One of the joys of speaking with dozens of business leaders every week while delivering our business acumen and business leadership programs is hearing all the new buzzwords being thrown around.

Some of it is corporate jargon and blather that will disappear in six months. But I try very hard to listen through the noise because every once in a while, what sounds like another buzzword is actually a weak signal that something important is changing.

Over the past several months, one of those signals has been getting louder: Scale.

Voices of Leadership

“We are making an investment so we can really scale this thing.”

“AI is the catalyst we have been waiting for to achieve massive scale.”

“The world is getting smaller, which gives us an incredible opportunity to scale.”

Scale certainly isn't a new concept. Business leaders have been obsessed with it for hundreds of years.

But I am beginning to think the definition is changing.

The Old Economics of Scale

What really got me thinking about this were the television advertisements for Starlink.

Internet virtually anywhere. Satellites orbiting the earth. Infrastructure being created at a level that would have sounded like science fiction not very long ago.

Whatever your opinion of Elon Musk, there is an interesting business principle connecting many of the businesses he has been involved with: the pursuit of usable scale. Electric vehicles aren't very interesting economically if you can manufacture only a few thousand of them. Space travel changes dramatically when rockets can be reused. Satellite internet becomes something entirely different when thousands of satellites can create a global network.

Amazon did something similar in a completely different way. What began as an online bookstore became an infrastructure capable of connecting millions of products, customers, sellers, warehouses, transactions, and eventually computing resources.

But none of this is really new.

The Industrial Revolution was fundamentally about scale.

Machines allowed companies to produce more goods with fewer hours of human labor. Railroads expanded reachable markets. Electricity enabled larger and more productive factories. Telecommunications allowed businesses to coordinate activities across increasingly large distances.

For most of business history, however, achieving scale required something very important: More.

More factories. More machines. More people. More capital. More inventory. More distribution. More infrastructure.

Yes, businesses became more efficient as they grew, creating the economies of scale we all learned about in Economics 101. But getting bigger generally required significant incremental resources.

That relationship is beginning to change.

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As a person who studies business acumen for a living and has been doing so for more than 50 years, I can sleep pretty well at night without worrying that AI is going to take over the world and kill all the humans.

Turn on the news, listen to a podcast, or spend ten minutes scrolling through your social media streams, and you might reach a different conclusion. Apparently, artificial general intelligence is coming, superintelligence is right behind it, millions of jobs are going to disappear, humans will become obsolete, and the machines will take over sometime around a week from next Thursday.

Maybe.

But I have a slightly more cynical, and much more boring, business acumen perspective.

Eventually, somebody has to pay for all of this. And that is where things get interesting.

A Little History Lesson

Over the past 150 years, we have seen versions of this movie before.

Banking became enormously powerful and complicated. Pharmaceuticals experienced explosive innovation and investment. Agriculture industrialized. Telecommunications transformed the world. The internet created entirely new industries. Software changed virtually every business process. Cryptocurrency arrived promising to reinvent money itself.

The technologies were different, but the business cycle often had some familiar characteristics.

An exciting new opportunity emerges. Capital pours in. Companies race to establish leadership. Investors reward growth. Competitors spend aggressively because nobody wants to be left behind. Infrastructure gets built. Talent becomes incredibly expensive. Expectations become enormous.

For a while, almost nobody wants to be the person in the room asking the boring questions.

How much is this costing us? Where is the return? When will this investment generate positive cash flow? What happens if demand doesn't grow as quickly as projected? What are the risks?

And perhaps the most important business acumen question of all: Is the next dollar we invest going to create more value than the last dollar we invested?

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Within the past month, the number one burning issue I have heard from business leaders, ranging from pharmaceutical companies to professional services firms, has been how to respond to customers demanding lower prices for products and services because a company “uses AI.”

The argument sounds logical.

“You’re using AI. AI makes your people more productive. The work takes less time. Therefore, you should charge me less.”

Maybe.

But maybe not.

For any business, using AI has two edges to the sword. On the one hand, when people who know what they are doing use AI effectively, they can create significant efficiencies, produce better work faster, and sometimes more cheaply.

On the other hand, AI isn't free, and there is a much steeper learning curve than most people understand. Companies are investing enormous amounts of money in platforms, infrastructure, integration, security, governance, training, and new capabilities. And when you factor in rework and lost productivity from people misusing AI and producing what has affectionately become known as “AI slop,” the economics aren't nearly as simple as customers might think.

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As the calendar turns and summer is over, business leaders realize things get much more serious. There is one month left in the third quarter and precious little time to make a major impact on the fourth quarter. And then, before we know it, Q1 2027 will be here.

On top of all that pressure, we are living and working in unprecedented times. Economic uncertainty, rapidly changing technology, geopolitical issues, shifting customer expectations, and AI are creating challenges and opportunities at a pace most organizations have never experienced.

It is why I continue to hear business leaders say some version of the same thing:

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When I first saw the number, I laughed it off as someone on our Operations team making a simple mistake. There is no way that only 58% of all the enrolled participants are actually showing up for their leadership training.

But upon further review, the number wasn't a mistake. Over the last three years, we have seen a steady decline in attendance from 67%, to 61%, to 58%.

Ten years ago, very few people would dare not show up for a leadership training program. Being selected was considered a privilege and a visible sign that the company was willing to invest in your career. Today, too many employees view training as something closer to a punishment.

Another meeting. Another day away from the work. Another eight hours of emails piling up while someone teaches you a leadership model you may or may not ever use.

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