hunting. A referral or a direct introduction to a hiring manager can bypass a lot of automated gates.

• Tailor Your Application (for Humans and Bots): It’s still important to craft customized resumes and cover letters for each job, not only to impress any human reviewer, but also to satisfy the ATS algorithms. Use the job description as a guide for keywords and required skills, and make sure those terms appear (naturally) in your resume if you have them. Many ATS filters will rank you higher if you match more keywords. That said, avoid extreme “keyword stuffing” or other tricks that make your resume hard to read. And absolutely double-check that your contact information is correct and formatted plainly, you don’t want a computer parsing error to make you uncontactable!

• Embrace AI as a Tool on Your Side: The AI revolution cuts both ways. Just as employers use AI, job seekers can too. There are AI-based tools to help you optimize your resume, practice interview questions, or even assess job descriptions for hidden requirements. For example, some candidates use generative AI (like ChatGPT) to draft cover letters or to role-play common interview questions for practice. Used wisely, these tools can save time and improve your preparation. Additionally, keep an eye on new platforms that might connect you with recruiters more directly or showcase your skills.

• Manage Your Expectations: The job search can be a long and unpredictable process, often filled with silence, delays, and impersonal interactions. It's important to set realistic expectations from the outset. Understand that not every application will lead to a response, and not every interview will result in an offer. Instead of checking your inbox obsessively, establish a routine, perhaps reviewing updates once or twice a day, to stay balanced and focused. Celebrate progress along the way, whether it’s a call from a recruiter or constructive feedback from an interview. Talk to peers or mentors who’ve been through the same thing; they can offer insights and help normalize the ups and downs.

Rebuilding the Human Touch: Recommendations for Employers

The burden of fixing an impersonal hiring process shouldn’t fall only on candidates. Employers have a critical role to play in making recruitment more humane and effective. Not only is this the right thing to do for applicants, but it’s in companies’ self-interest as well. Here are some constructive recommendations for recruiters and hiring managers to consider:

• Communicate, Communicate, Communicate: The message from candidates is loud and clear, 42% want stronger communication from recruiters. Make it a point to keep applicants informed at each stage. This doesn’t require writing dozens of individual emails; it can be as simple as setting up automated status updates when a position is filled or when a candidate is no longer in the running. The key is to close the loop. Aim to never let someone you’ve interacted with just dangle indefinitely.

• Eliminate “Ghost Jobs” and Bait-and-Switch Tactics: Posting jobs that aren’t truly open is a fast way to frustrate and lose trust with candidates. Audit your job postings, ensure that if a role is advertised, you are actively trying to fill it. If circumstances change (hiring freeze, internal hire made, etc.), take down the posting promptly. Likewise, avoid “evergreen” postings that collect resumes for no specific role unless you make it crystal clear that it’s a pipeline building effort. Candidates understand competition, but they do not appreciate feeling misled.

• Inject Empathy into Automated Interactions: Automation doesn’t have to feel cold. Review the wording of your template emails and system-generated messages, can they be made warmer or more helpful? Small tweaks like using the candidate’s name, thanking them for their time, and acknowledging the effort they put in can humanize a mass email. The goal is to remind candidates that there are people behind the process who care. Moreover, consider transparency about AI usage: if you use automated assessments, you might let candidates know (“You may be asked to complete an AI-scored video interview; here’s what to expect…”). 28% of job seekers want more clarity on how AI is used in hiring, and being upfront can build trust and understanding.

• Blend Tech with Human Oversight
  Use AI for efficiency but let humans make the final call. Train recruiters to critically assess AI recommendations and override when needed, especially for borderline candidates. Implement review mechanisms to catch false negatives and account for qualities algorithms miss, like attitude and growth potential.

• Restore Human Connection Where It Matters
  Infuse personal touch where it counts. A quick video call early in the process can go a long way. Invite top candidates to informal meet-and-greets and encourage recruiters to build relationships, not transactions. Kind, transparent communication leaves lasting impressions.

• Measure and Improve Candidate Experience
  Treat candidate experience like a KPI. Use post-interview surveys, track feedback, and fix pain points in the process. Set standards for communication. A positive experience, even without an offer, boosts your brand.

The Pros and Cons of AI in Hiring: A Balanced View

Is AI in recruitment a blessing or a curse? The answer is: it depends on how you use it. Here’s a quick look at the pros and cons:

The Upsides

• Efficiency at Scale: AI scans resumes, schedules interviews, and handles admin fast, freeing recruiters to focus on people. Faster process = better for everyone.

• Consistency: Algorithms apply the same rules to all applicants, reducing variability and potential human bias.

• Wider Talent Pools: Automation lets you consider more candidates, including those from unconventional backgrounds or geographies, surfacing hidden gems.

The Downsides

• Impersonal Experience: Automation can make candidates feel like just another number, alienating top talent.

• Bias Risks: AI can reinforce past hiring biases if not carefully designed and monitored.

• Over-Reliance: Rigid systems may miss strong candidates or misunderstand context. Human judgment is still essential.

• Candidate Skepticism: Some applicants, especially senior or creative ones, distrust AI-heavy processes and may opt out.

Bottom Line

AI in hiring is powerful, but it’s not magic. Use it to enhance, not replace, human decision-making. The best results come from a balanced approach: let AI handle the grunt work while people bring judgment, empathy, and fairness. That’s where the future of recruiting lies.

Conclusion

The recruiting landscape has evolved rapidly with AI and automation, and it’s clear that job seekers are feeling the growing pains. From being ghosted without a word to receiving form-letter communications and grappling with opaque algorithms, candidates are often left frustrated by the modern hiring process. These issues span industries and experience levels, whether it’s an engineer applying in tech or a nurse in healthcare, the desire for a fair, respectful, and human recruitment experience is universal.

Yet, this isn’t a problem with no solutions. Job seekers can adapt by staying proactive, leveraging new tools to their advantage, and finding ways to reintroduce human connection into their search. Meanwhile, employers can seize the opportunity to differentiate themselves by prioritizing the candidate experience.

Simply put, treating applicants with empathy and transparency is a competitive advantage in talent acquisition. Organizations that manage to combine AI’s efficiency with genuine human touch will not only hire better people, they’ll earn goodwill in the market.

Finally, it’s worth remembering that hiring is fundamentally about people, people with hopes, skills, and potential. As one recruiter commented, “Ghosting reflects poorly on a company’s culture… candidates deserve closure”. In the quest to streamline and optimize, we must not lose sight of the humanity at the core of work.

By heeding the frustrations voiced by today’s job seekers and taking thoughtful action, we can create a recruiting process that is both high-tech and deeply human, a process that finds great talent while treating everyone with the respect they deserve.

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Sources

Insights and data in this newsletter are drawn from publications and research, including:

• Greenhouse Software – 2024 State of Job Hunting report findings

• Greenhouse Blog – “Ghosting, ghost jobs and bots” (Dinah Alobeid, Jul 2025)

• Laurie J. Roth – “Hiring Used to Be Human; Now It’s an Algorithm” (LinkedIn, Feb 2025)

• Resume Genius – 2024 Job Seeker Insights Survey (1,000 U.S. candidates)

• Adam Broda – Career Coach (LinkedIn post, 2025)

• CNBC / Newsweek – Reporting on rising ghosting trends (2024)

• Katie Couric Media – “Ghosted by an Employer? Try These Expert Moves…” (Alaina Mancini, 2023)

• World Economic Forum – “Hiring with AI doesn’t have to be so inhumane” (Mar 2025)

• University of Washington – Research on AI resume screening bias (Oct 2024)

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Introduction

Let me guess, you opened LinkedIn this morning and thought, “Is everyone stepping down, or did I miss the memo?” You’re not alone. In the first six months of 2025, so many CEOs have exited that it’s starting to feel like the C-suite version of musical chairs, only no one is in a hurry to sit back down.

I’ve been watching this mass migration with interest and a raised eyebrow. Are these CEOs burned out? Bored? Getting poached by AI startups offering kombucha stock options? Or is this just the natural result of economic stress, political change, and a few too many “urgent” board meetings?

In this week’s Business Growth Blueprint, I unpack the record-breaking CEO turnover that’s defined early 2025. I’ll explore why so many leaders are bailing, what it means for the rest of us, and how companies can turn the chaos into a competitive advantage.

From retirements and burnout to boardroom oustings and billion-dollar reshuffles, it’s a leadership shake-up worth understanding, especially if you’re leading, investing, or just quietly wondering if your boss is next.

So grab your coffee (or something stronger), and let’s dive in. While CEOs may be stepping down, this newsletter is here to stay, so subscribe - it’s free!

A Record Wave of CEO Departures

In the first four months of 2025, U.S. companies saw an unprecedented wave of CEO turnover. A total of 1,028 chief executives left their posts between January and May, 19% more than the same period in 2024 and the highest January–May total on record.

This surge follows a record-breaking 2024 and a frenzied start to 2025. January alone saw 222 CEO exits, the most ever recorded in that month. February was not far behind with 247 departures, virtually matching the all-time one-month high set in Feb 2024.

Turnover eased in March (177 exits) but spiked again in April to 214, a 70% jump from April 2024. In May, departures moderated slightly to 168, although they remained a substantial 41% higher than in May 2024.

June data hasn’t been officially released yet, but if trends hold close to last June’s 234 exits, the first half of 2025 would surpass 1,260 CEO departures, easily eclipsing the previous record of 1,101 in H1 2024. In short, 2025’s “CEO exodus” is in full swing, and it has corporate boards, investors, and stakeholders taking notice.

Why does this matter? Such elevated churn at the top is historically unusual and speaks to the turbulent environment companies are navigating. Challenger, Gray & Christmas, which has tracked CEO changes since 2002, notes that the current rate of departures remains historically high despite month-to-month fluctuations.

With more CEOs leaving in early 2025 than ever before, the trend is making headlines and raising questions about stability and strategy in C-suites across the United States.

What’s Driving the Surge? Key Trends Behind the Turnover

Multiple converging factors are fueling this record CEO turnover. Company announcements reveal that many CEOs are “stepping down” or retiring, often after long tenures. “Stepped down” has been the single most cited reason for CEO exits in 2025, indicating the individual is usually staying on in some capacity (e.g., as a board member or advisor).

The second most common reason is “retired,” as a wave of seasoned leaders opt to leave; the average age of departing CEOs jumped to 63 this year (up from 55 the previous year). *Note: The average age of a CEO in the U.S. is ~56 years old

In January 2025, 28% of CEO departures were due to retirement, reflecting a demographic trend in which aging executives decide it’s time to pass the baton. As one expert put it, “many of these CEOs are taking the opportunity to leave” amid a generational shift in leadership.

Economic and political uncertainty is another major driver. Boards appear to be reacting to a “barrage of indicators” of difficult times ahead, including falling consumer confidence, tariff impacts, and rising prices.

With fears of slow growth and even a credit crunch in the air, companies want leaders who can pivot quickly. “Some CEOs are choosing this time to step away, others are being asked to,” observes Andrew Challenger of Challenger, Gray & Christmas, noting that boards are looking for leaders who can navigate uncertainty and course-correct quickly.

In some cases, directors (under pressure from activist investors) are showing less patience for underperformance and are quicker to oust CEOs who aren’t delivering results. At one point in 2024, nearly 40% of departing CEOs were forced out by their boards, a pressure that is continuing into 2025.

The broader context is that each of the past few years has presented unprecedented challenges to CEOs, stemming from the pandemic and its aftermath, labor upheavals (“Great Resignation”), inflation, and now major shifts in U.S. government policy.

One leadership advisor described it as “a generational transition of leadership” under extraordinary stressors. Facing this environment, some veteran CEOs are bowing out due to burnout and personal considerations. A recent survey found 71% of CEOs feel at least occasionally burned out, and 32% report frequent or near-daily burnout.

The top job has “never been easy, but the job is a lot harder now,” says Jane Stevenson, a global CEO succession expert. In 2025’s climate, disruption itself is a catalyst for CEO exits, and each high-profile departure in turn adds more disruption to the organization.

It’s worth noting that not all departures are negative or involuntary. A growing number of chief executives are leaving for “new opportunities” elsewhere, 74 so far this year, more than double the count by this time last year.

This suggests a hot market for experienced leaders, with CEOs being poached for bigger roles or new ventures. Meanwhile, interim CEOs are on the rise as boards take their time to find permanent leaders. Nearly one in five CEOs named in January 2025 were interim appointees (versus just 6% the previous year), reflecting both the sudden nature of some exits and caution in making long-term commitments.

Fewer interim chief executives have transitioned to permanent status this year, indicating that many companies are keeping interim leaders in place longer as they search for the right future CEO. This interim trend highlights a significant challenge: some companies lack a well-defined succession plan and are caught off guard, flat-footed by the turnover wave.

The rate of new CEOs who are women has decreased in 2025, with approximately 23–25% of incoming CEOs being female, down from roughly 27–29% in early 2024.

In parallel, women CEOs have also been leaving at slightly higher rates than before – 23% of CEO exits in Q1 were women, up from 20% the previous year, and in over half of those cases, they were succeeded by men. Perhaps in a future newsletter, I’ll tackle a more expansive view of CEO demographics.

Sectors Most Affected

The CEO turnover wave is widespread, affecting nearly every corner of the economy, but specific sectors are experiencing exceptionally high churn rates. The Government and Non-Profit sector has led the nation in CEO changes throughout early 2025. For example, 51 CEOs at government or non-profit entities left in January, and another 43 departed in April, making this sector the single largest source of turnover each month. (Notably, the vast majority of these were in non-profit organizations rather than governmental agencies.)

This pattern isn’t entirely new; non-profits and public-sector institutions often see high leadership changeover, but the sustained volume is striking. It may partly reflect leadership shake-ups tied to the change in U.S. administration (e.g., new government appointees, policy shifts) as well as retirements among long-serving nonprofit heads.

For instance, the CEO of Amtrak (a government-owned corporation) was pushed out in March as the White House installed new leadership aligned with its priorities, illustrating how political turnover can drive executive exits in public-sector roles.

Other industries experiencing elevated CEO turnover include:

• Healthcare: Hospitals and health product companies have seen a spike in CEO changes. In April, 26 healthcare CEOs left, representing a 136% increase from the same month in the prior year. In particular, hospital systems saw a wave of departures (15 in April alone, doubling the year-ago figure).

• Technology: The tech sector’s leadership remains volatile. Tech firms saw 25 CEO transitions in January and 16 in April, continuing a high pace of churn that tracks with the sector’s turbulence (layoffs, market resets) over the past year. While April’s tech CEO exits were flat year-over-year, the overall trend is that tech companies are not shy about swapping chiefs as they seek new direction in the face of economic headwinds and rapidly evolving and fast-moving innovation cycles.

• Financial Services: Banks, fintechs, and financial firms are also contributing to the surge in turnover. The finance sector experienced a rise in CEO exits in early 2025, with double-digit departures (e.g., 15 in January), a notable increase from the previous year. April’s departures were up 83% year-on-year. With interest rate pressures and market uncertainties, boards in finance appear to be making leadership changes to adapt (or, in some cases, CEOs may be taking opportunities in the hotter fintech or private equity space).

• Entertainment & Leisure: This industry, including media, hospitality, and gaming companies, has emerged as one of the most “turbulent” sectors for CEO turnover. In January, entertainment/leisure CEO exits were double their year-ago level, and that momentum continued into the spring (16 departures in April, up 129% year-on-year). As consumer behavior shifts and content businesses evolve, many companies are apparently opting for new leadership to find growth paths.

• Services and Retail: The services industry (spanning consulting, staffing, etc.) saw an eye-opening jump of 21 CEO exits in April, 250% higher than a year earlier. Retailers likewise have had notable churn; while the absolute number of retail CEO changes isn’t huge, April’s retail departures were five, up from just one in April 2024, and retail CEO turnover was elevated through 2023 as well (with many large chains changing leaders). This reflects the pressure on consumer-facing businesses to combat inflation, supply challenges, and new competition by pivoting strategies (often under new CEOs).

In short, no sector has been entirely immune to the wave of CEO turnover. Highly regulated industries (government, healthcare) and rapidly changing sectors (tech, media) are experiencing especially high rates, but even stalwarts like finance and retail are above historical norms.

This broad-based churn suggests systemic drivers at play (economic uncertainty, demographic shifts, etc.) that cut across industries. It also means boards in every sector should be evaluating their succession plans. If you haven’t had a CEO transition recently, it may be on the horizon.

Notable CEO Exits in Early 2025

The headlines of early 2025 have been filled with high-profile CEO departures. Here are a few notable examples of leaders who exited their roles between January and May, illustrating the diverse reasons behind the trend:

• Rodney McMullen – CEO of Kroger (Resigned in March 2025): A prominent example of an unplanned exit, McMullen’s departure was an abrupt ouster following a board investigation. Kroger’s board found the long-time CEO’s conduct to be in violation of company policies, leading to his immediate resignation.

• Stephen Gardner – CEO of Amtrak (Stepped down March 2025): Gardner, who headed the U.S. passenger railroad Amtrak, was asked to resign by the White House after a new administration took office. He stepped down “to ensure Amtrak continues to enjoy the full faith and confidence of this administration”.

• Lidiane Jones – CEO of Bumble (Resigned January 2025): After only about a year in the CEO role at dating-app company Bumble, Lidiane Jones resigned for “personal reasons,” a move that came after Bumble’s stock price plummeted nearly 50% during her brief tenure. In a candid admission of underperformance, the company acknowledged growth had stalled and even brought back founder Whitney Wolfe Herd to retake the helm.

• Warren Buffett – CEO of Berkshire Hathaway (Retirement announced April 2025): Even legendary long-term leaders are part of the turnover narrative. In April, 94-year-old Warren Buffett signaled his impending retirement, announcing he will step down as CEO of Berkshire Hathaway at the end of 2025.

  

• Wendy McMahon – CEO of CBS News & Stations (Resigned May 2025): McMahon’s departure came amid ongoing legal and reputational challenges at CBS, including controversy over journalistic practices and internal lawsuits. Her exit reflects how high-pressure public scrutiny and internal dysfunction can drive even seasoned media executives to exit abruptly.

• Andrew Witty – CEO of UnitedHealth Group (Resigned May 2025): Witty’s sudden resignation “for personal reasons” caused UnitedHealth’s stock to dip more than 11% and prompted the company to suspend its 2025 guidance. His exit left a leadership vacuum that was quickly filled by former CEO Stephen Hemsley, underscoring how succession readiness can mitigate investor panic during abrupt transitions.

• Ashley Buchanan – CEO of Kohl’s (Terminated May 2025): Buchanan’s firing came just over 100 days into his role after it was revealed that he had undisclosed romantic and financial ties to a vendor. The scandal highlighted how personal misconduct, even if unrelated to company performance, can swiftly derail an executive's tenure.

• Jochen Zeitz – CEO of Harley-Davidson (Retired April 2025): Zeitz’s retirement after five years leading the iconic motorcycle company marked a more traditional and planned leadership handoff. Nonetheless, it contributed to the broader pattern of long-tenured CEOs stepping aside in 2025.

These examples reflect just a fraction of the CEO exits seen so far in 2025. From ethical breaches and political pressures to retirements and burnout, the reasons vary widely, but the pattern is clear: a generational, structural, and strategic shift is underway in the leadership ranks across corporate America.

Implications: Risks and Opportunities of the Turnover Wave

For businesses, this unprecedented CEO turnover brings both serious risks and potential opportunities. On the risk side, a high rate of leadership change can be destabilizing.

Frequent CEO departures can disrupt strategic momentum, unsettle employees, and erode investor confidence. Leadership voids or prolonged interim periods create uncertainty about a company’s direction.

As one analyst noted regarding Kroger’s sudden CEO exit, a top-level shakeup “puts [a company] in a vulnerable position” and “for investors, the risk is obvious uncertainty.” Share prices can wobble when a respected chief leaves (indeed, Kroger’s stock dipped on the news of McMullen’s resignation).

Customers and partners might also lose some confidence if they perceive turmoil in the C-suite. In short, the continuity and trust that take years to build can be jolted by a change at the top.

There’s also a cost and time factor: CEO transitions, especially unplanned ones, are expensive (including severance, search costs, and onboarding a new leader) and can require months of effort from the board and management. And if many companies are simultaneously scouting for new CEOs, the talent market for proven leaders becomes tighter, potentially driving up compensation demands and making it harder to secure the ideal candidate.

However, it’s not all downside. A wave of departures also creates opportunities for renewal and strategic pivots. New CEOs can bring fresh energy and perspectives. For companies that have struggled or stagnated, a change at the helm can provide an opportunity to reset their strategy, culture, or priorities.

For example, boards seeking to navigate today’s choppy waters are often looking for “leaders who can navigate uncertainty and course-correct quickly,” and the hiring of a new chief executive can be tailored to acquire exactly those skills. In some cases, long-tenured CEOs stepping aside makes room for modernization: incoming leaders might be more tech-savvy, more attuned to evolving customer preferences, or more open to innovative business models.

The turnover trend also opens doors for talent: rising executives, a level or two down, now have more opportunities to take the top job as vacancies arise. In this sense, the exodus can spur a generational shift that, if managed well, leaves companies with leadership that’s more in tune with current challenges than perhaps their predecessors were.

From an economy-wide perspective, the high CEO turnover could lead to a reallocation of leadership talent. We’re seeing some CEOs leave big public companies to take roles in private equity or startups (seeking new challenges with potentially less public scrutiny).

Conversely, companies may recruit fresh faces from outside their usual talent pools. This churn might accelerate innovation and cross-pollination of ideas across industries if companies seize the opportunity to bring in dynamic leaders.

Still, the net effect of a CEO’s departure largely depends on how prepared the company is. A well-planned transition with a capable successor ready can increase investor confidence. On the other hand, a messy exit with no clear replacement can send a firm into turmoil. As Korn Ferry consultants caution, when a CEO quits, it’s “almost always a shock to the system,” raising doubts about the company’s future and spurring internal anxiety. That means the onus is on boards and leadership teams to manage these transitions carefully, mitigating risks and maximizing the upside.

Preparing for the Turnover Wave: Recommendations for Companies and Boards

For business leaders and boards of directors, the current wave of CEO turnover is a wake-up call. Here are strategic considerations and steps to navigate and anticipate leadership transitions in this environment:

• Double Down on Succession Planning: Don’t Wait for a Crisis. Regularly review and update succession plans for the CEO and other key executives to ensure continuity and preparedness. Ensure you have an internal leadership bench with multiple potential successors, and develop talent deeper in the organization (even 2–3 layers below the CEO) who could step up if needed. Identify rising stars and give them growth opportunities.

• Monitor CEO Well-Being and Burnout: The job is more demanding than ever, so it’s crucial for boards to keep an open dialogue with their CEOs about workload, support, and burnout. Proactively addressing burnout and mental health can extend a CEO’s effective tenure and prevent unexpected resignations.

• Align on Strategy and Expectations: Many forced resignations happen when boards lose confidence in a CEO’s performance or vision. To avoid sudden fractures, boards and CEOs should frequently align on strategy, goals, and risk tolerance. If course corrections are needed, try to address them collaboratively before defaulting to a firing. That said, if a CEO isn’t adapting to significant external changes, whether new technology, shifting consumer behavior, or regulatory changes, boards must be prepared to act.

• Be Transparent and Decisive in Transitions: When a CEO does announce a departure (or is removed), clear communication is vital. Both internal teams and external stakeholders should hear a consistent message about the change and the path forward. If an interim CEO is appointed, clarify their mandate and timeline. If a search is underway, reassure stakeholders that the board is on it. Uncertainty is the biggest risk to stakeholder confidence during a transition.

• Seize the Opportunity for Refresh: A leadership change is an opportunity to reassess the company’s direction and needs. Boards should revisit what key traits and skills the next CEO should have to meet the current and future challenges (which may differ from what was needed five years ago). For example, do you need a leader experienced in digital transformation? In navigating regulatory hurdles? In turnaround situations? Use the transition to bring in someone who fills those gaps.

• Strengthen Governance and Culture: High CEO turnover can reveal weaknesses in governance or company culture. Take this moment to reinforce solid governance practices. For instance, ensure your board has a robust process for evaluating the CEO and providing feedback. Cultivate a culture where senior leadership transitions (CEO or otherwise) are handled with professionalism and respect this will make your company more attractive to top talent.

So... Should You Be Worried Your CEO Just Updated Their LinkedIn?

Let’s face it, 2025 has officially become the “Hot CEO Summer” no one asked for. Nearly 1,260 chief executives have handed in their keycards so far this year, leaving companies scrambling for whiteboard markers, interim titles, and plausible press releases.

But here’s the twist: this isn’t just about burnout or board drama. It’s about a changing business climate that demands new leadership skills. Some CEOs are aging out, some are being gently (or not so gently) shown the door, and others are just realizing early retirement and a beach might be more appealing than quarterly earnings calls.

For businesses, this level of turnover is akin to corporate Jenga: pull the wrong piece too quickly, and everything wobbles. But if you're strategic, it can be an opportunity to rebuild smarter. Organizations that treat succession planning as a living, breathing discipline, not a once-a-decade fire drill, are the ones most likely to thrive in this environment.

