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When my teenage son developed mysterious symptoms, I followed the same path anyone else would: I put his health in the hands of a team of medical professionals. Multiple myeloma is a rare blood cancer. It is so uncommon in 17-year-olds that it doesnt appear on diagnostic checklists. Despite having no clear starting point to work from, my sons doctors worked their way to an accurate diagnosis through a process of trial and error, bouncing ideas off each other and testing and discarding hypotheses until they could tell us what was wrong. The process felt inefficient and uncertain at a time when I wanted fast answers and cast-iron guarantees. But this messy and distinctively human approach saved my sons life. AI promises to improve processes like this, replacing the fallible and unpredictable human mind with the analytic power of trained and tested algorithms. As someone who helps organizations implement AI technology, I know just how much potential it has to make processes and workflows more efficient. But before we start replacing human judgment at scale, we need to think carefully about the hidden costs that can come with productivity gains. A recent study in The Lancet Gastroenterology & Hepatology presented some sobering findings for AI maximalists. Physicians who spent several months working with AI support in diagnostic roles showed a significant decline in unassisted performance when the technology was withdrawn. This kind of deskilling effect isnt unique to either medicine or AI. We have known for years that extensive GPS use leads to a decline in spatial memory and that easy access to information reduces our ability to recall facts (the so-called Google effect). {"blockType":"mv-promo-block","data":{"imageDesktopUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/10\/creator-faisalhoque.png","imageMobileUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/10\/faisal-hoque.png","eyebrow":"","headline":"Ready to thrive at the intersection of business, technology, and humanity?","dek":"Faisal Hoques books, podcast, and his companies give leaders the frameworks and platforms to align purpose, people, process, and techturning disruption into meaningful, lasting progress.","ctaText":"Learn More","ctaUrl":"https:\/\/faisalhoque.com","theme":{"bg":"#02263c","text":"#ffffff","eyebrow":"#9aa2aa","buttonBg":"#ffffff","buttonText":"#000000"},"imageDesktopId":91420512,"imageMobileId":91420514}} Most people are willing to accept these cognitive losses in exchange for convenience. And that is a trade-off that individuals need to decide for themselves. But when it comes to organizations and institutions, things are more complex. The first concerns that leap to mind are worries about losing access to our AI tools after outsourcing our skills to them. What if the system crashes or performance drops off? While this is a real problem, it is nothing new. We can design backup solutions where necessary, just as we always have with technology. But there is another set of problems that cannot be resolved simply by putting guardrails in place. Human skill sets are important not just because they let us act on those skills, but also because they let managers and decision-makers understand and supervise what is happening on the frontlines. If physicians lose their diagnostic chops, who will validate or audit the output of the algorithms? Who will notice that the edge casesthe patients with statistically implausible diseasesare not being diagnosed correctly? And, perhaps most importantly, who will take responsibility for the algorithmic judgments, whether they are right or wrong? For most organizations, maintaining public trust is a core part of their relationship with society. Just as we wont eat in a restaurant if we dont trust the kitchen to deliver safe food, so we avoid products and services that we believe may harm us. Without accountability, trust is impossible. As an IBM training manual put it nearly 50 years ago: A computer can never be held accountable, therefore a computer must never make a management decision. The same principle holds true for AI. Without a clear accountability trail that leads to a human decision-maker, it becomes impossible to hold anyone responsible for any harms that arise from the AIs behavior. And this accountability deficit can destroy the legitimacy of an institution. We can see these dynamics at work in the U.K.s 2020 exam grading debacle. At the height of the COVID pandemic, with normal exams cancelled, the U.K. government used an algorithm to assign grades. The algorithm imported biases and systematically favored children from wealthy