You have probably seen the Microsoft advertising about poor Hank’s pizzeria. The commercial
The ad depicts a fairy-tale scenario where AI instantly transforms a business model and solves all of Hank's operational math in one go, without him needing to deal with messy spreadsheets.
I’ve seen the ad too many times now, and I feel really bad for Hank and his lack of business acumen.
First of all, while Copilot and other AI agents are incredible, if you look closely, Hank’s data appears to be neatly structured in a clean table. Anyone who has worked on real-world projects with non-data people knows how rare that is.
Getting costs categorized correctly, separating fixed from variable costs, understanding allocations, and reconciling totals is often the hard part. But it’s Microsoft and Copilot, which is a great tool, so they can have a pass on that one.
After Hank fixes his spreadsheet and points to a new sign in his window advertising the dollar slice, the camera pans to happy Hank and people lined up around the block to get their pizza.
Fortunately, the ad doesn’t show Hank’s P&L, Balance Sheet, or Cash Flow Statement because I suspect they would look pretty ugly. The bottom line is that in today’s economy and cost structures, Hank can't make money by generating only $8 of revenue per pizza.
And that is where the commercial becomes a surprisingly good business acumen lesson.
A Line Around the Block Doesn't Mean You Have a Good Business
One of the most dangerous misconceptions in business is confusing activity with profitability.
Hank has customers. Lots of them. The ovens are running. Employees are busy. Ingredients are flying out the door. Transactions are increasing. Revenue is flowing through the register. Social media is probably buzzing about the return of the legendary dollar slice.
Everything looks fantastic. Except perhaps the economics.
Every additional pizza Hank sells requires dough, sauce, cheese, toppings, boxes, napkins, labor, utilities, payment processing, cleaning, waste, and dozens of other direct and indirect expenses. On top of that, Hank still has rent, insurance, equipment, maintenance, taxes, technology, and all the other costs associated with keeping the doors open.
And somewhere buried inside that spreadsheet is the number that matters most:
How much money does Hank actually make every time he sells another pizza?
If the answer is very little, or worse, a negative number, then the line around the block isn't saving Hank's business.
It's accelerating his losses. Sell 100 pizzas at a loss and you have a problem. Sell 10,000 pizzas at the same loss and you don't have scale. You have a much bigger problem.
Welcome to the Difference Between Revenue and Profitable Growth
This is something we see all the time in our business simulations.
Participants become excited when revenue jumps 15%, 20%, or 30%. They celebrate market-share gains. They invest in capacity. They hire people. They increase marketing. They chase more volume.
Then the financial statements arrive:
And suddenly everyone realizes that growing revenue and creating economic value are two very different things.
Hank's dollar slice is a perfect example.
Perhaps the $1 slice is a brilliant loss leader. Maybe customers buy a $4 soda with it. Maybe they order additional higher-margin products. Maybe Hank has excess capacity during certain hours and the incremental contribution helps absorb fixed costs. Maybe the promotion brings customers into the restaurant who return later and purchase full-price products.
Those are legitimate business strategies. But notice what happened. We just stopped talking about AI.
We started talking about business acumen.
AI Can Do the Math. Hank Still Has to Understand the Business.
This is where I think the Microsoft commercial accidentally illustrates something incredibly important about the AI revolution.
The more powerful our AI tools become, the more important business acumen becomes!
That may sound counterintuitive.
If Copilot can analyze thousands of rows of data in seconds, build financial models, identify trends, calculate margins, develop forecasts, and recommend actions, shouldn't people need less financial and business knowledge?
I think exactly the opposite is going to happen. Because somebody still needs to ask the right question.
And somebody needs to look at an AI recommendation that says, "Bring back the $1 slice," and ask:
Does this actually make economic sense?
That person is Hank. AI can help Hank analyze his business. It shouldn't replace Hank's understanding of his business.
The New Business Acumen Is Knowing What to Ask Next
For years, we have taught business acumen as the ability to understand how a business makes money: how strategy, customers, operations, people, financial performance, and shareholder value connect.
AI doesn't make those connections irrelevant. It makes understanding them more valuable. Because increasingly, AI will give leaders an answer.
The competitive advantage will come from knowing whether it is the right answer to the right question.
Imagine Hank asking Copilot a few different questions:
Those questions could produce dramatically different recommendations.
And therein lies one of the most important business skills of the AI era.
The quality of the decision still depends upon the quality of the business thinking behind the question.
Poor Hank Needs More Than Copilot
I actually love the premise of the commercial. Small business owners should have access to sophisticated analytical tools. AI can democratize capabilities that once required analysts, consultants, complicated software, and enormous amounts of time. That's exciting.
But I would love to see the sequel. It's six months later. Hank is sitting at his desk. The line around the block is gone.
His accountant is sitting across from him.
And Copilot is open on the screen.
Hank types:
"Why am I selling twice as much pizza but have less cash in the bank?"
Now that is a business acumen commercial I would love to see.
And hopefully, before Hank brings back the $1 slice again, somebody teaches him about contribution margin.