So, whether you’re a board chair, an ambitious No. 2, or just wondering if your CEO’s “out of office” is permanent, here’s the bottom line: leadership turnover is no longer the exception. It’s the new operating reality. The smart move? Plan for it. Design for it. Maybe even embrace it. In today’s world, agility in leadership isn’t just an HR talking point; it’s a competitive edge.

And hey, if your CEO does quit mid-quarter, at least now you can say: “Oh yeah, we saw this coming.”

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Sources

Insights and data in this newsletter are drawn from publications and research, including:

• Challenger, Gray & Christmas CEO Turnover Reports; Bloomberg Law; Reuters; Puget Sound Business Journal/Bizwomen; Korn Ferry Insights; and other business news analyses.

Introduction

Have you ever wrapped up a massive project and felt that mix of exhaustion and relief, thinking, “Let’s never do that again,” only to find yourself in the same boat a few months later? Or maybe you’ve had an unexpected win and thought, “If only I knew how to replicate that!” This is where the magic of the After Action Review (AAR) comes into play.

Imagine a strategy session that not only helps you dissect what went right and wrong but also transforms your team’s performance for the future, it’s like a team huddle where everyone gets to learn the playbook. Originating from the U.S. Army, AARs have made their way into the heart of companies from tech powerhouses to retail innovators.

In this exploration, I’ll share how AARs can supercharge your team’s performance, align your strategies, and cultivate a vibrant learning culture. With three examples from various industries, you’ll see just how powerful these reviews can be in transforming not only outcomes but also the way your team thinks and operates.

Get ready to dive in and discover the potential for growth and innovation that an AAR can unlock!

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What Is an After-Action Review, Anyway?

In simple terms, an AAR is a candid conversation right after an activity. The team gathers to ask four key questions: “What did we intend to achieve? What actually happened? Why did it happen? And what can we do to improve next time?” It’s really all about learning, not pointing fingers or placing blame.

Creating a safe space for honesty is crucial here. The Army discovered that when everyone, leaders included, can admit their mistakes and celebrate successes together, it leads to the best learning.

The vibe is “no fault, no blame.” The idea is to assume everyone did their best with the knowledge they had and to focus on improving the process rather than shaming individuals.

When done right, an AAR feels more like a team practice session aimed at growth than a somber evaluation. It’s short, specific, and most importantly, happens as soon as possible while memories are still fresh.

It’s all about ensuring your team is better prepared for the next project, mission, or event.

Boosting Team Performance through Continuous Learning

The most apparent benefit of AARs is supercharging team performance. Instead of plowing ahead, making the same mistakes, teams that do regular AARs create a continuous feedback loop for improvement. Research supports this claim: teams have seen a 25% performance boost by introducing After Action Reviews.

In a remarkable two-year trial at a large organization, refining the AAR process resulted in a substantial increase of over 150% in productivity. A Bain & Company case study showed that companies using structured post-mortems improved project ROI by 20% or more over 18 months. Those aren’t typos. AARs can translate hard lessons into tangible gains.

Why such improvements? Because AARs turn every project (even failures) into an opportunity to get better. Instead of sweeping problems under the rug, an AAR forces the team to confront what happened and why.

Perhaps the timeline slipped because of unclear roles, or a sales campaign failed due to the incorrect assumption. An AAR brings those insights to the forefront. Over time, this habit of candid reflection means fewer repeat mistakes and more polished processes.

A Harvard Business Review study noted that companies that truly master the AAR process “gain and sustain a competitive advantage” by avoiding errors that erode value and by adapting more quickly than their rivals to new challenges.

In other words, consistent AARs make your organization more agile and resilient: your team learns to fix problems quickly and even anticipate issues before they derail efforts.

A great example comes from the U.S. Army’s own experience. The Army’s elite Opposing Force (OPFOR) training brigade, comprising just 2,500 soldiers, would routinely defeat much larger and better-equipped units in war games.

How? OPFOR made AARs part of its DNA: after every exercise, they relentlessly analyzed what happened and fed the lessons straight back into the next run. This cycle of “execute, learn, improve, repeat” meant that OPFOR continued to become more intelligent and adaptive, often outmaneuvering forces twice their size.

Businesses that adopt a similar ethos of continuous improvement can reap significant performance benefits.

Keeping Strategy on Track

AARs, or After Action Reviews, are more than just a way to boost everyday task performance; they're like a secret weapon for executing your strategy. Imagine them as the GPS for your plans: they help you check if you’re on track and make adjustments when needed.

During an AAR, teams take a step back to compare the original goals with what actually happened, discussing any detours along the way. This process is crucial for keeping your big-picture strategy aligned with day-to-day actions.

Waiting until the end of a project to find out things have gone off course is a recipe for disaster. AARs help you make those crucial mid-course corrections.

Take agile software teams, for example. They often hold short retrospectives (which are a form of AAR) at the end of each sprint. This approach enables them to adjust their priorities and tactics before diving into the next sprint, rather than proceeding blindly.

On a larger scale, companies can break hefty projects into phases, each followed by an AAR, to create feedback loops that keep everything aligned with the strategy. One cool technique inspired by the Army is the "Before Action Review."

It’s basically a pre-project AAR where teams reflect on past lessons and anticipate challenges before they kick things off. Answering a few standard questions can help unify everyone’s objectives and lay a solid foundation for effective AARs as the work unfolds.

The real magic of AARs? They give organizations agility. When teams embrace this way of thinking, they avoid getting stuck on autopilot. They continuously ask, “Is what we’re doing working? If not, how can we switch things up?”

Consider British Petroleum, which utilized AARs to save millions by rapidly sharing fixes across its oil rigs. Even the US Army learned from past mistakes by systematically reviewing each exercise or mission.

As one HBR article put it, the best teams don’t just compile reports that collect dust; they actively integrate their learnings and apply them back into their real-time execution.

The result? A strategy that’s not just a static PowerPoint slide but a living, breathing game plan that evolves with every lesson learned.

Building a Learning Culture (No Blame, No Excuses)

One of the most notable benefits of adopting After-Action Reviews (AARs) is how they can significantly enhance your organizational culture. If you're aiming to be a true learning organization, one that adapts, innovates, and continually seeks ways to improve, AARs can help you achieve this goal.

They make it clear that every experience is a chance to learn something new. When teams know that every project concludes with an honest debrief, they begin to pay closer attention to the outcomes and think critically about their work.

Over time, this fosters a culture where accountability and openness thrive: where the organization holds itself accountable for improvement and is comfortable discussing what happened.

A key factor in making AARs effective is psychological safety. Leaders need to create an environment where it’s okay to admit mistakes or disagree with the rest of the group.

In a good AAR, even interns can speak up in front of VPs, and the marketing team can inform the CEO that a campaign plan didn't meet expectations, without fearing for their jobs. The no-blame vibe of AARs (think no personal attacks or shaming) really helps encourage honest conversations.

Take Google, for example: their engineering teams treat post-incident reviews as completely blameless, assuming everyone had good intentions while focusing on how the process or some assumptions might have led to a hiccup. Google gets that if people are scared of punishment, they’ll hide problems, but if there's trust in the process, they’ll raise issues early on, which leads to better solutions.

Making AARs a regular thing also sends a strong message: learning is what we value here. Wins aren’t just high-fived and forgotten; losses aren’t swept under the rug, everything is evaluated for takeaways.

When a company like Microsoft holds postmortems after every project (even the ones that went well) and shares those reports internally, it demonstrates that improvement is something everyone is part of.

At consulting firm Jump Associates, they hold debriefs after every client meeting, involving everyone from junior staff to the CEO, to give and receive feedback. This kind of ritual breaks down barriers and hierarchies, nurturing a culture where continuous learning is simply “how we roll.”

Employees start to feel comfortable raising their hands to say, “Here’s what I think went wrong” or “I have an idea for next time.” Over time, that kind of openness becomes an integral part of the company’s identity, making it a highly attractive place for top talent who want to learn and grow.

In short, AARs help foster a learning culture by normalizing reflection and humility. As one leadership expert put it, the AAR has been called “one of the most successful organizational learning methods yet devised,” but it only works if it’s done with sincerity.

Avoid falling into the trap of turning it into just another checkbox exercise, where nothing meaningful is said. Instead, leaders should treat AARs as a special time for honest conversation and experimentation. When done right, AARs can transform your culture into one that craves improvement and isn’t afraid to face reality.

Real-World Examples: AARs Beyond the Usual Suspects

While AARs are rooted in the military, many businesses have quietly incorporated them into their core operations, reflection, and improvement processes. Here are three companies applying AAR principles in ways that directly impact performance.

1. Chevron: Embedding AARs into Global Operations
Chevron integrated After-Action Reviews into its Operational Excellence Management System, particularly across complex capital projects. After a major offshore drilling initiative, cross-functional AARs revealed breakdowns in vendor timing and logistics. Those lessons drove procedural changes across global sites, preventing the same issues from recurring.
Takeaway: AARs turned field experience into enterprise-wide operational gains.

2. Bridgewater Associates: Debriefing as a Cultural Norm
At Bridgewater, post-decision reviews function much like AARs. Teams dissect investment decisions, flag unexpected outcomes, and log lessons in a firm-wide system. This constant feedback loop fuels sharper forecasting and intellectual accountability.
Takeaway: AARs reinforce the firm’s data-driven culture and sharpen decision-making over time.

3. H-E-B Grocery: Tactical AARs for Emergency Response
When Winter Storm Uri (2021) hit Texas, H-E-B conducted rapid AARs at every level from store managers to supply chain leadership. These debriefs uncovered supply and power vulnerabilities, leading to swift upgrades in emergency protocols.
Takeaway: AARs helped H-E-B maintain operations during crises and earned public trust when it mattered most.

Putting AARs into Practice: Quick Tips for Leaders

Ready to try After Action Reviews with your own team? Here are some practical takeaways to get you started immediately:

• Make AARs a Habit: Schedule AARs consistently, ideally right after any significant project, event, or milestone. Don’t just reserve them for failures; do them after wins too (so you can repeat what worked!). The key is to normalize reflection as part of the workflow, not as a rare exception. Even a 15-minute debrief after a client call or sprint can yield insights while they’re fresh.

• Ask the Right Questions: Keep the discussion focused with a few core questions: What was supposed to happen? What actually happened? Why was there a difference? What will we do next time?. Start by reviewing the goals and expectations, then compare them to reality. Probe into the root causes (“Why did things go this way?”), and finish by identifying concrete action items or lessons for the future.

• Foster a Safe, Blame-Free Environment: Emphasize that the AAR is not about blaming individuals; it’s about improving the team as a whole. Set “ground rules” that everyone’s input is valued, rank is left at the door, and candor is a must. Leaders should go first in admitting their own missteps or uncertainties; this models humility and encourages others to speak up. If someone made a mistake, discuss how the system or process allowed it and how to prevent it, rather than “who screwed up.” When people see that an AAR won’t turn into a witch hunt, they’ll contribute more openly.

• Involve the Whole Team: An AAR shouldn’t be a closed management review; include everyone who was involved in the project or event. Different perspectives will reveal different aspects of what happened. Sometimes, even customers, partners, or other stakeholders can offer valuable insights. The richness of an AAR comes from hearing all sides, the view from the front lines, and the control room. Ensure that someone facilitates so that even the quiet voices are heard.

• Focus on Actionable Outcomes: A review isn’t worth much if nothing changes afterward. Aim to end each AAR with 2-3 clear lessons or follow-up actions. Assign responsibility for any action items, who will do what by when, to ensure the learning is implemented. Also, find a way to share the lessons. Many organizations create brief AAR write-ups or add learnings to a knowledge base so others can find them. The point is to prevent the “we’re discovering the same mistakes all over again” syndrome.

By following these steps, you can avoid common pitfalls. Instead, you’ll kickstart a cycle of continuous improvement. Start small, maybe do a quick AAR at your next team meeting about how that last product demo went. You might be surprised by the insights your team surfaces once you give them the forum. And once you act on a few AAR takeaways and see results, the buy-in will only grow.

Conclusion

Remember, the AAR is a simple idea with radical implications. It says that every day is a school day, every project, meeting, or mission can teach us something if we’re willing to learn.

In the fast-paced world of business (and high-stakes world of private equity), it’s easy to jump to the next deal or task without pausing. AARs urge us to hit “pause” and reflect, so that we don’t rob ourselves of hard-earned lessons.

As one Army veteran-turned-executive might say, “The only truly bad mistake is the one we make twice.” So gather your team, crack open the discussion, and turn those war stories and projects into fuel for better performance. After-action reviews might just become your secret weapon for long-term success.

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Sources

Insights and data in this newsletter are drawn from publications and research, including:

• U.S. Army Training Circular 25-20 (1993) – A Leader’s Guide to After-Action Reviews.

• Harvard Business Review (Darling et al., 2005) – “Learning in the Thick of It.”

• Wharton@Work – Nano Tools for Leaders (Henshaw, 2012). “After Action Reviews.”

• Harvard Business Review (Fletcher, Cline & Hoffman, 2023). “A Better Approach to After-Action Reviews.”

• Google Site Reliability Engineering Book (2016). “Postmortem Culture: Learning from Failure.”

• LinkedIn – Matt Green post (2022). A healthcare executive notes that “Research shows that individual and team performance can improve by 25% by using After Action Review.”

Introduction

As a kid, I vividly remember watching the cartoon show “The Jetsons” and dreaming about having my own aerocar with a transparent bubble top. Then came “Star Wars,” introducing the Cloud Car, and I was completely sold on the idea. Fast forward to the other day when I was driving on the highway with a passenger. I remarked, “Can you imagine if all these ‘challenged drivers’ were flying around? No way that will EVER happen!”

The notion of flying cars isn’t new; it’s been a part of our imagination for over a century, with the first hypotheses emerging in 1901. In the 1960s, it was predicted that by 2000, we would all be soaring in the skies. Many futurists in the early 2000s believed we’d see widespread flying car use by the 2020s. Yet, here we are, firmly rooted on the ground.

However, the concept of Urban Air Mobility (UAM), once a futuristic idea of “flying taxis,” is becoming a reality. Companies are developing small electric vertical takeoff and landing aircraft (eVTOLs) designed to transport a handful of passengers on demand at low altitudes, bypassing the traffic jams below.

With advancements in technology, including the use of lightweight materials, improved batteries, and automation, coupled with the growing challenges of urban congestion and lengthy commutes, this is a pivotal moment for the sector.

In just five years, over $14 billion has been invested in Advanced Air Mobility, primarily into eVTOL manufacturers, reflecting strong confidence that air taxis will soon be part of our transportation landscape.

Major U.S. airlines, automakers, and technology investors are backing startups in this space, while the FAA and NASA prepare for the integration of air taxis into national airspace. We’re on the brink of a mobility revolution in the skies, and a projected market worth hundreds of billions by 2040.

Investors and city leaders are closely monitoring developments, excited by the potential for faster travel within and between cities, new transportation networks, and a sustainable solution to urban gridlock.

So, why does it matter now? After years of prototypes and anticipation, the U.S. air taxi industry is nearing its first real deployments. Companies like Joby and Archer are conducting flight tests and working through FAA certification processes, aiming to transport passengers sometime in 2025 (primarily airport-to-downtown corridors).

The FAA’s recent “Innovate28” implementation plan targets initial scaled operations by 2028 in at least one U.S. city. Globally, developments are accelerating as well; for instance, China’s EHang received the world’s first certificate for an unmanned eVTOL. All these factors suggest that what was once merely a dream is now on the verge of reality.

For executives and investors, this emerging industry could unlock entirely new business models and ecosystem opportunities. For city planners and regulators, it necessitates immediate strategic thinking to ensure these new aircraft enhance urban mobility rather than disrupt it.

In short, urban air taxis represent more than just a new vehicle they signify a broader transformation in how we move people and goods, merging aviation with everyday urban transport.

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What Air Taxis Are and The Problems They Solve

Air taxis are typically battery-electric VTOL aircraft designed to operate as on-demand air transportation within metropolitan areas. They carry a small number of passengers (often 2 to 6, plus a pilot), and can take off and land vertically, like a helicopter, enabling operation from compact “vertiports” atop buildings or parking lots, rather than full runways.

In essence, an air taxi is a highly automated, electric aircraft designed to ferry people or cargo at low altitudes (~3,200 feet or less) across town, addressing the need for faster travel in congested cities.

Key use cases for air taxis include:

• Urban commutes and airport shuttles: One of the first targeted applications is connecting city centers to major airports or business hubs. For example, Archer Aviation (in partnership with United Airlines) is launching a route from downtown Chicago to O’Hare Airport, a trip that takes 45+ minutes by car, which could be flown in about 10 minutes.

• Inter-city hops: Link nearby cities or suburbs (say 20–50 miles apart). This “air metro” concept could connect, for instance, New York City to the Hamptons or Los Angeles to Orange County, easing highway congestion for frequent routes.

• Public services and emergency response: Beyond passenger convenience, air taxis could serve as a means for medical evacuations or organ transport within cities, provide fire-fighting support, or deliver emergency supplies in disaster-hit areas.

• Tourism and aerial sightseeing: Air taxi services could offer scenic flights over metropolitan attractions or fast connections to tourist destinations (imagine hopping from Las Vegas to the Grand Canyon in minutes).

• Logistics and cargo: Rapid delivery of high-value goods. Some designs can carry hundreds of pounds of cargo, offering potential solutions for last-mile delivery in congested cities or ferrying supplies to remote areas.

Air taxis aim to reduce time lost in traffic by utilizing vertical transport, potentially cutting travel times from hours to minutes. These quiet, zero-emission aircraft address noise and pollution concerns, and if costs decrease, they could become a viable alternative to driving in cities, similar to rideshare services, by avoiding road congestion.

Major Players and Partnerships: Who’s Leading the Charge

The U.S. air taxi landscape is taking shape around a few pioneering companies and their strategic partners. Below are the major players (including a few international leaders for context) and how they’re positioning themselves with partnerships in aviation and infrastructure:

• Joby Aviation (U.S.): Widely considered a frontrunner, Joby is targeting a commercial launch in 2025 in American cities. It has secured substantial funding and partnerships: Toyota has invested heavily (over $400M) and is partnering on manufacturing, bringing automotive-scale expertise. Delta Air Lines took a stake in Joby to develop air taxi services shuttling its passengers to airports in New York and Los Angeles. Joby even acquired Uber’s Elevate division, aligning itself with rideshare networks. Its aircraft seats four passengers plus a pilot, boasts a range of ~150 miles, and is touted for its quiet profile. Joby’s strategy is vertically integrated, building the aircraft and operating the service with plans for ride-booking via app and Delta’s customer base feeding demand.

• Archer Aviation (U.S.): Archer is another U.S. leader, also with a 4-passenger aircraft. Archer has a high-profile partnership with United Airlines, which not only invested in Archer but also placed a large order of up to 200 aircraft. Together, they announced the first planned U.S. air taxi route: Downtown Chicago (Vertiport) to O’Hare Airport in 2025. This “trunk route” model (connecting a city center to a major airport) is Archer’s beachhead strategy, after which secondary routes to suburbs would follow. Archer also partnered with automaker Stellantis (Fiat Chrysler’s parent), which is investing $55M and will help build Archer’s aircraft at scale. For infrastructure, Archer is working with local authorities in its target cities (Chicago, Los Angeles, and possibly Miami) to designate vertiports.

• Volocopter (Germany): Leading in the EU with plans for global expansion, aiming for certification of its two-seat air taxi. The company has collaborated with infrastructure partners to build a prototype in Singapore. With a focus on safety and turn-key urban air mobility services, the company is seen as a benchmark

  

  Lilium (Germany): Lilium is developing a unique 6-passenger aircraft that is designed for longer ranges (~150+ miles). The company’s approach is more akin to an air shuttle network connecting multiple cities or regional hubs. It has inked notable partnerships, such as with Lufthansa Airlines. Simultaneously, Lilium is working with Frankfurt Airport (Fraport) on integrating operations into a major airport’s infrastructure. Lilium had earlier announced plans for a Florida network (with Ferrovial to develop vertiports in cities like Orlando and Tampa. *Note: Atlantic Aviation acquired Ferrovial Vertiports in January 2025), backed by a deal with Brazilian airline Azul to deploy Lilium jets in Brazil. While Lilium’s timeline lags Joby/Archer, its vision of regional air mobility and high-profile partners position it as a long-term player if it can execute its technical roadmap.

• Vertical Aerospace (UK): Developed a piloted model designed to seat four passengers. The company went public through a special purpose acquisition company (SPAC) and has secured approximately 1,400 pre-orders. Key partners include American Airlines, Virgin Atlantic, and Avolon. Vertical is collaborating with Rolls-Royce and Honeywell on the powertrain and avionics, and has also partnered with helicopter operators, such as Bristow, for future services. The first full-scale prototype took to the skies in 2022, with certification expected by 2026. Rather than operating as an airline, Vertical's focus is on selling aircraft, with plans to make a significant impact in the U.S. market through its alliance with American Airlines.

• EHang (China): Notable for its flagship autonomous air taxi, which operates without a pilot. The company has conducted demonstration flights in China, including tourism flights in Guangzhou. The company envisions deploying fleets for various purposes, all of which will be managed from a central command center. Although EHang does not have major airline partners, it has collaborated with the Chinese government and is exploring partnerships in Asia, including the development of firefighting drones in Japan and a tourist operation in Bali.

Other notable mentions in the ecosystem include Wisk Aero (a Boeing-backed U.S. startup developing a self-flying air taxi, though its autonomous approach means a longer timeline into the 2030s) and Eve Air Mobility (spun out of Embraer, Brazil, with significant orders and partnerships, including with Blade and UPS). Major aerospace and transportation companies are also circling: Airbus is developing a prototype; Hyundai has a UAM division aiming for 2028 service; and ride-sharing firms like Uber (via Joby) and Lyft have shown interest in integrating air options.

Market Opportunity

The potential market opportunity for urban air mobility is enormous; however, estimates vary widely due to the early stage. Several reputable analyses agree on high long-term upside:

• Morgan Stanley famously projected the global market could reach $1.5 trillion in annual revenue by 2040, and even $9 trillion by 2050. However, in the latest update, Morgan Stanley moderated its base-case outlook to about $1.0 trillion by 2040. *Note: Investors often cite these numbers to justify the hefty valuations of eVTOL startups.

• McKinsey & Co. also sees transformational potential, though with scenario-based outcomes. In one McKinsey scenario, advanced air mobility could generate on the order of $300–400 billion in annual revenue by 2040 globally (assuming a “breakthrough” pace of adoption).

• Other forecasts underscore uncertainty in timing. The variability in these forecasts highlights the dependency on technology, regulation, and consumer uptake that remains to be proven.

Revenue streams in a mature air taxi market would likely come from passenger fares (akin to airline or rideshare revenue), business travel services (corporate subscriptions or memberships for frequent flyers), logistics/cargo fees, and potentially public sector contracts (for emergency services).

The business models are still being defined. Some companies plan to operate their own fleets and generate revenue based on each trip, similar to the "Uber of the air" model. In contrast, others aim to sell aircraft to fleet operators or airlines, earning manufacturing margins while also generating revenue from support services.

Infrastructure needs present another facet of the market opportunity (and necessity). To unlock these revenue forecasts, significant investment in physical and digital infrastructure is required:

• Vertiports are the equivalent of airports, featuring landing pads, passenger handling facilities, and charging stations. Cities will need networks of vertiports strategically placed for efficient routes (e.g., one in each major business district, at key transit hubs, and at airports). Real estate developers and infrastructure funds are already looking at parking garages, rooftops, and unused land as potential vertiport sites. As of 2025, dozens of vertiport projects are in the planning stage globally, but widespread construction will require clear revenue signals and regulatory approvals.

• Energy and charging infrastructure: High-power charging systems or battery swap facilities will be needed at vertiports to quickly turn the electric aircraft. Utilities and city power planners will need to ensure capacity for clusters of electric air taxis, especially if dozens could charge simultaneously during peak hours.

• Air Traffic Management (ATM) systems: To safely manage potentially hundreds of new low-altitude flights, new traffic management solutions are required. The existing air traffic control (ATC) system is not designed to handle high volumes of flights below 5,000 feet in urban areas. NASA and the FAA have been testing Unmanned Traffic Management (UTM) concepts and digital flight corridors for drones and eVTOLs.

• Maintenance and support infrastructure: Like helicopters and airplanes, eVTOL fleets will need hangars, maintenance facilities, and repair services. This opens opportunities for MRO (maintenance, repair, overhaul) providers in the long term. Initially, manufacturers might handle their own fleet maintenance (Joby, for example, might maintain its airline-style operations in-house), but as the industry grows, third-party service networks could emerge.

All of these elements will require investment, creating adjacent markets for construction, technology, and services. In summary, the market opportunity for air taxis extends far beyond selling aircraft. It encompasses an entire ecosystem of manufacturing, services, and infrastructure that will evolve over the next two decades.

Barriers to Adoption

Air taxis offer big promise, but several serious roadblocks stand in the way of widespread adoption in the U.S.:

• Regulatory Hurdles: FAA certification remains the single largest barrier to success. As of mid-2025, no eVTOL has received full type certification, and production and operator approvals are still pending. Safety concerns make regulators cautious, which slows progress.

