Three weeks into her new role as VP of operations, Maria got an 11:47 p.m. Slack from her COO: Where are we on the Q3 supply chain numbers? She had sent him those numbers that morning. She sent them again.
By 6 a.m., Marias boss had changed the entire project scope based on a board conversation she didnt know had happened. By noon, hed ccd the CEO on a complaint about delaysdelays caused by his own shifting priorities.
Maria didnt push back: She absorbed the burden. She reframed his abrupt messages before forwarding them to her team. She stayed late recalculating projections to match his latest mandate. She deflected her teams frustration with careful explanations about strategic pivots. The work was exhausting, and it was invisible. Her team saw a supportive leader. Her boss saw smooth execution. No one saw the toll.
Many managers find themselves in this position: absorbing friction from above while protecting those below. Gallup research finds that managers account for at least 70% of changes in employee engagement, yet many of those same managers report feeling crushed by contradictory demands from their own bosses. McKinsey research confirms that the quality of the relationship with a direct manager is the single most important factor in employee satisfaction. The message is clear: The friction you absorb doesnt just affect you. It reverberates through everyone below you.
In my executive and team coaching work with senior leaders, I see this pattern repeatedly: A C-suite leader creates destructive organizational friction through a chaotic style, lack of personal accountability, and unchecked reactivity. And managers are left to absorb it.
Its an unsustainable dynamicbut one managers can counteract. Here are four strategies for navigating friction without burning out or compromising your effectiveness.
1. Name the Friction, Then Decide Whats Worth Absorbing
The first step is getting honest about which type of friction youre dealing with. Constructive frictiona boss who raises the bar, questions your logic, or forces you to confront underperformanceis uncomfortable but valuable. This is what I call healthy friction. If your boss is pushing you to eliminate inefficiency or rethink a flawed process, thats worth leaning into, not absorbing.
Destructive friction is different. Its energy lost to misalignment, rework, and emotional labor. Stanford management professor Bob Sutton identifies several types of destructive friction: unnecessary complexity that adds steps without adding value, ambiguity when goals keep shifting, emotional volatility that forces you to manage up constantly, and micromanagement that erodes autonomy.
Liz Wiseman, author of Multipliers, calls leaders who create destructive friction diminishers. They drain capability through behaviors like jumping in with answers or involving themselves in every decision.
To separate signal from noise, seek to understand whether this unnecessary interference is actually your boss managing real constraints you dont see. A sudden pivot might reflect CEO pressure. Increased scrutiny might follow a compliance issue. Research on the hidden realities of leadership shows that senior leaders frequently operate under pressures that are invisible to their teams.
Use these criteria to assess the situation:
Comprehension: Have you had a candid, vulnerable conversation with your boss to understand the origin of the friction? What specific behaviors create it?
Duration: Is this temporary or chronic? You can absorb friction during a crisis. You cant sustain it indefinitely.
Impact on outcomes: What is your role in creating or enabling the behavior? Does absorbing the friction improve results or just create an illusion of progress?
Cost to you and your team: What does it cost in time, energy, and team morale? Are you protecting your team or just delaying the impact? If talented people are leaving, youre not absorbing effectively.
Marcus, chief of staff at a healthcare startup, learned this the hard way: I spent three months resenting my CEOs constant questions about our hiring pipeline. I thought he was micromanaging. Then I learned we were six weeks from running out of runway, and he was trying to slow spending without panicking the team. I wish Id asked, What are you seeing that Im not? sooner.
2. Create Systems That Reduce Friction
Once youve diagnosed the friction, build systems to reduce itsystems that dont require you to be the constant intermediary.
The instinct is to work harder, absorb more, and hope conditions improve. But research consistently shows that individual effort cannot compensate for structural dysfunction. A Deloitte study finds that when productivity tools and ways of working lack clarity, they create more work rather than less. And Gallups engagement research shows that only 46% of employees clearly understand what is expected of them, a 10-point drop from 2020. When the system around you generates confusion, the solution is not to absorb faster. Its to redesign the system.
Four structural changes can reduce your role as the constant go-between.
Establish clear decision rights. Much friction comes from unclear ownership. When roles blur, decisions stall and accountability weakens. Bains RAPID framework (recommend, agree, perform, input, decide) can help. When Maria finally had this conversation with her boss, they discovered he wasnt trying to micromanage. He genuinely didnt know she had authority to approve vendor contracts under $500K.
Create predictable communication. Random check-ins create constant interruption. Your operating rhythm is a signal of how you leadit sets the tempo for decision-making, collaboration, and accountability. One director of product management I coached solved her bosss just checking in problem by instituting a Friday afternoon dashboard: three metrics, three decisions pending, three risks. He stopped asking because he knew hed get answers Friday, she said.
Document and share context. When priorities shift, capture the change and its rationale. A simple decision log helps everyone see how you got here and why yesterdays plan changed.
Build buffers into your processes. If your boss routinely changes direction, dont commit your team to immovable deadlines. Build in review points. Use phased rollouts.
3. Have the Conversation
Sometimes systems arent enough. You need to name the pattern directly. Your boss likely doesnt see themselves as creating friction; they see themselves as ensuring quality or responding to pressure from above. Research on managing up suggests framing it as a shared problem, not an accusation. Try the following scripts:
Frame it as shared: I want to make sure Im giving you what you need without overwhelming the team. Can we talk about how decisions are flowing right now?
Come with data: Weve reprioritized three times this month, which has added about 40 hours of rework. I want to understand whats driving these changes so we can build more flexibility into the plan.
