When you go to work for Volvo in Gothenburg, Airbus in Toulouse, or Honda in Japan, nobody hands you a little white card indicating that you’re enrolled in the company’s health plan. A mechanic in Gothenburg, an avionics technician in Toulouse, and a machinist in Yokohama have health coverage that has nothing to do with their employment status.

When you go to work for General Motors in Michigan it does. Oh, and if you belong to the UAW and work for General Motors in Michigan you get a different white card than the folks who work in accounting.

Why?

The answer has nothing to do with healthcare.

It’s an accident of history that traces its roots to a federal wage freeze enacted in 1942 that brought Rosie the Riveter into the job market to make planes, tanks, and uniforms for American forces.

Nearly eighty-five years later, a significant portion of America’s $5 trillion healthcare system remains organized around an 84 year old workaround created for a wartime labor shortage.

Soldiers came back from the war, went to work for one company for their entire career and were handed a gold watch on their last morning. That world no longer exists. We change careers, change companies, and no one is waiting for the gold watch and the pension.

Today, more than 70 million Americans, 36 percent of the workforce, freelance, consult, contract, or drive for a platform. By 2027, that number will cross 50 percent. One in six workers is staying in a job they want to leave because they cannot afford to lose their health insurance.

Researchers have a name for it. They call it job lock. There is a companion phenomenon called entrepreneurship lock, the business that never launched, the risk that was never taken, the idea that died in a cubicle because the founder could not afford to walk away from their benefits because of a family member’s pre-existing condition.

A traveling nurse is equally valuable as their hospital based peer. The hospital based nurse gets employer provided care for themselves and their family. The traveling nurse is on their own.

We built it for Rosie the Riveter, sustained it for the organization man. We reward and subsidize the corporate worker and ignore the uber driver, the IT contractor, and the waitress because of an eighty year old workaround.

The clock is ticking. Gig work is overtaking traditional employment and neither the healthcare nor employee benefits market is structured to deal with this evolution.

Every debate about healthcare eventually becomes a fight over insurance companies, pharmaceutical companies, physicians, hospitals, unions, employers, or government. We argue endlessly about the participants. We rarely question the architecture connecting them. Yet architecture determines incentives, incentives determine behavior, and behavior determines outcomes.

The solution isn’t clinical. The solution isn’t political. The solution is architectural. The same architecture we applied to education and to housing. North Star, Hub, Scoreboard, Clock, and Throttle.

The North Star for a developed economy is, or should be, access to healthcare regardless of how or if a person earns a living.

Employers are the hub of the system today. It’s an administrative and economic burden that our global competitors do not face. It’s a tax on business that creates a structural disadvantage for American manufacturers competing in a global marketplace. It holds down wages. Every dollar an employer spends on spiraling health insurance premiums is a dollar that never shows up in a paycheck.

The hub should be a free market where the individual is empowered to make their own decisions about providers and where decisions are made by providers and not by clerks from payors.

The problem is not employers. The problem is that healthcare is attached to the employer instead of the individual.

A passport belongs to the individual. A Social Security number belongs to the individual. A driver’s license belongs to the individual. Healthcare should belong to the individual as well. It should travel with the individual from job to job, company to company, and through every stage of life. A temporary employment setback shouldn’t burden the individual with outrageous COBRA premium because their company downsized or sold a division to private equity.

The scoreboard for our health system should not be activity. Physicians should be compensated on outcome not on the volume of procedures completed. Every procedure, visit, and service a doctor performs is assigned an RVU value by the American Medical Association. Medicare uses those values to set reimbursement rates. Private insurers largely follow Medicare’s lead. The more RVUs a physician generates, the more they get paid.

It’s not working. America’s maternal mortality rate of 22 deaths per 100,000 births trails Albania, Croatia, Finland, Denmark, and Singapore. Our rate of chronic preventable disease reveals the same problem. $5 trillion, almost $15,000 per person isn’t working.

The throttle is investment in outcome based care that redirects the $5 trillion into care that works. To care that reduces our maternal mortality rate and the epidemic of chronic preventable diseases.

I’m not suggesting the system pay for facelifts. I’m saying that we pay for treatments that work and that those decisions should be made by providers and not by procurement managers who negotiated a good deal with a PBM. If a treatment works, fund it. If it doesn’t kill it.

All moonshots are audacious. Starting a business is audacious. Changing careers at fifty is audacious. Leaving a company to build something new is audacious. Caring for a sick spouse while working part time is audacious.

Why are we allowing healthcare portability to stand in the way of those choices?

We built this architecture for Rosie the Riveter and sustained it for the organization man. Both served America well. But the labor market they inhabited is disappearing.

We don’t tell people where they can bank based on where they work. We don’t tell people where they can buy groceries based on where they work. We don’t tell people where they can buy a car based on where they work. Yet somehow we’ve accepted the idea that an employer should determine which physicians, hospitals, pharmacies, and specialists we can access.

The architecture no longer matches the world it serves. It’s time to build one that does.

I tied myself in a knot this week thinking about the housing crisis. There are numerous logical market-based quick fix solutions. Repurpose commercial office space. Repurpose closed military communities. But none of those solutions address the root of the problem. They don’t address the causes of the mismatch between the supply of and demand for affordable housing. Nor do they provide entry into the housing market for first time homebuyers to allow them the opportunity to build wealth through property ownership.

The deeper I dug into the housing crisis, the more I realized that it is not a standalone crisis. It is the visible manifestation of interconnected failures in mental health, transportation, education, housing finance, banking, zoning, immigration, and drug policies. Every proposed solution collides with another system operating under a different set of incentives, constraints, and political realities. There is no hub that connects the dots and proposes a coherent set of strategies that address the conditions that underlie our current homelessness and housing challenges.

Which is really what The Architecture of Competence has been about from the beginning.

At its core, the architecture of competence is about the operational art of getting things done. It’s the discipline of connecting tactical action to strategic outcomes under real-world conditions of friction, uncertainty, limited resources, politics, time, and human failure.

The government knows how to do this. They did it during the COVID-19 pandemic with Operation Warp Speed. The government was the capital allocator, the synthesis hub, the logistician that shrunk a 70 month vaccine development timeline into 11 months. They allocated capital to Pfizer, Moderna, and Johnson and Johnson while ensuring that information was shared across all the organizations. They secured personal protective equipment and mobilized the nation’s manufacturing base to fill gaps in interrupted, broken, and vulnerable supply chains.

That architecture is the missing piece in developing coherent strategies that address the housing crisis. Addressing housing without addressing minimum livable wages, public transportation, education, narcotics policy, immigration, and veterans treatment is the equivalent of treating covid by handing out hand sanitizer and masks without investing in the vaccine capable of stopping the spread of the virus.

According to a 2024 Harvard study, more than 770,000 people experienced homelessness, the highest number ever recorded. This was an 18% increase over the prior year. That number is a floor, not a ceiling. The unhoused are the most visible victims. Behind them sit 22.7 million renter households who spend more than 30% of their take home pay on housing, a record high for the fourth consecutive year. Behind them come another 8.5 million households that are severely cost-burdened or living in substandard housing. 150,000 of the unhoused are children, a 33% increase over the prior year, the largest single year increase of any population group. A child experiencing housing instability will be more likely to experience health challenges, emotional distress, and fall behind academically.

These are not housing statistics. They are the measurable human fallout of systems that were never designed to talk to each other. The path into homelessness is rarely a straight line. It runs through failed handoffs between mental health, substance abuse, employment, veterans services, immigration, and housing. Nobody owns the intersection. Nobody is responsible for catching people before they pitch a tent under a highway underpass in Los Angeles or Houston.

The North Star is an adequate supply of housing inventory at all income levels with safety nets to catch the people who, for whatever reason, fall through the cracks. The safety net isn’t an apartment alone. It’s a network of services that address domestic abuse, substance abuse, and PTSD among others.

The Hub is the engine for synthesis of data. In this model the federal government is a resource allocator and data collector that creates the incentives for the private sector to invest in low income housing. These incentives could come in the form of loan guarantees, tax breaks, and logistics. The government must use their massive purchasing power to drive down costs, speed zoning decisions and permitting processes to get inventory into the system.

The Hub’s first step is a joint interagency task force between HUD, HHS, ICE, DEA, and transportation among others to better understand the root causes of homelessness and target neighborhoods where low income housing is most needed.

The Hub without a clearly defined clock and scoreboard is just another committee. A Hub without a throttle to accelerate programs that work and kill programs that don’t is just another failed bureaucracy. The architecture of competence requires the North Star, Hub, Clock, Scoreboard, and Throttle to be deployed and coordinated by leaders committed to rigorous analysis and disciplined execution.

The clock is running. Homelessness increased 18% in a single year. Child homelessness increased 33%. These are not gradual trends. They are acceleration signals. The scoreboard has to reflect that urgency. Success isn’t measured in housing starts, loan guarantees issued, or task forces convened. It is measured in households stabilized, cost burden reduced, children housed, and veterans off the street. If the programs aren’t moving those numbers they get killed and the capital gets redeployed.

The solution isn’t a single policy. And it isn’t a massive public bureaucracy. There isn’t one single silver bullet solution that will put an end to the housing crisis. The solution is integrated policy that leverages both public and private resources. A policy that addresses supply and demand imbalance, supports pathways to living wage employment, and provides access to shoulder services that address the underlying factors that contribute to chronic housing challenges.

We have seen public private partnerships before and we have also seen the consequences when oversight slips. The XVIII Airborne corps are great war fighters but rotten landlords. The military tried something similar when it turned to private builders to update and manage badly outdated housing stock. Companies like Hunt Military Communities have built and maintained housing at bases across the country. They do it profitably while providing better housing for our servicemen and women and their families. Was it a perfect experiment? No, there were acknowledged maintenance issues across the privatized inventory of military housing. Improved supervision has rectified the most severe of the problems and provided the oversight necessary to maintain satisfactory standards for our service members and their families.

The model for this integrated approach already exists at a smaller scale. Veterans Community Project operates tiny home villages in five states with an 85% success rate among participants receiving on-site case management and support services. In Seattle, the Low Income Housing Institute’s tiny home villages moved nearly 50% of residents into permanent housing, outperforming traditional congregate shelters by a significant margin. The common denominator isn’t the size of the unit. It’s the wraparound service network attached to it. Stable shelter plus mental health support, substance abuse treatment, and employment services breaks the cycle. Shelter alone manages it.

We’re not going to solve intractable problems generations in the making overnight. We can, however, build a mechanism to invest, evaluate, iterate, and accelerate investment in programs that work and kill those that do not.

Solving the housing crisis in this country isn’t a single moonshot. It’s building the architecture for a space station on the moon with all of the support structures that ensure the inhabitants thrive.

I went to nursery school, elementary school, junior high school and then high school. I even, begrudgingly, went to Sunday school. I went to college. I went to Airborne School, the Armor School, and the Scout Platoon Leader’s School. Then I went back to grad school. Admittedly, I know nothing about school. I certainly know nothing about school in the era of artificial intelligence or how it will change the classroom.

I do know that education is the key that unlocks the door to opportunity for every child in every zip code. Not everyone needs to study Kant. Not everyone needs to study Plato. Not everyone should be forced to read the utterly incomprehensible novels of William Faulkner like I was. And, oh, Professor Wilson, if you are reading this, I couldn’t finish the Sound and the Fury. I tried.

Some people need to learn how to thread pipe, run wire, and build roads. Others need to learn how to clean teeth, run MRI machines, and make a perfect sous vide chicken breast. There are schools for all of that. There are kids who find their passion in a lab, kitchen, or behind the wheel of an 18-wheel truck. Their contributions are every bit as valuable as a banker, accountant, or teacher.

