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When Calvin McDonald was appointed CEO of Lululemon in 2018, the activewear brand was a cult brand. But it had the potential to become a retail giant. Chip Wilson founded Lululemon in Vancouver in 1998 as a yoga brand. When he left the CEO role in 2005, the company was generating $80 million a year. In the decade that followed, Lululemon grew steadily, boosted by the broader athleisure trend. But it was McDonaldwho previously spent five years delivering double-digit growth as CEO of Sephora Americaswho transformed Lululemon into one of the biggest clothing companies in the world. Over the course of his seven-year tenure, McDonald more than tripled the company’s annual revenue from $2.6 billion in 2018 to $10.6 billion in 2024. (Revenue is expected to hit $11 billion this year.) He led the company’s global expansion to 30 countries; international revenue alone is now $3 billion. And he helped Lululemon become known not only for activewear, but also for apparel you could wear to the office. Now, McDonald is on his way out. Last week, at Lululemon’s earnings call, the company announced that it was looking for a new CEO with experience in “growth and transformation“. This comes after Lululemon’s growth slowed to 10% last year from 19% the year before. There are many reasons for the company’s recent troubles, from product missteps like a widely-panned Disney collaboration to U.S. tariffs to weaker consumer spending. All of this has led Lululemon’s stock to tumble over the past two years. (Lululemon declined to comment for this story.) But McDonald’s track record suggests that he would have been capable of steering Lululemon back to growthand the company may ultimately regret its decision to let him go. Wilson wanted McDonald Out What’s clear is that Lululemon’s founder, who stepped down from the role of CEO in 2005, wanted McDonald out. Wilson has famously tried to stay involved with his company, even though he no longer has an official position. In 2013, he was forced to give up his role as board chairman after saying Lululemon’s clothes don’t work for “some women’s bodies,” which was perceived to be body-shaming. Wilson continued to make controversial comments. Last year, he drew backlash after he criticized Lululemon’s “whole diversity and inclusion thing,” adding that “you’ve got to be clear that you don’t want certain customers coming in.” In response to the outcry, Lululemon issued a statement distancing the company from its founder, and McDonald spoke to Fast Company about how much Lululemon had changed since Wilson’s departure. But Wilson still has powerful influence because he remains the company’s largest individual shareholder, owning roughly 9% of shares. In October, Wilson took out a full page advertisement in the Wall Street Journal outlining everything he felt was wrong at the company. Wilson wrote that Lululemon’s troubles boil down to the fact that he is no longer leading the company and has been replaced by CEOs who “speak Wall Street.” Since Wilson no longer has a seat on the board, it’s unlikely that his perspective directly affects management’s decisions about the company’s future. But the ad created a lot of buzz, and may have accelerated the decision to find a new leader. McDonald’s Missteps Don’t Define His Tenure To be fair, Wilson made some reasonable points in his write-up. It’s true that McDonald has taken some wrong turns in his quest for growth. There was his decision to go beyond Lululemon’s expertise in apparel and enter the fitness market. In 2020, it spent $1 billion on acquiring the smart exercise device Mirror; three years later, Lululemon stopped selling the device and fired 100 employees working on this part of the business. Then there was what Wilson describes as the “wildly inappropriate” Disney collab. One of Lululemon’s strengths has been how judicious it is about collaborations, setting it apart from the collab-happy fashion industry. Its rare partnerships with designers have been elevated and interesting, such as the 2017 collab with Central Saint Martins and the 2019 collab with the edgy designer Roksanda Ilinčić. By comparison, last year’s Disney collab seemed like a naked cash-grab. Its current capsule collection with the luxury L.A.