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Hello and welcome to Modern CEO! Im Stephanie Mehta, CEO and chief content officer of Mansueto Ventures. Each week this newsletter explores inclusive approaches to leadership drawn from conversations with executives and entrepreneurs, and from the pages of Inc. and Fast Company. If you received this newsletter from a friend, you can sign up to get it yourself every Monday morning. Modern CEO is coming to you today from the Cannes Lions International Festival of Creativity. What started 60 years ago as an advertising awards program has evolved into an annual gathering of media and marketing executives that is increasingly attracting business leaders from different industries, including CEOs. Any CEO who wants to grow, innovate, and stay culturally relevant will benefit from being here, says Shelley Zalis, founder and CEO of the Female Quotient, a community of women in business that hosts a lounge at the event. Tony Capuano, president and CEO of Marriott, concurs: Cannes Lions is where the worlds most powerful creative conversations happenonstage, over coffee, and in every meeting along the Croisette [Canness main street], says Capuano, who is speaking on a panel with former NBA star Carmelo Anthony at Stagwells Sport Beach activation and moderating a session on food and travel at the JW Marriott. For me and our team, its an essential moment to tap into the energy of global culture, explore how brands are shaping behavior, and build partnerships that help us connect more meaningfully with travelers around the world, he adds. Cannes: a creative compass Part of the appeal of the confab is the robust presence of technology giants that are dominant marketing platforms (Alphabets Google Services segment, for example, which includes revenue from search, YouTube, and other ad sources, saw 2024 revenue climb 12%, to $304.9 billion), developers of the generative artificial intelligence (gen AI) tools that are transforming content creation, or both. Amazon, Canva, Meta, IBM, Microsoft, and Salesforce are among the tech companies popping up in lounges and meeting spaces, and the festival is honoring Adobe CEO Shantanu Narayen as its Creative Champion of the Yeara new award that seems designed to ensure the participation of a major tech CEO at the proceedings. The impact of gen AI on creativity will be a major theme this year, attendees say. The event also offers an opportunity for business leaders to discuss broader issues, such as political and economic risk. Judy A. Smith, founder and president of strategic advisory firm Smith & Company, is speaking on a panel about building and protecting a brand in uncertain times. Smith, who is attending Cannes Lions for the first time, says she sees value in being able to meet and hear from so many decision-makers in a short period of time. Its a great way to stay on top of emerging trends and see whats shaping the future of the industry, she says. To be sure, those who recommend Cannes Lions as part of the CEO conference circuit are firm believers in the power of creativity and creative leadership in corporate ranks. In a world shaped by perception, confidence, and social connection, creativity is not a department. Its a leadership tool, says Claudia Romo Edelman, who will unveil the latest edition of her We Are All Human Foundations Hispanic sentiment research in Cannes. If youre serious about driving change, theres no better place to sharpen your vision. Is Cannes a must-do for you? Should CEOs outside the media and tech ecosystem make the trip to Cannes? You can decide for yourselves: Modern CEO will deliver a few extra dispatches from the event this week with insights and takeaways from panels, interviewsand maybe a few parties. And if you have questions you want me to ask the CEOs I meet, send them to me at stephaniemehta@mansueto.com, and Ill try to work the answers into my newsletters. Listen, watch, and read more: Postcards from Cannes What small businesses can learn from Cannes Lions The Brand-New World podcast explores AIs mastery over the world of advertising Why Unilever won Creative Marketer of the Year at Cannes Lions last year
Category:
E-Commerce
Government leaders worldwide are talking big about AI transformation. In the U.S., Canada, and the U.K., officials are pushing for AI-first agencies that will revolutionize public services. The vision is compelling: streamlined operations, enhanced citizen services, and unprecedented efficiency gains. But here’s the uncomfortable truthmost government AI projects are destined to fail spectacularly. The numbers tell a sobering story. A recent McKinsey analysis of nearly 3,000 public sector IT projects found that over 80% exceeded their timelines, with nearly half blowing past their budgets. The average cost overrun hit 108%, or three times worse than private sector projects. These aren’t just spreadsheet problems; they’re systemic failures that erode public trust and waste taxpayer dollars. When AI projects go wrong in government, the consequences extend far beyond budget overruns. Arkansas’s Department of Human Services faced legal challenges when its automated disability care system caused “irreparable harm” to vulnerable citizens. The Dutch government collapsed in 2021 after an AI system falsely accused thousands of families of welfare fraud. These aren’t edge casesthey’re warnings about what happens when complex AI systems meet unprepared institutions. The