• Infrastructure & Airspace: Vertiports need to be built, airspace integrated, and zoning approvals secured, none of which are fast or easy. Early routes will be limited, which will reduce flexibility and profitability.

• Noise & Public Acceptance: Despite quiet designs, community pushback is likely to occur. Cities like New York City already resist helicopter traffic. Public trust will hinge on noise reduction, transparency in flight paths, and effective community outreach.

• Safety Perception: People are wary of flying in new, small aircraft, especially those that are autonomous. One incident could derail trust. The industry must prove airline-level safety through redundancy, testing, and human-piloted rollouts.

• Battery Limits: Current batteries have a range of ~20–50 miles per trip. Performance, lifespan, and thermal risks are still issues. Until next-gen batteries arrive, scale and economics remain constrained.

• Business Viability: High initial costs mean early rides will be pricey, limiting adoption. The challenge: scale manufacturing, reduce costs, and expand into broader markets. Without enough infrastructure or riders, the “chicken-and-egg” problem persists.

Bottom line: These challenges aren’t insurmountable, but they will take time, trust, tech breakthroughs, and billions in capital. The winners will be those who navigate the gauntlet best, striking a balance between innovation, safety, and brilliant execution.

When Will Air Taxis Become a Reality?

2025–2026:
Initial commercial flights begin. Joby and Archer aim to launch limited routes (e.g., Chicago to O’Hare, New York City to JFK) pending FAA certification. Operations will be small-scale, piloted, and use existing infrastructure, similar to helicopter shuttles.

2027–2028:
More cities join early trials. The FAA’s Innovate28 initiative aims to target “at-scale” urban operations in at least one city by the 2028 LA Olympics. Expect expanded fleets, more visibility, and closer regulatory alignment.

2029–2030:
Transition from trials to networks. Expect broader service in major hubs such as Los Angeles, Miami, and Dallas. Routes increase, but flights are still piloted and follow fixed corridors under visual flight rules.

2030–2035:
Scaling begins. Manufacturers ramp up production, and more cities deploy services. Autonomous cargo flights may start. Regulatory frameworks loosen, and early consolidation in the industry begins to emerge.

2035–2040:
Potential tipping point. Autonomous passenger flights emerge in some regions. Networks of vertiports link metro areas. Air taxis are becoming a viable mode of urban transportation, particularly for accessing airports and premium routes.

Preparing for the Air Taxi Era

Investors:
Think long-term. The air taxi market will take time to mature, with real revenues unlikely before 2030. Focus on companies with substantial capital, partnerships, and progress in certification. Diversifying across the ecosystem, including battery technology, vertiport infrastructure, autonomy software, and suppliers, may offer lower-risk, high-upside plays. Be patient and policy-aware.

City Planners:
Start preparing now. Identify vertiport sites, update zoning and building codes, and engage with the local community. Build cross-agency task forces to coordinate efforts. View air taxis as part of a multimodal network and consider public-private partnerships. Early movers can become industry hubs, but equity and access must be part of the plan.

Operators & Mobility Providers:
Air taxis will complement or disrupt existing services. Airlines should integrate Urban Air Mobility into their hubs and loyalty programs to enhance their offerings. Helicopter operators can transition to eVTOL. Rideshare and logistics companies should prep for “third-dimension” integration. Train pilots, ready IT systems, and partner early to stay competitive.

Adjacent Opportunities:
Infrastructure, real estate, software, insurance, finance, and workforce development all stand to benefit. “Picks and shovels” businesses that enable UAM rather than flying it may offer faster, more stable returns with lower regulatory hurdles.

Competitive Positioning:
Air taxis should be marketed as solutions to specific pain points, such as airport commutes and congested routes, rather than as luxury toys. Sustainability, speed, and reliability will be key differentiators. Partnering with trusted brands can help gain public trust.

Final Word:
UAM isn’t science fiction; it’s a coming shift in mobility. Early engagement and strategic positioning across sectors will determine who leads when the skies open for business.

Conclusion: Air Taxis and the Future of Mobility

Air taxis represent more than a novel mode of transport. They signal a shift toward a brighter, more integrated future of mobility. Like the car and the jet before them, eVTOLs have the potential to reshape how we live, work, and navigate cities. While the path forward involves regulatory, technological, and societal hurdles, the direction is clear: mobility is moving into the vertical dimension.

This isn’t about luxury rides for the elite. Air taxis could unlock real efficiency in crowded urban areas, acting as airborne connectors in a multimodal network that includes autonomous shuttles, trains, and intelligent routing platforms. Rooftops may evolve into vertiports. Drones may handle urgent deliveries. The urban sky could become a carefully managed, high-value traffic layer.

For leaders and investors, this is not just about flying vehicles. It is about entering a new mobility ecosystem built on electrification, automation, and data. The opportunity lies in solving longstanding problems of congestion, access, and emissions by using new tools. Cities that embrace this shift early could gain a significant edge in economic growth and talent attraction.

Ultimately, air taxis are no longer science fiction. They are part of a broader, transformative wave in the transportation industry. The sky is not the limit anymore; it is the next highway. Now is the time to shape how we use it.

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Sources

Insights and data in this newsletter are drawn from publications and research, including:

• FAA’s Innovate28

• Joby/Archer press releases

• Morgan Stanley & McKinsey forecasts

• Noise/performance tests

• Airspace management and vertiport development plans

Introduction

I was speaking with a CEO the other day, an innovative and driven individual running a fast-growing business. Somewhere between back-to-back board meetings and putting out fires with two key clients, he admitted something I’ve heard from a lot of leaders lately:

“Honestly, I can’t remember the last time I had a full hour just to think.”

Not plan. Not reply. Not execute. Just think.

And that stuck with me. Because it’s not uncommon. Somewhere along the way, reacting became the default mode of leadership. We reward the fastest response, the swiftest fix, the calendar filled to the edge. But here’s the irony: in our rush to keep up, we’ve lost the time and space to look ahead. The urgent has hijacked the important, and strategic thinking has become collateral damage.

This isn’t a critique. It’s a reality check. And perhaps a reminder: if we want to lead well, we must return to thinking purposefully, rather than reacting on autopilot. It’s the leaders who carve out space to think strategically, deliberately, even defiantly, who consistently pull ahead.

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When Was the Last Time You Thought?

Let’s be honest: you probably can’t remember the last time you had a solid hour just to think. Not to respond to emails, not to sit through meetings, not to scan social media, just to think.

These days, most leaders are caught in a whirlwind of meetings, messages, and a calendar that leaves zero space for actual thinking. You start early, run all day, and crash at night, only to wake up and do it all over again. Thinking time? That feels like a luxury, something you’ll get to once things “slow down.” (Spoiler: they never do.)

But here’s the truth: strategic thinking isn’t just a bonus activity; it’s the most important part of the job as a leader.

Yet, in a culture obsessed with urgency, true reflection often gets pushed aside. We glorify busyness, chase inbox zero, and wear “always on” like a badge of honor. As an example, my goal has always been to read and respond to all emails within 24 hours of receipt. As my responsibilities and title increased, I eventually had to abandon that objective. I couldn’t keep up, but it didn’t mean that by abandoning it, I added more time.

Strategy often gets relegated to an annual off-site meeting, only to be overshadowed by the next urgent issue. I’ve seen this time and time again in organizations.

The result? Leaders end up reacting instead of guiding, companies drift instead of aiming, and long-term direction takes a back seat to short-term chaos.

It’s time to pause this madness. If we want to lead with purpose, we must start thinking purposefully again.

The Strategy Drought Is Real

This isn’t just a hunch; a genuine strategy drought is occurring in many organizations. We have access to more tools, dashboards, and AI-generated insights than ever before, yet leaders are spending less time on strategy.

According to a Korn Ferry study, the average C-suite executive dedicates less than 5% of their time to actual strategic planning. That’s right, only a tiny fraction of their workweek. The remaining 95% is consumed by execution, meetings, and addressing emergencies.

It's no surprise that many companies feel stagnant. The situation isn't improving, either. A survey by McKinsey revealed that only 23% of executives believe their organizations excel at strategic decision-making. This means that nearly three out of four leaders are effectively saying, “We’re kind of winging it.”

It’s astonishing, despite having more data at our fingertips than ever, obtaining meaningful insights seems more challenging. We are inundated with numbers but starved for direction. While everyone is overwhelmed with metrics, very few pause to ask, “What do all these numbers mean?” or “Where are we truly headed?”

The strategy drought is real, and it manifests in cautious decision-making, conflicting priorities, and teams that are exceptionally busy but not necessarily making progress.

How Leaders Became Tactical Operators

How did we end up in this situation? How did visionary CEOs become glorified project managers?

Not long ago, leadership was all about vision, anticipating the future, identifying new opportunities, and dreaming up what comes next. Now, many leaders find themselves mired in the details.

They’re chasing down late invoices, reviewing expense reports, handling client escalations, and micromanaging tasks that shouldn’t even be on their radar.

Everything feels urgent, leading them to spend their days extinguishing fires instead of guiding their teams toward the future. It feels less like being a Chief Executive Officer and more like being a Chief Firefighter.

This shift didn’t happen overnight. Several factors contributed to this change. Technology has made everyone accessible 24/7, meaning leaders are never truly off the clock. Companies have become leaner and faster, which initially seemed efficient, but also resulted in leaders taking on more of the daily operational responsibilities. Additionally, there’s constant pressure to deliver this quarter's results, even when it jeopardizes long-term growth.

The outcome? A generation of leaders who excel at reacting but lack the time and energy for genuine strategic thinking. This dynamic is exhausting. Teams are experiencing burnout, and so are their leaders. We’ve equated being busy with being effective. The reality is that constant activity doesn’t equate to progress, nor does it signify strategic thinking.

The 3 Enemies of Strategic Thinking

Let’s identify the usual suspects. There are three major culprits quietly undermining your ability to think strategically every single day:

1. The Calendar Cram

If your calendar resembles a game of survival, you’re not alone. Most executives, including me, are booked solid, with every 15-minute slot accounted for weeks in advance. There’s no white space and no time to think, just one meeting after another.

In fact, one study found that CEOs spend about 60% of their time in meetings, yet nearly three-quarters of those meetings are deemed unproductive. We’ve come to equate a packed calendar with productivity, while empty spaces are often perceived as a sign of laziness. We’ve all been there when, on the odd week, our calendar is not “full”. The thoughts range from “thank goodness to what will my boss think to what’s going on?”.

The issue is that when your day is filled with calls and check-ins, you lack the opportunity to zoom out and actually think. You end up reacting all day instead of planning.

2. The Urgency Trap

This one is pervasive. Phrases like “I need this ASAP,” “Any update?” and “Can you jump on a quick call?” probably sound familiar. We’ve cultivated a culture where everything feels urgent, even when it’s not.

It creates a constant fire drill. When you’re always in firefighter mode, there’s little time for long-term thinking. Consequently, strategic projects get pushed aside as today’s minor crisis takes precedence. This leads to a cycle where we confuse being busy and frantic with being effective. However, that's just a misconception fostered by a culture of urgency.

The real problem arises in organizations where urgency is consistently turned up to maximum. Big ideas don’t get the time they need to develop. There’s no opportunity to consider, “Wait… should we even be doing this?” or “What’s our longer-term game plan?” When you’re always sprinting, you miss the chance to pause and change direction.

3. The Data Flood

We live in a world overflowing with metrics. Dashboards, real-time analytics, feedback surveys, reports, spreadsheets, you name it. While data is powerful, an excess of it can become another trap.

It’s easy to fall into analysis paralysis, overanalyzing numbers in so many ways that you lose sight of the bigger picture. Even worse, you might become obsessed with micro-metrics (like this week’s conversion rate) instead of addressing macro questions, such as, “Are we even playing the right game?”

Too often, we mistake data for insight. However, strategy isn’t just about understanding the numbers; it’s about making sense of them. That requires perspective, not just processing power.

Any one of these issues, calendar overload, urgency addiction, or data overwhelm, can derail your strategic focus. However, when they occur together, they create a perfect storm that keeps even the most astute leaders stuck in reactive mode, working hard but ultimately going nowhere.

Why This Is More Dangerous Than It Looks

Staying in reactive mode can feel productive, can’t it? You're addressing problems, sending off midnight emails, and keeping everything moving. It appears to be progress and feels like leadership.

However, the reality is that constant reactivity is akin to running on a treadmill. You're exerting effort, there’s no doubt about that, but you're not actually advancing. The business isn’t growing; it's merely surviving.

The more you chase today’s issues, the more you delay tomorrow’s opportunities. You miss significant chances because no one is scanning the horizon for potential challenges. Minor problems are often ignored until they escalate, as there is no time to address their root causes. You're heroically busy, but in reality, you’re just treading water.

This isn’t just a personal time-management issue; it’s also a strategic problem.

Look around. We’re operating in one of the most complex and fast-moving business environments we’ve ever seen. AI is reshaping entire industries, and customer behavior can change overnight. If you’re only ever reacting, you'll always lag behind, forced to adapt after the fact instead of leading the change.

That’s the risk: busyness creates a false sense of security. It makes us feel in control when we’re actually on the defense. Without a clear strategy, you’re essentially flying blind in a storm.

Sure, your team is working hard, but are they focusing on the right things? Probably not, at least not consistently. The cost? Wasted time and energy, leading to teams that experience burnout from constant whiplash and shifting priorities.

The truth is that the enemies of strategic thinking, calendar overload, urgency addiction, and data overwhelm aren’t just annoying; they are undermining your future. Step one is recognizing that. Step two? Regaining control.

Restoring Strategic Discipline: Practical Steps

Great news: you can break free from the urgency trap! Restoring strategic discipline might not be a walk in the park, but with some intentional habits, you can definitely regain control over your time and agenda. Let’s dive into some practical steps to help you along the way:

Block Off Thinking Time: This might sound basic, but trust me, it’s a game-changer. Schedule “thinking time” as if it were a crucial meeting. Start with a 2-hour slot once a week where you completely disconnect from the hustle and bustle of daily tasks, with no emails and no calls.

Use that time to brainstorm (don’t take a nap), reflect, read, become more informed about your industry and trends, or simply step back and think big. Guard that time like it’s gold! If someone tries to book you during that slot, just say you’re busy because you are! I find Friday mornings are perfect for this “thinking”.

By making this a routine, you signal to yourself and others that thinking is an integral part of the process. You’d be amazed at how much clarity comes when you regularly give yourself permission to think.

Ask Better Questions: Strategic thinking often kicks off with the right questions. Encourage yourself and your team to think beyond the usual “What do we need to do right now?” Start asking, “Why are we doing this?” or “How does this align with our long-term vision?”

For instance, instead of just asking, “How can we boost sales this quarter?” also consider, “What do our customers truly value, and are we delivering that?” or “What if we approached this completely differently?”.

By posing intriguing, fundamental questions, you’ll uncover insights that typical queries miss. Great strategies come from curiosity and challenging the status quo, so create a habit of exploring those “whys” and “what ifs” in meetings. Trust me, better questions lead to better answers.

Use Decision Journals: Think of a decision journal as your trusty sidekick for making smarter strategic choices. Here’s the scoop: whenever you make an important decision, jot down a quick note/email about what you decided, why you made that choice, and what you expect to happen.

Keep it simple, just a few thoughts on your rationale. Then, set a reminder to check back in 6 or 12 months for an after-action review. When you revisit it, ask yourself: Did it unfold as expected? What lessons can we take away?

This practice helps you clarify your thinking upfront and spot patterns in your decision-making over time. It’s like having a personal coach for your strategic choices. Over time, this will sharpen your judgment, reduce repeat mistakes, and boost the learning in your strategy process.

Audit for Strategic Debt: Just like organizations rack up technical debt with quick fixes that backfire later, you can accumulate strategic debt by sidelining long-term thinking.

Take a hard look at initiatives or lingering “temporary” solutions that don’t align with your current strategy, or worse, lack one altogether. Identify where you're doing things just because that’s how it’s always been done. I’ve seen most companies get stuck in some aspect of, “Well, we’ve always just done it that way.”.

Make a list of those strategic debt items. Then, tackle them systematically: either realign them with your strategy or phase them out altogether. Think of it as a spring cleaning for your business strategy.

By clearing away those misaligned activities, you can refocus on what truly matters. Committing to a strategic debt audit annually (or even quarterly) sets you up to regularly prune distractions and outdated directions. Remember, strategy isn’t something you set and forget; you have to actively maintain it, or risk drifting off course again.

Implementing these habits does take commitment. At first, it might feel a bit awkward to turn down meetings or push back on “urgent” tasks to protect your thinking time. However, keep in mind that as a leader, your true value shines in the direction and clarity you provide, not just the tasks you complete.

By blocking time, asking the big questions, documenting your decisions, and tackling strategic debt, you’re steering your schedule back toward high-value work. You’re bringing conscious thought into a space where autopilot usually reigns. Over time, these practices will help your organization respect strategic thinking as real work.

The Strategic Advantage No One Talks About

In today’s business world, where speed, hustle, and “always on” are worn like badges of honor, here’s a bold but true statement: slowing down to think is a serious competitive advantage.

It’s counterintuitive. Most leaders say they don’t have time to think. But that’s precisely why thoughtful, strategic leadership stands out. While others scramble from fire to fire, chasing the crisis of the day, you can be the one making clear, confident decisions that move the needle.

And here’s the kicker: the best strategic moves often look like “doing nothing.” Saying no to a shiny opportunity. Ignoring a vanity metric. Walking away from a trend that doesn’t fit the long game.

Michael Porter nailed it when he said, “The essence of strategy is choosing what not to do.” The real pros don’t just chase growth; they filter it. They prioritize with ruthless clarity.

Look at the companies that missed this:

• Yahoo said yes to everything and became a cautionary tale.

• Peloton chased pandemic demand without pausing to rethink long-term consumer behavior and got crushed when the tide turned.

• Meta (Facebook) spent billions on the metaverse before realizing it had no clear strategic path. Meanwhile, TikTok ate its lunch on relevance and attention.

Compare that to Apple, which famously ignores market pressure until the timing and strategic alignment are right. Or Amazon, which thinks in decades, not quarters.

In a world where everyone’s reactive, thoughtfulness becomes a superpower. It’s not loud. It doesn’t show up on your KPI dashboard. But it shapes the big bets that win.

Want a real edge? Stop trying to keep up. Start thinking ahead. Protect your thinking time like your business depends on it, because it does.

Final Takeaway

At its core, leadership is about providing clear and intentional direction. While execution is important, you can’t just sit in a room dreaming up big ideas without rolling up your sleeves. It’s crucial to recognize that if you only react to what’s thrown at you and focus solely on checking boxes and handling urgent matters, you’re not truly leading; you’re merely managing.

The difference between a reactive manager and a strategic leader often boils down to one simple habit: making time to think.

Here’s a challenge for you: schedule a “strategy oasis” this week. Take just one hour and block it on your calendar like any other meeting. During this time, disconnect from emails and avoid responding to them.

Just you, a notebook, maybe a whiteboard, and one big question you’ve been putting off. What’s a goal you’ve ignored? A risk you haven’t had time to explore? An idea you keep meaning to revisit?

You may be surprised by what emerges during this hour. It could lead to a new direction, a smarter way forward, or simply provide the clarity you’ve been missing. Even if you use the time just to breathe and clear your head, that’s still a victory.

Now here’s the key: don’t let this be a one-time event. Make it a habit. Set aside one protected hour each week to step back and truly lead, not just execute. At times, it’s okay to involve a coach or a peer to bounce ideas off of.

The lost art of strategic thinking doesn’t have to remain lost; you can reclaim it, one quiet hour at a time. By doing so, you’ll think more clearly, lead more effectively, and demonstrate to your team that thoughtfulness isn’t a luxury, it’s an essential part of the job.

So go ahead, block the time, silence the noise, and allow yourself to think. Your future self will thank you, and so will your team.

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Sources

Insights and data in this newsletter are drawn from publications and research, including:

• Korn Ferry. C-Suite Trends and Leadership Time Allocation

• McKinsey & Company. The State of Organizations 2023

• Harvard Business Review. Michael Porter quote: “The essence of strategy is choosing what not to do.”

• Harvard Business Review. Research on Executive Time Use and Meeting Productivity

• Slack Future Forum. Executives Overwhelmed by Digital Communication & Urgency Culture

• MIT Sloan Management Review. The Overload of Data and Decision-Making Fatigue

• Stanford Graduate School of Business. Urgency Culture and Innovation Tradeoffs

• Gartner. Strategic Planning Pitfalls in the Age of AI & Real-Time Data

• Bain & Company. Why Strategy Gets Ignored and How to Bring It Back

Introduction

In less than a decade, SpaceX’s Starlink has evolved from an ambitious concept into the world’s largest satellite internet network, reshaping global connectivity, redefining telecom competition, and emerging as a tool of geopolitical significance.

This strategic briefing offers a comprehensive overview of Starlink’s development, current capabilities, use cases, financial trajectory, and competitive landscape.

It also examines Starlink’s broader implications for business leaders, investors, and policymakers as the convergence of space, technology, and infrastructure enters a new era.

The reason I wanted to discuss Starlink is that I am an avid backpacker who enjoys exploring high-elevation, remote areas. One of the main attractions of this activity is the lack of connectivity. I don’t want to be connected.

However, for safety purposes, I do use a SPOT Satellite GPS Messenger (Gen 4), which relies on the Globalstar satellite network to transmit data from anywhere in the world. It’s $25 a month, and the device is $150.

I have been considering switching to Starlink because having a reliable way to signal for help is crucial. I will likely make the transition at some point as costs decrease, and I am very curious about how this technology will impact businesses and our overall way of life. Let’s explore that!

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History and Key Milestones

• 2015 – Project Announcement: SpaceX CEO Elon Musk announced plans for a satellite internet constellation (later named Starlink) in January 2015, followed by the opening of a satellite R&D facility in Redmond, WA. Musk estimated a ~$10 billion investment and positioned Starlink’s profits as funding for SpaceX’s Mars ambitions. Yes…Starlink falls under SpaceX.

• 2018 – Test Satellites: SpaceX launched two demo satellites in February 2018 to validate the technology. That year, the U.S. FCC granted approval for an initial 4,425-satellite network, contingent on deploying at least half by 2024.

• 2019 – First Launches: In May 2019, SpaceX deployed the first batch of 60 operational Starlink satellites into low Earth orbit (LEO) on a Falcon 9 rocket. By November 2019, Starlink launches were occurring regularly (with ~60 satellites per launch) to build out what is called “the constellation”.

• 2020 – Beta Service: Starlink began a private beta in mid-2020 and opened a public “Better Than Nothing” beta by October 2020. Early beta users reported download speeds of over 150 Mbps (sufficient for gaming, etc.), demonstrating broadband-class performance.

• 2021 – Initial Commercial Service: In 2021, Starlink began accepting general pre-orders and rolling out service in the U.S., Canada, and the UK, with a focus on rural and underserved regions. SpaceX also secured licenses in various countries and began scaling production of user terminals.

• 2022 – Growing Network and War Role: By 2022, Starlink’s constellation surpassed 2,000 satellites and expanded service to all seven continents. The user base grew to over 1 million by year-end. Notably, Starlink was rapidly deployed to Ukraine after Russia’s invasion to restore communication, becoming a lifeline for the Ukrainian military and civilians (initially funded by SpaceX, later by the U.S. and allies).

• 2023 – Rapid Expansion: SpaceX continued to launch near weekly, scaling the network to ~3,500+ satellites by early 2023. Starlink surpassed 1.5 million customers by the end of Q2, and SpaceX reported that Starlink hardware was no longer sold at a loss as economies of scale took effect. In mid-2023, the U.S. Department of Defense signed contracts to formally fund Starlink services for Ukraine. SpaceX also introduced a military-focused Starlink variant called Starshield for secure government communications.

• 2024 – Scale & Profitability: By May 2024, Starlink’s constellation reached around 4,000 active satellites and approximately 3 million subscribers worldwide. SpaceX disclosed Starlink had generated $1.4 billion in 2022 (up from $222 million in 2021) and turned a quarterly profit in 2023. Starlink’s service became available in ~100 countries and territories as regulatory approvals expanded.

• 2025 – Largest Satellite Network: Starlink is now by far the world’s largest satellite network. As of March 2025, SpaceX had over 7,100 Starlink satellites in orbit (roughly two-thirds of all active satellites in existence). The constellation is on track to achieve global mobile coverage, and SpaceX projects that Starlink’s annual revenue could reach approximately $12 billion in 2025. SpaceX’s valuation has climbed to ~$350 billion, with Starlink estimated to comprise about 60–65% of that value (over $200 billion). Musk has floated the idea of spinning off Starlink, but most recently stated that there is no near-term plan for an initial public offering (IPO).

  

Current Deployment and Technology Model

Starlink operates a mega-constellation of low-Earth orbit (LEO) satellites designed to deliver broadband internet globally. Unlike traditional geostationary satellites at 36,000 km, Starlink satellites orbit at an altitude of ~550 km, dramatically reducing latency to 20–40 ms (similar to ground fiber) and enabling responsive two-way connectivity.