Focus on impact, not intent: When requests come in after 9 p.m., the team feels like they need to respond immediately, which is creating burnout. Can we establish core hours for urgent communication?
Propose experiments: What if we tried a two-week sprint where priorities stay locked unless something is genuinely on fire?
Andrea, a senior director at a media company, used this approach when her bosss conflict-avoidant style created constant mixed messages. I told him, I think we both want the same thing: happy clients and a sustainable pace. Right now, were getting requests from three stakeholders who think they are all top priority. Can you help me understand how to sequence these? He didnt love the conversation, but he did start having clearer conversations with stakeholders.
4. Know When to Stop Absorbing, And Protect Your Own Leadership
Sometimes friction stops being fuel and becomes rot. Drawing on insights from organizational psychologists like Adam Grant, you can watch for three warning signs that conflict has crossed into dysfunction: Its chronic rather than tied to specific crises, its driven by ego or insecurity instead of real business concerns, and its starting to show up in exit interviews and the loss of your strongest people. At that point, continuing to quietly absorb the damage is not noble leadership. Its enabling a toxic culture.
You have three options:
Escalate. Share what youre experiencing with a skip-level leader or HR business partnernot as gossip, but as a risk flag. Weve lost three senior people in six months, and the exit interviews all mention the same concerns about unclear priorities.
Set boundaries. Let some friction flow downward or upward. If your boss demands weekend work for nonemergencies, say no. If they change priorities daily, push back: I need three business days to reallocate resources. If its truly urgent, tell me what were deprioritizing.
Leave. If the friction is chronic, youve tried to address it, and nothing changes, staying may be costing more than its worth. Make an exit plan.
James, former VP of Sales at a SaaS company, eventually chose to leave. After two years, I realized this is the job. And the job was making me someone I didnt want to be: short-tempered with my team, anxious on Sunday nights, too tired to be present at home. Leaving felt like giving up. Six months later, I can see it was the smartest thing I did.
The bigger risk, though, is what happens if you stay and dont change course. Deloittes research on leadership sustainability shows that burned-out leaders transmit their stress directly to their teams, creating a cascade that damages performance at every level. You become reactive instead of strategic. You model anxiety instead of steadiness. You teach your team that success means managing up rather than delivering value.
The Fallout from Friction
With time, Maria also realized this. I thought I was being a good boss by shielding my team. But I was teaching them that last-minute fire drills were normal. When one of my best people resigned, she said, I just want to work somewhere that feels calmer. I wasnt absorbing the friction. I was transmitting it.
So as you navigate friction from above, ask yourself regularly: What kind of leader am I becoming? What norms am I creating? What am I teaching my team about how work should feel?
Being a buffer matters. But being a buffer shouldnt require you to lose yourself in the process.
At a park near Canberra, Australia, a series of small white pyramid-shaped boxes are part of a new experiment: Can frog saunas help bring back an endangered species?
The green and golden bell frogan iconic Australian amphibian with a call that sounds like a cross between a power tool and a quacking duckis already extinct in the area. Like other frog species around the world, it was a victim of a deadly fungus called chytrid that has been killing amphibians for decades. But scientists are reintroducing the vibrant frog with the hope that a design intervention can help it survive.
[Photo: courtesy Simon Clulow/University of Canberra]
The sauna is a simple design, with bricks inside a plastic enclosure that heats up in the sun. The bell frog loves sitting in the heatand conveniently the high temperatures kill the fungus.
The technology we’re using is extremely low tech, said Simon Clulow, a conservation ecology professor at the University of Canberra leading the research. Thats good because everything we do in science and conservation, ideally, we want to be accessible, affordable, and scalable.
[Photo: Tyler Cherry/University of Canberra]
A new intervention backed by years of research
Clulow started thinking about the idea as a doctoral student, when he noticed that frogs in a university enclosure liked to sit in the holes inside bricks, probably because they could hide away and feel warmer. At the same time, he knew that the chytrid fungus was most dangerous when frogs got cold. That led to this idea: Could you create essentially pockets of disease refuge by creating little hot spots in the environment? he said.
[Photo: Tyler Cherry/University of Canberra]
Along with other researchers, he initially tested bricks that were painted black, but they didn’t get quite warm enough, so the small plastic greenhouse was added to help keep the bricks hotter. Research has shown that this type of environment makes a difference.
“We know for sure if we hold the frogs in a temperature-controlled cabinet at those sorts of temperatures for even just a couple of days, it usually leads to complete clearance [of the fungus],” Clulow said. “But even just short-term spikes clearly have beneficial effects.”
The green and golden bell frog used to be common on Australias eastern seaboard. It was widespread in every farm, in everyones ponds, and it was just one of those frogs probably nobody took much notice of because it was absolutely everywhere, Clulow said. Universities often went out to collect the frogs for use in biology classes. Then, in the 1980s, the fungus devastated the population, along with other species of frogs. Only a few isolated pockets of the green and golden bell frogs were left on the coast.
[Photo: Tyler Cherry/University of Canberra]
The places where the frogs survived were a little warmer in the winter, with water that was slightly more saline. That led to the second part of the intervention in the new studytiny ponds with slightly saltier water, which research has shown also kills the fungus without harming the frogs. (The salinity is only about two or three parts per thousand, not enough to taste salty if you drank the water.)
The scientists call the small saline ponds spas, and they’re set up next to the saunas. The new experiment is the largest of its kind. The research team installed 15 experimental wetlands sprawling over hundreds of square miles in Australias Capital Territory, with some areas acting as a control to see how well the interventions work. Theyve released around 450 frogs so far this year; the first generation was raised in captivity and given the extra boost of a vaccine against chytrid. The next generation, born in the wild, will rely on the saunas and spas to treat the fungus.
