Operating Models

Operating Models

Graded signals in Operating Models, checked for novelty and linked to the original.

Fortune September 1

EY pays workers to demonstrate human skills as AI advances

The big picture: EY is offering cash awards up to $25,000 to workers who demonstrate human skills like judgment and adaptability. The company is explicitly betting that these skills remain valuable as AI reshapes accounting work.
Why it matters: As AI automates routine tasks, enterprise leaders must decide how to value and retain employees with irreplaceable human capabilities. This signals a market shift toward skills that machines cannot easily replicate.
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MIT Sloan Management Review August 27

Companies investing heavily in reskilling workers for emerging technologies

The big picture: Organizations across industries are spending significant resources on programs to teach employees how to work with new technologies. These programs focus on skills like data literacy, digital fluency, systems thinking, and adaptability.
Why it matters: Workforce readiness is becoming a competitive priority. Leaders must invest in reskilling to ensure their teams can work effectively with new tools and approaches.
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McKinsey Insights August 26

AI agents need performance management, too

The big picture: Organizations are treating their digital workers like team members. Leading companies are building structures to help both people and AI agents perform better together.
Why it matters: As AI agents take on more work, leaders need systems to track and improve their output, just as they do for human staff. Without this oversight, AI deployments may underperform or create friction with teams.
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McKinsey Insights August 26

AI agents need performance management like your people do

The big picture: Leading organizations are helping their talent and digital workers thrive side by side. People remain at the heart of technology transformation.
Why it matters: As AI agents take on more work, you need frameworks to evaluate and optimize their performance just as you do for human teams. This treats AI as a workforce decision, not just a technical one.
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Axios August 25

Data centers are reshaping U.S. economic investment and politics

The big picture: Data centers are the largest capital projects in human history and are driving unprecedented economic investment in the United States. They are central to the AI race and have become a major political issue.
Why it matters: Enterprise AI leaders operate in an environment where data center availability, location, and regulatory treatment are now front-and-center political and economic questions. Understanding the scale and sentiment around this buildout is essential to planning infrastructure needs.
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Fortune August 25

Land opposition is pushing data centers offshore

The big picture: Seventy percent of Americans oppose data centers in their communities, prompting companies globally to explore seawater cooling and offshore locations. This shift addresses local resistance to traditional onshore data center development.
Why it matters: Enterprise leaders must prepare for a future where data center options, costs, and latency profiles are shaped by location constraints. Offshore and alternative cooling solutions are becoming viable parts of infrastructure planning, not edge cases.
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Axios August 25

Climate group advises Democrats on data center backlash

The big picture: A climate-focused political group is sharing a memo with Democratic candidates showing how to capitalize on declining public support for data centers. The memo argues that public opinion on data centers is declining and presents a political opening.
Why it matters: Enterprise AI leaders should expect data center regulation and siting to become fiercer political battlegrounds. Policy around data center approval, permitting, and operations will likely shift based on electoral dynamics, making infrastructure planning more uncertain.
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Axios August 24

UAW and Deere face contract talks as AI demand boosts equipment sales

The big picture: The UAW and Deere are heading toward contract negotiations while construction equipment sales surge due to data center buildout demands. Union leaders are pushing back against AI companies and seeking labor protections.
Why it matters: Equipment makers like Deere are profiting from AI infrastructure growth, and labor is now demanding a share of those gains. Enterprise AI leaders should expect increased pressure on supply chain costs and labor conditions tied to the AI boom.
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MIT Sloan Management Review August 24

Build leaders by developing social capital alongside skills

The big picture: Leadership development programs traditionally focus on performance and execution results. The argument is that developing social capital and relationships should receive equal weight in developing the next generation of leaders.
Why it matters: Enterprise AI leaders oversee organizations undergoing rapid technological change. Building strong internal networks and relationships through leadership development helps teams navigate complexity and builds resilience during AI-driven transformation.
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Axios August 23

Texas governor warns AI data centers face backlash

The big picture: Gov. Greg Abbott told ABC that data center companies 'dug their own grave' by failing to win community support in Texas. Abbott is reversing course after once actively promoting the AI data center boom in the state.
Why it matters: Abbott's sharp shift reflects how local opposition is becoming a political force that reshapes governors' positions on AI infrastructure. This signals that even leaders initially supportive of AI growth may withdraw backing when communities push back.
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McKinsey Insights August 21