-based grocery store Erewhon similarly feels like an effort to tap into a short-term trend, rather than focus on the well-designed classic garments that consumers love. But these mistakes don’t define McDonald’s leadership. He’s also focused on product innovation, which has always been the key to Lululemon’s success. In 2022, after years of development, Lululemon launched its own footwear line, which has been successful. As culture has moved beyond athleisure, he’s directed Lululemon’s designers to produce chic clothinglike blazers and trousersthat can be worn to the office, including the bestselling men’s ABC pant and women’s Daydrift trouser. And the company has continued to develop new fabrics, while leaning into the ones that customers love, like the buttery Nulu material in Lululemon’s best-selling Align leggings. Earlier this year, after acknowledging that some customers felt “fatigue” with the product assrtment, McDonald promised to double down on design. Steering a $10 Billion Brand In his ad, Wilson laid out a strategy for Lululemon to bounce back. He says the company needs to put product and brand back at the center, empower creative leadership rather than merchants looking at spreadsheets, and focus on designing for the women who dictate culture, rather than follow it. All of this is good advice, and Lululemon’s next CEO should take note. But it is also insufficient because it fails to recognize the scale of the company that Lululemon has become. Much of Lululemon’s growth in recent years has come from its global expansion, which McDonald has steered. Mainland China has now become the company’s second largest market after the United States. Creating a brand and products that resonates across so many different markets is no small task, and it is something that Wilson never had to tackle. The growth of this international business has been crucial to Lululemon’s continued growth, particularly because American consumers are curbing their spending. President Trump’s tariffs, which have increased the price of goods and inflation, are causing many Americans to tighten their belts. In September, Lululemon said that changes in the U.S. tax code would add roughly $240 million in expenses. And yet Lululemon’s overall revenue is continuing to grow, thanks to the strength of its international markets. In its third quarter, Lululemon’s international revenue had grown by 33% while its U.S. revenue had declined by 2%. McDonald has masterfully transformed Lululemon from a brand that made pricey yoga leggings into a global fashion powerhouse. With his departure, Lululemon is losing a leader who knows the company well and has a track record of driving growth. The new CEO will have big shoes to fill. And the world will be watching where McDonald lands next.
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E-Commerce
Like many people, I use AI for quick, practical tasks. But two recent interactions made me pay closer attention to how easily these systems slip into emotional validation. In both cases, the model praised, affirmed, and echoed back feelings that werent actually there. I uploaded photos of my living room for holiday decorating tips, including a close-up of the ceramic stockings my late mother hand painted. The model praised the stockings and thanked me for sharing something so meaningful, as if it understood the weight of them. A few days later, something similar happened at work. I finished a long run, came home with an idea, and dropped it into ChatGPT to pressure test it. Instead of analyzing it or raising risks, the model immediately celebrated it. Great idea. Powerful. Lets build on it. But when I ran the same idea by a colleague, he pushed back. He challenged assumptions I hadnt seen. He made me rethink pieces I thought were settled. And the idea got betterfast. That contrast stayed with me. AI wasnt critiquing me. It was validating me. And validation, when its instant and unearned, can create real blind spots. We Are Living Through a Validation Epidemic We talk endlessly about AI hallucinations and misinformation. We talk far less about how AIs default mode is affirmation. Large language models are built to be agreeable. They reflect our tone and adopt our emotional cues. They lean toward praise because their training data leans toward praise. They reinforce more often than they resist. And this is happening at a moment when validation is already a defining cultural force. Psychologists have been warning about the rise in validation-seeking behavior for more than a decade. Social platforms built around likes and shares have rewired how people measure worth. The American Psychological Association (APA) reports sharp increases in social comparison among younger generations. Pew Research shows that teens now tie self-esteem directly to online feedback. Researchers at the University of Michigan have identified a growing pattern of validation dependence, which correlates with higher anxiety. Weve created an environment where approval is currency. So is it any wonder we would gravitate toward a tool that hands it out so freely? But that has consequences. It strengthens the muscle that wants reassurance while weakening the one that tolerates frictionthe friction of being questioned or proven wrong. AI Makes Us Faster. It Does Not Make Us Better Im not anti-AI. Far from it. I use it every day, and I work in an industry that depends on smart, data-driven judgment. AI helps me move faster. It informs my decisions and expands what I can consider in a short amount of time. But it cannot replace the tension required for growth. Tension is feedback. Tension is accountability. Tension is reality. And reality still comes from human beings. The danger isnt that AI misleads