[Photo: Tyler Cherry/University of Canberra]
The real-world test
When we talked, Clulow had been up until 3 a.m. the previous night tracking the newly released frogs. They’re not hard to spot. “They have a really fantastic, obvious call, a little bit like a motorbike revving up,” he said, demonstrating the sound. The frogs have microchips so they can be tracked. So far, roughly a month after the first frogs were released, the population is thriving.
[Photo: Tyler Cherry/University of Canberra]
The first big test for the project will be in the upcoming Australian winter (during the North American summer), and then the following winter when the new generation of frogs will need to survive. The outside temperature can dip to negative 5 degrees Celsius, or 23 degrees Fahrenheit. Inside the tiny saunas, it can stay a toasty 77 to 86 degrees Fahrenheit.
The research team still needs to prove that the interventions work as well in the wild as they did in the lab, but the solution could potentially be replicated around the world. At least 90 species of frogs have gone extinct because of the fungus; hundreds of others are at risk.
Roger Sauerhaft thought he had done everything right. The 38-year-old PR consultant had been running his solo practice in New York since 2021, paying $1,189 a month for what seemed like good health insurance through his states individual marketplace.
In late 2023, he developed a medical issue that required a specialist, and started calling doctors’ officesonly to be turned away again and again. The closest in-network specialist was an hour away in Long Island.
One medical administrator was honest with him: His plan’s network was too restrictive. He needed broader coveragebut that wasn’t available to him.
“When you’re a solopreneur, your health is your business,” Sauerhaft says. “When you have a problem, you need to get it fixed really quickly. That requires access.”
Approximately 16.5 million Americans were self-employed as of January 2026, according to the Bureau of Labor Statistics. MBO Partners 2025 annual survey puts the number at 72.9 million, counting not just full-time self-employed workers but also part-time and occasional independent earners.
For solopreneurs and small-business owners across the U.S., individual marketplace plans are predominantly HMOs, or health maintenance organizations, which have narrow networks and require referrals to see specialists. PPOs, or preferred provider organizations with broader access, are available on marketplaces in only a handful of states or through employer-sponsored plans.
Most solopreneurs across the U.S. get their insurance from Affordable Care Act marketplaces. Premiums, deductibles, and out-of-pocket costs can eat up a significant portion of their income, and many plans restrict access to care through narrow provider networks. This gap leaves many paying high prices for plans that dont meet their needs, forcing them to choose between their health and their businessor find creative work-arounds to access better coverage.
Making it work
For Sauerhaft, HMOs were the only plans available on his states ACA marketplace, complicating his search for a nearby specialist. He looked at options from the Freelancers Union, but couldnt find anything better and began questioning the future viability of his business.
I thought about folding the business at that point, he says.
Instead, he expedited his wedding by a few months so he could join his fiancées employer PPO plan. He had gone independent to chart his own path, but the system had basically taken it away from me, he says.
Liang Zhao, 38, was able to set up her own independent PR practice in 2019, in part because she had access to health coverage through her husbands employer. But in September 2025, her husband was laid off. Their premiums for a family of three jumped from around $700 to $3,000 per month under COBRA (the Consolidated Omnibus Budget Reconciliation Act, a federal law that ensures individuals and their families are able to maintain access to healthcare coverage during certain life events, such as job loss).
“We’re literally one layoff away from an entire family losing coverage,” Zhao says. Historically, this country has set up a system where health insurance has been distributed through employers, so the whole system benefits larger employers who are able to negotiate better rates for their employees.
Solopreneurs who can’t rely on a spouse’s coverage have to get more creative.
For Bob Christie, an independent consultant based in New York who travels across the country for his work, having nationwide coverage is a prioritybut the state marketplace offers plans that work only in New York, or other states in an emergency.
A broker connected Christie with Iron Health Benefits Partners, a Nebraska-based company that works with independent contractors. He technically became their employeefilling out a monthly questionnaire for token paywhich gave him access to their Blue Cross Blue Shield of Nebraska group plan with nationwide PPO coverage. His premium: $1,321 a month.
Barriers to growth
When it’s time to expand, health insurance can be a formidable obstacle. Alvin Carlos, 34, a financial planner in Washington, D.C., built his solo practice into a five-person firm and knew he needed to offer coverage to attract and retain talent. But when he explored group plans for his five employees across five states, a broker’s quote came to $8,010 a monthmore expensive than individual coverage.
His solution was to turn to a Health Reimbursement Arrangement, or HRA. Carlos reimburses employees $300 to $1,000 monthly depending on whether they’re single or have a family, covering premiums, copays, and deductibles. HRAs are a tax-advantaged benefit that gives employees flexibility to choose their own plans. Hes increased the reimbursement once in 2026 due to premium spikes.
“Our health insurance system is broken,” Carlos says. “It is so expensive and it is so complicated.”
Navigating the rules
Sole proprietors and companies with few employees have to wade through a patchwork of state-specific rules, shifting eligibility standards, and premiums that keep going up.
Theyre in a very precarious position right now, says Jesse McDonald, a health insurance broker based in Milford, Connecticut. U.S. healthcare costs keep escalating, so the insurance that’s covering it gradually escalates. Its been a problem thats been getting worse and worse.
McDonald said enhanced premium tax credits during the pandemic briefly eased the burden for many independent workers, lowering monthly premiums and expanding eligibility. But those enhanced subsidies expired at the end of 2025.