backgrounds. But even if it had worked perfectly, something critical would still have been missing: institutions that can justify their decisions to those affected by them. Nobody will be satisfied by an algorithmic explanation for a result that might have lifelong effects. Ultimately, the government reversed course, replacing the AI judgment with assessments made by each students teachers. What this means for your organization The challenge isnt whether to use AIits how to implement it without creating dangerous dependencies. Here are specific actions leaders, managers, and teams can take: Implement AI rotation schedules: Ensure that teams rotate periodically from AI-assisted work to manual work to maintain core competencies. Create skill preservation protocols: Document which human capabilities are mission-critical and cannot be outsourced. Establish accountability chains: Specify which decisions require human sign-off. Institute analog days: Schedule regular sessions where teams solve problems without AI tools. Design edge case challenges: Create exercises focusing on unusual scenarios AI might miss. Maintain decision logs: Create institutional memory of the value and role of human judgment by documenting when and why you override AI recommendations. Practice explanation exercises: Regularly require team members to explain AI outputs in plain languageIf they cant explain it, they shouldnt rely on it. Rotate expertise roles: Ensure multiple people can perform critical tasks without AI support, preventing single points of failure. Warning signs your organization is too AI-dependent Watch for these red flags that indicate dangerous levels of depndency: Teams cant explain AI recommendations Acceptance of AI results without validation has become the norm Staff miss errors or outliers that the AI overlooks Employees express anxiety about performing tasks without AI assistance Simple decisions that once took seconds now require AI consultation If you spot any of these signs, you need to intervene to restore human capability. The path forward My sons cancer was successfully diagnosed thanks to structured redundancy in his care team. Multiple specialists approached the same problem through different lenses. The bone specialist saw what the blood specialist missed. The resident asked the naive question that made the senior doctor reconsider. This kind of overlap can look like inefficiency at times, but if we dont work to retain it, we lose something vital. We should not shy away from the advantages AI can offer when it comes to analytical speed and pattern-recognition. But at the same time, it is essential that we shield the decision-making process from being overwritten by a single algorithmic voice. We must keep humans in the loop both because they can look beyond statistical likelihood and because they can be held accountable for their final decisions. Yes, maintaining human capabilities alongside AI will be expensive. Training tracks that preserve human skills, AI-off drills, and rigorous human audits all cost money. But they preserve the institutional muscle memory that holds the whole edifice up. The cost of losing the human perspective is one we cannot afford to bear. {"blockType":"mv-promo-block","data":{"imageDesktopUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/10\/creator-faisalhoque.png","imageMobileUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/10\/faisal-hoque.png","eyebrow":"","headline":"Ready to thrive at the intersection of business, technology, and humanity?","dek":"Faisal Hoques books, podcast, and his companies give leaders the frameworks and platforms to align purpose, people, process, and techturning disruption into meaningful, lasting progress.","ctaText":"Learn More","ctaUrl":"https:\/\/faisalhoque.com","theme":{"bg":"#02263c","text":"#ffffff","eyebrow":"#9aa2aa","buttonBg":"#ffffff","buttonText":"#000000"},"imageDesktopId":91420512,"imageMobileId":91420514}}
Category:
E-Commerce
During a recent New York Fashion Week, a wood-paneled boutique popped up in SoHo next to Louis Vuitton and Bottega Veneta. On the racks were tailored, wide-leg jeans and simple black Henley dresses that signaled understated elegance. But unlike those of neighboring boutiques, the clothes werent from a storied European maison de couture. They were some of the newest collections from Scoop and Free Assembly, two brands led by Brandon Maxwell, creative director at the House of Walmart. The pop-upwhich featured items priced between $8 and $75was part of the Bentonville, Arkansasbased retailers strategy to get its products in front of urban shoppers who might not be familiar with its growing array of fashion-forward budget