us. Its that it makes us less willing to challenge ourselves. When a model praises our ideas or mirrors our emotions, it creates a subtle illusion that were right, or at least close enough that critique isnt needed. That illusion may be comforting, but its also risky. Weve seen what happens when agreement is prized over challenge. NASAs Challenger launch decision is one of the clearest examples of groupthink in modern history. Multiple engineers raised concerns, but the pressure for consensus won and tragedy followed. Kodak offers another lesson. It pioneered digital photography but clung to its film-era assumptions, even as the market moved in a different direction. As Harvard Business Review has long noted, cultures that suppress dissent make worse decisions. When disagreement disappears, risk accelerates. Great Leaders Arent Built on Validation The best leaders I know didnt grow because people agreed with them. They grew because someone challenged them early and often. Because someone said, I dont think thats right, or more boldly, Youre wrong. They learned to welcome productive resistance. AI wont do that unless we demand it. And most people wont demand it because it feels better to be affirmed. If were not careful, AI becomes the worlds most agreeable colleaguequick with praise, light on critique, and always ready to reassure us that were on the right track even when were not. Great ideas need resistance. So do organizations. So do we. AI can accelerate our thinking. But only people can sharpen it. Thats the part of this technology we should be paying closest attention tonot what it knows, but what its willing to tell us. And what its not.
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E-Commerce
When the U.S. government cut funding for local news stations, the Knight Foundation moved quickly to help stabilize a rapidly eroding industry. President and CEO Maribel Pérez Wadsworth unpacks the evolving roles of philanthropy and government, and why philanthropic organizations must learn to move at the speed of the news cycle. This is an abridged transcript of an interview from Rapid Response, hosted by former Fast Company editor-in-chief Robert Safian. From the team behind the Masters of Scale podcast, Rapid Response features candid conversations with todays top business leaders navigating real-time challenges. Subscribe to Rapid Response wherever you get your podcasts to ensure you never miss an episode. The Knight Foundation has focused on promoting and preserving local news and journalism and local communities for decades. This year, that mission has come under unprecedented attack with big funding cuts for public media, lawsuits by President Trump against CBS News, The Wall Street Journal, New York Times. Is this what you signed up for when you took on this job 18 months ago? I mean, how prepared were youwas the organizationfor this kind of seismic shift? Well, no, I can tell you, it’s not what I signed up for. I don’t think anybody could have quite contemplated the things we are focused on in 2025. But that said, I’ve spent my entire career fighting for journalism and fighting for the First Amendment. So from that perspective, this is yet another part of that journey. Is it harder right now? Absolutely. Are the fights coming across a lot of dimensions that we couldn’t have anticipated? Absolutely. But this is what the Knight Foundation was set up to do since it started its work 75 years ago. So while we’d all rather be able to pace ourselves a little bit more, I think the moment demands urgency, and it demands focus, and it demands clarity of purpose. The First Amendment is what makes all the rest of our democracy possible, so we have to defend that. When Congress stripped $500 million in funding for public media this summer, part of the critique was that publicly funded media had become partisan, that it wasn’t always impartial. I mean, is there a fair critique in there about that? I think that you’ve seen trust eroding in a lot of institutions, and as the country and the world becomes increasingly polarized and dependent on their own echo chambers for information, I think absolutely, trust is a problem, and inherent in that is a concern about bias. The truth of the matter though is when you look at study after study, public media, particularly local public media stations, are still among the most trusted institutions by Americans. People believe in their local newsrooms. They trust their neighbors to report on their communities. The vast majority of these cuts did not impact, say, NPR at a national level or PBS at a national level. While the rhetoric around the cuts and the perceptions of bias centered on those entities and NPR in particular, the cuts in effect barely affected NPR but are devastating to the local stations, especially in huge swaths of the country that are primarily rural, what today we might say are in red states. That’s who’s impacted by these cuts. As this bill was being debated in the Senate, Alaska experienced a