Jennifer Chumbley Hogue, a Dallas-based health insurance broker, says 22% of her clients qualified for subsidies in 2025. Of those clients, about half went without coverage in 2026 after losing that support.
Still, she cautions solopreneurs not to assume theyre out of options, recommending they consult brokers with extensive knowledge of their local market and rules.
Fixing the access gap
For Sauerhaft, the barrier isnt cost but breadth of coverage.
“Even if I had to pay $2,000 a month for a PPO, I would have done it,” he says. “It wasn’t about affordabilityit was about getting access.”
He believes his states marketplace could better serve solopreneurs if it offered more middle-ground options between restrictive HMOs and PPOsor allowed people to pay more for greater provider choice.
Sauerhaft, whose own coverage crisis nearly derailed his business, sees the pain as a catalyst for change.
The more people who get caught in this broken system, the more awareness there will be, and hopefully pressure to fix it, he says. I am heartened by the fact that things are already much better today than they were 20 years ago, but progress can be slow.
A year ago at the Munich Security Conference, Vice President JD Vance accused Europe of using ugly, Soviet-era words like misinformation and disinformation to justify restricting dissent, and warned that its speech rules posed a greater threat to democracy than Russia or China.
Now the Trump administration is acting on that belief.
Earlier this month, as Secretary of State Marco Rubio addressed this years conference (in a far more conciliatory tone), the U.S. government launched Freedom.gov.
For now its just a landing page, but it is reportedly planned as a way for Europeans to duck content bans, including restrictions on hate speech and terrorist propaganda. Officials have discussed incorporating a built-in virtual private network (VPN) function that would make users internet traffic appear to originate in the U.S., effectively routing around European content restrictions. The project is overseen by Sarah Rogers, under secretary for public diplomacy; Edward Coristine, a former member of Elon Musks Department of Government Efficiency (DOGE), is reportedly working on the sites design.
The backdrop is escalating tension over tech regulation. European and U.K. authorities have tightened enforcement on social media platforms, recently opening investigations into X and its AI chatbot Grok over alleged rule-breaking and harassment. These moves have angered Trump administration officials, who see them as attempts to criminalize American companies and suppress speech.
Proponents might argue that it is merely the modern-day version of Radio Free Europe, which broadcast unfiltered news across the Iron Curtain, says Anupam Chander, an expert on global tech regulation at Georgetown Law. Thats likely how the Trump administration sees it: Officials have framed Freedom.gov as a champion of digital freedom and emphasized the State Departments long-standing support for the proliferation of privacy and censorship-circumvention technologies like VPNs.”
But others see it as interference. Democratic countries are likely to see the American portal as improper interference with domestic laws, says Chander, who believes countries might respond to the American freedom portal by ordering their internet providers to block it.
Paul Bernal, a professor of information technology law at the University of East Anglia in Norwich, England, expects the EU would simply block the site. Under laws like the Digital Services Act, Europe can bar platforms that attempt to evade its rules.
I can’t see how the Americans are going to stop them effectively blocking access, he says. Web-blocking capabilities exist. We do it for child sex abuse material. We do it for copyright. The result could become a kind of cat-and-mouse thing where the U.S. puts something up the EU blocks, then the U.S. puts it up somewhere else, and so on.
Bernal also rejects the administrations framing. There is no question to anyone who knows about free speech that Donald Trumps regime are very much anti-free speech, he says. Theyre closing down their enemies wherever they can, theyre taking over platforms like TikTok and TV stations like CBS in order to ensure they toe the line over political things.
In his view, the dispute is fundamentally about geopolitics rather than about freedom of speechand about Europe trying to limit the influence of American tech companies on its politics.
Last year was full of talk about tariffs. Are they coming up or going down? On which products and countries? How could businesses handle all the uncertainty? But while there was a lot of discussion of these fees, paid on imported goods and raw materials, there wasnt actually that much evidence of their price impact at stores. According to Amazon CEO Andy Jassy, thats about to change.
Tariffs had a modest impact on prices in 2025
Tariffs are a tax on businesses, which means youd expect that if tariffs go up, so do prices. But the effect of President Trumps ever-changing but always aggressive tariff policies didnt cause the huge price hikes and widespread economic damage many feared in 2025.
Economists offer several likely explanations. One is all the exceptions and carve-outs the government made after announcing the tariffs. What Trump threatens and what ends up being charged are often very different.
The actual tariffs are much lower than what were announced, and that is one of the reasons why the effects have not been as big as feared, Harvard economist Gita Gopinath told The New York Times.
Another big reason is timing. Trump hasnt been shy about his love of tariffs. That means many people got ahead of the new taxes by stockpiling goods before they came into effect.
Consumers and business time very-short-run purchases to try to minimize tariffs, according to the Budget Lab at Yale University. This can reduce the amount of imports of higher-tariffed goods and countries for a time.
But Jassy says this tactic to keep prices down may have reached its expiration date.
Amazons CEO warns of big pricing changes to come
Jassy spoke to CNBCs Becky Quick at the World Economic Forum in Davos, Switzerland, and said that so far, Amazon has seen some of the tariffs creep into some of the prices, some of the items. He continued: And you see some sellers are deciding that theyre passing on those higher costs to consumers in the form of higher prices, some are deciding that theyll absorb it to drive demand, and some are doing something in between.
But the days of these modest impacts may soon be over. I think youre starting to see more of that impact, he continued.