Every moonshot starts with architecture. The structure that takes the idea from the drawing board to small steps and giant leaps on the lunar surface. The ability to assess what’s working and what’s not. The technical knowledge paired with the grit and determination necessary to solve the hard problems that make landing on the moon possible.

The North Star should not be a four-year degree for every kid. Some kids would rather turn the wrench underneath the chassis of an Audi than sit in a lecture hall exploring demand curves, Freud, differential calculus, or iambic pentameter.

The North Star for education is simple: help kids find what they are good at, what they love, and give them a path to turn it into a productive life.

We don’t have a monolithic education system in this country. There are over 13,000 school districts spread across cities, towns, and counties. Depth of opportunity is largely rooted in geography. Kids in rural Mississippi and kids in New York City suburbs who have exceptional aptitude in mathematics should have the same opportunities.

Geography is not destiny. Not any more. Not if affordable broadband reaches every corner of the country the way the TVA brought electricity to Appalachia during the 1930s. Not if that broadband streams AP courses and instruction to neglected hamlets, boroughs, and inner cities.

Genius is evenly distributed. Opportunity is not. Abe Lincoln learned to read by candlelight in a log cabin in Kentucky. Who knows, the next Lincoln might be learning on a tablet in a cold water flat in St. Louis.

The Hub for education goes beyond synthesis. It aligns pathways of opportunity with evolving national needs. It’s about ensuring that kids get matched and guided into programs that build on their skills and passions. That means equipping kids with mathematical, analytical, scientific, and mechanical skills while recognizing that athletic, artistic, and musical gifts matter too.

The hub also has to measure what matters. Race to the Top and No Child Left Behind measured test scores as if the test were the final score. They weren’t. A sales manager who tracks calls made instead of deals closed is measuring activity, not outcome. The same logic applies to education. Test scores tell you what happened in the classroom. Employment outcomes tell you whether any of it mattered.

The federal government shouldn’t run every classroom in America, nor should it dictate the curriculum to every school district. But it should know which welding program in Ohio is producing skilled tradesmen, which math program in Mississippi is creating engineers, and which nursing pipeline in Arizona is actually putting nurses into hospitals five years later.

The Department of Education cannot operate in isolation. Every cabinet department depends on the workforce the education system produces. The future engineers at NASA, the cyber specialists at NSA, the welders in the Navy’s shipyards, and the nurses at the VA all come out of the same pipeline. If we understand what the country needs, we can build an education system designed to produce it.

The military has long understood this. The service academies and ROTC programs create a talent pipeline that transforms promising high school students into field grade and general officers twenty and thirty years later. The same needs exist in the civilian world. Teachers, physicians, nurses, welders, cyber analysts are critical skills that deserve the same strategic investment as field artillery and quartermaster officers.

The Scoreboard and Clock are essential. If we align the Scoreboard and Clock to the North Star, we shift measurement from graduation rates to employment outcomes three, five, and ten years after graduation. Schools that prepare kids for productive lives should be measured on that metric.

Innovation, by its very nature, is iterative. A throttle that accelerates investment into what works, and kills programs that don’t. Spending more money on programs that don’t produce results is bad management, bad policy, and bad government.

Education is not a social welfare program. It is a national development strategy. The goal is not to push every child toward the same credential, but to build a system that identifies talent early, develops it honestly, and converts it into productive work. That is how you grow the skill base, grow employment, and grow the tax base. That is how a moonshot goes from launchpad to touchdown.

President Kennedy planted the seeds of the Apollo program when he proclaimed our intention of landing a man on the moon by the end of the decade at Rice University in 1962. He didn’t know how we’d get there, how we’d get back, or how we’d pay for it. He had people for that.

Neil Armstrong never plants the flag on the moon without the engineers, scientists, and flight controllers working across an extended enterprise inside an architecture of competence that adhered to timelines, solved technical challenges, and continuously adapted in service of the Apollo mission.

This architecture is deliberate and repeatable. It structures an organization to focus on the mission, synthesize data, measure progress, and adjust strategy based on what the data says.

These five structures, North Star, Hub, Scoreboard, Clock, and Throttle, don’t only apply to moonshots. They apply to your business, the community organization you lead, and even your career.

Kennedy’s statement: “We will go to the moon by the end of this decade” is the perfect articulation of strategic intent. It established the mission, the timeline, and pointed the entire country toward a clearly defined goal. It wasn’t the ambiguous fluff we see in corporate mission statements that proclaim an organization will be the best widget maker in its industry. It was a North Star every scientist, engineer, and American could understand. More than sixty years later, it still stands as one of the boldest declarations of national ambition ever spoken by a chief executive.

James Webb, NASA’s administrator, built a program office that coordinated more than 400,000 people across 20,000 companies, universities, and government agencies. NASA was the Hub for synthesizing information, assembling teams, and allocating resources in service of the overarching mission.

The next two mechanisms are the Clock and the Scoreboard. For Apollo, they were simple. Land a man on the moon and bring him home safely before the decade ended. The clock was fixed and public. Every American knew the deadline.

Can you say the same for your team? Do your people understand the organization’s North Star? Do they know what success looks like? Do they understand how today’s work connects to tomorrow’s mission?

Progress in complex systems is never linear. Apollo moved forward through breakthroughs, setbacks, and tragedy. After a catastrophic fire killed the three astronauts aboard Apollo 1, NASA halted the program, reassessed the command module, redesigned safety and evacuation procedures, and corrected underlying engineering flaws because crew safety was paramount. Sometimes slowing down is the key to going faster.

That is the function of the Throttle. It sets the pace of investment, creates onramps and offramps, and gives leaders the ability to accelerate, pause, or terminate initiatives based on evidence rather than inertia. The practical question is simple: who has the authority to accelerate investment, slow it down, or kill an initiative entirely? And are the decision criteria clear to everyone involved?

As we look forward to the six moonshots I outlined last week, the question is whether we have the architecture of competence to actually accomplish them. Do we have the North Star, Hub, Scoreboard, Clock, and Throttle to solve the entitlement solvency crisis, build high speed rail, and provide healthcare to all Americans?

Because moonshots are never limited by ambition alone. They succeed or fail based on whether institutions can transform intent into execution.

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Godspeed John Glenn. Small steps, giant leaps. Images from Hubble and the Webb Telescopes. Artemis orbiting the far side of the moon. Vivid and timeless reminders that, even in these divided times, we are capable of hard things.

Tranquility Base isn’t the only place American greatness was displayed for the world. Americans built the Hoover Dam, split the atom, and developed the polio vaccine. The smartphone or laptop you’re reading this on originated in the minds, garages, and labs scattered across Silicon Valley.

Hard things are possible if we point ourselves in the right direction and have the collective resolve to do them. The muscle memory is there. We saw it with Operation Warp Speed during the COVID-19 pandemic.

Over the next several months I’m going to explore six potential 21st century moonshots along with the architecture of competence that makes them possible. It is not an exhaustive list nor is it meant to be representative of every problem facing the country.

Collectively, they require ambition, will, and consensus. They also require measurement of return on investment. Every new dollar of federal spending should return a multiple of the outlay while improving lives for all Americans.

The eight-piece series introduces an architecture of organizational competence that can have lasting impact on our people and our country. It is not a wish list. It is a blueprint to rebuild the architecture of competence that makes moonshots possible. The architecture improves decision making under pressure and is designed to allow leaders to establish and communicate intent, synthesize information, measure results on established timelines, double down on what is working, and kill what is not. This architecture works in government, in businesses, and in organizations both large and small.

The first five moonshots are not inherently aspirational. They are foundational. Maslow starts with shelter, safety, food, and health. A nation that fails there forfeits the right to ask its citizens to dream. You can’t layer the transformational and aspirational on a cracked foundation.

The sixth is foundational in a different way. Without it none of the others are possible.

Moonshot 1. Education.

How do we change education to prepare our kids for a world where their coworkers will include AI agents? How do we teach them to think and co-create alongside AI in an epoch where the collective knowledge of humanity accompanies them in their pocket everywhere they go?

To equip them for the future, we must move beyond rote memorization of facts. We must teach the critical thinking, technical, and scientific skills that make the other moonshots possible.

In a world of deepfakes and algorithmic bias, the most important technical skill we can teach our kids is the scientific method. It is the only tool we have to distinguish between a breakthrough and a con, a hallucination and truths grounded in data. If our leadership is blind or ignorant to the difference, and refuses to interrogate the facts, we aren’t just losing our edge; we are losing our legitimacy.

Moonshot 2. Housing.

I travel the country nearly every week and the poverty is devastating. People sleeping on the walkway leading to the Spokane Falls, near the statue of General Pershing and Pancho Villa in El Paso, and on the streets of Santa Barbara and Santa Monica.

More people are working remotely. Young people are rejecting the office and the commute. How can we reimagine millions of square feet of underutilized work spaces to quickly get people off the streets and into homes? How can we create affordable housing that provides dignity and an onramp to health and employment?

Moonshot 3. Healthcare.

Why is access to healthcare tied to employment? Why is the accident of health insurance provided as an incentive to Rosie the Riveter during World War II still the design of the system today? Employer based private health insurance stifles economic growth, inhibits job mobility, introduces profit margin, and limits access. How many potential great entrepreneurs stayed in their middle management jobs because they needed healthcare coverage for a child with a disability or a spouse with a chronic illness?

We can keep the best of the system we have today while figuring out how to expand coverage and shift the cost curve by investing in outcome based care rather than fee for service.

Moonshot 4. Public Transportation.

We can travel from London to Paris by train in a few hours. Northeast Regional service from New York to Boston covers nearly the same distance and takes double the time. Why haven’t we connected Houston, San Antonio, and Austin on a high-speed rail? Destroying the highway gridlock choking the region unlocks productivity, cleans the air, and makes our cities more livable.

The country that built the transcontinental railroad, invented the airplane, and popularized the automobile can figure out that Uber isn’t the most efficient way to get road warriors from midtown to LaGuardia on a rainy Thursday night when the United Nations is in session and the Rangers are at home.

Moonshot 5. Entitlements.

Social Security and Medicare are teetering on the brink of insolvency. Democrats know it. Republicans know it. Maybe it’s time we did something about it. The fastest growing age group in the country is over 90. The Social Security system designed for life expectancy of the 1930s is ill equipped for the life expectancy of the 2030s. We need to keep the promises to workers within 15 years of retirement while reimagining what it looks like for younger workers.

Hiding from the problem for fear of touching the third rail doesn’t make the problem go away.

It sets the stage for a future crisis where the price of political inertia is far greater than the cost of fiscally and morally responsible governance.

Moonshot 6: Fiscal Responsibility.

Last week the Treasury Department announced that our national debt surpassed the gross domestic product. This came to light as the administration asked for $1.5 trillion on defense. Annual interest expense on the debt now exceeds $1 trillion. Decades of profligate, unprioritized, and irresponsible spending limit our ability to launch the other five moonshots.

Fiscal responsibility isn’t just about the size of the government. Fiscal responsibility is about accountability and stewardship of tax dollars.

In 1941, Senator Harry Truman didn’t wait for a report from a bipartisan commission on war spending. He got in his car, drove to the defense plants, and exposed the waste, fraud, and rot slowing down the Arsenal of Democracy. He proved you could be a fierce patriot and a ruthless auditor at the same time.

Not everything will work. Programs will fail. Competing priorities will crowd some spending out and redirect it toward new challenges.

But the North Star of clear strategic intent, a Hub to synthesize data, a Clock with clearly defined timelines, a Scoreboard to measure results, and a Throttle to accelerate or kill programs become the strategic levers we deploy to manage them effectively.

Austerity is not the answer. We can’t cut our way out of this mess. Strategic investment, responsible governance, and definable metrics will get us back on the path to sustainable growth.