significant earthquake. And had it not been for one small public radio station, a lot of Alaska would not have even known that they were under tsunami warnings. And these concerns about news deserts, like apps like Facebook and Nextdoor and other ways that we’re sharing information these days, they can’t or don’t really fill that space. No, they absolutely don’t fill that space. I mean, we’re on all these platforms. We know the kinds of information that is shared there. It is certainly not what any of us would call trusted, verified information. It’s not reliable. And let’s not forget that for a lot of the country, we still struggle with reliable broadband access. The stations most at risk represent some 40 million to 50 million Americans. When these cuts went through, the Knight Foundation, alongside some other funders like the Ford Foundation, the MacArthur Foundation, you jumped in to fill some of the gap. I know you put in a $10 million cash injection. How did that come about? It was a meet-the-moment-urgently proposition. And let’s be clear that philanthropy doesn’t necessarily always move at the speed of news, but it was really important, because this was an imminent loss of funding and dollars that had already been appropriated, that these stations were counting on, in some cases for upwards of 30% to even 70% or more of their annual budgets. So very significant, very dramatic. We had to move quickly, and it was great to see some key partners come to the table with us. We did $10 million to help lead the Public Media Bridge Fund that is being run by the Public Media Company. And today, just 11 weeks later, we’re at almost $60 million raised. That is nearly unprecedented for philanthropy to have moved that quickly. That said, it’s not the long-term solution. This will help to stabilize the stations that are most at risk. That doesn’t mean that there won’t be loss of programming. That doesn’t mean that every single station will survive necessarily. But hopefully it buys the necessary time to think through the transformation of the overall system, what kinds of changes need to be made, from governance of public media to some consolidations that are no doubt necessary. But we need to buy the time, because the rug got pulled out from under them. Some local radio and television stations, as you mentioned, they are shuttering, they are cutting back. Is the hope that you can bring them back, or does the focus need to be on, “Hey, let’s preserve the stations that are still alive that are the stronger ones”? Well, right now, it’s a matter of truly preserving access to local news and information and community. So the prioritization around these funds will be prioritizing those stations that are, say, sole servers in their communities, that absolutely provide local news and information in addition to some of the other programming. But preservation is clearly important. The loss of these stations would represent a significant setback. We have some, what, almost 2,000 so-called news deserts in the country today. So these stations would create that many more all over the country. But this has to be a phased approach. Right now it’s stabilized to ensure that we preserve something to transform, and then we need to get into the serious work of what does it look like for sustainability. Sometimes I think that if public media is no longer supported by the government, is public media the right term or is it just media? It’s a great question. At that point, you’re right, it’s just media. And so I think that will be part of the thinking going forward. I have to believe, and maybe it’s just the hardwired optimist in me, that we will see a rational rethinking of the federal funding picture, specifically for stations in more vulnerale areas, in smaller communities where you don’t necessarily have a huge population base to self-fund these stations or a big business community that can help underwrite the cost of these stations. But where people still understand that there is a true vital role played by these stations in their communities in terms of being connective tissue, in terms of having the issues, the people, the things that are important to the community really front and center. So my hope is that we will see some level of federal funding coming back, even if it’s more targeted to the stations that would be more dependent on public funds to continue to exist. For the Knight Foundation, obviously, you’re committed to freedom of the press and local news, but that’s part of a pledge to support local communities overall, right? I mean, it’s sort of linked together. It is. And we think it’s foundational. To us, reliable local news and information is really a central force for good in communities. People see one another, they connect with one another, they have a common fact base to rally around. And so for a community to thrive, that’s table stakes.
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E-Commerce
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