Many sellers simply dont have much of a choice but to pass on the cost of tariffs. At a certain pointbecause retail is, as you know, a mid-single digit operating margin businessif peoples costs go up by 10%, there arent a lot of places to absorb it, the Amazon CEO said. You dont have endless options.
No white knight is riding to consumers rescue
No matter what you might hear coming out of the White House, realistically, those options do not somehow magically include getting foreign suppliers to shoulder the cost of tariffs. A new study by the Kiel Institute in Germany found that a whopping 96% of the costs of tariffs are passed on to U.S. importers and consumers.
Nor can smaller businesses that are already squeezed keep shielding consumers indefinitely. When large retailers raised prices, smaller firms said, were going to try to not raise prices, giving them a competitive edge, Kyle Peacock, founder of Peacock Tariff Consulting, explained to Harvards Institute for Business in Global Society. But, he continued, they can only absorb it for so long.
Jassys comments suggest that the breaking point for many sellers is fast approaching. The Amazon CEO is far from the only business luminary issuing such warnings.
On a recent investor call, Nike cautioned tariffs could add about $1 billion in costs during its 2026 fiscal year. Mattel warned it may need to raise prices on toys, while Walmart likewise said it may be forced into selective price increases on imported goods.
Add to these existing pressures Trumps latest threats to slap further tariffs on European countries if they fail to go along with his weird neo-colonialist demand that they hand over Greenland, and the picture looks worrying.
Economists fret Amazons CEO is right
The Peterson Institute for International Economics worries all this could spell higherrather than lowerinflation this year.
The pass-through of tariffs to consumer prices has been modest to date, suggesting U.S. importers have been absorbing the bulk of the tariff changes. That will change in the first half of 2026, Lazard CEO Peter Orszag and PIIE president Adam Posen predicted.
The many reasons for the lagged pass-through include businesses pricing based on when their inventories arrived (and have since run out) and concerns around being seen as raising prices too rapidly (so they are instead gradually increasing them). This wont last, they continued.
Of course, who knows what Trump might do in the end. His track record has, to put it mildly, been inconsistent and changeable. But if he doesnt chicken out and change course, many economists clearly fear Amazon CEO Andy Jassy is right.
Hard-pressed U.S. consumers are hopin life gets more affordable in 2026. Theyre likely to face the opposite.
Jessica Stillman
This article originally appeared on Fast Companys sister website, Inc.com.
Inc. is the voice of the American entrepreneur. We inspire, inform, and document the most fascinating people in business: the risk-takers, the innovators, and the ultra-driven go-getters that represent the most dynamic force in the American economy.
A new word has entered the business headline writers lexicon over the last month: the SaaSpocalypse. Between mid-January and mid-February 2026, around a trillion dollars was wiped from the value of software stocks. The S&P North American Software Index posted its worst monthly decline since the 2008 financial crisis. Individual stocks have been savaged, with even Microsoft, the ultimate tech blue chip, falling by more than 10%.
The panic is real. But is it rational?
The catalyst for this turmoil was a series of product launches from AI companiesmost notably Anthropics Claude Cowork tool and its subsequent upgradesdemonstrating that AI agents are now capable of handling complex knowledge work autonomously. The markets interpretation was both swift and brutal: If AI agents can do what enterprise software does, then enterprise software is finished.
That narrative is clearly persuasive to those who have been busily dumping stocks. But it rests on a fundamental misunderstanding of what enterprise software is, what it does, and why replacing it isnt the straightforward proposition the market appears to believe.
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More Than a Tool
The simple premise behind the market turmoil is that AI agents will, in the not-too-distant future, be able to perform most or all of the tasks that are currently performed by enterprise software. But this vision of the future misunderstands enterprise software at a fundamental level. Enterprise software isnt just a set of tools. It encodes the enterprise itself. Decades of business rules, process flows, governance structures, compliance requirements, data definitions, and role-based permissions are held within these systems.
When a company runs on SAP, Salesforce, Microsoft, or ServiceNow products, its not simply using a suite of software that sits on top of the organization. These systems hold the organizations operating architecture in digital formthe institutional memory of how the business actually works in practice, every day, at every level.
Replacing enterprise software with a fully agentic enterprise isnt just a matter of swapping one piece of technology for another. The moat around enterprise software isnt the code. Its the accumulated domain knowledge, the business logic, and the deep integration with how organizations actually operate.
Three Fallacies Driving the Panic
The case for wholesale replacement rests on three assumptions. Each collapses under scrutiny.
The first is the change management fallacy. Putting enterprise software in place is not like installing an app; these are often multiyear organizational transformations involving workflow redesign, data migration, retraining, and deep integration across departments. Companies typically change ERP systems every 5 to 10 years, and even routine migrations require months of rigorous preparation.
The notion that organizations will undertake wholesale replacement of their entire enterprise architecturenot with new software, but with an entirely different paradigmignores the reality that change management is one of the hardest things organizations can attempt. The disruption involved in even incremental software upgrades creates significant operational risk. A complete paradigm shift involves risks to the business of an entirely different order of magnitude.
The second is the economic fallacy. Even if replacement were technically feasible, there is no compelling reason to believe it would be cheaper. Token-based AI pricing is expensive at the enterprise scale, and the world in which running agents across an entire organizations operations could cost less than current SaaS subscriptions is not yet the world in which we live. Token costs will fall over timewe can be sure of thatbut building a case for wholesale replacement on the assumption that they will fall far enough and fast enough to undercut the established economics of enterprise software involves stacking assumption on top of assumption.