James Madison gave Congress the power of the purse. We cannot build high-speed rail, reform our schools, or save Social Security if we are governed by whim, petulance, and grievance rather than the weight of vision and responsibility.

Roosevelt, Marshall, and Truman knew that you can’t build an Arsenal of Democracy on a foundation of rot. Do we?

1. AI is real but not in the way we think it is. It will replace the customer service agent, the cashier, and the cab driver. It won’t replace the architect, the builder, or the carpenter. It will change how they generate blueprints, estimate costs, and prototype their work.

2. Women and girls are outpacing men and boys academically, socially and professionally. They are more focused, more disciplined, and don’t let ego get in the way of getting the job done. And somehow they still have time to pick up the kids from school.

3. Boys and men are in a crisis. They are skipping college, eating gummies, and playing xbox in mom’s basement instead of building the skills that lead to independent lives. A zero six hundred formation at Fort Benning or Parris Island followed by a five mile run in boots builds confidence, discipline, accountability and calluses that last a lifetime.

4. Winston Churchill was right about democracy being the worst form of government except for all the others. James Madison was right that tyranny and faction are dangerous bedfellows. Let’s hope that Madison’s genius holds and that balance returns to democracy when we’re finally exhausted by the partisan kabuki theater currently masquerading as politics.

5. 60 is the new 40. Our retirements will look nothing like our grandfathers’. It will be a third act and not a walk off the floor holding the ball waiting for time to expire.

6. There’s no hope for the New York Jets.

7. Competence is on hiatus across institutions big and small, public and private. It returns only when problems like education, entitlements, and healthcare get so big and so undeniably urgent that posturing and avoidance are no longer possible.

8. It’s the balance sheet that will kill your business and crush the economy. No business can innovate its way out of a math problem and no country can grow its way out of a debt crisis. Interest payments for yesterday’s expenses do nothing to unlock potential. They don’t fuel growth. They are not an investment for tomorrow. They are an unpaid and unfunded mortgage that will recklessly fall to our children’s grandchildren.

9. Artemis’ journey to the moon and back proved we can still do hard things. It captivated the world. And provided us with a glimpse of the unseen dark side of the moon.

10. Mozart, Bob Dylan, Paul Simon, Joni Mitchell, and Miles Davis experimented, evolved, and improvised. I hear something new every time I listen.

Those are my thoughts for this Tuesday morning from my window seat somewhere above America at 35,000 feet. What are you thinking about?

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Quick, who won last year’s Super Bowl? The Stanley Cup? NBA Championship? The World Series? Unless you live in Seattle, Florida, Oklahoma City, or Los Angeles you probably can’t remember. I couldn’t either, I had to look it up.

The winning teams are not the point. Sports are one of the last few things that unite the country. Things that we watch at the same time in a sports bar or in our living room. How many team calls last week started with did you see Rory putt with his back to the hole on 16, or congratulating Connie from marketing for winning the company NCAA bracket pool? Despite the tribal rivalries between Michigan and Ohio State, Bears and Packers, or Yankees and Red Sox they provide a common prism through which we can experience the world.

It’s for that reason that the integrity of the games matter.

Shoeless Joe Jackson didn’t always live in a corn field in Iowa. He was a real baseball player. In the 1919 World Series he hit .375 with 12 hits, a home run, 6 RBIs in 8 games. He led both teams in batting average and set a World Series record for hits that stood until 1964. Jackson, along with 8 teammates, was banned from baseball for throwing the World Series. Jackson professed his innocence for the rest of his life. According to urban legend, Jackson wandered sandlots across the country for the rest of his life in search of a game.

Pete Rose was a bully, a hypocrite, a gambler, and a tax cheat. He was also a giant of the game and collected more hits, 4,256, than anyone in the history of baseball. In 1989 commissioner Bart Giamatti banned Rose for life for betting on baseball.

Jackson and Rose faced baseball’s death penalty for violating baseball’s rule 21: There is no gambling on baseball. The signs were posted in every major league clubhouse.

Thirty-five years later the signs are still posted in the clubhouses in English, Spanish, and Japanese.

The Sell-Out

Look out from the dugout and FanDuel, DraftKings, and BetMGM have billboards in ballparks. Their ads blanket every local and national broadcast with spokespeople including: LeBron James, Kevin Hart, Jamie Foxx, Shaquille O’Neill, Charles Barkley, Kendall Jenner, and Vince Vaughan.

Disney owns BETESPN. In the ultimate act of corporate synergy Mickey and Donald may soon have a segment reviewing parlays and spreads for next week’s games on the Manning-cast on ESPN2 every Monday night during the NFL season.

The sports leagues didn’t change their minds about the original sin of gambling. They changed their minds once the money moved from the back alley to the internet.

The leagues decided to take the money from the legal sports books after years of looking away from Ralph the Rake, Benny the Bookie, and Sammy the Sharp. Honestly, the leagues would accept advertising revenue from Walter White’s Cook Shop and Deli if they were confident the check would clear. And why shouldn’t they?

The Scandals

What followed were the most predictable scandals in the history of scandals.

In November 2025, two Cleveland Guardians pitchers, Emmanuel Clase and Luis Ortiz, were federally indicted for taking bribes to throw specific pitches, balls in the dirt, so gamblers could win prop bets. Clase was a three-time All-Star building generational wealth as one of the game’s most effective closers. He was not a journeyman reliever on a league minimum salary.

Emmanuel Clase earned roughly $4.9 million in 2025. The betting scheme allegedly netted the gamblers he was working with $700,000 total across three years, with Clase receiving a few thousand dollars per game. In one documented instance he received $7,000 for a single rigged pitch. Bribe payments funded repairs on Clase’s country house in the Dominican Republic.

Clase was one of the most effective closers in baseball and inhabits a different financial sphere than the rest of us. $7,000 is .0014% of his annual salary. For Clase and his fellow big league stars, $7,000 is a tip for bottle service at the Bellagio. It’s immaterial, a rounding error.

That’s not greed. That’s what happens when you build a system that makes it frictionless to corrupt the product and then act surprised when someone does it. For its entire history, the league tried to keep gambling in the back alleys and phone booths in Bensonhurst. They banned Shoeless Joe and Pete Rose. They opened the floodgates when the money was too vast to ignore.

It’s not just baseball. The NFL, NBA, NHL, NCAA and PGA were there at the troughs too feeding on the cash the legal sports books infused into their sports.

In October 2025, the NBA had its own reckoning when Portland Trailblazer head coach Chauncey Billups and Terry Rozier were caught in the federal crosshairs. Billups, a Hall of Famer and sitting head coach, was allegedly acting as a “face card” for rigged, Mafia-backed poker games, while Rozier was indicted for trading inside information on his own injuries to fuel a $200,000 prop-betting ring.

Although the league suspended both Rozier and Billups, they were caught by the FBI, not by the league’s multi-million dollar integrity department. Twenty years earlier, referee Tim Donaghy bet on his own games for four seasons before the feds caught him too. The league didn’t find either one.

Want to know Roger Goodell’s worst nightmare? It’s not a work stoppage or a television ratings dip. A kick sails two feet right on a Thursday night game between the Jaguars and Cowboys. The Cowboys lose by 1 and don’t cover the spread. The guy hasn’t missed a short field goal all year, can you be sure the kicker’s on your side? Can Goodell? Can Jerry Jones?

The Big Con

When the sports leagues reversed course on sports gambling, after spending decades lobbying Congress to keep it illegal, the risks didn’t disappear. The money appeared. That’s the whole story. Commissioners and owners didn’t conclude gambling was safe. They concluded they wanted the revenue, and then built the case backward. They pointed to decades of regulated betting in Nevada while ignoring Tim Donaghy, Pete Rose, and the structural reality that a referee with a betting account and inside information is nearly impossible to catch in real time. The “integrity fees” they negotiated with states weren’t safeguards. They were the justification. The story that made taking the money feel responsible.

The Solutions and the Payback

We can’t put the genie back in the bottle. The revenue provided by the sports books from advertising and data syndication is too valuable to the leagues and to the teams. There are steps that can fix this, that can break The Loop and protect the integrity of the games. None of them require the leagues to give back the money. If the leagues are benefiting from exploiting the risks of the games, the players should be protected from the toll of the game.

The first and most urgent step is banning proposition bets. Clase didn’t throw a game. He threw some pitches in the dirt. That is the difference between prop bets and the Black Sox intentionally losing the World Series.

Prop bets don’t require a player to betray his team or abandon his competitive instincts in any meaningful way. He just has to bounce one ball in the dirt, run out of bounds a yard short, or miss a short putt in the opening round of the Waste Management. The psychological threshold is low. The money is immediate. The detection risk is minimal. A burner phone, an offshore encrypted text messaging service, a red flag in a flower pot on the balcony conceal the electronic bread crumbs. Prop bets are not a feature of sports gambling. They are a corruption delivery system, and the leagues know it.

The second step is to create a truly independent integrity commission, funded by a mandatory percentage of sports book revenues paid directly to the commission, not to the leagues. The distinction matters. The leagues have demonstrated they cannot police what they profit from. An arm’s-length structure, think independent inspector general rather than commissioner’s office, gives the commission both the resources and the jurisdiction to investigate and prosecute without asking permission from the people cutting the checks.

That jurisdiction must extend to college sports. The NCAA’s enforcement apparatus is a well-documented joke, and if the commission stops at the professional level, the corruption doesn’t disappear. It just migrates downstream to where the players are younger, less financially secure, and more vulnerable.

The commission should also fund treatment for sports gambling addiction. The sports books didn’t create problem gamblers by accident. They hired behavioral scientists to make their products as compulsive as possible. The leagues cashed the checks. Funding treatment isn’t charity. It’s the cost of doing business with an industry that monetizes addiction.

The third step is the one the leagues and the NCAA will resist most, because it forces them to look at what they have actually built. It will force them to confront the physical stakes of contact sports. The sports books didn’t create football or hockey’s gladiatorial combat. The gambling money just makes the economics of that bargain impossible to ignore.

NIL didn’t solve the labor problem. It gave the star quarterback a jersey licensing deal and called it equity. It didn’t do anything for the right tackle from Colorado State who was cut after his fourth concussion, never had an NIL deal worth mentioning, and walked away with nothing but exhausted eligibility and a medical history he’ll be managing for the rest of his life.

A portion of sports book revenues should fund pension, medical assistance, and CTE research programs that benefit both professional and college athletes. Not as charity but to reward their contribution to the multi-billion dollar businesses built from their labor. The leagues need to compensate and protect the players for sacrificing their bodies and brains so that we can place a three team parlay on Grambling, Indiana State, and Southern Illinois.

The professional sports leagues and the NCAA built a product on the physical destruction of the people playing it, cashed the gambling checks on top of it, and this fund is a step that simply balances the moral obligations with the physical hazard.

Sports matter. They matter because they unify us and create a shared experience. Clase was a warning shot. Throwing a game is the logical end state if we fail to protect the integrity of the games. At that point Roger Goodell, Adam Silver, and Rob Manfred might as well be Vince McMahon hitting opponents over the head with folding chairs. This is not a black swan. The warnings are hiding in plain sight. They always are.

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In the old days when we surfed through the hundreds of channels with seemingly nothing to watch, I couldn’t help but stop what I was doing and watch when I stumbled on The Shawshank Redemption. No matter what part of the movie it was, I would sit down and watch it all the way through to the end. There’s something about Morgan Freeman’s narration that just sucks me in every time. In fact, I watched it the other day on a late night flight home from somewhere.

