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Hello and welcome to Modern CEO! Im Stephanie Mehta, CEO and chief content officer of Mansueto Ventures. Each week this newsletter explores inclusive approaches to leadership drawn from conversations with executives and entrepreneurs, and from the pages ofInc.andFast Company. If you received this newsletter from a friend, you cansign up to get it yourselfevery Monday morning. Leaders, are you listening to your frontline employees? Two billion people worldwidethats 80% of the global workforcemanufacture products, provide services, or work directly with customers. Theyre often the first to see or hear about problems, and listening to their insights can help avoid headaches. Steven Kramer, CEO of workforce management software company WorkJam, shared an example of a retail client whose salespeople noticed a batch of sweaters that had uneven sleeves. They shared information about the defect with management, and the company was able to pull the item from the stores. They might have sold thousands and thousands of the items, which would have led to bad publicity for the organization and a big return event for the stores, Kramer says. Empowered and well-supported frontlines will lead to better business results. Unfortunately, companies are losing ground when it comes to engaging their frontline workers. Consultancy Mercers annual Inside Employees Minds study finds that two-thirds (66%) of frontline workers in 2024 said they were motivated to go above and beyond what is normally expected of me to make my company successful, down five points from 2023. In contrast, more than three-fourths (76%) of salaried workers said they were motivated to go above and beyond. Clocked in, but tuned out Employees offer many reasons for their dissatisfaction, including financial strain and barriers to career advancement. Many bear the brunt of customer anger and incivility, which has risen steadily and sharply in the last decade. And some feel their feedback isnt valued. How can CEOs and other executives glean insights from on-the-ground employees? WorkJams Kramer, not surprisingly, advocates using technology platforms to engage in a two-way dialogue with workers. WorkJams clients can offer their employees a mobile app that enables pulse surveys and messaging among workers and managers, allowing frontline employees to flag issues in real time. Management, in turn, can provide updates and information that might normally not reach workers in the field. Employees want to have this digital connectivity, Kramer says. They want to feel connected to their leadership and understand the values and the objectives of the company. (When it comes to artificial intelligence technologies, employees in the field are more skeptical, according to a June 2024 study by BGC, with about 22% expressing anxiety over generative AI, compared with 18% of managers and 15% of leaders.) Start the conversation Of course, the best way to solicit information from frontline workers is to actually talk to them. When leadership expert Bill George was CEO of medical device maker Medtronic, he says he tried to spend 30% of his time with frontline employees. (The remaining 70% of the time was spent with customers, executives, and external employees.) In contrast, the leaders who participated in Michael Porter and Nitin Nohrias oft-cited 2018 study on CEO time management spent just 6% of their time with rank-and-file employees. If they spend 30% of their time with frontline workers, theyll better understand the needs of both customers and employees and will be better able to lead their companies, George wrote in a 2022 article for Harvard Business Review. Scott Salmirs, president and CEO of ABM Industries, which provides infrastructure, maintenance, and facilities services to clients ranging from airports to elementary schools, says he encourages his executives to do time in the field. Adds Salmirs, whose company employs more than 100,000 team members and frontline workers: You have to be out there building relationships, being present and engaged. Its all about connecting with, inspiring, and learning from the field. Are you fostering a culture of communication? ABM also runs a “Shark Tank”-style event where frontline employees can pitch ideas to leadership. We tell our frontline team, if you come up with innovations, youll be recognized and rewarded, Salmirs says. When youre in the field, you know what the clients want more than somebody sitting in corporate. Such pitch contests have become a hallmark of companies on the Fast Company Best Companies for Innovators list, an annual program that recognizes businesses that empower employees at all levels to improve processes, create new products, or invent new ways of doing business. If your company has an interesting way of enlisting your frontline workers to help you innovate, share your story with me at stephaniemehta@mansueto.com, and consider applying to be a Best Workplace for Innovators. The final deadline is March 28. Read more: Leading from the front The 100 Best Workplaces for Innovators 4 ways AI and tech tools can help frontline workers progress How to get your frontline to make your business their business Feedback from the frontline is every CEOs superpower
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E-Commerce