brands. The SoHo stint was just one of the ways chief merchant Latriece Watkins a 25-year veteran of the company who joined the C-suite in 2023is positioning Walmart to appeal to a broader spectrum of shoppers. Our goal is to refresh and elevate all of our fashion brands, Watkins says. Were only 10% of the way there. For six decades, Walmart has been the go-to retailer for rural, lower-income Americans. But at a time of inflation and economic uncertainty, Americans of all backgrounds are more budget conscious. Prices have gone up for three years, says Mickey Chadha, a retail analyst at Moodys. Even the wealthy are looking to save money, and theyre gravitating toward Walmart. This presents the retailer with the opportunity to win over more affluent consumers, snagging them from competitors like Target and Amazon. Watkins has been introducing higher-end brands, like Apple, Sonos, and Nikes Air Jordan, both into stores and on Walmart.com. Her team is also developing and refreshing private labels that look premium but are inexpensive, with a focus on growth areas, such as apparel. In addition to working with Maxwell to reimagine the Scoop and Free Assembly lines, Walmart relaunched No Boundaries last year. The 30-year-old fashion brand, which generates $2 billion a year, has been updated to appeal to the tastes of Gen Z, with prices under $15. This July, the company unveiled Weekend Academy, a new trendy label for tweens. Watkins is also targeting Walmarts grocery business, which makes up 60% of its sales. Last April, the company launched Bettergoods, its first new private-label food brand in two decades; the line of 400 attractively packaged globally inspired food items has quickly lured new customers into stores. Theyre already among the fastest-moving items we sell, Watkins says. The strategy is working: While roughly 45% of Walmarts customers earn less than $50,000 a year and only 7% earn more than $100,000, the companys share of high-income customers is expanding. In the first half of 2024, households earning more than $200,000 drove growth in the grocery business, making up 8% of customers. And in the third quarter of 2024, customers who earn more than $100,000 accounted for 75% of Walmarts gains in market share, a trend that continued in 2025. Now, Watkinss challenge is to continue winning over deeper-pocketed customers while keeping the budget-conscious ones happy. We have a core customer we will never alienate, she says. But we now have an opportunity to delight them with merchandise that goes beyond the essentials. The typical Walmart store looks nothing like its swanky New York pop-up. Under fluorescent lights, youll find aisles stacked with 120,000 products, from cereal to apples to sneakers to candles. Watkinss team of merchants selects every one of these goods. Just as importantly, theyre responsible for how much each item costs. As merchants, we take a ton of responsibility for the prices customers see, Watkins says. Price has always been Walmarts critical advantage. When Sam Walton founded the company in 1962, he had the radical idea of selling products as cheaply as possible when the conventional wisdom among retailers was to charge the highest price the customer was willing to pay. Waltons approach meant lower margins, so he focused on selling in volume, creating vast stores in small, rural towns underserved by other retailers. By pursuing this approachthe most successful in retail historyWalmart has become the largest company in the world by revenue, to the tune of $681 billion in 2024. It has 10,750 stores in 19 countries. In the United States, its 4,605 stores are within 10 miles of 90% of the population. And since Walmarts prices remain 10% to 25% lower than those of its competitors, it often serves as the primary retailer for low-income families in nonmetropolitan areas, according to research by the Analysis Group. Watkins has no intention of changing this. Were going to keep serving the customer who has trusted us for years, she says. Yet Watkins believes her team has an opportunity to serve a wider demographic by adding more products to the assortment. Walmarts merchants track the tastes of higher-income consumers and bring in premium brands that will appeal to them. In recent years, thats included Oxo kitchenware, DeLonghi coffee makers, and La Roche-Posay skincare. Walmart pores over its store data, selectively placing these higher-end products in areas with higher incomes. All of them also appear on Walmarts website, which includes half a billion items. Its a formula thats working, says Chadha. Walmart is growing year over year by gaining customers on the high end without losing customers on