Maturity Trap The core problem isn’t AI technology itselfit’s the mismatch between ambitious goals and organizational readiness. Government agencies consistently attempt AI implementations that far exceed their technological maturity, like trying to run a marathon without first learning to walk. Our research across 500 publicly traded companies for a previous book revealed a clear pattern: organizations that implement technologies appropriate to their maturity level achieve significant efficiency gains, while those that overreach typically fail. Combining this insight with our practical work implementing digital solutions in the public sector led to the development of a five-stage AI maturity model specifically designed for government agencies. Stage 1: Initial/Ad Hoc. Organizations at this stage operate with isolated AI experiments and no systematic strategy. Stage 2: Developing/Reactive. Agencies begin showing basic capabilities, typically through simple chatbots or vendor-supplied solutions. Stage 3: Defined/Proactive. Organizations develop comprehensive AI strategies aligned with strategic goals. Stage 4: Managed/Integrated. Agencies achieve full operational integration of AI with quantitative performance measures. Stage 5: Optimized/Innovative. Organizations reach full agility and influence how others use AI. Most government agencies today operate at stages 1 or 2, but AI-first initiatives require stage 4 or 5 maturity. This fundamental mismatch explains why so many initiatives fail. Without the right cultural frameworks, technological expertise, and technical infrastructure, organization-wide transformation based around AI capabilities stand little chance of success. Start Where You Are, Not Where You Want to Be The path to AI success begins with brutal honesty about current capabilities. A national security agency we studied exemplifies this approach. Despite seeing enormous opportunities in large language models, they recognized serious risks around data drift, model drift, and information security. Rather than rushing into advanced implementations, they are pursuing incremental development grounded in institutional knowledge and cultural readiness. This measured approach doesn’t mean abandoning ambitious goalsit means building toward them systematically. Organizations must select projects that are appropriate to their maturity level while ensuring each initiative serves dual purposes: delivering immediate value and advancing foundational capabilities for future growth. Three Immediate Opportunities For agencies at early maturity stages, three implementation areas offer immediate value creation opportunities while building toward transformation: 1. Information Technology Operations IT represents the most accessible entry point for government AI adoption. The private sector offers a road map 88% of companies now leverage AI in IT service management, with 70% implementing structured automation operations by 2025, up from 20% in 2021. AI can transform government IT through chatbots handling common user issues, intelligent anomaly detection identifying network problems in real-time, and dynamic resource optimization automatically adjusting allocations during peak periods. These capabilities deliver immediate efficiency gains while building the technical expertise and collaborative patterns needed for higher maturity levels. The challenge lies in government’s unique constraints. Stringent security requirements along with legacy systems at agencies like Social Security and NASA create implementation hurdles that private sector organizations rarely face. Success requires careful navigation of these constraints while building foundational capabilities. 2. Predictive Analytics Predictive analytics represents perhaps the highest-value opportunity for early-stage agencies. Government organizations possess vast data resources, complex operational environments, and urgent needs for better decision-makingperfect conditions for predictive AI success. The U.S. military is already demonstrating this potential, using predictive modeling for command and control simulators and live battlefield decision-making. The Department of Veterans Affairs has trialed suicide prevention programs using risk prediction algorithms to identify veterans needing intervention. Beyond specialized applications, predictive analytics can improve incident management, enable predictive maintenance, and forecast resource needs across virtually any government functin. These implementations advance AI maturity by building essential data management practices and analytical capabilities while delivering immediate operational benefits. Unlike complex generative AI systems, predictive analytics can be implemented successfully at any maturity stage using well-established machine learning techniques. 