My brain works in funny ways. I see patterns in unexpected places. I can’t explain it. I don’t know why, but watching Brooks Hatlen alone in the halfway house after a lifetime in prison made me think of Colin Powell. The link between the two isn’t guilt. It’s the human wiring that institutions shape.

Colin Powell was a soldier, a statesman, and one of the most admired Americans of the last fifty years. He was also, like Brooks Hatlen, an institutional man. He was the product of the US Army. Commissioned through ROTC, tested in battle in Vietnam, multiple commands, served as National Security Adviser, Chairman of the Joint Chiefs during the first gulf war, and Secretary of State.

When faced with the sketchy evidence of the presence of weapons of mass destruction in Iraq, he had a private conversation with President Bush warning him of the pottery barn rule, “You break it you, own it.” Powell was skeptical of the intelligence. He shared his reservations with the President privately and went to the United Nations to make the case when the President decided to go to war. A good soldier lines up behind the chain of command once a decision is made. General Powell was a very good soldier.

Andy Dufresne doesn’t go to the United Nations to do the President’s bidding. Andy Dufresne leaks his reservations to Bob Woodward, takes off to Zihuataneo and blows the lid off the whole shaky thing. Andy Dufresne is the rare individual who challenges the institution and has the courage to act on what he knows to be true.

Mark Felt was Andy Dufresne.

Daniel Ellsberg was Andy Dufresne.

John McCain, who refused an early release to stay with his men, was Andy Dufresne.

Pee Wee Reese, who put his arm around Jackie Robinson and ended the debate about whether he belonged, was Andy Dufresne.

Secretary Powell was Brooks Hatlen. That doesn’t make him a bad man, it makes him human. He was the product of the institutions where he spent his adult life. He was loyal to the President. To the President’s father. And to the chain of command.

I’ve written about failure of institutions for much of the last year. Challenger, Boeing, the War on Drugs, Venezuela, Iran, Intel as if the institutions are people. They are not.

With due respect to the Supreme Court. Institutions aren’t people. They are led by people organized into teams and hierarchies and exhibit the same weaknesses as any group of humans. I’ve written about the institutions without addressing the frailties and failings of the individuals who comprise those teams. It’s a missing piece of the puzzle and unlocks the mystery of why organizations fail to act on information they already possess.

Recognizing that we are conditioned to belong, leaders at every level have to build feedback loops and synthesis hubs that encourage rather than punish candid feedback. Boards of directors, red teams, employee surveys, internal audit, steering committees, project governance, safety reviews. We already have the mechanisms; but we consciously and subconsciously filter bad news and dissenting opinions to maintain organizational harmony. It shouldn’t take the courage of Mark Felt to stop a doomed launch or ensure that the reinforcing safety mechanisms are in place at Deepwater Horizon.

If that sounds irrational, it isn’t. There’s a reason smart, seasoned people stay silent even when the stakes are catastrophic. Psychologists Roy Baumeister and Mark Leary

published research that reframed how we understand human motivation. Their conclusion was precise and unsettling. The need to belong isn’t a preference or a cultural artifact. It’s a drive as fundamental as hunger. Threats to belonging produce the same psychological distress as physical pain.

Why didn’t Secretary Powell go public with his reservations? Write an op-ed in the Wall Street Journal? Resign in protest?

Powell wasn’t a passive participant or victim. He was a kid from the Bronx shaped by the army. He made a choice informed by a lifetime spent in the very institution he served. His greatest moment of individual triumph came about from the disciplined application of overwhelming force aligned with a doctrine that he wrote and championed. His vigilance protected the soldiers he led from the mistakes he lived through in Vietnam.

Layer on the personal loyalty to President Bush 41 and Powell was caught in a Shakespearean drama. The trusted aide to the former President was brought in to serve that very President’s son and provide the experience and wisdom, gravitas, and credibility the new commander in chief lacked.

Powell was trapped by the very institution he served. He was hard wired to line up behind the chain of command. He trained a lifetime to quash his personal perspective and do the administration’s bidding once the decision to go to war was reached.

In an interview with Al Jazeera Secretary Powell acknowledged this failure, “It has blotted my record, but you know, there’s nothing I can do to change that blot. All I can say is that I gave it the best analysis that I could.” It was far deeper than a blot. It was the human cost of belonging.

There’s a deeper tragedy in the story of the run-up to the Iraq War. The other man who was uniquely positioned to stop it was trapped by the respect and precedent. He was a former Congressman, Ambassador, CIA Director, Vice President and President. He was also a father. A father who, out of loyalty to his son and the institution of the presidency, had to hold his tongue.

Of course, he dispatched one of his noblemen, Brent Scowcroft, to deliver a warning to the son on the op-ed pages of the Wall Street Journal. But the conversation between a father, a son, and two Presidents never happened.

When Bob Woodward later asked the younger Bush if he had consulted his father before the invasion, the answer was chillingly clear: he didn’t need to, because he was appealing to a “higher father” for strength. His heavenly father didn’t push back. His earthly father most certainly would.

If your source of validation doesn’t have the capacity to disagree with you, it isn’t a feedback loop. It’s an echo.

Powell couldn’t speak out because of belonging. Bush 41 couldn’t speak out because of institutional loyalty. And the man behind the resolute desk couldn’t hear either of them because he had already reached his conclusion and was working backward. Psychologist Ziva Kunda called this motivated reasoning. We don’t reason towards the truth. We reason toward the conclusions we’re already motivated to reach. A discussion with a higher father who cannot disagree is the perfect validation for a decision that’s already been already made.

Faith alone is not the problem. When faith replaces the grueling work of stress testing assumptions, we become passive participants looking for inoculation from the grave consequences of our decisions.

We’ll never know if one conversation between father and son, between two Presidents over coffee overlooking the ocean in Kennebunkport might have changed the outcome.

This is the ultimate institutional breakdown. While Powell and the elder Bush were trapped by the norms of the Presidency, the man behind the resolute desk decided to seek spiritual rather than strategic guidance.

This is institutional capture at the individual level. Institutions fail because we’re human. That humanity is hard coded into our DNA. It prevents us from speaking out even when we know we should. It prevents us from asking the hard questions and interrogating facts that are obvious in hindsight. Not because we’re evil. Because of our deep seated need to belong.

President Bush never asked the second level questions. What is the worst possible outcome from this decision? What happens if they don’t throw rose petals at the feet of the conquering heroes? What if there are no weapons of mass destruction? Who will keep the lights on and keep the water running once we depose the Ba’athist regime?

One tragedy of the war in Iraq is that the two men with the trust, credibility, and prestige to stop it couldn’t because they were loyal, human, and conditioned by a lifetime inside the institution to conform to its norms. The other is that the man charged with making the decision lacked either the humility, instinct, or confidence to consult the one other person on the planet who faced similar circumstances a little more than a decade before.

The Iraq war was an extreme case and few of us will ever be in the room to make those decisions. But the same logic applies in every organization and many of the cases I’ve written about before. The engineer at Deepwater Horizon under pressure to stop the bleeding at Macondo, the flight director at NASA being pushed for a launch decision, the project manager whose implementation is over budget and facing delays, a CEO of a company whose traditional revenue model is under attack. None of them are Powell. None of them are going to war. But they are all running the same operating system. Loyal. Human. Conditioned by our DNA to conform and to belong.

In each of these cases, there was an Andy Dufresne, an engineer who identified a risk, an inspector who found a flaw. In every case their warnings were silenced by leaders whose incentives clouded their judgment. They buried the dangers while grossly underestimating the consequences.

The questions for the practitioner, the team leader, the board member reading this are straightforward.

• Does the organization actively encourage and reward candor and dissent?

• What role does fear play in the culture of our organization?

• Does the system reflexively reject the contrarian opinion?

• Do the pressures to meet quarterly targets overwhelm the data that points to risk?

• Do we have a mechanism to synthesize competing points of view?

The warning signs are often visible. Our biological software is programmed to filter them out, to prioritize the group over the reality, and to rationalize the conclusions we've already reached. We stay inside the walls because it's safer to be wrong inside than to be right on the outside. Until, of course, it's too late.

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Bananas

I worked for a software company that was acquired. The day the acquisition closed they removed the bananas from the snack room . It was symbolic.

Bananas were a cost that we didn’t need.

Bananas were gone.

Want a banana? Buy it at the bodega across the street.

We’re not in the banana business.

Last week that same company announced significant layoffs. Tens of thousands of people were notified by email at 6:00am that their services were no longer needed. No discussion. No phone calls. No George Clooney to do your dirty work and let them go.

Maybe it was a rational decision. The company exists to maximize returns to shareholders and the capital could be better used to invest in new initiatives.

Employees are a cost. But shareholder value isn’t produced in spreadsheets; it’s produced by people solving problems for customers. You can’t prune your way to growth.

Maybe it was an irrational decision. Shareholder returns are a product of the activities of other stakeholders. Customers are a stakeholder. Employees are a stakeholder.

Were those 30,000 employees delivering services that provided any value to the customer? If they weren’t, what does it say about your management that you had enough redundant headcount to field two airborne divisions?

There were project managers running critical projects for Fortune 500 companies.

There were consultants deploying software for community hospitals.

There were developers building new products and adding enhancements to existing products.

That work didn’t disappear with the people.

The project milestones are looming. Who’s going to explain to the customer’s CIO that the entire project team was let go and immediately cut off from your systems? What do you say when she asks for a continuity plan?

The shiny new thing is always tempting. The convertible is obviously better than the ten-year-old minivan with the dent in the rear gate that got the kids to dance recitals and soccer practices now that they’ve left for college.

But maybe you need to move them into their first apartment in the Back Bay.

The BJÖRKSNÄS bed frame from Ikea doesn’t fit in your Miata.

Maybe the new business is better. But what happens to the old one? What are you saying to your existing customers about your concern for their business when you destroy the continuity midstream?

Shareholder value is a tricky thing. Betting everything on the shiny new thing is a gamble that your existing customers won’t look across the street at your competitor for the old thing. The old thing that bought the private island in Hawaii, funded the corporate jet, financed the America’s Cup, and the movie studio.

What happens if the shiny new thing blows up? What happens if the customer for whom you are building the data centers in Texas runs out of money? Byju ran out of money. Northvolt ran out of money. Builder.ai ran out of money.

You’ve made your decision. The bananas are gone from the snack room. But some of the customers who paid for that snack room are going to go too.

They’ll get their bananas from the bodega across the street.

But, you are not in the banana business.

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ChatGPT and Anthropic are changing the world. Just not in the way the market thinks. The market is again confusing enabling technology with the value creating asset.

I walked into a management of technology class in the winter of 1999 hosted for Fordham at the Bloomberg headquarters in New York. On the whiteboard was a single word. Google. The professor, Peter Keen, told us that it was about to become one of the most important companies in the world. He explained that their search algorithm was fundamentally different and would accelerate the utility of the internet through exponentially better search results.

Peter could see around corners and we became friends who bonded over baseball and good steak dinners in both Washington and New York. I’m glad that he saw his beloved Red Sox finally break the curse even if it was at the expense of my Yankees.

He introduced me to a couple of interesting companies that were well ahead of their time. The first was Xybernaut. Xybernaut pioneered the idea of wearable computers. The second was Webvan. Both companies flamed out for different reasons. Xybernaut for investor fraud and Webvan ran out of money.

Webvan raised $1 billion of venture capital and was looking to pioneer online delivery of groceries. Peter introduced me to Webvan and I interviewed for a job. I didn’t get it because I called their baby ugly. I challenged their logic. I questioned whether plowing $1 billion into a sophisticated national distribution network made sense before they proved the model in a single tech forward market like San Francisco or Austin. They were sitting on $1 billion of capital and they didn’t have to spend it like a kid who got hot at the craps table during a stag party in Vegas.