the low end. But adding upscale brands can only take a retailer so far. The way to turn someone into a regular Walmart customer is to get them hooked on products they cant get elsewherewhich is why Watkins is so focused on bolstering the companys private labels. We want to have an assortment of items that customers want to repeat-purchase, says Watkins. If you make an item people love, they will come back for it again and again. Of Walmarts 90 house brands, 22 generate upwards of a billion dollars in annual revenue, including Wonder Nation kids clothing, Ozark Trail outdoor gear, and Onn electronics, which includes TVs and tablets. These brands have historically focused on no-frills essentials. But to appeal to richer customers, Watkins is rolling out in-house brands that focus on quality and design. The move is straight out of Targets playbook at a time when the Minneapolis-based retailer is flagging. Over the past two decades, while Walmart was serving rural, working-class Americans, Target was capturing trendy urbanites by focusing on good design. Target partnered with high-end designers to create cheaper versions of their products and launched private labels that mimicked the popular new brands on the market. But over the last year, Targets sales have declined amid operational challenges and boycotts from consumers over its reversal on DEI initiatives. This has given Walmart an opportunity to win over some of Targets waffling shoppers. Bettergoods is Walmarts first big play to steal Targets thunder. After researching food trends, Watkinss team noticed that Walmarts customers were looking for more global flavors, plant-based ingredients, and foods that cater to dietary restrictions. Our food business is so large that we have insight into everything thats happening in the food industry, she says. It was clear that the customer profile was changing. In response, the company developed Bettergoods specialty grocery items, including macarons, gochujang sauce, and mushroom umami seasoning, that wouldnt be out of place at a pricier retailer. Even so, 70% of Bettergoods products cost less than $5. While other Walmart food brands have a budget aesthetic, Bettergoods has a custom typeface and multicolor packaging that looks as good as in-house brands at Target and Whole Foods. This postioning is paying off. So far, 60% of people who buy the brand have never previously purchased from Walmarts private labels, and their repurchase rate is 40%. Bettergoods also introduces shoppers to other Walmart offerings. Walmart is succeeding at picking up a share of the wealthy consumers basket, says Sucharita Kodali, a retail analyst at Forrester. If they start shopping at Walmart for food, they may pick up tablecloths, bug sprays, and socks. To help build knowledge of its house brands outside the store, Walmart has recently created an influencer network to showcase its private labels on social media, and last fall, it embarked on a 29-city Style Tour in a blue camper van that let people shop items from 15 of its fashion labels. Weve been able to expose our assortment to people who dont have stores as close to them but can access these products the same or next day by shopping online, Watkins says. Our differentiator is our ability to serve customers in multiple ways, all at the same time. Thanks to Watkinss merchandising strategy, more high-income consumers are now online-only Walmart shoppersan important step in helping Walmart catch up to Amazons e-commerce dominance. Over the last decade, Walmart has invested in its website, from launching a third-party marketplace to improving delivery speeds to offering a Prime-like membership program called Walmart+. At $100 billion, Walmarts online sales are significantly smaller than Amazons $480 billion, but they are growing twice as fastby 20% in 2024, compared to Amazons 11% sales growth. Last year, Walmart dispatched 6.5 billion items via same- or next-day delivery. The e-commerce capabilities of Walmart and Amazon are head-to-head at this point, says Chadha. Walmarts advantage is that it has a significant store footprint, which they can integrate into their e-commerce by turning them into distribution centers. In some cases, Watkins says wealthy consumers order from Walmarts website in order to shop the budget retailer discreetly, but she believes elevating product design and quality will help change peoples perceptions. I received a note from someone who said she got so many compliments on a dress she wore to her friends wedding. No one knew it was from Walmart, she says. Were focused on being a place where people feel so good about their purchases, they want to tell their friends about it.