SpaceX mass-produces these small satellites and launches them in batches of 20–60 on Falcon 9 rockets. As of early 2025, over 7,100 Starlink satellites are in orbit, with ~7,100 functioning (some deorbited as newer models replace them).

This massive deployment provides Starlink with unrivaled coverage. It is the only high-bandwidth satellite network with near-global reach, spanning North America, Europe, Asia, Africa, Oceania, and even the polar regions.

Each Starlink satellite is equipped with phased-array antennas and lasers. The user connects via a pizza-box-sized dish antenna on the ground, which communicates with the overhead satellites. Newer satellite versions include laser inter-satellite links that allow Starlinks to relay data to one another in space.

This means a Starlink satellite passing over, say, a ship in the ocean can beam internet to another Starlink satellite in range of a distant ground station, without the need for local infrastructure. The network dynamically hands off coverage between satellites as they move, and sophisticated software in user terminals allows seamless connectivity as multiple satellites rise and set overhead.

SpaceX also operates a global ground station network and secure gateways, including partnerships with major data centers (e.g., Google and Microsoft) to route Starlink traffic into the internet backbone for efficient content delivery.

Coverage and capacity: With thousands of satellites, Starlink can provide service virtually anywhere on Earth. Initially, coverage focused on higher latitudes, but now spans equatorial regions as well.

The network’s capacity is shared among users in a cell, so speeds can vary. Individual users typically experience download speeds of 50–200 Mbps (sometimes higher in low-congestion areas) and upload speeds of 10–40 Mbps. In layman’s terms, these speeds are excellent. Starlink’s low latency enables applications such as video calls, VPNs, and online gaming, which were previously impractical on traditional satellite links.

To manage demand, SpaceX has implemented various service tiers and data policies (such as data caps or “Priority” data buckets on some plans) to ensure the growing customer base can be supported. Ongoing launches continually add capacity, and SpaceX plans to use its Starship rocket in the near future to deploy second-generation Starlink satellites that are larger and even more capable.

These upgrades aim to increase bandwidth per satellite and eventually enable direct connectivity to standard smartphones (a future service announced in partnership with T-Mobile for text messaging). In summary, Starlink’s technology model leverages low-orbit, high-volume deployment and novel communications technology to deliver broadband.

Use Cases and Customer Base

Starlink’s customer base spans consumer, commercial, and governmental users, addressing scenarios where traditional connectivity is unavailable or inadequate:

• Rural and Underserved Consumers: The primary market for Starlink has been individual households and businesses in rural or remote areas that lack high-speed internet. Starlink enables these users, ranging from farms in Iowa to villages in the Amazon, to access broadband without the need to wait for fiber or cable lines.

• Enterprises and Industry: Starlink offers business-grade plans for enterprises in remote areas, including mining, energy, construction, and agribusiness. Partnerships with cloud service providers, like Microsoft’s Azure Space, enhance client connectivity by combining satellite internet with cloud computing. Many small and medium businesses, from resorts to oil rigs, are adopting Starlink to access reliable broadband.

• Maritime Internet: Starlink is being adopted across the maritime sector, from shipping to leisure. SpaceX launched Starlink Maritime plans in 2022, initially at a high price (~$5,000/month for unlimited use), targeting commercial ships, superyachts, and offshore rigs. In 2023–24, they introduced more affordable maritime plans (starting at $250/month with data caps) to serve fishing vessels and private boat owners. Almost all of the major cruise lines have a partnership with Starlink to provide internet services on board their ships.

  

• Aviation and Mobility: In-flight internet is being revolutionized by Starlink. SpaceX developed Starlink Aviation terminals that can be mounted on aircraft, offering up to 350 Mbps to each plane. Several airlines have signed on, notably Hawaiian Airlines, which has begun offering free Starlink Wi-Fi on its trans-Pacific flights (becoming the first major carrier to do so). Beyond aviation, Starlink’s portability features enable RV owners and adventurers to stay connected on the go. Emergency responders and disaster relief teams have similarly used Starlink to set up instant communications centers wherever needed. The mobility use cases, including land, sea, and air, are a key differentiator of Starlink.

• Government and Military Users: Although not initially a direct commercial focus, Starlink has seen significant uptake by government entities. Military forces (from Ukraine to the U.S. European Command) have deployed Starlink for field communications, as it can be set up in minutes and provides a hard-to-intercept link for data and voice in conflict zones. Starlink is also used in humanitarian operations, for example, supporting connectivity in refugee camps and disaster-struck regions where infrastructure is down. SpaceX now offers Starlink Government service packages, and as mentioned, a higher-security Starshield variant is being developed for defense clients. Moreover, agencies such as FEMA and first responders utilize Starlink to restore communications after hurricanes, wildfires, and earthquakes. (For example, during the September 2024 Hurricane Helene response in the U.S., FEMA deployed dozens of Starlink units to reconnect cut-off communities.) These use cases underscore Starlink’s strategic value when traditional networks are compromised.

Overall, Starlink’s customer base is rapidly diversifying. From connecting a remote school to enabling telemedicine in a village, from powering Netflix on an airplane to guiding drones on the battlefield, Starlink has demonstrated a wide scope of applications that were previously impossible or prohibitively expensive with legacy technologies.

Financial and Commercial Impact

Starlink’s rapid growth has significant financial and market implications for SpaceX and the broader telecom industry. I had already touched on subscribers and revenue, so let’s review pricing and other factors.

Pricing tiers: Starlink’s commercial strategy involves multiple service tiers and pricing models, striking a balance between affordability for consumers and premium offerings for specialized markets. As of 2025, pricing (in the US market) roughly breaks down as follows:

• Residential: ~$80–120 per month for typical home use, offering up to ~25–220 Mbps downlink speeds, plus a one-time ~$360 for the standard Starlink dish kit which may be paid in monthly installments (Pricing varies by country; in some regions, monthly fees have been reduced to spur adoption).

• Business (Local): $65–$ 540 per month for priority bandwidth designed for businesses, featuring a larger high-performance antenna (with a $1,499 hardware cost) for enhanced resiliency. These plans deliver better throughput during peak times and higher allocation for enterprise data needs.

• Mobile (Roam/RV): ~$150–200 per month for portable use (with options for regional or global roaming). These plans allow users to take Starlink with them on vehicles or to different service addresses. Some options offer metered data (e.g., purchase data buckets) for casual use.

• Maritime/Global: Tiered plans ranging from ~$250 per month up to ~$2,150 per month for top-tier unlimited use. Hardware for maritime/global (flat high-performance dual-dish kits) costs ~$2,500 for small vessels to ~$10,000 for large ships. This provides 50GB - 2TB of data usage, a huge upgrade over previous services.

• Aviation: Custom pricing – Starlink Aviation hardware incurs a high upfront cost (estimated at $ 100,000+ per aircraft for the specialized phased-array antennas). Airlines like Hawaiian provide the service free to passengers, presumably absorbing the cost or treating it as a competitive amenity. Charter operators may pass costs to clients. SpaceX advertises up to 350 Mbps to each equipped aircraft, which is split among passengers.

These pricing tiers indicate Starlink’s two-pronged strategy: to penetrate the mass market for consumers with relatively affordable hardware and monthly fees, while also monetizing high-value commercial segments (such as maritime, enterprise, and airlines) that can bear premium prices for superior connectivity.

The company has demonstrated flexibility in adjusting prices in certain countries with lower purchasing power or where competitor ISP prices are relatively low. Starlink has reduced monthly rates to attract subscribers. Conversely, it charges a premium for “Priority” data or faster speeds, where customers are willing to pay (such as mission-critical business use). This tiered approach helps maximize Starlink’s revenue potential across diverse customer groups.

Capital investment and valuation: SpaceX has invested billions into Starlink’s development and deployment. Musk initially cited a cost of approximately $10 billion to build out the network, though some estimates suggest it could exceed that once the full Gen2 constellation and supporting infrastructure are complete.

To fund this, SpaceX has raised numerous funding rounds; Starlink’s success is a key driver of SpaceX’s soaring valuation, as previously discussed.

Morgan Stanley and other investment banks have modeled Starlink’s valuation in various scenarios. A 2024 Morgan Stanley analysis suggested that Starlink could eventually account for ~75–80% of SpaceX’s revenue and profit generation.

Should it IPO, some analysts project Starlink could command a valuation in the tens of billions or more (for context, rival OneWeb was valued at $3.4 billion in its 2023 merger, and Amazon’s Project Kuiper is entirely within a $1.3 trillion company).

In any case, Starlink has quickly become a major player in the telecom and media sector, with a growing financial profile. Its global revenue streams make it a unique asset that private equity and public market investors are watching closely.

The commercial impact of Starlink extends beyond SpaceX’s coffers. It is disrupting incumbent industries, pressuring telcos and satellite operators to respond (discussed further below), and it has spurred a wave of investment in space-based communications.

SpaceX’s aggressive deployment and first-mover advantage have set a high bar, potentially yielding a winner-takes-most dynamic in LEO broadband. That said, sustaining profitability will require managing costs (including launch, satellite replacement, and customer acquisition) and achieving a sufficient scale in subscriber count.

Thus far, the trajectory is promising: Starlink is already the largest satellite internet provider by users and revenue, and its growth is filling a previously untapped demand for low-latency global broadband. If it continues to execute well, Starlink could become one of the world’s leading internet service providers (by coverage area, if not eventually by subscribers) and a cash engine for SpaceX or any entity spun out of it.

Competitive Landscape

Starlink’s emergence has galvanized competition in both the space and telecom sectors. Key players and competitors include:

• OneWeb / Eutelsat OneWeb: OneWeb, a UK-based LEO satellite internet company and early rival to Starlink, emerged from bankruptcy in 2020 and deployed its 634 satellites by early 2023. Now merged with France’s Eutelsat, OneWeb focuses on serving enterprise, government, and telecom clients, rather than offering direct-to-consumer services. While its constellation is smaller than Starlink’s, operating at a higher orbit (~1,200 km) reduces the number of satellites needed for coverage; however, this results in higher latency (~70 ms vs. Starlink’s ~30 ms). OneWeb emphasizes reliability and partnerships, particularly with the telecom and transportation sectors, aiming to complement or provide an alternative to Starlink, especially for governments concerned about their reliance on U.S. systems.

• Amazon’s Project Kuiper: Project Kuiper, backed by Amazon with a $10 billion investment, is set to compete heavily with Starlink. It has FCC approval for a 3,236-satellite constellation and has recently launched its first two test satellites, with a goal of deploying half by mid-2026. Kuiper plans to start service in select regions by late 2025 and aims to leverage Amazon’s consumer ecosystem and cloud infrastructure. The competition is expected to be intense due to both companies' strong financial backing and technical capabilities, though Starlink currently enjoys a 5-year lead and a large customer base.

  

• Traditional Satellite ISPs (GEO operators): Before Starlink, satellite internet was primarily provided by geostationary (GEO) companies, such as Viasat and Hughes, serving rural North America, maritime, and aviation markets. While they offered decent speeds (up to ~100 Mbps), their high latency (~600 ms) limited competition with Starlink's low-latency service. In response, GEO providers are launching new high-capacity satellites and focusing on in-flight Wi-Fi and government contracts. However, Starlink is taking market share from traditional providers. Unusual partnerships have formed, such as Hughes and Dish investing in OneWeb, as GEO firms seek to adapt. Despite regulatory lobbying to slow LEO deployments, GEO providers are likely to lose significant consumer internet market share over time, retaining advantage only in niche scenarios.

• Other Emerging Constellations: Several initiatives are emerging alongside OneWeb and Kuiper. Telesat’s Lightspeed aims for a LEO constellation focused on enterprise markets, but funding delays have pushed its launch target to 2026. AST SpaceMobile plans to offer direct satellite-to-cell phone service for areas that are currently unserved, focusing on voice and text services rather than high-speed broadband. China is developing its own mega-constellation, GuoWang, with over 12,000 satellites for both independent and military use, while other governmental projects, such as the EU's IRIS² and Russia's Sphere, are in their early stages. The next few years are likely to bring increased competition, benefiting consumers with more options and potentially lower prices.

Geopolitical and Defense Relevance

Starlink’s decentralized internet service has significant geopolitical implications, particularly evident during Russia’s 2022 invasion of Ukraine. When communication was disrupted, SpaceX shipped Starlink terminals that quickly restored connectivity for the government, military, hospitals, and civilians.

This was crucial for encrypted communications and intelligence sharing, with one officer stating that Starlink was as essential as weaponry. By late 2022, over 20,000 terminals were active, funded through crowdfunding and donations. Initially, SpaceX covered most of the costs ($20M a month), but later, the U.S. Department of Defense and the EU formalized funding.

By mid-2023, Starlink in Ukraine was under a Pentagon contract, highlighting its role as critical infrastructure in conflict. Controversy arose when SpaceX limited some usage to prevent escalation, revealing tensions between corporate control and military needs. In response, SpaceX announced Starshield, a service for sensitive government use under U.S. control.

Starlink has been involved in several geopolitical issues beyond Ukraine. During the 2022 protests in Iran, activists used Starlink kits to bypass government internet shutdowns, prompting a response from the Iranian regime. The service was also utilized in Myanmar by dissident groups facing network disruptions.

In India, during unrest in Manipur in 2023, insurgents acquired Starlink units to circumvent a government blackout, despite the Indian government not having authorized their commercial use. Some countries, such as China, Iran, and Russia, have banned Starlink receivers or made the unauthorized use of them illegal, although enforcing these bans can be challenging.

The success of Starlink has alarmed rival powers. Russian military thinkers view it as a significant force multiplier for the U.S. and allies, with efforts to jam its signals in Ukraine proving largely ineffective. SpaceX has fortified Starlink’s defenses, demonstrating resilience against cyber and electronic warfare attacks.

China, regarding Starlink as a national security threat, has considered options to neutralize it during wartime, including anti-satellite missiles and cyber hacks. In 2023, a U.S. Space Force official highlighted China’s development of tools to target satellites, including those used by Starlink.

In response, Western militaries are exploring their own satellite constellations, raising concerns about the potential for conflict over commercial systems. This development complicates international law, as attacking Starlink could entangle the U.S. in the defense of a private entity's assets.

Regulatory and diplomatic challenges are emerging with Starlink’s satellite internet service. Many countries prefer to control local telecom services, which led India in 2021 to halt Starlink pre-orders due to licensing issues. Other nations have delayed approvals or mandated local partnerships, as seen in Nigeria.

Export controls also complicate matters, as U.S. rules affect service in sanctioned countries such as Iran and North Korea, where special licenses are required. The European Union has largely supported Starlink; however, concerns about spectrum interference and competition with the upcoming IRIS² constellation have sparked regulatory discussions.

Additionally, astronomers worldwide are advocating for measures to reduce Starlink's impact on the night sky, prompting SpaceX to implement sunshades and lower satellite brightness. [In 2024, I observed a Starlink satellite with my naked eye fly overhead in a remote area with zero light pollution and a new moon. I can attest to the issue.]

Starlink has emerged as a strategic asset with significant geopolitical implications. It represents private, global infrastructure that operates outside the control of any single government. For the U.S. and its allies, Starlink provides a resilient communications layer now being integrated into Pentagon architectures.

For authoritarian regimes, it serves as a potential means of information freedom that is difficult to block. This dual-use nature complicates diplomacy, raising questions about whether Starlink satellites are civilian infrastructure or military assets.

As nations aim to develop their own capabilities to reduce dependence, expect more discussions on norms for engaging commercial space systems during conflicts. Starlink's role in Ukraine has underscored the critical importance of space-based internet, highlighting the consequences of falling behind in this area.

Forward-Looking Analysis and Implications

Starlink is poised to be a transformative force in global connectivity, with ripple effects across telecommunications, technology, and even societal resilience. Here are several forward-looking considerations on how Starlink could reshape the landscape:

1. Reshaping Global Connectivity and Digital Inclusion: Starlink’s expansion aims to provide high-speed internet globally, potentially bridging the digital divide. Areas with poor infrastructure, such as rural Appalachia and remote villages, will greatly benefit from satellite broadband, enabling entrepreneurship, online education, and telemedicine.

However, the initial cost of ~$360 for hardware combined with higher monthly fees may limit access primarily to more affluent users. Over time, costs will decrease, allowing poorer communities to gain access too.

SpaceX is already partnering with rural schools in Chile and Brazil and working with authorities in the U.S. and Australia to connect underserved areas.

2. Forcing Evolution in the Telecom Industry: The telecom sector is taking notice of Starlink and upcoming LEO constellations, which pose a competitive challenge, particularly in underserved markets. Traditional telecoms may respond through collaboration or innovation, such as partnerships where mobile operators use Starlink for backhaul, accelerating 4G/5G rollouts in remote areas.

Early examples include OneWeb's deals with AT&T and Starlink’s partnership with T-Mobile to enable direct-to-handset satellite messaging, thereby enhancing connectivity in areas with poor coverage.

However, Starlink poses a threat to telcos’ satellite broadband subsidiaries and rural ISPs. Accenture warned that telcos, particularly in emerging markets, must adapt or face decline, potentially leading to regulatory lobbying against Starlink or attempts to bundle services with satellite offerings.

Ultimately, Starlink could prompt telecom providers to enhance their services and pricing as connectivity becomes more commoditized, ultimately benefiting consumers and enterprises with increased choices and innovations in connectivity.

3. New Market Opportunities and Spin-Off Potential: If Starlink maintains its growth trajectory, it could launch new offerings, such as direct-to-device connectivity and a potential smartphone tailored for satellite use. The company might also explore IoT solutions by introducing lighter, cost-effective terminals or updates for connecting devices globally.

Additionally, Starlink could enter the enterprise cloud connectivity market by bundling satellite links with cloud services for remote computing, leveraging partnerships with Microsoft Azure and Google Cloud.

If SpaceX spins out Starlink for an IPO, it would likely attract significant investment interest, while also needing to ensure subscriber growth and profitability. This could potentially lead to partnerships or acquisitions in the telecom sector.

4. Geopolitical Connectivity and “Space Networks” Competition: Starlink's success is prompting other nations to develop their own satellite systems for digital sovereignty. Over the next 5–10 years, we may see a fragmented landscape, with the U.S. utilizing Starlink and potentially Amazon, China relying on its state-run alternatives, and Europe utilizing IRIS² for regional users.

With multiple constellations, interoperability will be crucial. Will devices seamlessly switch between networks? Some countries might restrict Starlink in favor of their own or allied systems, especially if it's seen as U.S.-aligned.

The Pentagon’s contract with Starlink suggests an increasing military reliance on commercial satellite communication, potentially limiting the need for government satellites while also creating a dependency on SpaceX.

5. Technical and Regulatory Challenges Ahead: Looking forward, Starlink’s growth is not without hurdles. One major challenge is orbital congestion and space sustainability. With plans for 12,000 or even 42,000 Starlink satellites, plus thousands from competitors, concerns have arisen about the risks of space debris and collisions.

Regulators like the FCC and international bodies (ITU, UNCOPUOS) will likely impose stricter requirements on debris mitigation, satellite brightness, and safe operations. SpaceX has attempted to be proactive in that its satellites deorbit at the end of their life and autonomously avoid collisions using tracking data.

However, as the skies become increasingly crowded, coordination among operators will be vital. Starlink’s ability to maintain a high launch cadence also depends on launch technology: SpaceX eventually needs Starship (its new heavy rocket) to be operational to deploy the larger Gen2 satellites efficiently.

Delays or issues with Starship could bottleneck constellation upgrades. Financially, if a global recession or market saturation hits, Starlink might need to moderate its expansion or face price competition from rivals. Another factor is customer experience, as more users join, Starlink must manage network capacity to avoid oversubscription, which can slow speeds.

This may involve launching even more satellites or expanding ground infrastructure. On the regulatory side, spectrum battles will intensify: Starlink uses Ku- and Ka-band frequencies (and is experimenting with E-band). Terrestrial 5G operators and others are eyeing some of the same bands, so Starlink will continue to be involved in negotiations and disputes over airwaves.

Internationally, securing landing rights (permission to operate) in each country is an ongoing task; some places will have political roadblocks. Nonetheless, given SpaceX’s track record, Starlink is likely to meet many of these challenges with engineering solutions and sheer scale (e.g., launching replacements faster than failures occur, etc.).

6. Long-Term Vision – A New Telecom Paradigm: Zooming out, Starlink suggests a new connectivity paradigm where space-based networks may supplement or replace parts of terrestrial networks. In a decade, a significant portion of global internet traffic, particularly in developing regions, could rely on satellite constellations, while urban areas focus on fiber networks.

This shift might allow countries to prioritize core infrastructure and local distribution, using satellites for rural coverage. In extreme cases, Starlink could offer a direct alternative to national internet service providers (ISPs), raising questions about regulation and the balance of competition. A multi-layered internet (ground and space) could enhance resiliency, allowing connections via satellites even during disasters that cut other infrastructure.

Conclusion

Starlink’s journey is just beginning, and it is already making a remarkable impact on both industry and society. It has proven that a large-scale space-based internet is not only feasible but also financially viable. By pushing competitors to innovate and inspiring nations to craft new strategies, Starlink is reshaping the landscape. It has brought critical connectivity to everyday life, from rural homes to essential support in wartime Ukraine and natural disasters.

For senior business leaders and investors, Starlink embodies the dawn of a new sector bursting with potential for high returns and strategic value. Yet, it also presents a disruptive challenge, poised to redefine existing business models in telecommunications, media, and technology. As Starlink and its competitors evolve, we can anticipate faster internet access for more people and groundbreaking services that leverage satellite connections, all while fostering a convergence of terrestrial and satellite communication infrastructures.

The strategic implications are profound: control of information and connectivity may increasingly lie with those who oversee these satellite constellations. Currently led by SpaceX, a private company with an ambitious vision, this future may soon include other networks.

Staying attuned to Starlink’s evolution will be vital for anyone interested in the future of connectivity, global markets, and the intersection of technology and geopolitics. The sky is not just a limit; it has transformed into a bustling, competitive marketplace, with Starlink at the forefront, turning what was once science fiction into a vibrant reality.

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Sources

Insights and data in this newsletter are drawn from publications and research, including:

• SpaceX / Starlink Official Communications

  • Starlink.com product and pricing pages

  • SpaceX press releases and satellite deployment updates

  • Elon Musk interviews and statements (e.g., Twitter, earnings calls)

• U.S. Government and Regulatory Filings

  • FCC filings and licenses for Starlink (public records via FCC.gov)

  • U.S. Department of Defense contracts for Starlink use in Ukraine

  • Federal Aviation Administration (FAA) and National Telecommunications and Information Administration (NTIA) public documents

• Business & Financial Reporting

  • Wall Street Journal – Reporting on Starlink subscriber growth, revenue, and profitability

  • Bloomberg – SpaceX valuation, Starlink financial models, IPO speculation

  • CNBC – Interviews with SpaceX executives, updates on Kuiper and OneWeb

  • The Information – Internal Starlink revenue documents (2023 leak)

• Industry & Space Sector Analysis

  • SpaceNews, Ars Technica, The Verge – Satellite launch tracking, policy debates, engineering updates

  • Quilty Analytics – Satellite broadband market forecasts and LEO constellation comparisons

  • Advanced Television – Maritime and in-flight connectivity case studies

• Defense & Geopolitical Think Tanks

  • Center for Strategic and International Studies (CSIS) – Starlink in Ukraine, militarization of LEO

  • Secure World Foundation – Policy and space sustainability reports

  • U.S. Space Force and Pentagon briefings on Starshield and space communication systems

• Academic and International Reporting

  • Harvard Kennedy School’s Belfer Center – Satellite cyber and geopolitical risk commentary

  • International Telecommunication Union (ITU) – Global spectrum coordination for satellite operators

  • Reports from India’s Ministry of Telecom, EU Commission (IRIS² plans), Russian and Chinese defense publications commenting on Starlink’s strategic implications

Introduction

My first “real” exposure to U.S. Army Rangers was when I went through Ranger School as a young infantry officer. I heard the stories and what the training would be like. I felt very prepared mentally and physically to complete the program.

Fast forward to Day 1, Hour 1 in the School…well…I wondered, “What have I gotten myself into?” and was determined to go straight through and not spend one additional minute. I successfully adhered to that mantra and graduated.

Reflecting on the experience, it wasn’t what I would describe as “fun,” but life-changing. Sure, I carried a 100+ pound rucksack, slept 2-4 hours a night, hallucinated due to lack of sleep (yes…really), and lost 30 pounds.

Yet what I learned was that, foremost, the school is about leadership. It’s first learning how to follow so one can lead. It’s sharing everyday experiences and creating unmatched bonds. It’s understanding that the body can push as far as it needs, and training the mind to keep up and not to give in.

The battle cry “Rangers, lead the way!” first rang out during the D-Day landings in Normandy and became the Rangers’ enduring motto. Such principles are not just battlefield bravado; they translate powerfully into effective business leadership.

Many veterans and entrepreneurs have found that the values guiding a Ranger unit can drive success in the boardroom, especially in high-performance environments.

This summary distills key Ranger leadership tenets and shows how to apply them to business leadership, scaling teams, and mentoring others.