Nathan Bedford Forrest was famous for saying that the way to win battles was being firstest with the mostest. He was both a detestable human being and horribly wrong. Being first with capital is not the same thing as understanding an industry’s logistics and dynamics. As Omar Bradley reportedly said, “amateurs study tactics; professionals study logistics.”

Webvan got there firstest with the mostest. So did Pets.com. The sock puppet got an obituary.

Chewy and Instacart got there later, cheaper, and with a clear understanding of where the value lived.

Webvan and Pets.com confused speed and capital with sustainable competitive advantage.

The enabling technology was real. The market was real. The asset wasn’t the pipe. It was the underlying data and the system built on top of it. Like Forrest, they were horribly wrong.

Being first with capital is not the same thing as being right about where value accrues.

The cable bundle was a forced subsidy for 200 channels that nobody watched. Did anyone really need both Lifetime and the Hallmark channels? One channel with Christmas movies that inevitably end with star crossed lovers kissing in a small town gazebo was certainly enough.

Netflix launched their streaming at $7.99 per month. Cable raised their prices and added on impossible to decipher fees. Comcast, Time Warner, Optimum, and Cox Communications built the superhighway that carried the getaway car that robbed their bank.

Initially, every Netflix stream, every YouTube cat video ran over cable broadband. The cable companies conflated the value of the pipe with the value of the content and paid for it with long-term market cap destruction. While cable TV revenue shrank by $17 billion between 2017 and 2024, Netflix and YouTube grew from $11 billion to $96 billion combined, much of it delivered over cable broadband financed by their competitors.

By the time Comcast realized the underlying value of their content library and launched their own streaming service Peacock, they had already lost the race.

Last week I wrote about the New York Times and the Washington Post. The Times pivoted to digital successfully. The Times expanded their subscriber base by building a content platform to include games, cooking, sports, and product reviews. The Post has not. The Times understood that content rather than platform drove value. The Post is struggling to align its content, product and cost structure into a sustainably profitable model.

The market is making precisely the same category error for the third time in twenty-five years. The reported valuation of OpenAI was $730 billion on a revenue run rate of $13 billion. Anthropic was valued at $380 billion on a revenue run rate of $14 billion. Neither OpenAI nor Anthropic is a pre-revenue dotcom with a sock puppet mascot. The revenue growth is both real and unprecedented.

But the market is pricing them as if the large language models are the asset. It is not. The model is the enabling technology. The pipe. The data is the asset. The models matter, but only to the point of sufficiency. Sufficiency works for writing resumes and emails. After that, differentiation and value creation shifts away from the model and toward the data and the systems built around it.

OpenAI and Anthropic will print money licensing these models to the enterprise for the next few years. But gravity always wins. Deepseek and other cheaper models are already entering the market. Pricing power and margins will inevitably erode.

Epic has 300 million patient records. Workday has twenty years of curated finance and HR data. Salesforce has the commercial relationship map of the global economy. Bloomberg has forty years of market microstructure. Thomson Reuters has a century of legal precedent. These are not solely applications. They are repositories of proprietary, high-fidelity data that no one else can access or replicate. When they embed an LLM, the model becomes the interface. The curated data becomes the moat. A generic Claude API call built on publicly available internet data doesn’t know your organization’s compensation plan or your operational cost structure. Workday Sana trained on your data knows both.

Workday Sana powered by an LLM beats your ERP with a rogue finance user feeding spreadsheets into a generic unlicensed LLM every time. Because the data matters more than the model. The model has to be good enough. The market is currently valuing the middle of that stack as if it’s the top. That’s mispriced. It’s a fundamental misunderstanding of the value chain of enterprise software.

The stock market is stripping hundreds of billions from the market capitalization of enterprise SaaS platforms because it thinks they will be replaced by AI. A more likely narrative is that AI will enhance the value of these platforms over time by exposing the underlying data to improve decision making and identify trends.

Payroll has to be perfect. Financial statements have to be perfect. Can a probabilistic LLM sitting on top of a generic vibe coded infrastructure accurately calculate payroll for Aliquippa, Pennsylvania? City wage tax? School district earned income tax? State withholding? Local services tax? Every decimal? Every employee? Every pay period? With a complete audit trail?

LLMs are probabilistic engines. Enterprise financial systems are deterministic. That’s not a technical distinction. That’s the entire argument.

There is a place for a probabilistic model. It’s great at predicting the next word. Do you want an air traffic control system that’s right 95% of the time on approach to LAX? That’s what a probabilistic system can achieve today.

The end state isn’t always a winner take all cage match. In this case, the general purpose large language models are enabling technologies that enhance and extend the value of the existing enterprise application stack. Think of it as a three layer cake. Infrastructure at the bottom, Models in the middle. Curated data and purpose built systems at the top.

The internet didn’t kill Oracle. It became the delivery mechanism for Oracle’s databases and applications. LLMs won’t kill Workday or Salesforce. Workday will leverage LLMs to provide insight and efficiency to enterprise applications that power HR, finance, payroll and planning. The pipe doesn’t displace the content, it carries it and amplifies its value.

The market has confused enabling technology for the asset three times in the last twenty-five years. Google dominates search. Salesforce, Thomson Reuters, and Workday lead their respective segments. With each shift in technology, the companies that owned the data, the actual content won. This outcome is likely to be the same with AI. There will be clear winners. Claude is real. ChatGPT is real. The revenue growth is extraordinary. But the moat is data.

It’s the data, stupid.

Andy Grove was paranoid. Bill Gates was paranoid. Steve Jobs was paranoid. Bill Belichick was really paranoid. They weren’t reacting to threats. They were shaping the market. They were building nimble, adaptable organizations. Paranoia combined with vision, execution, and self-awareness built the three companies that defined the era of personal computing and won six Lombardi trophies.

Paranoia is embedded in the DNA of Michael Porter’s model of industry competition. Threat of competitors, threat of substitutes, threat of new entrants, buyer power, supplier power. It is a way to understand your industry’s landscape and identify threats before it’s too late.

Beyond Porter, we have SWOT analysis, the BCG Matrix, 7 S’s, and Strategy Maps. The problem isn’t that we don’t have a way to identify threats. It’s that we don’t act on the information we already have.

It’s almost as if we have a radar screen but no one trained the operators on how to use it. We file away the analysis as part of a static annual planning cycle rather than as an active part of the day to day management of the organization. The various strategic planning models are paranoid.

The operators are not.

Lacking paranoia creates complacency, a condition where organizations dismiss or ignore threats that are obvious in hindsight. Why is it that forensic analysis proves that organizations had all the information that they needed to recognize an existential threat but failed to act?

The nuanced answer is that long term survival becomes a function of organizational capacity to adapt. Adaptability is a core competency of the organization and grows out of the following equation.

Adaptability = Vision + Execution + Paranoia + Self-Awareness

The only sustainable competitive advantage comes from your ability to interrogate the future and challenge the status quo. The traits and skills that made you successful in the past may become the exact reasons you fail in the future.

Competitors leapfrog your position, scale the walls, and cross the moats you’ve built to sustain market leadership. The startup you’ve never heard of is calling on your customers and is burdened with neither your legacy cost structure nor your organizational history.

Is the value of a recording label built only through the distribution of a vinyl LP, a cassette, a CD, or an MP3?

Is the value of a newspaper actually the physical newspaper put into the plastic bag and left at the end of your driveway or tossed into the bushes by a teenager on a Schwinn?

The newspaper industry whiffed on the definition question entirely. Most traditional publishers defined their business narrowly around publishing and printing a daily newspaper that generated revenue from subscription and advertising because that was the historical legacy of the newspaper business. Circulation declined. Advertising collapsed. Craigslist killed classifieds overnight. Craigslist didn’t sneak up on anyone. It sat in plain sight, stripping away the most profitable part of the business while publishers treated it like a sideshow. One by one the great American newspapers became distressed assets. Now they’re billionaire vanity projects or private equity carcasses being stripped for parts.

The music industry watched the pitch go by, paralyzed by fear of piracy like a little leaguer facing a Sandy Koufax curveball. The labels had the artists and the catalogs. They protected their legacy businesses while watching Napster and Kazaa prove in real time that their customers wanted digital, not analog. Instead of building viable alternatives, the industry responded by suing 12-year-old Napster users. Their inaction allowed Apple to redefine the competition through the iPod and iTunes. Then Spotify transformed the value chain, shifting the profit pool from physical distribution to streaming. The shrinkwrapped, impossible to open, $14.99 CD became a $9.99 subscription with access to virtually every song ever recorded.

Microsoft under Satya Nadella is the counter-narrative. Nadella inherited a company that had missed mobile, missed search, and was watching Amazon build the cloud business that Microsoft should have owned. The Windows religion, the belief that every product had to serve the operating system, had paralyzed the company for a decade. Ballmer’s caretaker reign had the company wandering in the desert worshiping at the idol of Windows.

Nadella didn’t grow Microsoft’s market capitalization from $300 billion to over $3 trillion by defending what once made it great. He revived it by applying all four variables. Vision to redefine what business Microsoft was really in. Execution to pivot massive teams toward cloud services. Paranoia to see that Amazon’s head start could be fatal. And self-awareness to recognize that Windows, the company’s crown jewel, had become its cage.

Moving on from Joe Montana to Steve Young is an excruciatingly difficult decision. Sometimes you have to kill your darlings to write the next chapter or win the next trophy.

Jeff Bezos bought the Washington Post. Patrick Soon-Shiong bought the LA Times. Sheldon Adelson bought the Las Vegas Review-Journal. The industry that once held the powerful accountable now exists on the charity of the powerful.

That’s not a recovery. That’s a corporate hospice with good branding.

The Los Angeles Times laid off 20% of its staff in 2024. Citing declining revenue, the Washington Post recently laid off one third of its staff. The Pittsburgh Post-Gazette announced that it will close after 239 years of operations later this year.

Against this environment the New York Times is thriving. They’ve grown revenue from $2.07 billion in 2021 to $2.82 billion in 2025. The Times didn’t define their business as a physical newspaper. They defined their core competency as delivering information. “All the news that’s fit to print.” They’ve expanded beyond news to include a vibrant cooking application, The Athletic for sports coverage, Wirecutter for product reviews, and the puzzles application that has people around the world asking, “How many did you get the Wordle in today?”

The Times didn’t survive by accident. They survived because someone in the room had all four variables working. Vision to define the business correctly. Execution built on decades of journalism discipline and deliberate practice. Paranoia about the kid in the garage who was going to deliver information better, faster, cheaper. And the self-awareness to know that the physical newspaper was the pipe, not the product.

The choice to go online was not binary. Online vs. print. The choice was to feed the cash cow while building the future star online. The Times built optionality into their future when they established the paywall. They made it increasingly valuable by bringing new people into the tent through their acquisitions and platform extensions. People who couldn’t pick Thomas Friedman or Maureen Dowd out in a police lineup read the product reviews, search for recipes, and collaborate with friends and family to find all of the words in the Spelling Bee.

The Washington Post had the same assets and a legacy of legendary journalism. Bezos was one of the great business people in history. He came to the Post with an incomplete understanding of what the underlying value of the institution was and systematically dismantled it.

Ironically, the great retail disrupter lacked the ability to counter and react to the disruption facing the media, and lacked the self-awareness that maintaining editorial quality and ensuring independence of the free press was the asset, not the liability. Bezos shelved a presidential endorsement, shuttered foreign bureaus, decimated the sports section, and fired the publisher. Hundreds of thousands of subscribers abandoned the paper.

Let’s give Bezos credit that he had the original vision to transform the Washington Post into a digital first property. He invested heavily to modernize the Post and the early years of his ownership showed promising results. Where he failed was in execution of that vision, paranoia and the self-awareness that the value of the business was in the legacy of its journalism not in the physical newsprint. By abandoning that legacy, he assured its decline.