Token costs are only one part of the equation. The true cost of running agentic systems includes orchestration, integration, data pipelines, monitoring, security, auditability, and the human time required to supervise and correct outputs. The last item is the one most easily underestimated: As agents take on more autonomous and more consequential work, assurance costs will rise, not fall. And even before you reach the question of ongoing costs, the price of the transition itselfthe data migration, workflow redesign, retraining, and inevitable disruption to operationswould be enormous.
The economic argument for replacement isnt just weak; at present, it barely exists. This isnt to say that its not plausible in some future world. But until we have a convincing map that leads there, its not a serious proposition.
The third, and possibly the most important, is the general-purpose agent fallacy. The assumption behind the market panic is that powerful, general-purpose AI agents will take over enterprise functions wholesale. But this doesnt reflect how AI actually delivers value today, and it may not reflect how agents ever deliver value.
Research consistently shows that AI works best when its targeted at specific problems with rich contextual grounding. A study conducted by the Australian government found that broad-access AI tools produced significant improvements in basic tasks like summarizing information and preparing first drafts, but that their lack of fit to users specific contexts undermined efficiency gains in more complex work. The result was a productivity paradox: Time saved through automation was consumed by checking and correcting outputs that lacked the domain-specific nuance the work required.
This finding has direct implications for the SaaSpocalypse thesis. General-purpose agents deployed to replace enterprise software will face exactly the same problem. Without deep local contextthe profound domain knowledge and specific workflow logic that enterprise software encodesthey will produce generic, unreliableoutputs that require constant human correction.
To work effectively at the enterprise level, agents need to be narrow, contextually rich, and tightly integrated with specific workflows. And once you start building agents that way, youre not replacing software as a service. Youre rebuilding it through an agentic lensat enormous cost and with no guarantee that the result will be better than what you already have.
What Leaders Should Do
None of this means the landscape isnt shifting. AI is changing how people interact with software and how organizations think about their technology investments. But the right response isnt to tear up the enterprise architecture. Its to evolve it. Rather than reacting to the panic, leaders should take three concrete steps.
1. Audit your vendors AI road maps. The strongest enterprise software providers are already integrating agentic capabilities into their platforms. If yours arent, thats a genuine concern, and it may be time to look for vendors who are. The question isnt whether to adopt AI, but whether your existing partners are doing it for you.
2. Invest in data quality and process documentation. The effectiveness of any AIwhether embedded in your software or deployed as agentsdepends on the quality of the data and the clarity of the processes it works with. This is the foundational investment, and it pays off regardless of where the technology lands.
3. Evaluate agentic approaches for genuinely new workflows. Where youre building new capabilities or addressing needs that your current software stack does not serve, purpose-built agentic solutions may be more effective and more flexible than new SaaS implementations. This is where the technologys real greatness lies.
Further reading
Do you really know what agent means? – Fast Company
How AI is changing what it means to be the CEO – Fast Company
The Trillion-Dollar Question
The SaaSpocalypse makes for dramatic headlines. But the idea on which those headlines are basedthat AI agents will soon be eating the lunch of enterprise software providersis founded on a misunderstanding about what enterprise software does. Its not just a tool that performs tasks. Its the digital encoding of the organizations institutional architecture. That isnt something a general-purpose tool can easily replace.
The real risk for business leaders isnt that they will be too slow to abandon their enterprise platforms. Its that they will be stampeded by market panic into undervaluing the systems and institutional knowledge they already have. AI will reshape enterprise softwarethat much is certain. But there is a meaningful difference between a technology that changes how software works and one that makes software unnecessary. That distinction matters. And for the moment at least, the market has lost sight of it.
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When a new general-purpose technology emergesbe it railroads, electricity, computers, etc.companies react in predictable ways. A small minority tries to reinvent themselves around it; the majority looks first for ways to cut costs.
Right now, in the middle of the most significant technological inflection since the internet, many organizations are choosing the second path. They deploy artificial intelligence to automate call centers, reduce head count in back offices, and squeeze marginal gains out of existing processes. They measure AI ROI in payroll savings and hours reclaimed.
It feels rational. It feels disciplined. It feels safe.
It is also the fastest way to miss the real opportunity.
Innovation waves are not efficiency programs
AI is not a new SaaS tool, nor is it merely a workflow enhancement. It is a rapidly evolving general-purpose technology advancing from large language models to agentic systems and toward systems that learn from interaction with environments (the so-called world models that can simulate, plan, and act).
When the underlying capability is shifting every few months, optimizing for cost reduction is like trying to improve the fuel efficiency of a car while its engine is being replaced with a jet turbine.
The organizations that win in moments like this do not start by asking, Where can we eliminate labor? They ask, What becomes possible that was previously impossible?
Those are radically different questions.
The productivity paradox should have been a warning
In the early 1990s, economists puzzled over a surprising phenomenon: Computers were everywhere, yet productivity statistics stubbornly refused to reflect their impact. In a press article, Nobel laureate Robert Solow famously quipped, You can see the computer age everywhere but in the productivity statistics. That observation became known as the “productivity paradox.”
At the time, many assumed the paradox was a failure of technology. My own research from that time examined why the paradox appeared at all, showing that productivity measurement lags widely behind actual transformational change and that the mechanisms of value creation were not captured by conventional metrics.
The explanation was obvious only in hindsight. The gains were diffuse, uneven, and entangled with organizational change. Companies had digitized old processes instead of redesigning them.
Today we are watching the same pattern unfold with AI.