Each section provides insights and real-world examples relevant to business leaders, private equity professionals, and senior executives seeking an edge in leadership.

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“Rangers Lead the Way!” – Leading from the Front

The core Ranger motto, “Rangers Lead the Way,” means that Ranger leaders go first into the most challenging missions, setting an example of courage and initiative.

In practice, no Ranger leader would ask their team to take on a challenge they are unwilling to tackle themselves. This ethos of leading from the front builds enormous trust and credibility, whether on the battlefield or in business.

Great business leaders roll up their sleeves and set the example for others. For instance, a CEO might join sales calls or work alongside frontline teams during a crisis, demonstrating commitment.

An example of this is Howard Schultz, the former CEO of Starbucks. During tough times, Schultz visited stores, worked behind the counter, and spoke directly with baristas. His approach? “You have to be present to make the right calls.”

By being present where the hard work is done, leaders inspire their people to push harder and “follow them up the hill,” just as Rangers rally behind officers charging up a bluff.

So, what is the Business Application? Leading from the front in a company means visibly taking initiative on challenging tasks and being first to embrace change. Instead of issuing directives from a corner office, effective executives engage directly with challenges and model the behaviors they expect:

• Set the example: Show exemplary work ethic, ethics, and resilience in day-to-day operations. As the Ranger Creed says, “My care of equipment shall set the example for others to follow”, meaning leaders maintain high standards themselves.

• Share the risks and burdens: Just as Rangers share hardships in training, business leaders should partake in the “grunt work” during high-pressure projects. This signals that no job is beneath the leader and that the mission is a shared endeavor. In my view, titles are for external benefit only.

• Earn trust through action: When teams see leaders navigating obstacles at their side, it creates trust and loyalty. Employees are likelier to go “all in” when their leaders visibly lead the way through uncertainty.

Real-world examples abound. During the 1944 Normandy invasion, Army Rangers followed General Norman Cota, who personally moved among frontline troops under fire, urging “Rangers, lead the way!”.

In the business world, this same ethos is reflected by CEOs who stay “right up with the lead platoons” of their company during tough times, actively guiding and motivating teams rather than commanding from afar. The result is a culture where initiative and bold leadership become contagious at every level.

“No Excuse Leadership” – Extreme Ownership and Accountability

Army Rangers operate in an environment where excuses don’t save lives or accomplish missions. The phrase “No Excuse Leadership” has become shorthand for the Ranger expectation that leaders accept complete responsibility for outcomes and never blame circumstances.

In Ranger School, candidates are pushed beyond their limits on minimal food and sleep, yet failure is not met with sympathy but with the credo: leaders don’t make excuses!

They learn to improvise, adapt, and overcome obstacles with sheer determination. This culture of accountability translates directly to high-performance business teams.

In business leadership, “no excuses” means fostering a mindset of extreme ownership, taking responsibility for results, and focusing on solutions instead of blame.

Challenges such as market downturns, supply chain failures, or aggressive competitors are approached the same way a Ranger unit approaches a formidable objective: with resolve and creative problem-solving rather than defeatism.

A former Ranger described this mentality succinctly: “No-excuse leaders don’t have to act tough, but they must display mental toughness”. That mental toughness in business looks like pushing through adversity (tight deadlines, budget cuts, failed deals) by finding a way to do the job without complaint.

Importantly, a no-excuses culture starts at the top. Leaders who own their decisions, good or bad, set a powerful example for their teams. Companies run by leaders with military backgrounds (steeped in accountability) often outperform their peers.

One study found that companies led by ex-military CEOs outpaced the S&P 500 and had longer CEO tenures, suggesting that this no-excuses leadership style yields tangible results.

For example, many veterans-turned-CEOs institute “no blame” policies if a project fails; the focus is on learning and fixing the issue, not excusing it or pointing fingers. This encourages candor and rapid problem-solving.

This also means that leaders “lean in” to a problem and do not excuse it away. I’ve seen this a few times in my career, and, in the end, the business and morale suffer.

Tech executive Dan Streetman (I’ve spoken with him a few times), a former Army Ranger, West Point graduate, and now CEO of a cybersecurity firm, argues that leaders must combine confidence with humility, owning up to mistakes while remaining determined to correct course.

By admitting errors plainly and refusing to hide behind excuses, leaders build credibility and a culture where the team likewise takes ownership of problems.

In summary, No Excuse Leadership in business creates an environment where goals are met through responsibility and resilience, not rationalization, much like a Ranger unit holding themselves to the mission no matter the challenges.

“Never Leave a Fallen Comrade” – Loyalty and Team Cohesion

Rangers live by an unwavering code: “I will never leave a fallen comrade to fall into the hands of the enemy”. This commitment to loyalty and mutual support means that every Ranger knows their team will go to great lengths to protect and aid them.

In combat, it’s literal rescuing wounded teammates, but the principle extends to morale and trust. Translated to business, never leaving a teammate behind means fostering a culture of support, mentorship, and “got your back” camaraderie.

Rather than a cutthroat environment where underperformers are cast aside, high-performing organizations often echo this Ranger principle by investing in people and helping them improve.

Former Army Ranger and CEO of Conquer Academy Jeramiah Solven notes that Rangers “protect each other on the battlefield and never leave a man behind, loyalty and teamwork principles which executives can use to create amazing team culture and employee satisfaction on the battlefield of business”.

In practice, business leaders can implement this by ensuring no team member faces overwhelming challenges alone. For example, if a project is in trouble, the whole team rallies to fix it rather than isolating or blaming one individual.

Accountability in a Ranger-like culture is a two-way street: leaders hold people to high standards and provide them the support and resources to meet those standards.

Real-world case: Ahmed R. Ali, a military veteran CEO, grew his tech company TISTA from 1 to about 700 employees by emphasizing a “people-first” culture.

He explains that “you can’t succeed in the military without taking care of your battle buddy, and no leader in any environment can succeed without team members who look out for each other”.

At his company, new hires go through a rigorous onboarding (their “basic training”), and once they’re part of the team, the focus is on building them up for the long term. This reflects the Ranger approach of bringing every member up to elite standards and never giving up on each other.

The result? High loyalty and lower turnover, much like a Ranger unit, the team becomes a tight-knit force where everyone trusts that others will cover their blind spots and help them grow.

For leaders in private equity or fast-scaling companies, this principle is especially relevant: as teams expand, scaling culture and preserving trust are paramount.

Ranger-style loyalty can be instilled by: (1) Mentorship programs (pair new team members with experienced “battle buddies” for guidance), (2) Team-based problem solving (no one left to struggle alone), and (3) Recognition of group wins (celebrating how the team pulled together).

By never leaving anyone behind, leaders create a unified team prepared to tackle ambitious goals, knowing every member has backup. As one veteran put it, “take care of your soldiers and they will take care of you… in the job and outside the job, this practice never fails”.

“Sua Sponte” – Initiative and Empowerment at All Levels

A distinctive Ranger principle is captured in the 75th Ranger Regiment’s Latin motto “Sua Sponte,” meaning “Of their own accord.” In essence, every Ranger is expected to take action proactively, even without explicit orders.

This reflects a culture where initiative, adaptability, and decentralized decision-making are highly prized. In the fast-moving scenarios Rangers face, waiting for instructions can be fatal; similarly, in business, front-line employees and junior leaders often have the best information to make quick decisions. Empowering them to act can be a game-changer for agility and innovation.

In military terms, Sua Sponte means each Ranger sees themselves as a leader responsible for the mission’s success. They are trained to understand the commander’s intent and then use their judgment to accomplish the task.

One leadership commentator described it as pushing decision-making authority to the front lines: Rangers “take action on their own initiative, without waiting for orders or direction from above… based upon their training, [they] respond appropriately”. This is analogous to what modern management gurus call empowering the edge or decentralized leadership.

Business Application: Companies that embrace a Sua Sponte-like ethos encourage employees at all levels to exercise judgment and initiative in service of the company’s goals. Instead of a hierarchical bottleneck where all decisions wait for executive approval, these organizations practice trust and empowerment:

• Leaders communicate a clear vision and values (the business equivalent of a commander’s intent, which everyone should know).

• Within that framework, team members are entrusted to make decisions and solve problems immediately, using their training and best judgment.

• Managers act more as coaches and mentors than micromanagers, knowing that the person on the ground often can “find a way to get it done” without seeking permission for every minor move.

The payoff is speed and adaptability. For example, if a customer issue arises, a frontline employee in a Sua Sponte culture wouldn’t wait for three layers of approval to appease the client; they would take ownership to resolve it in real time (much like a Ranger adjusting to on-the-ground realities).

Companies like Zappos, famed for innovation, use this principle by giving teams autonomy to execute on goals, trusting that people closest to the problem will act in the company’s best interest.

This principle also plays into scaling: as an organization grows, leaders cannot personally make every decision. Training your “troops” to think and act independently is crucial.

A high-profile illustration is the “Team of Teams” approach popularized by retired General Stanley McChrystal (a former Ranger), which argues that pushing decision-making power downwards and enabling small, agile teams to lead is the key to succeeding in complex, fast-paced environments.

In short, empowering initiative at all levels, the Ranger way creates a leadership multiplier effect in business, turning your entire team into confident problem-solvers rather than order-followers.

Mission Planning and Preparation – “Train as You Fight”

Another Ranger leadership hallmark is meticulous planning, training, and contingency preparation. Rangers famously say, “If you fail to plan, you can plan on failing.”

In Ranger operations, every mission is preceded by exhaustive planning sessions, rehearsals, and “what if?” scenario planning. As Keni Thomas, a former Army Ranger from the Black Hawk Down mission, recounted, success under pressure came from rigorous preparation:

“We do the planning in advance. We come up with the what-ifs, the contingencies, and the contingencies for the contingencies… You implement your practice. You train as you fight and fight as you plan.”.

In other words, Rangers practice for chaos so that when chaos comes, they execute with calm discipline.

In business, too, high-stakes situations (major product launches, negotiations, crises) reward those who have planned and drilled ahead of time. Effective leaders adopt the Ranger mentality of never winging it on critical missions.

This can mean instituting robust strategic planning processes, running simulations or scenario drills, and ensuring teams are well-trained in their roles. For example, a sales team might role-play tough client negotiations (contingency: what if the client pushes back on price? what if tech issues arise during the pitch?).

Tech companies often conduct “game day” exercises to test their systems’ resilience by simulating outages directly parallel to the military training for worst-case scenarios. The Ranger credo “you can’t phone in the practice” applies here: peak business teams train hard so real performance is sharp.

No elite sports team or military unit skips practice; likewise, the best businesses invest in employee training, dry runs, and playbooks for various scenarios.

Additionally, Ranger planning emphasizes clarity of mission and roles. Everyone knows the objective and their part in achieving it, even if plans change on the fly. In a corporate context, this suggests that leaders should communicate mission objectives clearly and ensure each team member understands how their work contributes to the bigger picture.

When unexpected challenges hit, a key employee leaves, a supply chain breaks, a well-prepared team can reorganize quickly because they’ve internalized the mission and practiced adaptability.

The famous saying “no plan survives first contact with the enemy” holds true in business, too, but Rangers mitigate that by planning thoroughly and being ready to pivot when needed.

As seen on D-Day, when plans went awry, Ranger leaders improvised effectively because they understood the mission intent and had rehearsed different contingencies.

Business leaders who emulate this by doing their homework, training their teams, and staying flexible will navigate turbulence far more successfully than those who rely on hope or rigid plans alone.

Decisiveness Under Pressure – Staying Calm and Taking Action

High-performance environments, whether in combat or business, inevitably face crisis moments when something goes wrong and panic looms. Rangers are trained that when the unexpected happens, “when things go wrong, don’t stand around.” They must make decisions and lead, even amid uncertainty or fear.

Keni Thomas recalls that when a Black Hawk helicopter was shot down in Mogadishu, the worst instinct would have been to freeze or say, “This isn’t my job.” Instead, Rangers stepped up to contain the situation.

“Panic makes you want to save yourself, but saving yourself leaves other people hanging,” Thomas explains. “Leadership is a choice we make on a daily basis to do the right thing… You can’t stall and hope things work themselves out. You have to be proactive. It is your job to make sure that the people to your left and right get out, that they are protected.”.

In these words, we hear the Ranger emphasis on calm, selfless action in a crisis – focusing on the mission and the team, rather than one’s own fear or confusion.

In the business arena, leaders frequently confront their own “Black Hawk down” moments: a sudden loss of a major client, a PR fiasco, a cyber-attack, or any shock that threatens the organization.

A Ranger-trained mindset is incredibly valuable here. Rather than falling into paralysis or casting blame, an effective leader will maintain calm, assess the situation clear-headedly, and rally the team to respond.

This could mean quickly convening a crisis team, communicating transparently with stakeholders, and providing reassurance to employees. The ability to “not give up on you,” as Lt. Col. Walter Sorensen says of Ranger-qualified leaders in business terms, not abandoning the team or mission in a tough moment, can be the difference between failure and recovery.

A practical example is the way some companies handle outages or emergencies through pre-appointed incident leaders who immediately take charge to fix the issue, while others coordinate support, akin to how a Ranger unit has contingency leadership when an officer is down.

This prevents chaos and instills confidence that someone is at the helm. Additionally, Ranger-trained individuals often speak of “detachment,” the practice of taking a mental step back to survey the battlefield.

Business leaders can do the same under pressure: pause, gather facts, prioritize actions (which fires to put out first), then execute decisively. The credibility built from previous principles, leading by example, loyalty, and no excuses, pays off here: teams are far more likely to follow a leader into the fire if that leader has proven their steadiness and commitment.

In sum, adopting Ranger-like decisiveness and composure under pressure means choosing action over paralysis, and focusing on collective success (“get everyone out safely”) rather than self-preservation. That approach steadies organizations in storms and often turns potential disaster into a story of resilience.

Mentorship and Team Development – The “Ranger Buddy” System

One of the less heralded Ranger practices is the “Ranger Buddy” system. In Ranger School and in Ranger units, soldiers are paired with a buddy to train, problem-solve, and keep each other going through hardship.

Ranger Buddies share everything from carrying heavy gear to keeping each other awake on overnight missions. This concept teaches a powerful lesson: no one succeeds alone. “Everyone needs a Ranger Buddy to provide counsel, to be a listener, or to challenge us to push farther than we otherwise could do alone,” writes a Ranger School graduate.

In military life, this means your partner might literally save your life or motivate you to persevere when you’re exhausted. In business, the principle translates to mentorship, coaching, and peer support as critical drivers of performance.

For an executive audience, consider how a Ranger-buddy mindset can improve team scaling and talent development. When a new team member joins, assigning them a seasoned “buddy” or mentor can accelerate onboarding and ingrain the company’s values (much like a veteran Ranger imparts lessons to a rookie).

This is akin to creating a “force multiplier.” Two people working in tandem can achieve more than the sum of their parts because they learn from and reinforce each other. Senior executives in private equity or high-growth companies often pair up with strong operational partners or advisors in a similar fashion, ensuring no leader goes it alone when making tough strategic decisions.

Additionally, encouraging peer-to-peer coaching within teams, where colleagues regularly check each other’s work, share feedback, and push each other to improve, builds a culture of continuous learning. It echoes the Ranger sentiment that “we all need the encouragement and accountability that comes from a buddy”.

Real-world evidence of this principle is seen in many top companies that implement formal mentorship programs or “buddy systems” for new hires and for leadership development. For example, at Microsoft, new employees are often assigned an onboarding buddy to show them the ropes.

At consulting firms and investment banks, it’s common to have a more experienced colleague guide analysts or associates through their early projects. These practices reduce ramp-up time and prevent avoidable mistakes, just as a Ranger buddy prevents his partner from unknowingly stepping into danger.

Moreover, a culture that prizes mentorship tends to retain talent better, because people feel invested in and supported. Dan Streetman, the Ranger-turned-CEO, has displayed this by passionately mentoring veterans transitioning into tech careers.

Through initiatives that train and place former service members, he is extending the Ranger ethos of “never leave a comrade” into a form of professional mentorship beyond his company. The takeaway for business leaders is clear: to scale high-performance teams, develop leaders at every level by pairing people up, sharing knowledge, and holding each other accountable to grow.

A Ranger unit’s strength is not just in a few star individuals; it’s in the tight fabric of mentorship and mutual accountability that holds the group together. The same is true for world-class business teams.

Conclusion – From the Battlefield to the Boardroom

The leadership principles honed by Army Rangers have proven remarkably transferable to competitive business environments. It’s no coincidence that many military veterans thrive in corporate leadership roles. The values of discipline, teamwork, accountability, and courage under pressure are universally effective when adapted thoughtfully.

As we’ve seen, Ranger-inspired leadership means leading from the front, owning results with no excuses, building a loyal team culture, empowering people to act with initiative, planning and training hard for any scenario, staying calm and decisive under fire, and lifting others through mentorship.

For business leaders, private equity professionals, and executives, these concepts offer a roadmap to scaling organizations that are not only high-performing but also resilient and cohesive. A culture built on Ranger principles will likely exhibit strong trust, rapid decision-making, and an unyielding focus on the mission qualities that give companies an edge in turbulent markets.

As one Ranger-turned-executive observed, “The proficiency of your people and systems is directly proportional to the level of success you will have in business… you must have the right team members who can work together, protect each other, and hold each other accountable”. In other words, long-term business success isn’t just about having a great strategy or product; it’s about forging a team with Ranger-like excellence and unity that can execute that strategy.

By adopting mottos like “Rangers Lead the Way!” as a daily leadership reminder, executives can inspire their organizations to be bold and proactive. By insisting on “No Excuse” accountability, they set a standard that lifts performance.

By committing to never leaving anyone behind, they cultivate loyalty that money can’t buy. These lessons, born in Ranger School’s grueling trials and in real battles, can become a source of competitive advantage in the business world.

Just as Rangers train to fight on to the objective, “though I be the lone survivor”, corporate leaders guided by grit and principle can persevere through business adversity to achieve their mission. In summary, Army Rangers lead the way, and by internalizing their leadership principles, so can you in your industry.

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Sources

Insights and data in this newsletter are drawn from publications and research, including:

• Army Ranger Creed and Ethos – U.S. Army Ranger Creed (Army.mil)

• Dustin Siggins, “From Iraq to the Corner Office: Army Ranger Principles For Running Your Business,” Zenger News (syndicated, Oct 2021)

• Brace E. Barber, No Excuse Leadership: Lessons from the U.S. Army’s Elite Rangers (John Wiley & Sons, 2004) – via J. Flinchbaugh summary and RangerSchool.com

• Keni Thomas keynote leadership lessons – GovLoop (Oct 2014)

• Tom Magness, Leader Business blog – “Rangers Lead The Way” I & II (2009)

• Entrepreneur Magazine – William Salvi, “The Most Important Traits Are Confidence and Humility: Leadership Lessons from an Army Ranger Turned CEO” (Feb 2025)

• USO.org – Ret. Maj. Gen. John C. Raaen Jr., “Rangers Led the Way on D-Day” (June 2019)

• Indo-Pacific Command News – “‘Rangers Lead the Way!’ Airmen Cultivate Leadership Qualities…” (July 2019).

• Forbes (via New Orleans Data News Weekly) – “Army Ranger Principles for Running Your Business”.

Riding on Autopilot

Imagine tapping your phone for a ride, and an empty car rolls up. No driver waves hello; just you and a talking dashboard.

Uber and Lyft redefined how we hail rides, but a new challenger is revving up: autonomous vehicles. The question now is whether ride-hailing giants will smoothly embrace this driverless tech or get stuck in the slow lane.

It’s a fun scenario to picture unless you’re an Uber or Lyft executive wondering if your business model is about to be disrupted.

Let’s buckle up and explore how self-driving upstarts like Waymo, Cruise, Tesla, and more are threatening to upend the rideshare world, and what it all means for the business of getting from Point A to Point B and for YOU as a passenger/investor.

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Uber & Lyft Today – On Top, But Checking the Rearview

Uber and Lyft dominate ride-hailing, facilitating millions of trips and generating hefty revenues, yet profits remain elusive, and the road ahead is uncertain.

Both companies once poured money into developing self-driving tech in-house, only to hit speed bumps. Uber’s costly autonomous division suffered a high-profile fatal crash in 2018, prompting the company to sell its self-driving unit to the startup Aurora in 2020.

Uber took a stake in Aurora as part of that deal, effectively outsourcing its driverless ambitions while keeping a foot in the game.

Lyft made a similar U-turn, selling its “Level 5” (I’ll explain later what this is) self-driving division to Toyota’s Woven Planet for $550 million in 2021 to cut losses and reach profitability faster.

Having shed the expense of building autonomous tech from scratch, Uber and Lyft shifted gears to partnership strategies. Today, both companies still rely on armies of human drivers for virtually all rides.

But they’re also busy lining up alliances with the autonomous vehicle (AV) upstarts that aim to replace those drivers. In other words, the rideshare leaders are hedging their bets: enjoying the current dominance of their platform while preparing for a future when your Uber or Lyft might have no one behind the wheel.

It’s a delicate balance as they must keep drivers (and regulators) happy now, yet embrace the driverless revolution that could make those drivers obsolete tomorrow.

Waymo & Cruise – The Autonomous Assault

Waymo, Google’s well-funded spin-off, is leading the charge in robotaxis. Waymo’s self-driving cars are ferrying customers with no human operator and racking up serious numbers in Phoenix, San Francisco, Los Angeles, and Austin.

There have been some concerns by passengers over: (1) Technical Glitches, (2) Drop-off Challenges, and (3) Service Limitations.

In fact, Alphabet CEO Sundar Pichai recently revealed that Waymo is now completing over 250,000 paid rides per week in the U.S.. Waymo’s rider-only “Waymo One” service is no longer a science experiment; it’s a burgeoning business that’s starting to dent the universe of urban transport.

Backed by GM prior and wholly owned as of February 2025, Cruise had been neck-and-neck with Waymo, operating driverless ride-hailing in San Francisco and testing in Phoenix and Austin. Their fleet of distinctive Chevy Bolt robotaxis hit a milestone of over 700,000 driverless trips in California in 2023 before plans skidded off course.

A series of mishaps (including a much-publicized incident where a Cruise car dragged a pedestrian on a city street) prompted California regulators to suspend Cruise’s permits in late 2023.

By early 2024, Cruise had “paused” all driverless operations amid safety investigations, and reports emerged that parent GM was restructuring or even shuttering major parts of the unit after investing $10 billion.

This abrupt pit stop for Cruise has left Waymo as the undisputed front-runner in U.S. robotaxis for now. It’s a vivid reminder that the autonomous road is bumpy; technical prowess alone isn’t enough without public trust and regulatory green lights.

Not to be forgotten are other players revving their engines in the autonomous arena. Motional, a Hyundai–Aptiv joint venture, is testing robotaxis in Las Vegas (in partnership with both Uber and Lyft) under a 10-year deployment deal.

Zoox, owned by Amazon, has developed a spaceship-looking driverless shuttle and is running pilot rides around San Francisco’s Treasure Island as it eyes commercial service.

Startup May Mobility is launching autonomous shuttles in 2025 (teaming up with Uber in Arlington, TX). Even Chinese AV firms like Baidu’s Apollo Go, AutoX, and Pony.ai are making strides abroad.

In short, Waymo isn’t alone; a crowd of tech and auto companies is competing to bring robotaxis to the masses. Each of these could become a formidable competitor or a potential partner to Uber and Lyft.

The key question is: will the ride-hailing giants be disrupted by an upstart’s superior technology, or can they harness these new technologies to reinforce their own platforms?

Tesla’s Wild Card – The Elusive Robotaxi Fleet

No conversation about autonomous disruption is complete without Elon Musk and Tesla, who have been loudly promising a self-driving revolution from a different angle.

Unlike Waymo and Cruise with their dedicated taxi fleets, Tesla’s strategy is to leverage the millions of Tesla cars already on the roads via over-the-air software updates.

Musk has long teased a vision of a “Tesla Network” where Tesla owners could let their cars operate as robotaxis to earn extra income when they’re not using them. It sounds like a nightmare for Uber/Lyft (millions of privately-owned autonomous taxis swarming the streets, effectively crowdsourcing a competitor network) except for one sticking point: true full self-driving capability isn’t ready yet.

Tesla’s current Full Self-Driving (FSD) software is advanced driver assistance, but still Level 2 (requiring an attentive human as shown below); impressive, yet not the hands-off robotaxi Musk keeps predicting.

That hasn’t stopped Musk from making bold timelines. In late 2024, he unveiled a prototype “Cybercab” (U.S. Patent and Trademark Office refused to grant the company trademarks on "Robotaxi" as well as "Cybercab”) and claimed Tesla would launch unsupervised robotaxi services in cities like Austin by mid-2025, with a dedicated $25,000 steering-wheel-free robotaxi vehicle entering production by 2026.

Musk even took a jab at Waymo, criticizing it for using expensive, custom LiDAR-equipped cars produced in low volumes, whereas Tesla is betting on affordable cars with vision-only tech.

For Uber and Lyft, Tesla represents a tricky threat. On one hand, many Uber/Lyft drivers already use Tesla’s, taking advantage of the lower fuel (electric) costs. But if Tesla flips the switch to full autonomy, those drivers might be out of the equation.