This was neither an innovator’s dilemma nor a black swan. It was the predictable descent of an institution that failed to confront disruptive technological change.

“Only the paranoid survive.” Better said, only the adaptable survive. Adaptability grows from vision, disciplined execution, and the self-awareness to know that someone’s coming for your lunch money. Someone’s talking to your best customer. You don’t know who. You don’t know where. But they are coming.

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The ghosts of conflicts past wander the American military cemeteries and memorials scattered across the globe.

Aisne-Marne.

Ardennes.

Belleau Wood.

Brittany.

Cambridge.

Cantigny.

Chateau-Thierry.

Clark.

Corozal.

Epinal.

Flanders Field.

Florence.

Guadalcanal.

Henri-Chapelle.

Lorraine.

Luxembourg.

Manila.

Meuse-Argonne.

Mexico City.

Midway.

Montfaucon.

Montsec.

Netherlands.

New Zealand.

Normandy.

North Africa.

Oise-Aisne.

Pointe du Hoc.

Rhône.

Saipan.

Sicily.

The Somme.

St. Mihiel.

Suresnes.

Eisenhower’s ghost, like Jacob Marley, warns us as he walks amidst the fallen who rest in symmetrical lines of white marble gravestones. He speaks of the consequences of the unchecked power of the military industrial complex and the state of perpetual war we’ve been in for the last quarter century.

George Herbert Walker Bush’s ghost wanders the corridors of Washington and whispers, “Congressional support, global coalition, overwhelming force, clearly defined mission.”

Donald Rumsfeld’s spirit struts through the concentric rings of the pentagon clutching a memo he wrote and sent to senior aides in the spring of 2002 just a few months after the attacks of 9/11 and the beginning of the war in Afghanistan.

“I know I’m a bit impatient, but we are never going to get the U.S. military out of Afghanistan unless we take care to see that there is something going on that will provide the stability that will be necessary for us to leave. Help.”

He was right.

It would be another 20 years and the conditions were never met.

Two weeks ago the United States went to war with Iran. We were told Iran was two weeks from a bomb. Months earlier, we were told its nuclear capabilities had been completely and totally obliterated.

In a turn of phrase that was clearly written by Secretary of War Yossarian they tell us that the war is both nearly over and entering a new phase.

Marine expeditionary units are deploying to the region.

Play it again, Sam.

Our enemy is capable, determined, and cornered. The cyber attack against Stryker indicates that the Iranians understand that they can destabilize the ‘Great Satan’ without firing a shot directly against the homeland.

The first week of the war cost American taxpayers $11.3 billion.

In one week, we’ve spent the FBI’s entire annual budget for FY 2026 of $10.1 billion. Add in the National Endowments for the Arts and Humanities at $207 million each and we still have some change left in the sofa cushions to restore funding to both the Corporation for Public Broadcasting, and National Public Radio.

We gave the order, launched the attack, pulled the trigger without notifying congress, and without debate. Without national consensus.

The ghosts ask:

What is the mission?

What is the end game?

How long does it last?

What does victory look like?

Where is the national resolve?

Where is the debate?

Where are the controls?

Without deliberation. Without explanation. Without accountability. We have borrowed money to pay for a war our children’s children’s children will be paying interest on. To what end?

Ike turns towards the eternal flame that illuminates his successor’s grave and reminds us that “every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.”

The spirits gather in Arlington’s Section 60 waiting for the newest war dead and ask, “Are we safer today than we were yesterday and are we worthy of their sacrifice?”

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The Prussian theorist and general von Moltke said, “No plan survives first contact with the enemy.” General Eisenhower said, “In planning for battle I’ve found that plans are useless, but planning is indispensable.”

Mike Tyson said it best, “Everyone has a plan until they get punched in the mouth.”

I learned as an armored cavalry officer in the 1980s that the best way to kill a tank was another tank. That doctrine was right, until it wasn’t.

The Israelis had already discovered this was wrong in the 1973 Yom Kippur war when Russian-made shoulder-fired anti-tank weapons brought them to the brink of defeat. Today, the Ukrainians and Russians are crippling tanks with $500 modified drones.

Failure of imagination is not a new phenomenon. Tom Clancy in Debt of Honor wrote about a plane crashing into the Capitol building in 1994. Sam Nunn, that same year, wrote about a drone crashing and releasing chemical weapons in Washington, DC.

9/11 was seven years later. It was a failure of imagination. All of the information existed. No one connected the dots.

We’re in the middle of an imagination failure right now. We’ve unleashed a war against Iran. We don’t know how it ends. Anyone who says otherwise is selling certainty they don’t possess, confusing tactical success with strategic foresight and pretending they can see through the impenetrable fog of war.

Khamenei is dead. The conflict is spreading throughout the region. The cornered regime is not going to fight according to the Marquess of Queensberry rules. The wounded adversary doesn’t act rationally. He bites your ear in the third round in a boxing ring at Caesar’s Palace in a desperate act of self-preservation.

They’ll fight in places where we don’t expect it. A city bus in Tulsa, a shopping mall in Tacoma, a synagogue in Omaha.

The insurgent isn’t going to fight on your terms. He’ll reframe the fight to make your terms irrelevant. Both warfare and technology are morphing at speeds that break every institutional response. The moat is not defensible. The castle walls are not impregnable. The Maginot Line of competitive advantage is an illusion.

The same truths are evident in business. Corporations spend billions to defend indefensible positions in legacy businesses while technology investment hides a dirty secret. Most organizations run on spreadsheets given apocalyptic names: The Truth, The Mother of All Spreadsheets, The Big F***ing Spreadsheet, The Book of Revelation. Someone named them. A roomful of professionals argue over disparate versions of the truth every week in the forecast meeting. That’s not a data problem; it’s institutional capture expressed in a filename.

Your adversary isn’t your Fortune 500 competitor with a new release of their product. It’s the kid in the garage. They could be in Shenzhen, Bangalore, or Silicon Valley. They aren’t fighting you on your terms. They are making your terms irrelevant. They aren’t building a better CD player, they’re building an iPod, and then the iPhone or an electric car at a fraction of the price with a fraction of the parts.

We are at the dawn of another shift in technology. AI gives us the tools to process and synthesize massive amounts of data. But here’s the trap: feed AI your assumptions and it will validate your established thinking. We have to ask it something different. We have to ask AI to imagine the choke points, the vulnerabilities, the future by synthesizing beyond what we think we know, interrogating the data with a wider lens not limited by our rules, conventions, or established thinking.

If we ask the right questions, it can help us recognize what we could not imagine. It could warn us that mobile would supplant the PC, that the $500 drone can kill a $5 million tank, and that the hijacker didn’t need to learn how to land the plane.

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The pressure readings, the broken BOP valve, the skipped cement test, the missing centralizers. Every signal was in the system. They died because the organizational machine running BP, Transocean, and Halliburton was built not to synthesize them.

This is the third and final piece in the Macondo series. Today we go to the root. It is the 170-year-old design that still dictates how most companies move information and authority, and why it fails catastrophically under pressure.

It starts with a 71L clerk in the U.S. Army in 1980s Germany.

Specialist Mendoza was a human carrier pigeon in an olive drab Volkswagen cargo van. Every day he carried our maintenance report to Regimental HQ in Nuremberg. The reports from our squadron and the other squadrons gave the commander an accurate picture of equipment readiness, just in case the Russian 47th Independent Tank Regiment decided to attack that night through the Hof Corridor.

Mendoza was solving a problem that has plagued organizations since the beginning of time. Creating a shared picture of the operating environment. Although it was less than 40 years ago, he delivered his report before the fax machine, before email, and decades before the cloud would make secure transmission immediate.

Our maintenance report was little different from the reports line superintendents on the New York and Erie Railroad filed in the 1850s. It listed broken equipment and gave the regimental staff a picture of how many vehicles could roll out the back gate to fight the Russians on any given day.

In September 1855, a railroad superintendent named Daniel McCallum sat in a smoky New York office and dictated what would become the world’s first organization chart. He wasn’t doing it for aesthetics. He had a problem. His railroad, the New York and Erie, was 500 miles long and bleeding money on a per-mile basis compared to shorter lines. His conclusion was sharp. The failure wasn’t the railroad. It was the absence of a system.

What McCallum invented wasn’t just an org chart. It was an organizational framework. There were clear divisions of responsibilities, delegated authority, daily data feedback, and multidisciplinary teams organized around the flow of value. Leaders weren’t at the top of his diagram. They were at the bottom, with reporting lines drawn like branches of a plant. That detail alone says something about how he saw the job.

McCallum’s design was built around a simple insight. The people closest to the work need real authority to act on what they know. His divisional superintendents had full accountability for their lines, full visibility into daily data, and the power to make decisions without waiting for New York to weigh in. The structure was designed to move information and authority in the same direction. He recognized the telegraph’s potential to shrink time and distance, and built his entire daily reporting system around it. For the first time, information could move toward authority at scale.

Then Frederick Winslow Taylor came along and reversed the logic. Scientific Management separated thinking from doing. Managers at the top planned. Workers executed. Functions organized vertically by specialty, each reporting up its own chain. The org chart stopped looking like a branching plant and started looking like a series of parallel silos. Coordination happened, in theory, at the top. It worked brilliantly for hierarchical manufacturing organizations for a time. Globalization and the explosion of information across the enterprise broke it.

Why does this matter? Why am I talking about an org chart for a long defunct railroad?

I am looking back in time because modern organizational design is, in part, responsible for the tragedy at Macondo I’ve written about over the past few weeks. The hierarchical organization design with no way to coordinate the flow of information across BP, Halliburton, and Transocean allowed the $128,000 cement bond log BP skipped and the $1 million-per-day rig costs to become a $65 billion liability.

Macondo shows exactly what a siloed structure produces under extreme financial and operational pressure. BP, Transocean, and Halliburton each owned a vertical column. BP controlled the well plan. Transocean owned the rig and the crew. Halliburton owned the cement job. Each organization reported up its own chain to its own executives, with its own incentives and its own definition of success. Nobody owned the integrated picture. Nobody owned the synthesis function.

The anomalous pressure readings from the negative pressure test on April 20th were observed by people on the rig floor. The mechanical problems with the BOP valve were documented. The authority to stop operations and resolve the ambiguity sat somewhere above them, distributed across three corporate hierarchies with no shared mechanism for synthesizing what they were collectively seeing. McCallum would have recognized the problem immediately. He’d designed his entire system to prevent collisions on a single track railroad line 155 years earlier.

McCallum understood in the 1850s what organizations are still struggling with today. Information has to move toward authority, and authority has to sit close to the work. When you invert that relationship and then multiply it across globally dispersed organizations operating at digital speed, complexity doesn’t grow linearly. It grows exponentially.

For the first time since McCallum picked up his pencil, we now have the technological tools to solve the very failure that killed 11 men on Deepwater Horizon. AI can aggregate signals across dispersed organizations, surface anomalies, and connect information streams that never talked to each other before. The organizations that embrace it intentionally, that build synthesis functions into their structure with clear governance and accountability, have a genuine opportunity to prevent the next Macondo. The ones that let AI propagate without that intentionality will find themselves with exponentially more data flowing across the same siloed hierarchies Taylor built. They won’t have solved the problem. They’ll have amplified it.

Had BP connected the dots between the skipped cement test, the broken BOP valve, the fewer than recommended centralizers, the anomalous negative pressure test, Macondo would not have spilled oil into the gulf and killed eleven men.

Specialist Mendoza was a node on a distributed organization carrying information to decision makers. Today, the data sitting in our data warehouses, ERP, CRM and decision support systems serve the same function. Now the key is to effectively use technology to connect the dots, to create clarity, to manage risk, improve decision making and help organizations act on information they already possess.