Super Bowl Sunday always mints a lot more winners and losers than just those who play in the game. Its the biggest day in sports betting annually, with the American Gaming Association estimating a record $1.39 billion in the big game last month. For casual sports bettors, a Super Bowl wager might be enough gambling to last the entire year. For many others, though, it was just a warm-up for the 67 games of March Madness, the NCAA Division I Men’s Basketball Tournament, which kicks off this week. Sports betting has been a huge growth industry in the U.S. since it was legalized nearly seven years ago. With the help of online gambling companies such as DraftKings, legal sports betting brought in $13.7 billion in 2024 alone, up from $248 millionwith an “m”in 2017, when the industry was last restricted just to the state of Nevada. According to a new study, however, this enormous growth has come at the expense of financial stability, mental health, and a happy family life for millions of Americansespecially members of Gen Z. Intuit Credit Karma commissioned the study from data firm Qualtrics ahead of March Madness, to shed light on some of the collateral damage wrought by the booming sports betting industry. Plenty of people bet on sports very manageably and responsibly, says Courtney Alev, consumer financial advocate at Intuit Credit Karma. But like any vice, it can be a slippery slope. The studys findings show just how harmful sports betting has become since the 2018 SCOTUS decision in Murphy v NCAA made it legal in 38 states and Washington, D.C. Nearly a quarter (23%) of 1,000 respondents who engage in sports betting, or have a partner who does, admitted to being sports betting addicts. Almost the same number (22%) said that betting had caused financial distress for themselves and their families. And nearly half (48%) of all respondents claimed to have experienced mental health issues including depression as a result of their betting activity. [Images: Geenee/Adobe Stock, 3dsculptor/Adobe Stock] A separate, similar study published last month by the Journal of the American Medical Association (JAMA) further attests to the addictive nature of sports betting. That study analyzed aggregate Google search trends over the past eight years for queries that mentioned such words as gambling, addiction, and anonymous, and found that searches for help with gambling addiction cumulatively increased by 23% across the country in that time. One demographic that seems particularly susceptible to sports betting addiction, according to the Intuit Credit Karma study, is Gen Z37% of whom reported being addicted. Thats 14% more than the number of respondents across all age demographics claiming to be addicts. We’re seeing that sports betting is really impacting Gen Z at higher rates, which likely has a lot to do with just how digitally native that generation is, Alev says. Growing up in an era where everything is online, sports betting has just become another piece of that. Indeed, part of the reason so many users of all ages have gotten in over their heads seems rooted in online bets taking all the friction out of gambling. The rise of online sportsbooks such as FanDuel and ESPN Bet has essentially given most Americans a casino in their pocket at all times. Its no wonder theyre reportedly responsible for 95% of all sports betting in the U.S. These companies are known to spend up to a billion dollars annually on marketing, which anyone whos watched an NFL game in recent years can attest. Part of their strategy for enticing new customersand maintaining existing onesis through eye-popping promotions that can be difficult to resist. FanDuel and DraftKings, for instance, both offer newcomers $150 in bonus bets on their first $5 bet, and sometimes offer deposit bonuses, matching a percentage of new money players add to their sportsbook accounts. Bonuses like these give the betting-curious uninitiated a positive early experience, hooking them in for the long haul. As the Intuit Credit Karma study reveals, about a quarter of bettors (24%) pointed to these bonuses and incentives as primary motivators for their sports betting activity. In addition to gathering data on the financial distress that follows many Americans sports betting, the study also reveals its impact on their partners and childrens lives. We wanted to focus on the family aspect of it too because if you’re addicted to something like sports betting, you might have blinders on in terms of whether you actually have a problem, Alev says. A lot of spouses and children deal with those negative implications, maybe even more so than the bettor themselves. To that end, roughly a quarter (23%) of partners of those surveyed claimed they’ve had to pull from their children’s college funds to either keep the hobby going or pay off debt related to it, while 16% reported abuse and another 16% reported family estrangement. Not many guardrails exist to keep sports bettors from hitting bottom. Although the American Gaming Association launched the Have a Game Plan campaign in 2019 to encourage responsible betting, actual protections have been scant. In order to defend themselves and their families, Alev offers a common-sense solution for casual sports bettors: building in friction. Don’t save your credit card numbers, hide your card somewhere where you have to go find itmake it not just as simple as a click to be able to bet, she says. The important thing is forcing yourself o pause and reflect on where you are and the behavior. Beyond individual solutions, the JAMA study proposes some sweeping steps the U.S. government could take, including increased funding for gambling addiction services, enhanced advertising regulations, and stronger safeguards, such as betting limits and age limits, enforced breaks, and restrictions on credit card use for gambling. The most effective solution, however, seems both obvious and elusive. As the Intuit Credit Karma study points out, 28% of sports bettors wish sports betting was illegal again.