Tesla could activate an Uber-like service overnight using its existing customer app or a new platform, diverting riders to its own network. It would pit Tesla’s brand and massive fleet of owners directly against incumbent ride-hailing platforms.

However, that scenario hinges on technical and regulatory breakthroughs that have yet to fully materialize. For now, Tesla is a wild card: it boasts immense scale and ambition, but Uber and Lyft know all too well that promises of self-driving glory can be far easier made than kept.

Show Me the Money – Economics of Driverless vs. Driver

For all the futuristic cool factor of autonomous taxis, the real disruption boils down to cold, hard economics. Can a ride without a human driver be significantly cheaper (or more profitable) than one with a driver?

The early signs suggest yes. Uber and Lyft’s biggest cost is paying drivers; roughly 80–85% of each fare goes to the driver in earnings, meaning Uber/Lyft only keep a small slice of the pie. (Even after adding various fees that boost their cut to an effective ~30-40%, the majority of revenue is still consumed by driver labor.)

A robotaxi keeps nearly 100% of the fare for the operator, aside from operating costs. And those operating costs, maintenance, charging, cleaning, and software, could be far lower per mile than a human-driven car when optimized at scale.

What costs are not being considered in the above statement, which no one discusses? Assuming an electric car: electricity, insurance, repairs, and registration fees, which is ~$2,100 – $3,400 annually per vehicle (go with the higher number as insurance for driverless cars is more expensive). This does not include the required infrastructure, as one still needs a human to plug in a car, a secure parking area overnight, etc. Also, now one has to plan for staging and route planning.

The table below provides a rough comparison between driver and driverless operational models. However, the numbers on the right only work at scale, and today in the U.S., there are ~1 million drivers in the Uber/Lyft system.

Waymo has hinted at the magnitude of this advantage. Thanks to Google’s deep pockets and tech, Waymo has spent over a decade refining its self-driving system and sensor suite.

The result: Waymo’s cost to operate a robotaxi is around $0.30 per mile, less than half of Uber’s estimated ~$0.70 per mile cost with a driver. This allows Waymo to price fares about 6–12% lower than Uber on average and still come out ahead on margins.

In Phoenix, for instance, riders report Waymo’s autonomous rides often undercut Uber’s prices for the same trip, especially at busy times when Uber’s surge pricing kicks in.

Unlike human drivers, who need breaks, salaries, or surge incentives, a fleet of robots can work nearly 24/7. In Austin, a limited pilot found that 100 Waymo vehicles were busier than 99% of human Uber drivers in terms of trips per vehicle. A hint of how efficient a well-deployed AV fleet could be.

That said, my take is that if given the choice, one will select driverless out of curiosity, thus the efficiency numbers may be inflated.

However, the economics aren’t one-sided. Developing and deploying autonomous vehicles is enormously capital-intensive. Waymo has reportedly invested over $11 billion into its technology so far.

Each sensor-packed vehicle initially costs hundreds of thousands of dollars to produce, though that is dropping with new models (Waymo’s next-gen robotaxi built on a Geely platform could cost under $30,000 each as sensor costs plummet with scale).

There are also operational expenses that Uber/Lyft don’t directly bear today: owning and maintaining a fleet (currently, drivers supply and upkeep their own cars in the Uber/Lyft model). Empty miles – time when a driverless car repositions with no passenger – still incur costs.

And early robotaxi services have needed lots of on-call support, from remote technicians to teams ready to physically rescue vehicles stuck in unusual situations (say, confused by a construction zone or a row of traffic cones).

In short, while autonomy promises a radically lower cost per ride in the long run, it comes with high up-front investments and new kinds of overhead.

Uber and Lyft have enjoyed an “asset-light” model (no vehicle ownership, minimal capital expenditure) and switching to an autonomous fleet world could upend that, compressing margins for whoever runs the fleet.

The big bet, of course, is that eliminating driver pay more than offsets these costs. If that bet pays off, the first company to scale up robotaxis widely could potentially underprice all competitors and capture a huge market share.

That looming economic reality is what keeps Uber and Lyft’s leadership up at night and has them scrambling to make sure if driverless rides take off, they’re not left without a seat (or rather, a vehicle) in the game.

Roadblocks – Regulatory, Geographic, and Human Hurdles

Even if the technology and economics fall into place, the fate of autonomous ride-hailing will also depend on regulators and plain geography. As of 2025, the legal and public acceptance landscape for robotaxis is a patchwork.

In San Francisco and Phoenix, regulators have allowed full commercial driverless ride services, albeit with some stumbles. San Francisco’s officials, for example, initially green-lit Waymo and Cruise to operate 24/7, only to witness a series of odd mishaps; stalled AVs blocking traffic, confusion around emergency scenes, and that infamous Cruise accident.

The blowback led California to tighten the leash on Cruise and subject Waymo to greater scrutiny. In New York City, by contrast, the attitude is far more cautious. In 2024, NYC’s mayor announced that no fully driverless cars will be allowed for now.

Companies can test AVs in NYC only if a safety driver is sitting at the wheel. Officials made it clear that Manhattan’s chaotic streets won’t see empty robotaxis anytime soon, essentially declaring that “this technology is coming whether we like it or not, so we’re going to make sure we get it right”.

Regulatory hurdles also vary by state and country. Arizona embraced AV testing early (hence Waymo’s heavy Phoenix presence), while California’s approvals remain trial-based and revocable at any moment safety issues arise.

Some states have outright prohibitions on autonomous vehicles or require special permits that slow deployment. Overseas, rules differ wildly; Europe has stringent safety regulations that have kept most robotaxi trials in pilot mode, and places like London or Tokyo have yet to see any major self-driving ride services due to legal barriers.

Geography and climate pose another challenge: the current generation of AVs struggles in heavy rain, snow, or fog. That’s one reason most deployments have been in sunny states like Arizona, Texas, or temperate urban cores of California. Scaling to Chicago blizzards or torrential monsoons will take further technological hardening (and likely regulatory proof).

Then there’s the human factor. Driverless cars sharing streets with human drivers and pedestrians is complex. Every incident no matter how small can become big news and shape public perception.

Some riders absolutely love the novelty and safety promise of robotaxis; others are nervous about the idea of no driver in control. Ride-hail drivers, understandably, worry about their livelihoods. Labor groups in some cities are already lobbying for limits on robotaxis or provisions to retrain drivers for other jobs if automation reduces driver demand.

Uber and Lyft also face a PR balancing act: they need to champion innovation but risk alienating the very drivers who currently power their platforms. We’ve seen hints of tension, like drivers protesting when Uber experimented with AVs in their city, or demanding that companies commit to not replace them outright.

Regulatory bodies, often influenced by public sentiment and lobbying, will be weighing safety data, economic impact, and constituent fears as they decide how fast to open the gates for autonomous vehicles. In summary, the path for robotaxis is as much about navigating city hall and societal trust as it is about algorithms and sensors.

Takeaways for Business Leaders

• Disruption Isn’t Binary: The rise of autonomous vehicles doesn’t automatically spell doom for Uber and Lyft; adaptation is possible. The likely scenario is a gradual hybrid model where old and new co-exist. Businesses facing disruptive tech should seek ways to integrate or partner with the disruptors, rather than assuming an all-or-nothing outcome.

• Partnerships as a Strategic Pivot: Uber and Lyft’s response; teaming up with former competitors like Waymo, or enabling third-party AV fleets on their apps – highlights a key strategic lesson: when a core technology is out of reach, ally with those who have it. This can turn a threat into a mutual opportunity (at least in the transitional period).

• Cost Economics Win in the End: Whether or not Uber and Lyft remain on top may ultimately come down to unit economics. Autonomous tech promises a dramatic cost reduction per mile. Businesses must rigorously monitor cost trends; if a competitor finds a significantly cheaper way to deliver the service (be it through automation or other efficiency), it will upend market dynamics. Uber and Lyft are racing to ensure they share in the cost advantage of driverless fleets rather than being undercut by it.

• Regulation and Public Sentiment Matter: The case of Cruise’s abrupt halt shows how regulatory risks can derail even the best technology. Leaders in any industry should engage proactively with policymakers and address public concerns early. Winning hearts and minds (ensuring safety, communicating benefits, being ready to self-regulate) can be as important as winning the tech race.

• Continuous Innovation vs. Core Focus: There’s a balance to strike between exploring moonshot innovations and doubling down on core competencies. Uber and Lyft shed their moonshot projects to fix core operations and profitability, then re-engaged with innovation via external partnerships. Business leaders should evaluate when to build in-house, when to partner, and when to step back and let others take the R&D risk; all while keeping a long-term vision.

Closing – The Road Ahead

Uber and Lyft find themselves at a crossroads not unlike the one traditional taxi companies faced a decade ago. They once were the insurgents; now they must avoid becoming the disrupted.

The race between ridesharing giants and autonomous vehicle upstarts is on, and it’s not just about who gets there first; it’s about who finds the right model to thrive when they all arrive.

Will the next five years see Uber and Lyft successfully operating mixed fleets of human and robot drivers, or will names like Waymo and Tesla become the new default for catching a ride?

The road ahead is full of twists and turns, but one thing is certain: the concept of “going for a drive” will never be the same. As we watch this journey unfold, every business leader should be asking themselves a forward-looking question: In a world where cars can drive themselves, what value can we add, and how do we ensure we’re not left behind when the future comes rolling in?

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Sources

Insights and data in this newsletter are drawn from publications and research, including:

• Henry Chandonnet, “Uber is hedging its bets when it comes to robotaxis,” Fast Company, May 10, 2025.

• Jarry Wu, “Waymo Than Meets the Eye,” Ivey Business Review, Dec 31, 2023.

• “Lyft Announces New Round of Autonomous Partnerships,” Lyft Press Release, Nov 6, 2024.

• Tina Bellon & Eimi Yamamitsu, “Toyota to buy Lyft unit in boost to self-driving plans,” Reuters, Apr 26, 2021.

• Kirsten Korosec, “Uber sells self-driving unit Uber ATG in deal with Aurora,” TechCrunch, Dec 7, 2020.

• Andrew J. Hawkins, “New York City welcomes robotaxis — but only with safety drivers,” The Verge, Mar 28, 2024.

• Chris Kirkham, “Tesla’s robotaxi event long on promises, short on details,” Reuters, Oct 11, 2024.

• Aarav Shen, “Waymo Surpasses 250,000 Weekly Robotaxi Rides as It Expands in the U.S.,” Beijing Times, Apr 25, 2025.

Beware the Invisible Anchor

I’ve observed more companies falter due to internal friction than from any fierce competitor. You know the feeling: decisions that used to take an hour now require committee approval and three follow-up meetings.

Your once-agile startup now moves as if it's stuck in molasses. The problem isn't the market or a lack of talent; it's something hidden within your organization. It’s referred to as organizational drag, and it serves as a silent killer of growth. Too often, it goes unnoticed until it starts to choke your momentum.

Organizational drag is comparable to cholesterol in a corporation: it accumulates slowly and unnoticed. Initially, a new approval process or an additional layer of procedures might appear harmless, even beneficial for creating “structure.” However, over time, these small changes accumulate and become a significant burden.

In practical terms, organizational drag refers to the unnecessary meetings, redundant approvals, endless email chains, and cumbersome processes that make work feel more difficult than it needs to be. If you’ve ever wondered, “Why do we need three people to approve a simple marketing campaign?” you’ve experienced organizational drag.

Small inefficiencies and misalignments accumulate, acting as an anchor on your company’s speed.

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What Is Organizational Drag?

(In Plain English)

Organizational drag refers to the unnecessary burdens your organization carries that do not create value, essentially the opposite of operating efficiently. It manifests as cumulative internal inefficiencies that slow down decision-making, hinder innovation, and reduce responsiveness.

In plain English, it’s the friction in your day-to-day work. Think of needless internal interactions, unproductive or inconsequential meetings, and excessive email chains, all the things that waste time and sap energy.

Every organization has some of this, but high-growth companies are especially vulnerable. Why? Success breeds complexity. As you hire and scale, suddenly there are new departments, more stakeholders, and a process for everything.

What started as a nimble sprint turns into a bureaucratic shuffle. I’ve heard it described as “the mud that middle management drags you through,” and that’s not far off.

When a company is small, you can quickly notice any inefficiencies, but as it grows, these issues can become less visible. Organizational drag is like sand in your gears, often created by the company itself as it adds more people and processes in the pursuit of growth. Ironically, this can end up being the very thing that hinders further growth.

The Hidden Costs of Drag

You might think, “Sure, we have some red tape, but is it that bad?” The answer is yes, and then some. Organizational drag carries hidden costs that quietly erode your business from the inside.

First and foremost, it decimates productivity. Time spent navigating internal hurdles is not spent on serving customers, improving products, or seizing new opportunities.

Consider this: one analysis found that the average executive receives ten times as many communications today as they did 20 years ago and spends 23 hours weekly in meetings.

That’s a massive chunk of the week lost to inboxes and conference rooms. Multiply those wasted hours across a company, and you’re looking at an enormous opportunity cost in output. According to the data, the impact is $ 37 Bn lost annually.

Slow decision-making is another silent killer. When every minor decision requires a symphony of consensus, your organization loses agility. Opportunities don’t wait around.

If your team takes weeks to decide on a pricing change or approve a pilot project, faster competitors will take advantage of that delay. I've witnessed deals fall through and product launches miss their opportunity because internal processes moved too slowly.

The financial hit from these missed opportunities can dwarf any savings you think bureaucracy provides.

Then there’s the human cost. Talented people hate wasting their time. Organizational drag drains morale and breeds frustration among your best and brightest. Top performers will either disengage or head for the exits if they feel like they’re slogging through unnecessary sludge every day.

Disengaged employees cost U.S. companies between $450 billion to $550 billion annually in lost productivity.

As one Fortune 500 CEO put it, bureaucracy is a “disease” that “drives out good people, slows down decision making, and kills innovation.” In other words, drag doesn’t just slow your current operations, it actively repels the very people who could help you fix it.

And let’s not forget the cultural impact: when employees see that inertia and internal politics consistently trump results, it crushes their ownership mindset and willingness to go the extra mile. In sum, organizational drag quietly saps your organization’s time, money, and spirit.

Spotting the Drag: A Quick Self-Diagnostic

Organizational drag often goes unnoticed until it becomes severe, but there are warning signs if you know where to look. The following questions may help guide you to uncover areas:

• Do decisions that used to take an hour now take a week? (Be honest. How many layers of approval or rounds of meetings does a simple decision really require?)

• Are your team members drowning in internal meetings and emails? (Look at your calendar: if it’s filled with back-to-back internal check-ins, you’re probably dealing with drag.)

• Have you noticed great employees becoming disengaged or leaving despite strong company prospects? (Frustration with bureaucracy is a top reason rising stars exit.)

• Is “I’m waiting on X department” a common excuse for missed deadlines? (When dependency bottlenecks and unclear ownership plague projects, drag is at play.)

• Do new ideas or projects die in committee? (If initiative and creativity are smothered by analysis paralysis or endless vetting, you’ve got a drag problem.)

• Does every decision need to go through you, and/or are individuals hesitant to make decisions? (We’ve all worked in that one company where decision-making was discouraged,)

If you found yourself nodding (or wincing) at more than one of these, your organization may be carrying more drag than you realize. The first step is acknowledging it.

You can't fix what you don't recognize. The goal is not to assign blame but to highlight the creeping bureaucracy, complexity, or bottlenecks that have developed over time.

Even in a well-managed company, process entropy is a natural occurrence. The key is to regularly diagnose and address these issues before they escalate into significant problems that hinder growth.

Cutting the Slack: How to Reduce Drag and Regain Speed

The good news is that organizational drag is not a terminal issue; it's more like high cholesterol. With some disciplined changes, you can reduce it and return your organization to a more agile state.

Here are a few effective strategies that I’ve observed to minimize drag and enhance nimbleness:

• Clarify Decision Rights and Delegate Wisely: One of the quickest ways to reduce drag in an organization is by clearly defining who makes decisions. If every choice ends up at your desk or in a committee, that’s a problem. Push decisions down to those closest to the information and clarify “who has the D” for each decision. Set clear guardrails and trust your team to deliver.

• Adopt a 90-Day Cadence: If strategy without execution is daydreaming, then long-term plans without short-term urgency are just wishful thinking. A 90-day cadence injects speed and focus by treating each quarter like a sprint. Set clear priorities for the next 90 days, with no more than three major initiatives, and rally the team around hitting those targets. You can still have a long-term vision, but you’re executing in bite-sized, urgency-infused chunks.

• Streamline and Simplify Processes: Many teams struggle with complicated processes that often go unchallenged. Review your workflows and meetings. Are standing meetings truly necessary, or could a quick Slack update suffice? Is that multi-step approval process still valuable, or just a leftover from the past? Eliminate any steps that don’t pass the “so what?” test.

• Leverage Fractional Leadership or Outside Experts: Sometimes, the fastest way to cut through internal drag is to bring in a fresh and experienced set of hands. Fractional leaders, such as part-time CFOs or COOs, can be a game-changer for growth-stage or PE-backed companies that need expertise without adding another full-time executive. These professionals arrive with clear mandates, whether it’s fixing broken operations or untangling stalled projects, and they carry no political baggage.

• Instill a Culture of “Bias for Action”: Culture may seem soft, but it’s often what determines speed. When people fear mistakes, they slow down and hide behind process, which creates organizational drag. To counter that, reward action and learning, not just perfection. Let your team know that speed matters and smart risks are safe.

The common theme among these strategies is intentionality, actively designing your organization for speed and simplicity, instead of allowing complexity and inertia to develop by default.

Case Studies in Cutting Through the Noise

Organizational drag isn’t unique to small or struggling companies; it also affects giants. However, the companies that overcome it all share one trait: a willingness to confront the slowdown head-on and make structural or cultural shifts to regain momentum.

Ford serves as a compelling example of a legacy company taking decisive action to overcome organizational challenges. For years, Ford's internal structure was hindered by outdated systems, overlapping teams, and slow decision-making processes. Despite having strong brand equity, the company struggled to compete with faster, tech-driven rivals in the electric vehicle market.

To address these issues, Ford restructured its business in 2022, dividing it into two distinct divisions: Ford Blue, which focuses on traditional gas-powered vehicles, and Ford Model e, dedicated to electric vehicles and software innovation. This was more than just a rebranding effort; it was a strategic move to separate innovation from bureaucracy. CEO Jim Farley emphasized that this separation was intended to enhance speed and focus.

The results have been promising. Ford Model e has attracted tech talent, shortened product development cycles, and started to close the competitive gap with electric vehicle leaders. Meanwhile, Ford Blue continues to generate significant cash flow without the burden of managing a transformation it was not designed for.

Microsoft is another case study in transformation. In the early 2010s, the company was famously known for internal turf wars. Different divisions operated like isolated kingdoms, competing more with each other than with external rivals. Under Satya Nadella’s leadership, Microsoft replaced that siloed structure with a unified “One Microsoft” approach.

Teams were realigned, incentives were overhauled, and collaboration replaced infighting. The cultural shift didn’t just improve morale; it unlocked faster innovation and helped drive Microsoft's dramatic growth in cloud computing.

Netflix also faced its form of organizational drag as it expanded globally. Headquarters held too much decision-making authority, slowing down regional teams that needed agility to serve diverse markets. Instead of tightening control, CEO Reed Hastings leaned harder into the company’s “freedom and responsibility” culture.

Local teams were empowered to act autonomously, allowing Netflix to operate with agility and precision across continents. The payoff was substantial: faster product cycles, market-specific content strategies, and explosive international growth.

The takeaway from these examples is clear. You don’t need a total overhaul to beat organizational drag, but you need courageous clarity. Whether it is decentralizing authority, eliminating unnecessary layers, or realigning team incentives, the companies that move fastest are the ones that strip away the sludge and let talent run.

Closing Thoughts

Organizational drag may be subtle, but as leaders, we cannot afford to ignore it. I encourage you to closely examine your own company with this in mind. Where are things getting stuck? What frustrations keep recurring?

In a world where speed is crucial, your role as a leader is to create an organization that operates smoothly and decisively. This involves consistently eliminating excess, whether it’s a redundant report, an unnecessary hire, or your own tendency to interfere in minor decisions.

The rewards are significant: a company that’s not just larger but also better, faster, more agile, and ready for growth.

The silent obstacle to growth doesn’t have to be detrimental. By identifying and addressing organizational drag directly, you can reclaim your company’s lost momentum.

In my experience, the difference between companies that plateau and those that continue to thrive lies in this: the leaders who are willing to challenge the status quo and relentlessly streamline processes are the ones who unlock the next level of scalability.

So, ask yourself: where is drag quietly undermining potential, and what steps will you take to address it? The sooner you take action, the sooner you will remove that invisible obstacle, and trust me, your future self will thank you as you watch your organization move forward with renewed energy.

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Sources

Insights and data in this newsletter are drawn from publications and research, including:

• Michael Mankins & Eric Garton, Time, Talent, Energy

• Business Insider (various articles)

• Lauren Carter, L.A. Consulting

• Neha Goel, Medium (RightSize Collective)

Remote Isn’t New, But It’s Still Misunderstood

I remember a decade ago, long before COVID was even a plot twist, debating whether remote employees could be as effective as office dwellers. The answer was “no”.

Candidly, as a former consultant, when at client sites, I wouldn’t say I observed 100% productivity in onsite associates either. So, how could a remote associate possibly be “as productive”?

Fast forward to today: we’ve all lived the grand work-from-home experiment, yet the argument rages on. Some CEOs insist everyone trek back to HQ, citing culture or productivity fears.

For example, Amazon and AT&T have mandated that corporate employees return to the office five days a week. While the long-term impact remains to be seen, a study from the University of Pittsburgh found that strict RTO policies can lead to a 14% increase in employee turnover, underscoring the potential risks associated with such mandates.

Meanwhile, plenty of workers (and not a few studies) say, “Actually, we’re doing just fine in our pajamas, thank you.” Remote work isn’t a new concept; it has existed in various forms for years.

The conversation has become polarized: Is remote work the ultimate perk driving productivity and happiness, or a silent killer of culture, accountability, and progress?

Having observed both successful and disastrous distributed teams, I believe the reality lies somewhere in between. The debate over flexibility versus friction is not about choosing sides in an ideological conflict. It’s about grasping the complexities involved.

Let’s cut through the noise and look at what’s happening with remote work, the data, the struggles, the success stories, and the strategic trade-offs. By the end, I aim to give you a candid take on why remote work can work (and when it doesn’t, what’s actually to blame), so you can make smarter decisions for your business. Buckle up, because the ride isn’t over yet.

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What the Latest Research Shows

(Hint: Hybrid Wins)

If you sift through the latest research from places like Stanford, McKinsey, and Gallup, a clear theme emerges: extreme stances (all remote or all in-office) rarely outperform a thoughtful hybrid approach.

The data is painting a picture that should make the loudest voices on either end a bit uncomfortable.

Take productivity and performance. A new study by Stanford economist Nicholas Bloom, published in Nature, tracked 1,600 employees at a large global travel company to test the impact of remote work.

The result? Employees who worked from home two days a week were just as productive and just as likely to get promoted as those in the office full-time.

In other words, a balanced schedule didn’t hurt output at all. It did slash turnover: when the company let employees go hybrid (2 days at home, 3 in office), employee quit rates plummeted by a whopping 33%.

Fewer people quit, the company saved millions on rehiring, and nobody’s career progression stalled. As Professor Bloom put it,

“The results are clear: Hybrid work is a win-win for productivity, performance, and retention.”

What about fully remote work? Here, the story is a tad more complicated.

Bloom and colleagues have also found that fully remote setups can come with a productivity penalty of roughly 10% on average.

The culprits are what you’d expect: communication hurdles, harder collaboration, and the fact that it’s tough to replicate in-person mentorship over video.

However, and this is important, the average hides a lot of variation. Some companies manage remote work exceptionally well and see productivity climb; others struggle.

Plus, fully remote brings its own benefits that offset some of those challenges: companies save on real estate and can tap global talent pools to hire skill sets they might not find locally.

A 10% hit in one area might be an acceptable trade for a 30% larger talent pool or lower costs. So, context matters. A slight productivity dip doesn’t automatically make remote work a bad choice if you’re gaining elsewhere (more on trade-offs later).

Now, hybrid work, the mix of office and home, offers many of the upsides of both with fewer downsides. In the Stanford experiment above, hybrid workers saw no drop in performance versus their office peers.

And beyond that single study, a working paper by Stanford researchers concluded that hybrid working has essentially no impact on productivity overall, while significantly improving employee recruitment and retention.

It’s no wonder hybrid models have exploded in popularity. Plus, the data says a typical U.S. employer stands to save $11,000 a year for each employee who works remotely 2-3 times a week. This adds up to $1M for every thousand employees.

Let’s talk popularity: what are companies doing in the real world? According to a Gallup survey, hybrid is now the dominant way of work for “remote-capable” jobs.