The real question isn’t whether you have the information. It is do you have the ability to act on it.

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It’s easy to be a Monday morning quarterback and criticize BP, Halliburton, Transocean, Schlumberger, and the MMS for the tragedy at Deepwater Horizon. They were skilled professionals working in a dangerous, high-risk operation with tremendous stakes. All the organizations involved made a series of preventable and compounding bad decisions that culminated in the explosion, the deaths of 11 people, and the catastrophic contamination of the Gulf of Mexico.

My purpose is neither to criticize nor second-guess decisions made at Macondo. Rather, it is to analyze the organizational dynamics that led to the tragedy and propose a framework that similar organizations can use to prevent the next one. The recent roll back of environmental findings makes the internal governance of energy producers particularly urgent.

The managers working on the Macondo well were under tremendous pressure to finish their work. Behind schedule and burning cash, they ignored warnings and skipped steps that, in isolation, weren’t disastrous. Taken together, they were catastrophic.

We’ve all been there. Projects go off the rails and the scrutiny intensifies. The pressure magnifies the organizational dynamics that create peripheral blindness and lead to questionable decisions. Last week I described The Loop, a model of organizational failure that prevents organizations from acting on information they already have. It emerges through three failure modes: synthesis failure, misaligned incentives, and institutional capture. This week I’m applying a Loop breaking framework that asks five simple questions.

At Macondo, the answer to all five was no.

The Macondo well was a billion-dollar asset. BP, Transocean, Halliburton, and Schlumberger treated it like a construction project running late. That distinction is the entire story.

Start with the North Star. A team aligned around the safe extraction of the maximum value of crude oil doesn't skip a $128,000 cement bond test. They don't ignore anomalous pressure readings from the negative pressure test. The mission had been quietly replaced by a different one: get the well online this week. Nobody said so out loud. Nobody had to.

Which raises the Hub question. Was there a single person or business unit responsible for synthesizing what BP knew, what Transocean knew, what Halliburton knew, into a unified picture of risk? The commission answers that directly. Information flowed in vertical stovepipes rather than horizontally across organizations. People made decisions without fully comprehending their connection to other critical problems unfolding across the operation. The warning signs were all there. No architecture of shared consciousness existed across the disparate organizations to connect them before the obvious tradeoffs between speed and safety became fatal.

The team at Macondo was the Sundance Kid, perched at the top of a cliff, worried about whether he could swim. Butch had to explain it to him. It's not the water that's going to kill you. It's the fall. At Macondo, nobody was Butch.

The Clock failure made it worse. They were using a stopwatch to track daily expenses on a well expected to produce for decades. Someone inside that organization should have been able to say: we are burning $1 million a day on a well that will generate $1 billion over its lifetime. The overrun is noise. The asset is the signal. BP’s annual revenues exceeded $260 billion. Had the Macondo team run a full year over schedule, the overrun would still have been immaterial. Nobody reframed it that way because nobody was looking at the right clock.

Time horizons shape metrics and metrics shape behavior. The commission found that the relentless demand to bring production online caused the team to define success by the daily schedule rather than the long-term value of the asset. They were keeping score on the wrong game entirely.

And when it all came apart, nobody hit the kill switch. Theoretically, every worker on that rig could stop operations for safety. In practice, the Commission found no evidence of a top-down safety culture that made that real. BP’s well site leaders and Transocean managers had the positional authority to slow down, but no formal risk analysis system gave anyone the full picture required to use it.

The MMS, the regulator with actual legal authority to halt operations, had been captured. The royalty payments flowing from the oil industry to the MMS created a regulator that was financially dependent on the industry it was supposed to police. The MMS measured itself by royalty generation rather than by the rigor of its enforcement regime. The green light was always on.

Five mechanisms. All five failed. Eleven people died.

There is no way to say definitively that this framework would have prevented the accident at Macondo. Deep water drilling is one of the most complex industrial endeavors on earth and is inherently dangerous. I’m not pretending otherwise. But it is clear that it would have surfaced the risks to a centralized authority and reframed the problem before it was too late.

Deepwater Horizon is not an isolated case. The pattern repeats. NASA launched the Challenger despite warnings from Morton Thiokol about the O-ring performance in extreme cold temperatures. Boeing rushed the 737 Max to market to compete with Airbus, suppressing internal safety concerns until two crashes killed 346 people. The American war in Afghanistan persisted across 20 years and four presidential administrations despite misgivings from senior leaders in the White House and Pentagon that emerged within months of the invasion.

Organizations designed for the speed of information flows in the 1950s are simply not equipped for a world where information travels exponentially faster across globally extended enterprises. In the weeks ahead we’ll look at the role speed and complexity play in failure, and how organizations can ensure that information flows horizontally to enable a complete and coherent picture of risk.

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Last week I introduced The Loop, my framework for why organizations fail to act on information they already have. It emerges when synthesis failure, misaligned incentives, and institutional capture combine to create peripheral blindness and costly mistakes.

Today, I’ll show it in action.

On Thursday February 12, 2026, the Trump administration announced one of the most sweeping deregulatory actions in American history. The core of this move is the repeal of the 2009 Endangerment Finding. This Finding is a foundational legal and scientific determination that greenhouse gases like carbon dioxide and methane pose a threat to public health and welfare

The administration is not simply ignoring old laws. They are stripping away the legal foundation that allowed those laws to exist in the first place. They are eliminating environmental regulation based on a premise that the government never had the authority to impose them.

Let me make it clearer. Under the Clean Air Act, the EPA can only regulate a substance if it “endangers public health.” By officially finding that carbon dioxide, methane, and other greenhouse gases fail to meet the legal definition of a pollutant, the administration has effectively made it illegal for the EPA to regulate them. By weakening regulatory authority while simultaneously compressing review process timelines, the government eliminated the forced synthesis that makes oil companies connect the dots before they drill.

Simultaneously, the administration announced more surgical moves to protect the fossil fuel industry including delaying a regulation that targeted methane leaks for oil and gas operators. They also accelerated permitting for oil and gas drilling on national forest lands while issuing a new energy density policy that favors fossil fuels over renewables because they produce more energy per acre. The administration also scheduled two massive lease sales for oil drilling in the Gulf of Mexico and the Cook Inlet in Alaska.

Why does this matter? This is neither an environmental nor a political argument. It’s a systems argument. Accelerated timelines remove forced synthesis, the brake that makes people stop and consider the cost of speed. Regulation is far more than enforcement. It’s the thinking and planning that has to happen before you drill into a forest or below the ocean floor. Without that brake, catastrophe becomes predictable.

On April 20, 2010, the Deepwater Horizon drilling rig exploded in the Gulf of Mexico, killing eleven workers and injuring seventeen. For the next 87 days, oil poured from the Macondo well, located nearly a mile below the ocean surface, at a rate of roughly 60,000 barrels per day. By the time BP finally sealed the well, 134 million gallons of crude oil had entered the Gulf, coating over a thousand miles of coastline across six states. It was the largest marine oil spill in American history. Put in perspective, the Exxon Valdez spill in 1989 released 10.8 million gallons of crude oil into Alaska’s Prince William Sound. Deepwater Horizon was nearly 12 times worse.

The disaster was not the result of a single catastrophic failure. It was the accumulation of small decisions, each one trading safety for time and money. No one at BP, Halliburton, or Transocean connected the dots. Each shortcut, each safety compromise compounded the risks.

At the time of the accident, the well was 43 days behind schedule. BP and Transocean were burning roughly a million dollars a day in rig costs. The team was under tremendous pressure to get the well producing. The technicians and engineers ignored four separate safety warnings that, on their own, should have been sufficient to halt the project.

Halliburton’s own modeling software warned that BP needed 21 centralizers, devices to keep the pipe centered in the wellbore so cement seals evenly. BP went against their recommendation and only used six. When a BP engineer raised concerns, a colleague replied by email: “who cares, it’s done, end of story, will probably be fine.”

Halliburton told BP the cement was unstable. BP ignored the warning and continued to drill.

A Schlumberger crew was flown to the rig on April 18 to run a cement bond log, the only test that could confirm whether the cement had actually sealed the well. The test would have cost $128,000 and taken about twelve hours. BP canceled it and sent the crew home.

When the negative pressure test, a test to determine if anything is pushing back up the well, came back with anomalous readings that should have stopped operations, the crew talked themselves into a plausible explanation and kept going.

The blowout preventer, a mechanical device installed on the ocean floor to seal the well, was the last line of defense. It had known maintenance issues, including a hydraulic leak and a failed battery. Key components hadn’t been inspected in years. It failed. The result, millions of gallons of oil poured into the Gulf.

BP had all of the information. They simply didn’t synthesize it to create a unified picture of the compounding risk from the missing centralizers, the skipped cement test, the inconclusive negative pressure test, and the faulty blowout preventer valve. No one inside the organization with authority to slow the process had a complete understanding of the situation.

To date, the total cost to BP and its partners has exceeded $65 billion, with payments scheduled to continue through 2031. The savings from every shortcut, every skipped test, every ignored warning amounted to a few million dollars at most. BP saved $128,000 by not running the cement bond log. They saved perhaps $3 million by not using the recommended number of centralizers and running additional tests.

They were $58 million over budget and desperate to stop the bleeding. $58 million was .0000195 of BP’s 2010 revenues of $297 billion. That figure is immaterial. It’s a rounding error. A meaningless amount of money for a global energy behemoth.

Because of short-term pressures and incentive structures, BP executives made decisions that cost them a thousand times more than the budget overrun they were trying to fix.

But BP’s shortcuts were only half of the story. The agency responsible for catching those shortcuts wasn’t equipped or staffed to do its job. In fact, the Minerals Management Service collected $13 billion a year in royalties from the industry it was supposed to regulate. More drilling meant more revenue and more drilling meant more inspectors were needed. They had 55.

In 2010 there were roughly 3,500 offshore drilling and production platforms in the Gulf of Mexico. 90 of these were oil drilling platforms that, by regulation, required a monthly inspection. The remaining 3,400 production platforms required annual inspection.

3,500 platforms was the numerator.

55 inspectors was the denominator.

Each inspector had finite hours in a week.

The math simply didn’t work. Adequate federal oversight was a mathematical impossibility.

The AP confirmed that MMS missed at least 16 monthly inspections of Deepwater Horizon between 2005 and the time of the explosion.

The accident at Deepwater Horizon was neither unforeseeable nor unpredictable. A catastrophic accident on an offshore oil well is about as predictable a disaster as a NASCAR wreck in the banked turn at Daytona.

You are drilling a hole in the earth from a floating platform in the middle of the ocean. The hole starts by going down through a mile of water and then another two and a half miles into rock. You are sticking a straw into the earth looking for oil and gas bottled up under enormous pressure for millions of years. The oil company’s job is to keep the pressure contained until they are ready to extract the oil and gas through a sealed pipe.

BP simply chose, at every decision point, not to act on what they knew. This is a textbook example of the Loop. Synthesis failure, misaligned incentives, and institutional capture work together to create peripheral blindness and catastrophic failure.

Synthesis failure: BP had the information about the anomalous negative pressure test, the skipped cement bond test, and the compromised blowout preventer. No one connected the dots. Any one of these warnings alone should have been sufficient to stop operations. Together they ensured disaster.

Misaligned incentives: The project was $58 million over budget and burning $1 million a day. The report on the investigation of the accident at Deepwater Horizon concludes, “that the systematic failures at Macondo were rooted in a management culture where financial pressures likely biased decision-making in favor of time- and cost-savings.”