AIs impact wont show up neatly in cost metrics
Artificial intelligence does not produce clean, linear productivity gains that fit neatly into quarterly dashboards. Its effects are asymmetrical. One employee using AI effectively may outperform 10 peers. Another may misuse it, degrade quality, or even endanger our corporate cybersecurity plans. Some teams redesign workflows entirely, while others bolt AI onto legacy processes and call it transformation.
The result is what researchers now call measurement myopia: the inability of traditional metrics to capture improvements that are real but not directly tied to hours worked or cost saved.
Trying to measure AIs value solely through immediate cost savings is like trying to measure the value of electricity by counting candles not purchased.
Efficiency is the comfort strategy, but not the opportunity one
Cost-cutting is attractive because it fits existing governance structures. CFOs understand it. Boards reward it. Metrics are clear.
Exploration is messier. It requires experimentation without guaranteed returns. It demands a tolerance for failure. It produces intangible benefits before visible ones.
But in periods of fast innovation, efficiency is often the comfort strategy of laggards who dont yet understand what is happening.
If AI is treated primarily as a head-count-reduction tool, organizations will optimize the present and sacrifice the future. They will standardize mediocrity instead of discovering leverage.
Exploration, not exploitation, builds capability
Advocating exploration does not mean abandoning discipline. It means redefining it.
Leaders should be asking:
What new products can we build with AI-native capabilities?
What decisions can we delegate to systems that learn from feedback?
How can we redesign workflows, not just automate them?
Companies should mandate controlled experimentation across teams, not restrict AI usage to narrow cost-justification pilots. They should treat AI like an R&D posture rather than a shrink-the-budget posture.
Organizations that treat AI as an exploratory layerencouraging teams to test, prototype, recombine, and rethink workflowswill build institutional fluency. They will develop internal champions. They will uncover unexpected value that no top-down cost initiative would have surfaced.
The real risk isnt overspending. Its under-imagining
The greatest risk in this moment is not overspending on AI. It is under-imagining it.
Companies that chase short-term efficiency gains may report modest improvements and declare success. Meanwhile, more ambitious competitors will redesign their operations, products, and customer experiences around capabilities that didnt exist two years ago.
Over time, the gap will not be a few percentage points of margin. It will be strategic.
In periods of rapid technological change, survival does not belong to the most efficient. It belongs to the most adaptive.
For decades, formative assessment has been a silent engine for learningpowering insights about student progress and worker readiness. But lets be honest, in a world where technology is evolving faster than human skills, its time to ask questions about traditional teaching and learning models, and in many cases, modernize them.
So, lets talk about formative assessment in the age of AI. Formative assessment is the ongoing process educators and workplace trainers use to understand where students are in their learning and how to adjust instruction accordingly, through homework, essays, quizzes, and short writing assignments. Eighty percent of educators rate formative assessment as extremely or very important. Unfortunately, but understandably, the arrival of generative AI has made it difficult for instructors to determine what students genuinely understand, as AI tools can produce polished work instantly.
THE FUTURE OF ASSESSMENT DESIGN
While administrative policy can help address improper AI use, the real potential for progress comes from evolving assessment design itself. When assessments are built to prioritize the thought process rather than just the product, AI becomes far less disruptive and far more beneficial. Asking students to make their thinking visiblethrough reflections, revisions, or short explanations of how they approached a taskrestores the instructional signal that AI might otherwise obscure. For educators, this means being able to spot misconceptions earlier, tailor feedback more precisely, and differentiate support without increasing workload.
This shift isnt about adding complexity. If anything, its about adding clarity. And its an opportunity to modernize assessment in ways that mirror the world students are entering. In most professional environments, AI assistance is not only allowed; it is expected. Success comes from knowing how to use these tools responsibly: checking sources, critiquing the quality of generated outputs, and adapting insights to novel contexts. Assessments that emphasize reasoning, analysis, and the ability to apply knowledge to new situations better reflect these real-world demands. They prepare students not just to complete tasks, but to think with AI in ways that enhance their learning and judgment.
TEACHER BENEFITS
For instructors, thoughtfully integrating GenAI within formative assessment can also reduce friction. Welldesigned tools can automate repetitive tasks such as generating varied practice items, suggesting targeted feedback language, or providing examples at different proficiency levels. This allows educators to spend more time on the highvalue interactions that deepen learning and provide individualized support. In an era of rising expectations and constrained capacity, that shift matters.
There is another often overlooked benefit: insight. When AI helps surface patterns in student work, it gives educators a clearer starting point for instruction. With better visibility, teaching becomes more adaptive, and learning becomes more personalized. This is especially powerful in large classes, hybrid formats, or virtual learning environments where realtime insight can be harder to access. Recent Pearson research reveals strategies for schoolteachers and higher education instructors to evolve their formative assessments in a GenAI era.
Of course, none of this happens automatically. Bold, collaborative action is required across school and highereducation leadership, administrators, and policymakers to ensure formative assessment evolves in meaningful and sustainable ways. Together, these groups play a critical role in providing a clear AI strategy, supporting educator training, and shaping an ecosystem that aligns curriculum, instruction, and assessment with responsible GenAI use.
This transition also requires assessments that reward thoughtfulness over polish, reasoning over rote, and application over replication. And it requires a shared understanding that AI is not a shortcut to learning but a catalyst for insightone that can elevate the quality of teaching when used intentionally.
A LOOK AHEAD
The future of formative assessment isnt about outsmarting AI or pretending it doesnt exist. Formative assessment must remain fundamental to good teaching and effective learning.
Ensuring AI strengthens reflection, feedback, and understanding will allow it to become a partner, rather than a substitute for learning. With thoughtful action, the integration of AI into teaching and learning can move us closer to what education has always aspired to deliver: deeper learning, clearer understanding, and better outcomes for every learner.