Category:
E-Commerce
For a generation of young Americans, choosing where to go to college or whether to go at all has become a complex calculation of costs and benefits that often revolves around a single question: Is the degree worth its price?Public confidence in higher education has plummeted in recent years amid high tuition prices, skyrocketing student loans and a dismal job market plus ideological concerns from conservatives. Now, colleges are scrambling to prove their value to students.Borrowed from the business world, the term “return on investment” has been plastered on college advertisements across the U.S. A battery of new rankings grade campuses on the financial benefits they deliver. States such as Colorado have started publishing yearly reports on the monetary payoff of college, and Texas now factors it into calculations for how much taxpayer money goes to community colleges.“Students are becoming more aware of the times when college doesn’t pay off,” said Preston Cooper, who has studied college ROI at the American Enterprise Institute, a conservative think tank. “It’s front of mind for universities today in a way that it was not necessarily 15, 20 years ago.” Most bachelor’s degrees are still worth it A wide body of research indicates a bachelor’s degree still pays off, at least on average and in the long run. Yet there’s growing recognition that not all degrees lead to a good salary, and even some that seem like a good bet are becoming riskier as graduates face one of the toughest job markets in years.A new analysis released Thursday by the Strada Education Foundation finds 70% of recent public university graduates can expect a positive return within 10 years meaning their earnings over a decade will exceed that of a typical high school graduate by an amount greater than the cost of their degree. Yet it varies by state, from 53% in North Dakota to 82% in Washington, D.C. States where college is more affordable have fared better, the report says.It’s a critical issue for families who wonder how college tuition prices could ever pay off, said Emilia Mattucci, a high school counselor at East Allegheny schools, near Pittsburgh. More than two-thirds of her school’s students come from low-income families, and many aren’t willing to take on the level of debt that past generations accepted.Instead, more are heading to technical schools or the trades and passing on four-year universities, she said.“A lot of families are just saying they can’t afford it, or they don’t want to go into debt for years and years and years,” she said.Education Secretary Linda McMahon has been among those questioning the need for a four-year degree. Speaking at the Reagan Institute think tank in September, McMahon praised programs that prepare students for careers right out of high school.“I’m not saying kids shouldn’t go to college,” she said. “I’m just saying all kids don’t have to go in order to be successful.” Lowering college tuition and improving graduate earnings American higher education has been grappling with both sides of the ROI equation tuition costs and graduate earnings. It’s becoming even more important as colleges compete for decreasing numbers of college-age students as a result of falling birth rates.Tuition rates have stayed flat on many campuses in recent years to address affordability concerns, and many private colleges have lowered their sticker prices in an effort to better reflect the cost most students actually pay after factoring in financial aid.The other part of the equation making sure graduates land good jobs is more complicated.A group of college presidents recently met at Gallup’s Washington headquarters to study public polling on higher education. One of the chief reasons for flagging confidence is a perception that colleges aren’t giving graduates the skills employers need, said Kevin Guskiewicz, president of Michigan State University, one of the leaders at the meeting.“We’re trying to get out in front of that,” he said.The issue has been a priority for Guskiewicz since he arrived on campus last year. He gathered a council of Michigan business leaders to identify skills that graduates will need for jobs, from agriculture to banking. The goal is to mold degree programs to the job market’s needs and to get students internships and work experience that can lead to a job. A disconnect with the job market Bridging the gap to the job market has been a persistent struggle for U.S. colleges, said Matt Sigelman, president of the Burning Glass Institute, a think tank that studies the workforce. Last year the institute, partnering with Strada researchers, found 52% of recent college graduates were in jobs that didn’t require a degree. Even higher-demand fields, such as education and nursing, had large numbers of graduates in that situation.“No programs are immune, and no schools are immune,” Sigelman said.The federal government has been trying to fix the problem for decades, going back to President Barack Obama’s administration. A federal rule first established in 2011 aimed to cut federal money to college programs that leave graduates with low earnings, though it primarily targeted for-profit colleges.A Republican reconciliation bill passed this year takes a wider view, requiring most colleges to hit earnings standards to be eligible for federal funding. The goal is to make sure college graduates end up earning more than those without a degree.Others see transparency as a key solution.For decades, students had little way to know whether graduates of specific degree programs were landing good jobs after college. That started to change with the College Scorecard in 2015, a federal website that shares broad earnings outcomes for college programs. More recently, bipartisan legislation in Congress has sought to give the public even more detailed data.Lawmakers in North Carolina ordered a 2023 study on the financial return for degrees across the state’s public universities. It found that 93% produced a positive return, meaning graduates were expected to earn more over their lives than someone without a similar degree.The data is available to the public, showing, for example, that undergraduate degrees in applied math and business tend to have high returns at the University of North Carolina at Chapel Hill, while graduate degrees in psychology and foreign languages often don’t.Colleges are belatedly realizing how important that kind of data is to students and their families, said Lee Roberts, chancellor of UNC-Chapel Hill, in an interview.“In uncertain times, students are even more focused I would say rightly so on what their job prospects are going to be,” he added. “So I think colleges and universities really owe students and their families this data.” The Associated Press’ education coverage receives financial support from multiple prvate foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org. Collin Binkley, AP Education Writer
Category:
E-Commerce
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