In 2019 (pre-pandemic), ~60% of employees were fully on-site; by 2023, that number fell to just 20%. Hybrid arrangements shot up to roughly half of all workers; the remaining ~30% are remote. That’s a seismic shift in a few years.

And contrary to the idea that we’re all headed back to the office eventually, most workers expect to stick with their current remote/hybrid setup long-term.

In fact, 8 in 10 Fortune 500 CHROs say they have no plans to dial back remote flexibility in the next year. The experiment, it seems, has proven its value enough that flexibility is here to stay for the majority.

It’s also worth noting that when McKinsey surveyed thousands of employees in 2024 after a wave of return-to-office pushes, they found no clear “productivity winner” among in-person, hybrid, or remote workers.

Employees across all models reported similar performance and engagement overall. That’s a sign that any model can deliver results with the right sorting and some adaptability.

However, companies did double down on return-to-office in 2024 – the share of mostly in-person workers jumped from 34% to 68% in McKinsey’s sample – so we’re seeing a correction where some who went fully remote are coming back to hybrid. But again, those shifts haven’t made a dramatic dent in productivity metrics one way or the other.

One more nuance on the data: it suggests the impact of remote/hybrid work is role-dependent and industry-dependent. Not every job can be done remotely (obvious example: you can’t fix factory machines or serve restaurant guests from home).

Even within knowledge work, the effectiveness of remote work can vary. Roles heavy on individual focus work (software developers, writers, analysts) tend to thrive with fewer interruptions, and remote work can be a boon.

Roles requiring a lot of spontaneous collaboration or hands-on interaction (creative teams, some R&D, client-facing sales) may find remote work more limiting. Surveys indicate that employees in jobs requiring frequent in-person contact report that the hybrid isn’t as beneficial for them.

So, smart companies should look at which roles are remote-friendly and tailor policies accordingly. Blanket one-size-fits-all proclamations (“remote good” or “remote bad”) ignore that nuance. The best approach might be hybrid overall, but with flexibility for certain teams to convene more often if their work benefits from it.

The bottom line from the research is that remote work, especially in hybrid form, is not only viable, but it often matches or beats the old in-office model in terms of key outcomes like productivity, engagement, and retention.

Companies that rigidly oppose any remote work might be fighting the last war. As Bloom noted, about 80% of U.S. companies now offer some remote work options, and those clinging to 2019’s playbook may be “paying a price” in talent loss.

But that doesn’t mean remote work is a magic bullet either. To understand why some firms still struggle, let’s talk about the friction points that make many leaders wary.

Why Remote Gets a Bad Rap

(Leader Frustrations & Misconceptions)

Communication, collaboration, and culture consistently top the list of hybrid work challenges for both employees and leaders, highlighting why some companies struggle with remote models.

Despite the positive data, I’ve had plenty of candid chats with executives who loathe remote work. If you’re a leader who has felt that managing a distributed team is like herding cats in the dark, you’re not alone. Some common struggles keep coming up, and remote work often gets blamed for them (sometimes fairly, often not). Let’s unpack a few:

1. “Our culture is fading.” Many leaders worry that without the office, culture will collapse. No hallway chats, no team lunches, no shared energy. There may be some truth to this; however, culture isn’t built by proximity alone; it’s built by intention.

The best companies are deliberate: they define values clearly, build mentoring habits, and create new ways to connect, from virtual coffees to intentional rituals. Remote work can strain culture, but only breaks it if you let it.

2. Onboarding and developing talent. One common complaint: “How do we train new hires remotely?” It’s harder, no question. Without casual interactions or shadowing, new employees can feel lost. But the real issue often isn’t remote work, it’s unprepared managers who may never have learned how to onboard outside the office.

Remote onboarding works when structured, assigning a mentor, scheduling daily check-ins, and clearly communicating expectations. Companies that fail at this usually do onboarding poorly in person, too. Instead of blaming the remote, smart leaders invest in training, documentation, and support systems to close the gap.

3. Communication and collaboration breakdowns. In the office, quick questions happen naturally. Remotely, that spontaneity disappears, especially across time zones. Misunderstandings are more common, silos form, and collaboration slows without intention.

But these issues are fixable. High-performing remote teams set clear norms, use chat for quick updates, document big decisions, and encourage over-communication.

4. “How do I know they’re working?” Some managers struggle with remote work because they don’t trust what they can’t see. Having managed remote teams for most of my career, I can relate. It is frustrating at times.

However, I have learned that people can also look busy in the office.

The key to all of this (remote or otherwise) is to focus on outcomes, not activity. Set clear expectations and ensure individuals are hitting their goals. There is a delicate balance for sure, as one cannot constantly be asking for updates or checking over shoulders.

Micromanaging only kills morale. The fix is training managers to lead by results and building a culture where adults are treated like adults. Remote work reveals performance; it doesn’t hide it.

How Top Companies Are Making Remote (and Hybrid) Work

So, what are innovative companies, those “winners” who aren’t just shouting on LinkedIn about hustle culture or remote utopia, actually doing to get the best of both worlds?

In my experience and research, high-performing companies treat work models as a strategic challenge and have converged on a few key practices:

Structured Hybrid Schedules (“Anchor Days”). One emerging best practice is to designate certain days where everyone (or almost everyone) is in the office, and leave the rest flexible.

For example, Uber implemented “anchor days” on Tuesdays and Thursdays. On those days, all hybrid employees come in, guaranteeing in-person overlap. The other days, people can work remotely.

This approach satisfies both camps: collaboration and social connection happen on anchor days (since critical mass is there), while individuals get freedom and focus time at home on others.

Many companies do some variant: common in-office days, sometimes centered around team needs, or all-hands meetings. I’ve heard some firms refer to Wednesday as the “collaboration day” company-wide, keeping Mon/Fri remote for focus or personal flexibility.

The key is predictability, so that people know when to schedule critical face-to-face interactions and when they won’t be dragged into the office needlessly. It also prevents the worst-case hybrid scenario of a half-empty office daily (where you only sit on video calls because half your team stayed home, nobody likes that).

Anchor days give hybrid structure. And culturally, there’s something nice about saying, “Tuesday is the day we all see each other, let’s do our team lunch then.” It builds a rhythm.

“Virtual-First” and Async Communication. On the flip side of structured hybrid, some companies have leaned into being remote-first, meaning they operate as if everyone is remote, even if they have offices. I know this sounds a bit “odd”.

A great example is Dropbox, which pivoted to a “Virtual First” model. They ditched the idea of routine mandatory office days. Instead, they turned their offices into collaborative convening spaces (Dropbox calls them studios), redesigned for group work and connection.

Day-to-day, employees work from wherever (mostly home), and teams meet in person maybe once a week or for special projects, it’s optional, not required. To make this work, Dropbox invested heavily in technology tools and norms.

They document everything. They encourage people to communicate in writing and use channels that everyone can see, rather than siloed emails. Meetings still happen, but fewer and more intentionally.

This async-first mindset means if I have an idea at 10 pm, I might write it up and post it; my colleague sees it at 7 am their time and responds, we’re collaborating, just not simultaneously.

Companies like Atlassian have gone a step further: their employees can live anywhere in a set of countries and have complete freedom to choose between remote or office work. Atlassian explicitly says this policy opens up a wider talent pool and increases diversity, because they’re not hiring only where they have offices.

*Note: I did check Dropbox’s and Atlassian's financials, and both companies’ revenue growth is solid. EBITDA is strong for Dropbox and improving for Atlassian, so…

Investing in the Right Tools (and Etiquette). High-performing remote teams treat tools like core infrastructure. Reliable video calls, project management platforms, shared docs, and clear norms aren’t nice-to-haves; they’re essentials. Like you'd train people to use office equipment, remote teams need guidance on tool use and expectations.

Simple habits, like sharing agendas in advance or using one Zoom box per person, make a big difference. The best teams document how they work, often with a shared handbook, so nothing gets lost in translation. Clarity is the backbone of effective remote work.

Blending Full-Time with Fractional and Freelance Talent. Remote work has made it easier for companies to tap into fractional executives and freelance specialists. Hiring a part-time CFO or CMO is now common, especially for startups and PE-backed firms.

It’s flexible, cost-effective, and accesses top talent without full-time overhead. The best companies blend full-time staff with a trusted bench of contractors, scaling up or down as needed, but it only works if onboarding and communication are strong.

Rituals and Collaboration Equity. Great hybrid companies build intentional rituals to foster connection, from lively all-hands calls to surprise care packages for remote staff. These small touches go a long way in creating belonging.

They also prioritize “collaboration equity,” ensuring remote team members have an equal voice in meetings.

None of this is easy, but the trend is clear: companies that embrace flexibility with the right structure, tools, and policies are seeing gains in productivity, satisfaction, and talent attraction.

The Strategic Trade-Offs: Flexibility’s Pros & Cons

Even when remote or hybrid work is executed brilliantly, there are inherent trade-offs. As a business leader, you must recognize and weigh these trade-offs; no free lunch exists.

I prefer to frame it this way: choosing your work model is a strategic decision that should align with your company’s priorities and constraints. Here are some of the key operational trade-offs to consider:

Access to Talent vs. Team Cohesion. Remote work lets you hire beyond your local area, tapping into talent across cities, countries, and time zones. It’s a significant advantage, especially for hard-to-fill roles.

But with distributed teams, building strong bonds gets harder. You lose the casual moments that help resolve tension or build trust. Remote teams can still be tight-knit, but it takes effort and intention. Many companies find a balance by going hybrid, hiring broadly while bringing people together occasionally to strengthen connections.

Real Estate Savings vs. Travel Costs. Going remote can save big on office leases, freeing up money for growth, salaries, or perks. But those savings often shift to travel and coordination, think team offsites, coworking passes, or flying employees in for meetings.

Done right, it can still be cheaper than keeping a half-empty office. Planning is key: invest in meaningful gatherings that boost connection, not just costs. Many companies find it’s a better trade, and a more flexible, people-first way to work.

Speed and Innovation vs. Flexibility and Focus. Some leaders worry that remote work slows innovation, with fewer quick whiteboard sessions or spontaneous brainstorms. That can be true, especially for fast-moving teams.

However, remote work also gives space for deep, focused work, which can boost productivity. Engineers, writers, and analysts often thrive with fewer distractions.

Plus, time zone spread can speed up handoffs in distributed teams. You might trade off some creative spontaneity but gain structured, efficient collaboration. It all depends on your work style. Fast ideation may need more in-person time, while focused execution can thrive remotely.

Employee Flexibility and Satisfaction vs. Manager Comfort and Tradition. Remote work boosts employee satisfaction by offering flexibility and trust. People value the freedom to manage their time and balance life, often leading to better retention and performance.

However, some managers feel a loss of control or simply prefer the in-office style they grew up with. The real question is whether you optimize for employee needs or leadership comfort. Innovative companies know their workforce and adapt accordingly. Ignoring employee preferences just to stick with tradition can hurt morale and competitiveness.

When weighing remote, hybrid, or in-office models, consider trade-offs. What do you gain and lose, and how can you reduce the downsides? If remote risks are hurting cohesion, plan regular meetups.

If in-person limits talent, consider flexible options or satellite offices. The best companies are intentional; they choose a model, acknowledge the challenges, and put plans in place to address them. Problems usually come when teams drift into a setup without a clear strategy.

Conclusion: Clarity Over Chaos — Make Remote Work for You

I’m convinced remote work isn’t the problem; it’s unclear, inconsistent models that are. The data shows that roughly 60–70% of companies will operate in a hybrid or remote environment in the near future.

But success doesn’t hinge on where people work. It hinges on whether leadership sets clear expectations, sticks to them, and equips teams to thrive within them.

The companies struggling most are often the ones with vague policies, shifting mandates, or half-formed execution. In contrast, organizations that approach how they work with the same focus as what they work on, whether remote, hybrid, or in-person, are thriving.

As a leader, ambiguity is one of the worst positions you can put your team in. If leadership hasn’t decided on the plan, or sends mixed signals like “Sure, you can work from home… until we change our minds,” you’re breeding frustration and mistrust.

I’ve spoken to employees at companies that changed their remote policy three times in a year. Unsurprisingly, many started job hunting, not because of the model itself, but the chaos surrounding it. People will adapt to almost any clear, reasonable setup. What they can’t adapt to is churn.

So whatever you choose, be clear and intentional. Remote work isn’t binary; it’s a spectrum. Decide where your company sits on that spectrum, then communicate it with confidence.

If your model is “three days in-office, two remote,” great. Clarify which days, or how teams decide. If you’re going all-in on remote, spell out how you’ll onboard people, measure performance, and keep teams connected.

If you’re staying mostly in-person, explain why and double down on the value of being together (e.g., “We’re in-office for real collaboration, not video calls in cubicles.”)

Design your workplace like you’d design a product: with the end-user in mind, your employees, and a focus on solving friction points.

To help, here are a few diagnostic questions to test if your model is working:

• Do we know why we chose this model? Can you clearly explain how it supports your goals and culture?

• Is our policy clearly defined and documented? Can any employee explain the expectations?

• Are we training our managers? Are they equipped to lead effectively in this environment?

• How are we measuring success? Are you tracking outcomes, not just hours or presence?

• What’s our plan for culture and engagement? Do you have rituals and systems to keep people connected?

• Are we listening and adapting? Have you asked your people how it’s working, and are you making changes when needed?

These questions highlight where friction may be creeping in and help you fix the real issues, rather than blaming “remote work” or generational stereotypes.

Because in the end, the real question isn’t “Remote or office, which wins?” It’s “Which model works for us, and do we have the clarity and commitment to make it work?”

The loudest voices in the debate often have extremes or agendas. But most of us operate in the middle, where nuance, clarity, and consistency win.

The companies that tune out the noise and build flexible, thoughtful work environments that attract great people and empower them to do great work anywhere will lead.

Flexibility or friction? The choice is ours. With a clear strategy and a willingness to adapt, we can get the flexibility without the chaos. That’s the path forward for leaders who care more about results than rhetoric.

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Sources

Insights and data in this newsletter are drawn from publications and research, including:

• Stanford University (Nicholas Bloom)

• Gallup

• McKinsey & Company

• Nature (Academic Journal)

• Axios

• Dropbox

• Atlassian

• Uber

• GitLab

The other day, I was online with “customer service” — or rather, a very obvious AI bot.
At first, the experience was fine. But when the bot couldn’t understand what I needed, I asked to be connected to a live agent.

Guess what? That wasn’t possible.
You heard that right… Not possible.

And this wasn’t some scrappy startup — it was a large, well-known company.

Just a few weeks earlier, I had to reach out to another company’s customer service line. Only, there was no phone number. I was forced into chat. I got handed off three times, had to explain my issue thrice, and after 40 minutes, I was only half-confident my problem would get fixed.

I made a mental note to “fire” that company as soon as my subscription ended.

Sure, these are personal stories. But what about in business settings?
Is it any better — or is the customer experience just as broken?

Companies love to track NPS scores. They run surveys. They invest in automation. They talk about “customer obsession” on earnings calls.

But here’s the uncomfortable truth: It’s not about whether you use humans or AI. It’s about whether your customers feel understood — and whether their problems get solved.

Customer experience isn’t just a department or a chatbot upgrade. It’s the heartbeat of trust between you and the people who keep your business alive.

If that trust is broken, they’ll quietly leave.
And when they do, they won’t fill out your survey; they’ll just move on.

Customer Experience (CX) - Just a Buzzword?

In today’s market, experience is everything for customers. 88% of customers say a company's experience is as important as its products or services — the highest level since tracking began.

This shift didn’t happen overnight.

Over the past decade, businesses have slowly realized that winning and keeping customers often comes down to how those customers feel treated. From Retail to SaaS, companies are learning (sometimes the hard way) that a company is only as good as its service.

In this newsletter, I’ll take a fun-yet-informed look at how CX has evolved in recent years across North America. Fun? Well…you can be the judge of that.

I’ll explore long-term trends, the seismic changes post-COVID, and the flashy new tech — automation, AI chatbots, self-service portals, personalization engines, CRM systems, customer data platforms, and whether these tools are making customers happier and, as a business leader, your organization more efficient and increasing revenue.

I’ll also call out a worrying trend: as technology races ahead, some companies are leaving customers behind by neglecting good old-fashioned service and personalization.

Along the way, I'll sprinkle in statistics from Genesys, Forrester, PwC, Salesforce, and more, plus real-world examples (the good and the bad) from industries like retail, finance, hospitality, and SaaS.

Let’s dig in

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The CX Evolution: Why Experience Became King

Not long ago, “customer experience” meant customer service – often an afterthought relegated to call centers. But over the last decade, that mindset flipped.

Customer experience has become the competitive battlefield for businesses. (One Gartner study famously found that 89% of companies compete primarily on CX rather than products or price.) The reason is simple: happy customers stick around and spend more, while unhappy customers churn, and fast.

Consider loyalty and revenue: 81% of customers say a positive customer service experience makes them more likely to make another purchase. Moreover, 61% of consumers will pay at least 5% more if they know they’ll get a good experience.

In other words, people are willing to open their wallets for brands that treat them well. PwC even found that consumers are willing to pay a price premium of up to 16% for great experiences (especially in industries like hospitality and luxury retail).

And when customers feel appreciated, they’re more open to sharing data and trying new offerings, fueling a virtuous cycle for companies who “get it right.”

On the flip side, a bad experience can ruin brand perception overnight. Nearly one-third of customers (32%) would stop doing business with a brand they love after just a single bad experience, and 59% would walk away after several bad ones.

In North America, consumers have zero patience for poor service: one survey found 60% of customers will defect after one bad experience, up 22% from the prior year. The stakes are high, and they’ve been getting higher.

So, companies responded by elevating CX to a strategic priority. We saw the rise of Chief Customer Officers and customer journey mapping exercises. Companies invested in slicker websites, mobile apps, and omni-channel support.

Yet, despite all the talk and investment, many brands still struggle to deliver experiences that truly satisfy customers. In Forrester’s latest U.S. Customer Experience Index (2024), CX quality among brands hit an all-time low after declining three years in a row.

Only 3% of companies in that study were rated as “customer-obsessed,” i.e., truly putting customer needs at the center of their business. (Yes, just 3%, down from 10% a year prior.) Most firms still have a long way to go, and my question is, “Do they even care anymore”?

Why the gap? Often, it’s because knowing what makes a great experience is easier than doing it consistently. Customers say they want the basics: speed, convenience, consistency, and a human touch.

As PwC summed it up, “minimize friction, maximize efficiency, and keep a human element.” Companies, however, sometimes get distracted by shiny new trends or cost-cutting pressures and forget to nail the fundamentals.

I’ll explore those pitfalls shortly. First, let’s look at how recent years, especially the pandemic era, have reshaped customer expectations.

How COVID Changed Customer Expectations For Good

The pandemic didn’t just push people online, it rewired how they expect to be served.

In just 100 days, e-commerce adoption leapt forward a decade. From Zoom meetings to curbside pickup, consumers adapted fast and expected companies to do the same. That shift didn’t fade after lockdowns ended. If anything, expectations only grew sharper.

Four lasting CX shifts that occurred:

• Digital-First, No Excuses: Everyone became a digital user, even grandparents. Now, clunky apps or slow websites aren’t just annoying, they’re dealbreakers.

• Omnichannel or Bust: Customers move between digital and human channels seamlessly. But 84% of CX leaders say they still can’t fully connect those dots, and consumers notice. As my examples pointed out above, this is a real problem.

• Loyalty Is Fragile: 75% of consumers tried new brands during COVID. Many didn’t go back. Loyalty now depends on value, personalization, and well-run loyalty programs. Even companies such as Amazon may lose market share. Their customer experience has worsened, and now tariffs may impact prices.

• Human Matters (Still): People don’t want less technology, they want better technology that supports real human connection. Empathy still drives trust.

Bottom line: COVID raised the bar. Today’s customers expect fast, seamless, human-centered service across every channel.

Tech to the Rescue? AI, Automation & the CX Balancing Act

Technology has transformed customer experience, but not always for the better.

Companies have invested heavily in tools that promise faster, more personalized service, from AI-powered chatbots to CRM upgrades and self-service portals. And it works when done right. The problem is that it rarely is.

• 64% of consumers believe AI will improve CX

• CX leaders are spending 33% of their budgets on AI tools this year

• Use cases like chatbots, “next best action” CRMs, and real-time agent coaching are on the rise

What good looks like:

• Easy self-service and access to humans when needed….yes….ACCESS TO HUMANS

• Seamless transitions across channels

• Personalization that feels tailored, not creepy

Yet most companies aren’t there.

• 84% of CX leaders admit they don’t offer fully integrated omnichannel experiences

• 78% of marketers say their loyalty and CX systems are still siloed

• And 57% of CX technology isn’t even in the cloud yet

The good news? Companies are now investing in customer data platforms (CDPs), AI co-pilots, and cloud-native solutions to close the gap. However, the lesson is clear: Technology should solve real customer problems, not just cut costs or follow trends.

Are Companies Leaving Customers Behind?

With AI chatbots, automation, and data-driven personalization, you'd think customer experience (CX) is thriving. But many customers feel the opposite — overlooked, unheard, and undervalued.

Despite new technology, trust is eroding. A 2024 Salesforce study found:

• 72% of consumers trust companies less than they did a year ago

• 65% believe businesses misuse their data

Fancy tools aren’t winning hearts if they don’t feel personal, or worse, feel invasive.

There’s also a major disconnect in perception:

• 60% of companies believe they offer great service

• Yet 54% of customers say it feels like an afterthought

• And 59% feel brands have lost touch with the human side of CX

Automation done right enhances service. Done wrong, it signals cost-cutting over customer care. The Southwest Airlines holiday meltdown in 2022 is a case in point — outdated systems and inaccessible support cost them $600M+ in reimbursements and a $140M fine. Even beloved brands lose trust when they can’t deliver in critical moments.

Another blind spot: employee experience. Burned-out, undertrained staff can’t deliver great service. Forrester reports that declining CX often stems from companies neglecting employee well-being. Only 38% of U.S. consumers feel that front-line staff understand their needs.

In some industries, like SaaS, companies are cutting customer success teams to save costs. The result? Fewer reps, more accounts, less human connection, and more churn.

Bottom line:
Customers want to feel understood, valued, and supported, not just processed by a machine. When companies forget that, even the best technology won’t save them.

What Do Customers Want?

Technology is evolving fast, but the core of great customer experience remains surprisingly simple. Across studies, customers consistently ask for four things:

1. Solve My Problem, Fast and Easy

Speed and convenience top the list. 80% of U.S. consumers prioritize fast, friendly, knowledgeable service. They want low-effort resolutions — no repeating information, no jumping through hoops. Seamless handoffs across channels matter: 93% will spend more with companies that respect their time and make support frictionless.

2. Meet Me on My Terms

Omnichannel matters — but simplicity matters more. Customers want to choose their channel (chat, phone, app), expect continuity, and don’t want to start over. First-contact resolution is gold. Nearly 60% prefer fewer touchpoints to get what they need, and 69% expect connected experiences across departments.

3. Know Me, Respectfully

Personalization works when it’s relevant and not creepy. Customers want businesses to use existing data to anticipate needs, recommend smart options, and streamline communication. 63% are willing to share data if it leads to real value. But misuse that trust, and you’ve lost them.

4. Treat Me Like a Human

Courtesy, empathy, and a real effort to help still matter. 82% say friendly, informed support defines a great brand. Customers forgive mistakes if the recovery is sincere. What builds loyalty is listening, responding, and showing that their feedback drives action.

Bottom line:
Customers want companies to care about their time, their preferences, and their humanity. The best brands consistently deliver on what Forrester calls the “three E’s” of CX: easy, effective, and emotional.

When companies nail all three, they don’t just solve problems — they build loyalty.

Next up: real stories of brands that get it right — and those that don’t.

CX Wins and Fails Across Industries

Want to see what great (and terrible) customer experience looks like in the real world? Here are quick hits from four industries:

Retail

Win: Chewy has become legendary for empathy, sending flowers and even hand-painted portraits to customers who’ve lost a pet. Their personalized service drives loyalty and word-of-mouth like no ad campaign ever could.

Fail: Big-box retailers that failed to adapt during COVID (clunky curbside pickup, poor inventory visibility) lost ground to more nimble players like Walmart.

Lesson: Personal touches + convenience = retail CX gold.

Financial Services

Win: USAA and Navy Federal consistently rank among the top for CX by truly understanding and serving their unique customer bases. Human-centered service and helpful policies earn lasting trust.

Fail: Wells Fargo’s fake accounts scandal wasn’t just unethical, it destroyed customer trust and became a cautionary tale in CX.

Lesson: Trust and simplicity matter. If your bank helps when it counts, customers stay. If not, switching is easy.

Hospitality & Travel

Win: Ritz-Carlton empowers every employee to spend up to $2,000 to fix guest issues. Viral moments like “Joshie the Giraffe” show how small gestures create unforgettable experiences.

Fail: Airlines still rank low in CX. Even with some recent improvements (like Delta’s app-based rebooking), travelers often feel frustrated and undervalued.

Lesson: When things go wrong, how you respond is what customers remember most.

Software & SaaS

Win: Salesforce and HubSpot stand out by investing in customer success, education, and community. Their support turns customers into brand advocates.

