• THE IMPACT OF AI ON EDUCATION HAS BEEN PROFOUND. Recently 1,800 University of California science & math teachers signed an open letter that freshman students are displaying “severe preparation difficulties, requiring re-teaching of middle school math,” with 70% not performing at the level expected of a 14-year-old and some testing no better than 10-year-olds. Globally, a test of literacy & numeracy skills from 38 countries (which form the OECD) found one-in-six American students performing below the lowest level, “as if students had not gone to high school.” Multiple factors have contributed, including Covid shutdown, rising migration, schools watering down testing & accountability, scrapping of SAT & ACT entry tests, lowering of college entry criteria in support of DEI, and estimates that over two-thirds of students now use AI to cheat. At this point “the college grading system is almost meaningless as an academic measure, and academics are grudgingly surrendering to the concept that students may no longer need strong basic skills, because so much of the work they do in the future will involve tweaking things made by AI.” [ECONOMIST]
• RAPID AI ADOPTERS ARE FINDING THAT MIDDLE MANAGEMENT IS FAILING and slowing transformation efforts. As most organizations treat AI as a software rollout challenge to be managed by IT for fast-track to headcount reduction, latest studies by Gallup & Gartner report that Middle Managers are facing new pressures, lacking formal structures, carrying more responsibility as layoffs strip away layers of support, getting buried & burned out, with Manager engagement fallen to around 22% — the steepest decline in any employee group – and that one-in-five companies will eliminate over half of current middle management positions in 2026. The deeper issue will become loss of ‘leadership pipeline’ – absence of next-generation leaders. In traditional infrastructure, “juniors learn by watching Managers structure a workplan, pressure-test analysis, handle difficult client conversations, learn how to tell when analysis is plausible but weak and whether recommendations make sense, or how to challenge a client without losing trust. AI adoption it’s not about the technology; it’s about the support structure around the people who make AI work in practice.” [HARVARD BUSINESS REVIEW]
• AND FURTHER REALITY-CHECK DANGER ON THE IMPACT OF AI: A Board of Directors is responsible for oversight of a Company – not operational, but utilizing business & common sense to review input from the operating executives, who themselves rely on financial and ‘intelligence’ data to show how systems are behaving. The problem is that AI programs which develop such data cannot be logically followed. Reality is that AI allows the Board confidence in controlling direction, but without ‘understanding’ the underlying mechanics of how it reaches the answers or why it does what it does. Accordingly, “Board decisions do not remove exposure, but rather convert hidden exposures into chosen ones – not the same as an exposure one never sees coming… So, the risk is mistaking that feeling of control for ‘understanding,’ and learning the difference only on the day something goes wrong and no one can say why.” [CRAFT THINKING]
• THOUGHTS FOR THE WEEK: California housing costs are among highest in the nation for multiple reasons including high-paying construction worker jobs, environmental regulators which highly tax gas & fuels, Coastal Commission restrictions, and politicians protecting value of wealthy contributors’ estates. In elite Orange County, an income level of $104,200 (2¼ times the middle-class single average) now qualifies as ‘low income’ for rent-controlled ‘affordable’ housing – properties which developers set aside for purported public benefit, in return for varying tax credits, zoning allowances, or funding. [WASHINGTON EXAMINER]
• Latest research found that 80% of people falsely believe that dementia is a normal part of aging, which may be a self-fulfilling prophecy, since believing the best years are still ahead is likely to involve engagement in health-promoting behaviors such as exercising and building social connections. More optimism was associated with a 7.5 year longer lifespan for nearly half of 11,000 adults aged late 60s to early 70s studied for up to twelve years. [WASHINGTON POST]
• THE MOST CRITICAL FACTORS IN OPTIMIZING BUSINESS PERFORMANCE involve setting clear Goals, Timelines, and reality-based awareness of what’s needed to get there. Then come the Tactics to employ, with process for measurement along the way – both in maintaining strategic alignment with objectives and toward achieving desired outcomes. KPIs – Key Performance Indicators – are quantifiable metrics most helpful to spotlight the financial numbers needed and avoid guesswork in guiding management. DCG have decades of expertise in this area; let us help!