Institutional capture: The MMS knew it had missed inspections at Deepwater Horizon but was more focused on generating royalty revenue from the industry it was supposed to oversee. The inspectors they did have often lacked the technical expertise to evaluate complex drilling operations and had to rely on the companies they were regulating to tell them whether their own practices were safe.

Taken together, these three mechanisms create fertile ground for catastrophic failure.

The legendary UCLA basketball coach John Wooden used to ask his team, “Why is there never enough time to do it right but always enough time to do it over?” BP, Halliburton, and Transocean took shortcuts to keep up with a demanding project schedule and financial pressures. Instead of spending $128,000 to run the cement test, they skipped it. BP spent more than $128,000 on Post-it notes in 2010. The one-time $128,000 cost avoidance cost BP over $65 billion to date.

The government enacted reforms after eleven people died at Deepwater Horizon. It split MMS into three separate agencies to separate revenue collection from safety enforcement, doubled the inspection workforce, and created new standards for blowout preventers and well design.

The accelerated permitting timelines announced last week compress or eliminate the environmental reviews that force operators to think before they drill. Those steps forced synthesis. Without them, the decision-making process that failed at Deepwater Horizon gets faster, not better, and not more deliberate. Rolling back these guardrails doesn’t erase the underlying reasons for their creation.

The next Deepwater Horizon isn’t a black swan. It’s hiding in plain sight, and the government just weakened the guardrails designed to prevent it. That is the Loop operating in its purest form.

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Dr. Seuss is a national treasure not because he wrote children’s books in rhyme, but because he disguised societal diagnostics as children’s stories.

Over the past month, I’ve written about Horton, the Lorax, the Once-ler, and the Zax. It’s been a nostalgic journey back to my own childhood and to the nights I spent reading to my kids at bedtime.

The choice of Dr. Seuss was deliberate. I’m a simple man and enter the world through metaphor. His timeless wisdom is a relatable entry point into ideas I’ve been wrestling with intellectually and professionally for more than thirty years. Those ideas culminated in an unpublished book that currently lives on my hard drive and in the cloud. You can never be too careful.

In week one, I used Horton to talk about the importance of listening and connecting action to what we hear. I followed with a piece comparing former Intel CEO Craig Barrett to the Lorax, warning Congress that the country isn’t producing enough engineers to keep pace in the 21st century. I connected the Once-ler’s warning of unless to the fragility of democracy revealed by the events in Minneapolis.

Finally, I used the Zax to illustrate that global progress doesn’t stop simply because the United States Congress is paralyzed. China’s lead in electric vehicles and Taiwan’s dominance in semiconductors illustrate the compounded damage from generations of policy paralysis in education, immigration, and public sector investment.

Over a nearly forty-year career and more than a million miles of travel, I’ve seen a pattern repeat that the Seuss framework crystallizes. Other than the New York Jets, most organizations don’t fail because of inept leadership. Most institutions fail because they can’t act on what they already know.

NASA engineers knew it was too cold to launch Challenger. Boeing engineers knew MCAS on the 737 MAX was flawed. Generals, cabinet secretaries, and presidents knew for twenty years that the war in Afghanistan was failing. Intel recognized that mobile posed an existential threat to the dominance of the PC microprocessor. A generation later, it knew that the RISC architecture behind NVIDIA’s chips was better suited for the massive parallel processing required by artificial intelligence. Today, NVIDIA is among the world’s most valuable enterprises.

These examples aren’t hindsight or Monday-morning quarterbacking. In every case, the warnings existed in real time. Successful organizations led by brilliant people failed to act on information they already possessed, developing peripheral blindness that obscured threats obvious in hindsight. Catastrophic failures are not black swans. They are often the predictable result of an inability to synthesize and surface information and conclusions that already exist.

This phenomenon stems from three disparate but interconnected mechanisms: synthesis failure, misaligned incentive structures, and institutional capture. Together, these mechanisms form what I call The Loop and create fertile ground for institutional failure.

The Loop is not linear. These mechanisms reinforce one another continuously, shaping what information is surfaced, which risks are tolerated, and which truths are safe to acknowledge. Over time, candor erodes, inertia dominates, and leaders benefit from protecting and maintaining the status quo even as indisputable evidence of failure accumulates.

Over the next several weeks, I’ll drill into the causes of The Loop and the techniques leaders can use to recognize and break it inside their own organizations. Once you learn to see The Loop, you can’t unsee it. Learning to recognize it unlocks powerful tools for breaking it. Five specific mechanisms that can transform organizations through strategic alignment, information flow, measurement, time horizons, and authority

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Postscript: If you know a literary agent or publisher who might be interested in this work, I’d welcome an introduction. Thanks.

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Congress passed the CHIPS Act in 2022 to re-shore semiconductor manufacturing. The fabs are funded. The plans are drawn. But we don’t have the people to build them or staff them. TSMC’s Arizona plant is delayed for lack of steamfitters, electricians, and HVAC technicians. Industry projections suggest 67,000 of 115,000 new semiconductor jobs will go unfilled by 2030. We need engineers for the clean rooms.

We need steamfitters to build them.

Johnny can’t do the engineering. Jimmy can’t do the construction. And 75% of America’s semiconductor PhDs are foreign-born, most of them trained at our own universities, in our own labs, on our own federal research grants. They want to stay. We make them leave.

We allocated the money. We announced the plan.

Then we froze.

Professor McGrifter promised to build a wall to keep people out. Tech CEOs are begging him to let people in. The H-1B cap hasn’t moved since 1990. China graduates 3.5 million STEM students a year; we graduate 820,000. The math doesn’t work, but Congress stands still. One side performs anti-alien theater. The other wants more visas. Neither addresses the fact that Johnny can’t code while we deport the engineers who can. Jimmy can’t weld, but he’s posting skincare routines.

Meanwhile, Taiwan makes 97% of the world’s most advanced chips from an island 100 miles off China’s coast, in the most dangerous neighborhood on earth. A blockade could sever the supply chain overnight. We passed the CHIPS Act to reduce that risk. But we can’t staff the fabs without engineers. We won’t reform immigration to keep the engineers.

So we’re building facilities we can’t operate while staying dependent on a supply chain that could vanish in a weekend.

Professor McGrifter wants a wall. The CEOs want workers. The Red and Blue Zax stand frozen between them. And the fabs sit partially built, waiting for workers who aren’t coming.

The North-Going Zax and the South-Going Zax stood forever in the Prairie of Prax. The world didn’t wait. China didn’t either. While America argued about electric vehicles, China built the industry. BYD became the world’s largest EV manufacturer. Chinese firms now dominate batteries, motors, and the supply chains behind them. Ford wrote down $31 billion. GM stalled. BYD iterated, produced, and took the markets we assumed were ours.

They have the engineers. We don’t.

We stood frozen arguing about direction. China built the highway around us. By the time we moved, they were gone.

Johnny can’t multiply. Jimmy can’t weld. The Red Zax did nothing. The Blue did the same. Professor McGrifter sold crypto, bibles and golden high-tops and laughed all the way home.

Brigadier General Theodore Roosevelt Jr.’s war was real. Ours is metaphorical, but it is informed by the sacrifice of the men who rest in perpetuity at the American cemetery overlooking Omaha Beach. They lie in permanent repose, marked by gravestones planted in perfectly symmetrical lines, silent as Truffula trees.

The Lorax spoke for the trees for the trees had no tongues. Roosevelt and the men who rest at Normandy are our Once-ler, handing us a seed as a reminder of the price of freedom. They are speaking to us from the past with a single word of warning: unless.

Say Omaha today and thoughts pivot to college baseball, mail order ribeye steaks, or Peyton Manning rather than a shibboleth to sacrifice in the name of freedom. We have forgotten that the line of American freedom isn’t a straight path. It is a jagged path of bloodshed that starts at Lexington Green, runs through Antietam, and Normandy to the Edmund Pettus Bridge in Selma. The path is a reminder that America is an ideal captured in what Walter Isaacson calls the greatest sentence ever written, “We hold these truths to be self-evident, that all men are created equal.”

Today that democracy is under attack. It is under attack from within by the very institutions charged with maintaining the rule of law. George Floyd’s death in Minneapolis was a warning shot. The violence occurring on the streets of Minneapolis today is a potential kill shot that threatens competent self‑rule and the legitimacy of the government itself

Jefferson gave us the north star of freedom. Madison gave us the gears, the checks and balances. Lincoln challenged us to make our lives worthy of the sacrifice of the men who gave the last full measure of devotion. Dr. King spoke of the arc of the moral universe bending toward justice.

But the arc does not bend on its own. Our freedom, our form of government aren’t guaranteed. Roosevelt didn’t wait for perfect conditions on Utah Beach. He looked at chaos and said, ‘We’ll start the war from right here.’ The war for the soul of our democracy starts here. And it starts with us and people like us who care a whole awful lot.

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Maybe Craig Barrett’s testimony before Congress would have landed harder if he’d opened with, “I am the Lorax and I speak for the nerds.”

He didn’t. Barrett was a Stanford-trained materials scientist, Intel’s CEO and Chairman, testifying before the House Science Committee in 2007. He was measured and precise: without investment in STEM education, research, and immigration reform, America would lose its innovation edge.

Congress had heard this before.

A Nation at Risk warned in 1983 that the “educational foundations of our society” were eroding. By then, the problem was already decades old. In 1964, American students ranked 11th of 12 in international math. In 1973, they ranked last in science. By the mid-1980s, they were at or near the bottom in biology and chemistry. The message never changed.

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Our response: speeches, commissions, requirements, funding cycles.

Louisiana pays Brian Kelly a $54 million buyout not to coach football.
Meanwhile, teachers in Louisiana earn, on average, $56,000 a year.

We built the appearance of caring, not capability.

We didn’t make teaching attractive enough to staff STEM classrooms. We didn’t build a domestic engineering pipeline. We didn’t reform immigration to keep the foreign students we trained. We didn’t invest in the trades that advanced manufacturing requires.

Instead, we confused testing with education. No Child Left Behind cut science instruction to minutes a day. Race to the Top spent billions without measurable impact. Each decade produced a new initiative. None built capacity.

Alarm, theater, amnesia.

Repeat.

By 2007, nothing had changed. By 2022, American 15-year-olds ranked 26th in math on PISA; about one-third were at or below basic skill level, unable to do things like compare distances or convert prices reliably. U.S. math performance hit its lowest recorded scores even as the country’s relative ranking rose only because others fell further.

We’ve never led.
We’ve never caught up.

China now produces roughly four times as many STEM graduates as the United States. In the U.S., foreign-born talent carries the load: about three-quarters of semiconductor PhDs are foreign-born; roughly 43% of doctorate-level scientists and engineers are foreign-born; only around 41% of foreign STEM PhDs stay after graduation. The result is an annual loss on the order of tens of thousands of advanced engineers.

And now, as the U.S. tries to build semiconductor fabs with CHIPS Act money, it is discovering it does not have the people to build or staff them. Fabs need pipefitters, HVAC techs, electricians, welders and other skilled tradespeople. The American Welding Society projects a shortage of hundreds of thousands of welders in the next few years; about 94% of construction firms report difficulty finding skilled craft workers. TSMC’s Arizona plant has already been delayed in part over a lack of qualified local tradespeople.

Industry estimates suggest that 67,000 of roughly 115,000 new U.S. semiconductor jobs could go unfilled by 2030.

The warnings weren’t abstract. They were operational.

For sixty years, the United States heard them. For sixty years, it signaled concern instead of building capacity.

Craig Barrett was one of the Lorax who spoke for the nerds.
We didn’t listen.
And now we need more nerds.

But warnings are ignored because of a deeper stubbornness, the kind that stops two travelers in the Prairie of Prax.

More to follow. Next week.

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