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E-Commerce
The biggest concern for most people when it comes to AI and work is: Are robots going to take our jobs?Honestly, were right to be concerned. According to McKinsey & Company, 45 million jobs, or a quarter of the workforce, could be lost to automation by 2030. Of course, the promise is that AI will create jobs, too, and weve already started to see emerging roles like prompt engineers and AI ethicists crop up. But many of us also have concerns about how AI is being incorporated into our fields. Should a bot host a podcast, write an article, or replace an actor? Can AI be a therapist, a tutor, or build a car? According to a Workday global survey, three out of four employees say their organization is not collaborating on AI regulation and the same share says their company has yet to provide guidelines on responsible AI use.On the final episode in The New Way We Works mini-series on how AI is changing our jobs, I spoke to Lorena Gonzalez. Shes the president of the California Federation of Labor Unions, a former assemblywoman, and has written AI transparency legislation, including a law designed to prevent algorithms from denying workers break time. While there are many industry-specific concerns about AI in workplaces, she says that some of the most effective and impactful AI regulations address common issues that touch on many different types of workplaces. Robot bosses and algorithmic management Gonzalezs first bill on algorithmic management applied specifically to warehouses. We wanted to give workers the power to question the algorithm that was speeding up their quota, she said. Gonzalez explained that there was no human interaction and it was leading to an increase in warehouse injuries. What we started with in the warehouse bill, we’re really seeing expand throughout different types of work. When you’re dealing with an algorithm, even the basic experience of having to leave your desk or leave your station . . . to use the restroom, becomes problematic, she says. Taking away the human element obviously has a structural problem for workers, but it has a humanity problem, as well.” Privacy Gonzalez is also working on bills regarding worker privacy. She says some companies are going beyond the basics of watching or listening to employees, like using AI tools for things like heat mapping. Gonzalez also says she’s seen companies require employees to wear devices that track who they are talking with (in previously protected places like break rooms or bathrooms), and monitoring how fast workers drive when not on the clock. Data collection and storage A third area of focus for Gonzalez is data that’s being taken from workers without their knowledge, including through facial recognition tools. As an employee, you have a right to understand what is being taken by a computer or by AI as you’re doing the work, sometimes to replace you, sometimes to evaluate you, she says. These are issues that came up in the SAG-AFTRA strike last year, but she says these issues come up in different forms in different industries. We’ve heard it from Longshoremen who say the computer works side-by-side to try to mimic the responses that the worker is giving, she says. The workers should have the right to know that they’re being monitored, that their data is being taken, and there should be some liability involved. Beyond these broader cases of AI regulation, Gonzalez says that business leaders should talk to their employees about how new technology will impact their jobs, before its implemented, not after. Those at the very top get sold on new technology as being cool and being innovative and being able to do things faster and quicker and not really going through the entirety of what these jobs are and not really imagining what on a day-to-day basis that [a] worker has to deal with, she says. Listen to the full episode for more on how workers are fighting for AI regulation in industries like healthcare and retail and the crucial missing step in AI development Gonzalez sees coming out of Silicon Valley.You can listen and subscribe to The New Way We Work on Apple Podcasts, Google Podcasts, Stitcher, Spotify, RadioPublic, or wherever you get your podcasts.
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E-Commerce
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