Tom ap Simon is the president of higher education and virtual learning at Pearson.
IBM stock was down 10% on Monday afternoon after Anthropic published a blog post about how its Claude Code tool can be used to modernize software written in the COBOL language, which handles large-scale batch transactions. Many of the software systems used by the federal government, banks, and airlines are written in COBOL (“Common Business-Oriented Language”), and most of those systems run on IBM mainframes.
IBM also generates revenue from servicing, modernizing, and consulting on those mainframes. If COBOL code were converted to a more modern language, the systems would likely migrate to newer cloud servers.
But modernizing COBOLwhich was developed 67 years agois a slow and expensive process, largely because the code can be difficult to understand and easy to break. It often reflects decades of institutional knowledge and workflows, and is frequently poorly documentedmeaning its true intent can only be uncovered through close analysis. These challenges are compounded by the shrinking pool of programmers who know COBOL. Most university computer science programs no longer teach it.
Anthropic says this analysis phase is the most time-consuming and costly. Thats where Claude Code comes in. The tool can uncover and document workflows hidden within the code, identify dependencies across different parts of a code base, and give engineers insights into how to redesign systems.
With AI, teams can modernize their COBOL code base in quarters instead of years, the company writes in the blog post.
IBM says the analysis phase is not the hardest part. “Translating COBOL is the easy partthe real work is data architecture redesign, runtime replacement, transaction processing integrity, and hardware-accelerated performance built over decades of tight software and hardware coupling,” an IBM spokesperson said in an email. “That is the problem IBM has spent decades learning to solve, and AI is the most powerful tool we have ever had to do it.”
COBOL was developed in 1959 via a public-private partnership that included the Pentagon and IBM, with the goal of creating a universal, English-like programming language for business applications. But private-sector companies have largely moved away from it. The code is difficult and costly to maintain and was designed for batch processing, making it poorly suited for modern cloud-based and real-time applications. (Anthropic and IBM did not immediately respond to requests for comment.)
The U.S. government, despite repeated modernization efforts, continues to rely on COBOL-based mainframe systems to manage a wide range of financial transactions, including tax payments and refunds, Social Security benefits, and Medicare reimbursements.
Anthropics blog post comes in the middle of a separate dispute between the company and the government. Anthropic CEO Dario Amodei is expected to meet with Defense Secretary Pete Hegseth to explain why the company has not removed all safety guardrails from its AI models for Pentagon use. Anthropic has drawn the line at providing AI for autonomous weapons or systems that mass-surveil American citizens. At the moment, Anthropics models are the only ones approved for government use with classified information.
Anthropic says its blog post about COBOL modernization is unrelated to its friction with the government. “The timing here isn’t related to a new product or any events,” a company spokesperson said in an email. “This is part of an ongoing series of content we’ve been publishing around code modernization and Claude Code.”
And Anthropic’s blog post may not be the only factor affecting IBMs stock. Investor concerns about the speed and breadth of AI deployment have depressed enterprise software stocks more broadly. The market may also be reacting to uncertainty surrounding new global tariff announcements, which could affect tech companies and their supply chains.
The Big Gulp might have some new competition in the realm of giant beverages from an unlikely dark horse: Dunkin‘.
Over the weekend, Dunkin’ customers in New Hampshire and Massachusetts began posting head-turning images of giant coffee buckets on the menu at their local stores.
While some commenters doubted the veracity of these reports, a Dunkin’ spokesperson confirmed in an email to Fast Company that the donut chain is indeed testing out a 48-ounce collectible bucket at select stores after noticing buzz around coffee buckets taking off on social media.
A coffee bucket is exactly what it sounds like: a giant iced latte served in a plastic container that looks more like a garden tool than a cup.
The novelty beverage took off this summer and appears to have been sparked by several different small businesses, including Noctua Coffee in Missouri, Dulce Vida in Oklahoma, and Wicked Southern Coffee in Connecticut, all of which attracted thousands of views on social media.
Dunkin’ is no stranger to jumping on a trend, so it makes sense that the brand would arrive at this moment in the social media zeitgeist with a bucket in tow. In the past few years, Dunkin has experimented with wacky concepts like an alcoholic drink line, a donut deodorant, and a horny Halloween donut. Heres what to know about its latest launch:
Where can I find the Dunkin bucket?
Dunkin’ told Fast Company that the coffee bucket test is taking place at select stores in New Hampshire and Massachusetts, but the company did not provide an official list of locations.
Internet sleuths and coffee fanatics have uncovered a few stores that reportedly carry the bucket, according to a cursory search of social media. We have requested the full list of participating stores from Dunkin’ and will update this story if we hear back.
What comes in the bucket?
According to the Dunkin’ spokesperson, guests can fill their coffee buckets with classics like iced coffee, iced lattes, or Dunkin’ refreshers.
Also available are three featured drinks: the blueberry cobbler iced latte, caramel coco iced coffee, and strawberry dragonfruit lemonade refresher. (We shudder to imagine the nutritional contents of these creations.) Customers report paying between $7 and $10 for their buckets.
How are customers reacting?
So far, customers main complaint for this behemoth of a beverage appears to be the impossible prospect of transporting it.
One Instagram Reel with almost 85,000 likes from creator Elijah Boivin shows Boivin cradling the bucket above the caption, Me holding my Dunkin bucket because I dont know where to put it because it doesnt fit in the cup holder.
A modern conundrum, indeed.