Real AI impact requires rethinking product development, not just new tools

The big picture: Most software teams see limited returns from AI tools. Teams seeing real impact are redesigning their entire product development system around AI capabilities, not simply adding new tools to existing processes.
Why it matters: Tool adoption alone won't drive meaningful change. Leaders need to commit to systemic redesign of how products are developed to extract real value from agentic AI.
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McKinsey Insights August 21

Reckitt moved three transformation levers at once

The big picture: Reckitt transformed its core business, separated noncore businesses, and reset its operating model simultaneously. This decisive reset cut business complexity, accelerated decisions, and improved margins.
Why it matters: Many leaders sequence transformation moves to reduce risk. Reckitt's parallel approach shows that bundled, coordinated action can deliver faster results and stronger competitive positioning.
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McKinsey Insights August 21

Reckitt restructured fast: three simultaneous moves

The big picture: Reckitt made three major changes at once: overhauled its core business, spun off noncore units, and rebuilt its operating model. The speed and scope paid off with faster decisions and stronger financial performance.
Why it matters: This shows that enterprise transformation doesn't have to be sequential. Bold, coordinated action can cut through complexity and unlock growth faster than gradual change.
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McKinsey Insights August 21

Scale AI impact by redesigning the entire product development system

The big picture: Most software teams are not seeing real value from AI tools alone. Real impact comes from rethinking the entire product development process around AI capabilities, not just adding new tools to existing workflows.
Why it matters: Enterprise leaders investing in AI often focus on individual tools rather than systemic change. Redesigning the full development lifecycle is what separates teams seeing measurable ROI from those stuck in pilot mode.
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Fortune August 21

Fully remote workers report higher well-being and lower turnover

The big picture: A study of 7,700 employees found that remote workers report the highest well-being and are less likely to quit. The research found little evidence that remote workers felt less connected to colleagues or workplace culture.
Why it matters: Enterprise leaders pushing return-to-office mandates should weigh these findings against turnover and retention costs. Remote arrangements may deliver measurable business benefits in employee retention that offset in-office collaboration concerns.
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MIT Sloan Management Review August 18

Stock and wealth can't stop good engineers from leaving

The big picture: Even companies offering unprecedented compensation packages struggle to retain top talent. OpenAI's average stock-based compensation of $1.5 million per employee did not prevent high-profile departures, as rivals like Meta competed aggressively for the same people.
Why it matters: Retaining key employees is as much a cultural and strategic problem as a financial one. Enterprise leaders investing heavily in AI teams need to understand that money alone won't solve turnover.
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Axios August 18

Women capture just a quarter of new AI jobs

The big picture: Women made up 26% of new AI hires in the U.S. last year, compared with 50% of hires in other occupations. Men landed 74% of AI roles despite these jobs being among the fastest-growing and highest-paying available.
Why it matters: AI teams are growing rapidly and commanding top salaries, but women are missing this opportunity at scale. Leaders building AI organizations should examine hiring practices and pipeline gaps that are driving this disparity.
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Fortune August 18

Companies work best when run like meritocracies, not families

The big picture: Reed Hastings believes elite companies cannot operate with the loyalty and permanence of families. Netflix's approach to treating layoffs as business decisions rather than betrayals helped make it a $315 billion company.
Why it matters: This mindset shapes how leaders hire, manage, and separate from staff during downturns. Understanding the boundary between company loyalty and business pragmatism is critical for building sustainable organizations.
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McKinsey Insights August 18

European pulp and paper industry refocuses on operations

The big picture: Europe's pulp and paper sector is contending with weaker demand, rising costs, and increased competition. Companies are shifting their focus to optimizing operations, commercial management, and capital allocation.
Why it matters: For enterprises in this sector, operational efficiency and smarter resource allocation have become survival priorities. This shift creates opportunities for AI solutions that improve process optimization and decision-making across production and financial management.
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Gartner Newsroom August 17

HR and IT leaders must jointly own AI transformation strategy

The big picture: Work redesign driven by AI adoption is becoming a shared challenge between HR and IT departments. Gartner predicts that by 2029, 30% of organizations will form blended HR-IT teams to accelerate AI enablement.
Why it matters: Enterprise leaders need coordinated HR-IT strategies to successfully implement AI. Siloed decision-making between these functions will slow deployment and miss opportunities to align workforce capability with technology capability.
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