Fail: Some SaaS companies slashed support teams in downturns, frustrating customers and driving churn. SAP once lost ground due to clunky UX, proving that even powerful software must be usable and supported.

Lesson: In SaaS, the product and service are inseparable. Success = helping customers succeed.

Final takeaway:
Companies that deliver speed, empathy, and relevance consistently outperform. Good CX isn’t just a feel-good story — it’s a real growth strategy.

The ROI of Great Customer Experience

Does CX really pay off? The data says: absolutely.

Revenue & Profit Growth

According to Forrester, customer-obsessed companies grow 41% faster in revenue and 49% faster in profit. Over time, CX leaders outperformed laggards by 5.4x in stock returns.

Retention = Revenue

Bad CX drives churn — 53% of consumers leave a brand after just two poor experiences. Improving CX reduces attrition, boosts customer lifetime value, and lowers support costs. Loyal customers spend more and refer others.

More Spend & Premium Pricing

• 81% of consumers say great service makes them more likely to buy again.

• 61% will pay more for guaranteed good CX. Think Apple: people pay a premium for a seamless, supported experience.

Differentiation in Competitive Markets

When products are similar, CX is the tie-breaker. T-Mobile gained market share by killing contracts and adding perks. Startups often win by out-servicing bigger rivals.

Lower Costs via Word-of-Mouth

Happy customers promote you. Tesla built its brand with almost no traditional advertising. Meanwhile, bad experiences generate bad buzz and costly PR damage control. (We’ve seen Tesla demonstrate both positive and negative brand aspects)

Leading Indicator for Investors

CX metrics like NPS and CSAT now sit alongside EBITDA on investor dashboards. A 5% improvement in retention at a $100M company = $5M+ in recurring revenue.

Bottom line:
CX isn’t a feel-good initiative; it’s a growth strategy. Better experience = higher loyalty, lower churn, stronger brand, and higher valuation.

Conclusion

Customer experience in North America has shifted from a neglected function to a vital strategic differentiator, especially during the pandemic. Technology, like AI chatbots, can enhance CX but can also alienate customers if mishandled.

As my examples point out companies seem to be making efforts, but not working from the customer backwards. Understanding customer needs and frustrations is key.

Business leaders should view CX as crucial to brand reputation and revenue, particularly in private equity and strategy. When acquiring or growing a company, assess customer satisfaction: are they raving or complaining? This will impact your growth and retention.

North American consumers demand fast service, seamless technology, personalization, and a human touch. They reward companies that meet these expectations.

To excel in CX, listen to customers, invest in technology and people, and simplify their journeys. This approach can position you as a leader in the evolving CX landscape.

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Sources

Insights and data in this newsletter are drawn from publications and research, including:

• Genesys "State of Customer Experience"

• Forrester U.S. and Canada Customer Experience Indexes

• PwC "Future of CX" report

• Salesforce "State of the Connected Customer"

• Zendesk Customer Experience Trends

• Gartner, McKinsey, and Bain customer loyalty studies

• Case studies from Chewy, USAA, Ritz-Carlton, and Salesforce

Fast forward to today, AI can generate a strategy document in 30 seconds, and our feeds are overflowing with hot takes and headlines. Between nonstop news, algorithm-driven content, and chatbots ready to do your homework, it's never been easier to get information or harder to think deeply about it. That’s where critical thinking comes in.

It’s not just a buzzword. Critical thinking is the ability to analyze, question, evaluate, and reason your way through information, especially when things get messy. It’s the difference between reacting and responding, between jumping to conclusions and digging for understanding. And in a world that’s increasingly noisy and complex, critical thinking is the superpower Gen Z needs most, and where business leaders can help develop this generation.

This issue explores how Gen Z is developing critical thinking in a world of instant access and digital overload and how their upbringing in the tech era is both a challenge and an asset. Whether you're leading, teaching, or growing up Gen Z, you'll find practical, no-fluff strategies to help this generation not only sharpen their thinking but also lead with it.

Comparing Gen Z and Previous Generations in Critical Thinking

Before diving into how Gen Z compares with previous generations, it helps to understand who’s who across the generational timeline. Here’s a quick breakdown to frame the conversation:

How is Generation Z performing in comparison to older generations regarding critical thinking skills? The results are varied. On one hand, they excel at navigating the digital landscape. On the other hand, they occasionally struggle when the answer isn’t readily available through a quick internet search.

Employers often say Gen Z lacks strong problem-solving and reasoning skills, especially compared to Millennials and Gen Xers. Some even admit to avoiding Gen Z hires altogether (yikes). But let’s not forget: every generation gets this kind of critique when they're new to the workforce.

Back when Gen X came onto the scene (my generation), we were called “media junkies with no attention span.” Sound familiar? With cable TV, video games, and MTV as our backdrop, older generations were convinced our brains were being fried by flashing screens and loud music. Turns out, what looked like a distraction was actually the beginning of a new kind of media fluency, just as we're now seeing with Gen Z.

Still, there’s some data to back it up. Standardized assessments show that Gen Z scores slightly lower on tasks that require deep analysis or dealing with conflicting information. Only 29% of managers think Gen Z can handle complex problems on their own, compared to nearly 50% for Millennials and over 60% for Gen X. But here’s where it gets interesting—when it comes to digital savvy and spotting fake news online, Gen Z is ahead of the pack.

So what does this tell us? Gen Z might struggle with traditional critical thinking at times, but they’re not clueless. They’re just wired differently, more visual, more collaborative, and faster at scanning and filtering. What they need is a chance to slow down, think deeper, and apply their strengths to complex, real-world problems.

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Key Factors Influencing Gen Z’s Critical Thinking Development

Pervasive Technology & Instant Answers

Gen Z grew up with answers at their fingertips—literally. When you’ve had a smartphone since middle school (or perhaps earlier), why wouldn’t one Google everything? I know I routinely use my phone to provide answers, especially when it comes to “Now, who is that actor in that movie?”. While this makes them excellent information retrievers, it doesn’t always help them develop the mental endurance to wrestle with tough questions.

The problem is, instant answers often shortcut the brain’s deeper work. Instead of thinking things through, it’s tempting to just grab a quick explanation and move on. To provide an example, and this is not limited to Gen Z: For years, people have repeated the story that Albert Einstein failed math as a student, using it as “proof” that even geniuses struggle in school. I mean really?

It’s been quoted in speeches, social media posts, and even motivational books. But here’s the truth: Einstein never failed math. In fact, he was exceptionally good at it, mastering calculus by the age of 15. If one just thinks, critically, they know not all information passes the “sniff test”.

And all the digital multitasking? It trains the brain to scan, not reflect. So, while Gen Z is great at filtering through loads of information fast, they sometimes miss the slow-burn thinking that builds insight.

I’m not saying ditch the technology—far from it. But helping Gen Z build some “cognitive stamina” is key. That means providing more opportunities for them to wrestle with ambiguity, break down complex problems, and sit with something long enough to figure it out.

The Role of AI in Shaping Thinking Habits

I’m sure we all recognize that AI is both a gift and a trap. Sure, it can help you brainstorm ideas, outline an essay, and even clean up writing. But if you’re not careful, it can do too much of the thinking for you.

Gen Z is already using AI tools like ChatGPT and Grammarly to get things done faster, and who can blame them? As an example, I routinely use Grammarly to help clean up emails to clients. The challenge is making sure these tools supplement rather than replace thinking. When AI is used thoughtfully, it can actually sharpen critical thinking by providing feedback and helping explore alternative viewpoints. But if it becomes a crutch? That’s where skills start to atrophy.

Bottom line: AI isn’t the enemy of critical thinking, but mindless use of it might be. The trick is to treat it like a thinking partner, not a substitute.

Social Media and Information Quality

Social media is Gen Z’s second language. It’s where they get news, learn about the world, and have conversations about everything from climate change to fashion trends. But here’s the catch: most of it comes in tiny, bite-sized, often biased chunks.

TikTok, Instagram, and X (formerly Twitter) thrive on quick takes and emotional hooks. That doesn’t leave much room for nuance. And when the most-liked post wins, not the most accurate, it’s easy for misinformation to slip through. Gen Z is good at sniffing out some of this, but even they struggle to dig deeper.

The upside? This generation is incredibly curious and socially aware. They care about issues, want to make a difference, and are hungry to learn. The key is channeling that curiosity into habits of reflection, questioning, and source-checking. Because once they learn how to spot bias, verify claims, and ask smarter questions, they’re unstoppable.

Education System and Teaching Methods

Let’s be honest, school hasn’t always done Gen Z any favors when it comes to thinking critically. For years, education has focused on test scores and right answers, not exploration and open-ended thinking. Combine that with a pandemic that shut down classrooms and moved everything online, and it’s no wonder many students came out less confident in their reasoning skills.

There’s also a growing concern around declining reading comprehension, something essential to critical thinking. Recent studies suggest that Gen Z, while more digitally literate, is struggling with the kind of deep reading that builds analytical reasoning.

Skimming articles, scrolling through headlines, and favoring videos over text all contribute to the erosion of comprehension. And without strong reading skills, it becomes harder to evaluate arguments, interpret nuance, or build layered insight.

And now? Add AI to the mix. Students can plug a question into a chatbot and get an essay back in seconds. Tempting? Totally. But it can short-circuit the thinking process if schools aren’t careful.

The good news? Some educators are fighting back with active learning, debates, case studies, group projects, and problem-based learning. These approaches push students to engage, question, and connect ideas instead of memorizing them.

Want a real-world example of critical thinking in action? Look at West Point (yes, it’s my alma mater). Cadets there sharpen their reasoning not just in classrooms, but through leadership simulations, math boards, military strategy, field training, and the famous Thayer Method, which emphasizes pre-class preparation and in-class problem-solving.

They’re constantly asked to reflect, adapt, and apply knowledge under pressure. Critical thinking isn't just taught—it's lived. There’s something powerful about that hands-on, integrated model that more civilian education systems could borrow from.

Workplace Environment and Early Career Experiences

Gen Z didn’t just enter the workforce, they did it during a global pandemic. Many started their first jobs on Zoom, never met their manager in person, and learned company culture through Slack threads.

That matters. When you're remote, you miss out on the small stuff—overhearing how decisions get made, watching coworkers solve problems, asking quick questions after meetings. All of that is gold for developing workplace smarts and critical thinking.

Now that some companies are nudging people back into offices, there’s a chance to rebuild that learning environment. Hybrid work, if done right, can give Gen Z the best of both worlds—freedom plus mentorship. But leaders need to be intentional about creating space for reflection, feedback, and collaboration. That’s where growth happens.

Consulting firms, long known for their high standards and fast-paced environments, are navigating a generational shift with Gen Z. While they admire Gen Z's technology skills and curiosity, many also report a growing need to reinforce foundational skills like structured problem-solving, resilience, and critical thinking, especially in a world that offers quick answers but few frameworks.

A 2023 McKinsey report noted that while Gen Z candidates bring digital agility, nearly 60% of consulting managers cite “strategic thinking under pressure” as a skill gap needing targeted development.

Strengths and Weaknesses of Gen Z’s Critical Thinking

Let’s break it down. Gen Z comes to the table with some real assets, and a few blind spots, when it comes to thinking critically. Knowing what they do well (and where they could use a boost) is the first step in helping them thrive.

What They’re Great At

• Emotional Intelligence: Gen Z gets people. They’re in tune with emotions, care about mental health, and value empathy. That’s a huge plus in any group or team environment.

• Digital Savvy: They’ve got serious Google skills. Whether it’s finding obscure research or figuring out how to change a bike tire via YouTube, Gen Z knows how to hunt down answers fast.

• Questioning the Status Quo: This is a generation that asks “why?, a lot. This is a good thing as long as it’s applied in the right context. Challenging norms is a critical thinking skill, not a personality flaw.

• Desire to Learn: Surveys show, and this has been my personal experience, Gen Z is eager to grow. They want feedback, development, and purpose, not just a paycheck. That’s fertile ground for learning how to think better.

Where They Struggle and Need Help

• Attention and Focus: Growing up on fast content and multitasking hasn’t exactly trained Gen Z to sit still with a hard problem. Building mental stamina is a must.

• Over-Reliance on Tech: From calculators to ChatGPT, Gen Z is used to outsourcing thinking to tools. The key is learning when to lean in and when to unplug.

• Depth Over Breadth: They can find 10 articles on a topic in seconds, but making sense of it all? Synthesizing, evaluating, and applying ideas? That’s still a work in progress.

• Real-World Practice: Many haven’t had a lot of chances to use critical thinking outside school. They need real projects, real stakes, and real decisions to build those muscles. As business leaders, this is where you can help with full-time, as well as, intern associates.

Strategies to Strengthen Critical Thinking Skills

Now for the good stuff, what can you actually do about it? Whether you’re an employer, educator, or Gen Z yourself, here are practical moves to help strengthen critical thinking from every angle.

For Employers

• Make Questioning Normal: Create a culture where people are encouraged to ask, "Why are we doing it this way?" It’s how innovation happens, and how critical thinkers are made.

• Simulate Real Challenges: Give younger employees real-world problems to solve (not just busywork). Make space for trial, error, and iteration.

• Pair Them Up: Match Gen Z with experienced mentors who can model how they think through complex decisions. Bonus points if it’s a two-way street (e.g. reverse mentoring).

• Give Autonomy (with Guardrails): Let them take the lead on something. Then step back, but not too far. Think of it as bumpers on a bowling lane.

For Educators

• Ditch the Memorization: Push for more debates, essays, and open-ended projects. Get them exploring ideas, not regurgitating facts.

• Build Digital Literacy: Help students learn to vet sources, question what they see online, and build arguments backed by real evidence.

• Celebrate Process, Not Just Results: Reward students for how they got to an answer, not just whether they nailed it. It teaches resilience and reflection. An example, is having students talk through their solution in front of the class/on a board.

• Leverage AI Thoughtfully: Don’t ban AI (it’s here to stay), but teach students how to use it as a tool for brainstorming, comparing ideas, or challenging assumptions.

For Gen Z Themselves

• Pause Before You Google: Try to work out an answer first. Train your brain to think before you click.

• Ask Better Questions: Don’t settle for surface-level stuff. Dig deeper. Ask “Why?” and then ask “Why?” again.

• Challenge Your Own Views: Follow people who think differently. Engage (respectfully) with opposing perspectives, and, as hard as it may be, put emotions aside and let facts take the lead.

• Reflect on Your Thinking: After you make a decision or solve a problem, pause. What worked? What didn’t? What would you do differently next time.

Conclusion

Here’s the big idea: Gen Z isn’t bad at critical thinking, they’re just growing up in a world that makes it harder to practice. But with the right support, the right challenges, and the right mindset, they can absolutely become the clearest thinkers, boldest leaders, and most adaptive problem-solvers in the room.

So whether you're coaching, hiring, teaching, or are Gen Z, remember: critical thinking isn’t something you’re born with. It’s something you build. And there’s never been a better time to start. Good Luck!

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Sources

Insights and data in this newsletter are drawn from publications and research, including:

• Cangrade Soft Skills Research (2024)

• YouGov & National Association of Colleges and Employers (NACE) Survey (2023)

• McKinsey & Company, Gen Z Behavior Analysis (2023)

• Education Design Lab Report on Employer Perspectives (2022)

• Pew Research Center, Generational Comparison Studies (2020–2024)

• Israeli Cross-Generational Digital Critical Thinking Study (2024)

• American Association of Colleges & Universities (AAC&U), Liberal Education Trends (2023)

• The Chronicle of Higher Education, Pandemic Learning Impact Reports (2022–2023)

• Stanford History Education Group, Media Literacy Evaluation Studies (2021)

• Harvard Business Review, Workplace Trends Reports (2023–2024)

• LinkedIn Learning Skills Insights (2023)—they’re just growing up in a world that makes it harder to practice. But with the right support, the right challenges, and the right mindset, they can absolutely become the clearest thinkers, boldest leaders, and most adaptive problem-solvers in the room.

The hammock seller used software that automatically monitored stock levels and extracted insights from customer reviews, indicating what shoppers liked or disliked. Meanwhile, the toy company's AI assistant wrote product descriptions and analyzed social media statistics for sales trends. Both owners were amazed at how much time and money these tools saved them—AI acted like an extra pair of hands, enabling their small teams to accomplish much more.​

Their experiences highlight a significant trend: AI is no longer a luxury reserved for large companies, but a practical aide for businesses of all sizes.

Small and mid-sized businesses are rapidly jumping on the AI bandwagon. In 2023, roughly 36% of SMBs had invested in artificial intelligence; by the end of 2024, that number jumped to 42%​.

This surge has been fueled by the buzz around accessible AI tools (like the sudden popularity of ChatGPT) and by the very real success stories of early adopters. The message is clear: AI isn’t just hype – it’s becoming a competitive necessity.

As a business leader, how can you leverage the AI wave? Start by focusing on tools that solve real problems—not chasing shiny technology/fads. The biggest mistake right now? Investing in AI without a clear use case or overcomplicating it. Instead, look for simple ways to save time, improve decision-making, or engage customers more effectively. Small wins can snowball into a significant impact. Here are three key strategies to focus on:

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1. Streamline Operations and Save Time

One of the biggest immediate wins from AI is automating routine operations. Think about all the repetitive, time-consuming tasks that bog down your day – processing invoices, scheduling meetings, managing inventory, customer service triage, data entry, etc.

Those are precisely the kinds of jobs AI excels at. For instance, intelligent algorithms can reconcile your accounting records overnight or predict stock needs for next season by analyzing sales patterns. By handing off these tasks to AI, it’s as if you suddenly hired a few extra employees to work 24/7.

Small business owners/units report that adopting AI in their operations effectively does the work of about two full-time employees (plus another 1.5 part-timers) for them. Unsurprisingly, in one survey, 82% of SMBs said AI made their business more efficient.

Crucially, this isn’t just about cutting costs – it’s about freeing your real team to focus on higher-value work. Imagine your sales manager spends two hours a day manually pulling reports; with an AI tool generating those reports in seconds, that manager can now spend those two hours calling on new leads or improving the sales strategy. AI gives you back time.

Companies are using AI to automate everything from fraud detection to compliance paperwork, shrinking processes that once took days into mere minutes​.

The bottom line is that streamlining operations with AI means a leaner, faster business that can do more with less and respond quickly to changes.

2. Engage and Understand Your Customers

Another game-changing application of AI is in enhancing customer engagement. Big firms have long used AI to personalize shopping experiences (like Amazon’s product recommendations), but now even modest-sized businesses can tap into these powers.

For example, AI-powered chatbots can handle common customer questions online at any hour, so your customers get help immediately instead of waiting for office hours. These virtual service agents can schedule appointments, track packages, answer FAQs, and more – all without a human being needed for the basic stuff.

That frees your staff to tackle the trickier customer issues that truly need a personal touch. It also keeps customers happier: 86% of businesses using AI say it lets them communicate with clients more frequently and effectively (think instant responses and follow-ups)​. I know we all have had our good and bad experiences with chat AI bots, but the capability is far ahead of even what it was a year ago.

In other words, AI can ensure no customer inquiry falls through the cracks.

But customer engagement isn’t only about speed – it’s also about insight. AI can sift through heaps of customer data to reveal patterns in what people buy, what they complain about, or what features they love.

With these insights, you can tailor your products or services to meet customer needs better. One retailer, for instance, uses an AI tool to analyze every new product review that comes in, automatically highlighting common suggestions and issues customers mention.​

This helps the team quickly fix problems and double down on what’s working, leading to better reviews and repeat business. AI can also personalize marketing: even a simple algorithm can segment your customer list and send targeted offers (so your outdoorsy customers get camping gear promos while the urban customers get city-friendly products, for example).

All of this adds up to more engaged, loyal customers. People appreciate it when a business understands them and responds quickly – AI is helping companies do both at scale.

Remember, the best outcomes come when AI works with your team. Many companies using chatbots or AI text generators have a human review of essential messages or step in for complex cases, ensuring that the personal, human touch isn’t lost even as automation does its part.

3. Empower Your Team for Smarter Decisions

Lastly, AI can supercharge your decision-making – but only if your team is on board and up to speed. Modern AI tools are incredibly good at analyzing data and spotting trends that would be easy for a person to miss.

They can crunch sales numbers, market metrics, or operational data and instantaneously produce insights (like “hey, item X is selling faster in Denver this month, you should reorder sooner” or “factory output dips on rainy days, adjust staffing those days”).

Around 60% of companies report that AI has quickly improved their business decision-making by delivering key insights​.

When leaders have better, data-driven information, they naturally make smarter calls (or at least one hopes so) on everything from pricing to marketing strategy. AI gives your team analytical superpowers, turning gut decisions into informed decisions backed by real-time evidence.

Tools alone won’t move the needle unless your people know how to use them. Investing in your workforce’s AI skills is critical. Right now, there’s a big gap in many organizations: even among companies already using AI, only about half have provided training to their employees on these tools​.

Consequently, many workers feel uncertain about integrating AI into their jobs. Currently, only about one in three employees feels confident in their AI skills, and most of them likely assume it refers to using ChatGPT.

This represents a missed opportunity. Your sophisticated analytics platform will be ineffective if your analysts do not trust or comprehend its suggestions. The positive news is that employees directly experience the benefits when they receive training. In one study, 90% of workers who underwent AI training reported that it enhanced their job performance​.

The takeaway for business leaders is clear: prioritize AI education and training. Start small by holding workshops on using that new AI software you adopted, or encourage a few team members to become your in-house experts who coach others.

Create a culture where experimenting with AI tools is encouraged (and not feared). If you empower your team to leverage AI, they’ll make better decisions and amplify what the technology can do for your company.

As one Microsoft report put it, AI has the potential to free employees from the drudgery of “information overload,” allowing them to focus on creative, strategic work instead​, but only if we help them learn and adapt.

In short, pair human talent with AI insights, and you’ll get the best of both. Companies that treat AI as a collaborative tool for their people (rather than a replacement for them) will reap the most rewards.

Many employees who use AI at work agree it’s making them more productive and satisfied, but far fewer feel fully prepared to use it. In a recent survey, 73% of workers in AI-adopting companies said using AI tools has increased their productivity, and 60% said it improved their job satisfaction.

However, only 41% have actively prioritized learning how to use AI in their role, and the rest haven’t – which aligns with the finding that only about 37% of employees feel confident in their AI skills​.

This highlights the need for training and a supportive learning culture to realize AI’s full benefits.

The Investor’s Perspective: AI as a Value Driver

These AI initiatives – streamlining operations, delighting customers, and enabling more intelligent decisions – don’t just improve day-to-day performance. They can also boost the long-term value of the business, which is something on the radar of private equity firms and investors.

Investors love efficient, growing companies, and AI helps organizations be precisely that. By systematically weaving AI into a company’s processes, businesses have been able to lower operating costs and increase revenues, directly improving profitability.

One analysis suggests that this leads to higher company valuations, as earnings improve and buyers are willing to pay a higher multiple for tech-enabled, future-ready companies.

In plain English: a company that’s efficiently run with AI might sell for a higher price than an otherwise identical company that hasn’t embraced these tools.

It’s telling that even private equity firms themselves are starting to use AI to guide their investment decisions. Deloitte predicts that within the next few years, roughly 25% of PE firms will use AI when valuing and evaluating potential acquisitions​.

These investors are crunching data with AI to spot trends, assess risks, and find hidden opportunities in companies – a sign of how important they believe AI will be in driving growth.

This trend sends a clear message for business owners: demonstrating a strong AI strategy can be a real differentiator if you’re looking to attract investment or eventually sell your company.

It suggests to buyers that your business is poised for the future and not stuck in the past. Conversely, ignoring the AI movement could leave value on the table (or worse, make your company less competitive over time).

Conclusion

In summary, the principles remain consistent whether you operate a family business or manage a portfolio of companies. Utilize AI to streamline operations, engage with your customers, and empower your employees.

These are the three key areas where AI is currently making a significant impact. Start with small projects, learn from them, and then expand your efforts.

Companies are spreading themselves too thin by pursuing too many AI initiatives. Leading organizations prioritize depth over breadth, focusing on an average of 3.5 use cases, in contrast to 6.1 use cases for other companies. As a result, these leaders expect to achieve a return on investment (ROI) that is 2.1 times greater than that of their peers in their AI efforts.

The companies mentioned in the opening story viewed AI as a valuable partner, and this approach has resulted in improved efficiency, growth, and customer loyalty. Your business could be the next success story.

AI is here to stay, and leaders who adopt it thoughtfully will likely gain a competitive advantage in the future. What are your thoughts?

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Next Week, I will focus on Critical Thinking, its importance, and even the impact of AI on such a skill.

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Sources

Insights and data in this newsletter are drawn from publications and research, including:

• McKinsey & Company – Global AI adoption and workforce impact studies

• Salesforce & Deloitte – AI adoption in small to mid-sized businesses and private equity

• Bain & Company – Generative AI use in deal sourcing and portfolio strategy

• Business.com & RSPA – AI benefits for SMBs, including productivity, efficiency, and decision-making

• World Economic Forum – Responsible AI frameworks and governance

• Case Studies – Real-world applications from businesses like Axis Bank, CMY Cubes, and Nakie