3. Cybersecurity Enhancement Cybersecurity offers critical immediate value, with AI applications spanning digital and physical protection domains. Modern AI security platforms process vast amounts of data across networks, endpoints, and physical spaces to identify threats that traditional systems missa capability that is particularly valuable given increasing attack sophistication. Current implementations demonstrate proven value. The Cybersecurity and Infrastructure Security Agency’s Automated Indicator Sharing program enables real-time threat intelligence exchange. U.S. Customs and Border Protection deploys AI-enabled autonomous surveillance towers for border situational awareness. The Transportation Security Administration uses AI-driven facial recognition for streamlined security screening. While national security agencies implement the most advanced applications, these capabilities offer immediate value for all government entities with security responsibilities, from facility protection to data privacy assurance. Building Systematic Success Creating sustainable AI capabilities requires following five key principles: Build on existing foundations. Leverage current processes and infrastructure while controlling implementation risks rather than starting from scratch. Develop mission-driven capabilities. Create implementation teams that mix technological and operational expertise to ensure AI solutions address real operational needs rather than pursuing technology for its own sake. Prioritize data quality and governance. AI systems only perform as well as their underlying data. Implementing robust data management practices, establishing clear ownership, and ensuring accuracy are essential prerequisites for success. Learn through limited trials. Choose use cases where failure won’t disrupt critical operations, creating space for learning and adjustment without catastrophic consequences. Scale what works. Document implementation lessons and use early wins to build organizational support, creating momentum for broader transformation. The Path Forward Government agencies don’t need to choose between ambitious AI goals and practical implementation. The key is recognizing that most transformation happens through systematic progression. While strategic leapfrogging is possible in some situations, it is the exception rather than the norm. By starting with appropriate projects, building foundational capabilities, and scaling successes, agencies can begin realizing concrete AI benefits today while developing toward their longer-term transformation vision. The stakes are too high for continued failure. With 48% of Americans already distrusting AI development and 77% wanting regulation, government agencies must demonstrate that AI can deliver responsible, effective, and efficient outcomes. Success requires abandoning the fantasy of overnight transformation in favor of disciplined, systematic implementation that builds lasting capabilities. The future of government services may indeed be AI-first, but getting there requires being reality-first about where agencies stand today and what it takes to build toward tomorrow.(This article draws on the cross-disciplinary expertise and applied research of Faisal Hoque, Erik Nelson, Professor Thomas Davenport, Dr. Paul Scade, Albert Lulushi, and Dr. Pranay Sanklecha.)
Category:
E-Commerce
Almond, oat, coconut, and soy milks are only a fraction of the dozens of alternative milk options lining grocery store aisles and cluttering the countertops of coffee shops. If you can make milk out of it, there’s a good chance, you can find of a carton of it in a Whole Foods.That nondairy milk boom really exploded in the 2010s, which saw skyrocketing sales for brands like Almond Breeze and Oatly. There was even a great oat milk shortage of 2018. But nearly a decade later, that may be waning. The rise of social media tradwives, skyrocketing grocery prices, and a backlash against seed oils have veered consumers away from alternative milk choices and seemingly back to cows. According to Agricultural Marketing Service data, dairy milk is on the rise again with whole milk sales seeing a 1.6% increase from 2023 to 2024, and organic milk seeing a nearly 7% increase in sales. Plant-based milks, though, experienced a 4.4% decrease in sales in that same time period. Dairy milks have long been a bigger market than plant-based optionsU.S. milk production grew to $59.2 billion in 2022, while alternative milks are just under $6 billion market. But that recent drop in plant-based milk sales marked the first decline for the alt-milk industry in years. With this new growth in the dairy sector, the gap between animal and plant-based milks is widening, and alternative milks may struggle to keep up. Looking at the alternative milk space, options such as almond and oat are among some of the most popular choices for consumers, with almond milk holding the top spot since 2013, and its sales alone accounting for over 50% of all alt-milk sales. Oat milk holds the trophy for second-most popular nondairy milk choice, since its popularity skyrocketed in 2020.But specific brands may be struggling in an increasingly oversaturated market. Oatly was once the top-performing brand that couldnt keep its greyish-blue cartons on grocery store shelves, but recently it has been trending in the opposite direction. The company’s stock in U.S. markets is 98% below what their initial public offer was in 2021. In the first quarter of 2025, Oatly saw a 10.6% decrease in North American revenue compared to the first quarter of 2024. Protein, seed oils, and concerns about processed foods At the start of the alt-milk revolution, and to this day, nondairy milk brands position themselves as healthier than cows milk. Brands like Almond Breeze say that their almond milk has 50% more calcium than dairy milk (300 milligrams in a cup of cow’s milk versus 450 in a cup of Almond Breeze). Oatly says its levels of calcium, vitamin D, and riboflavin nearly mirror that of cows milk (levels are within a gram or two of each other). But consumer’s health obsessions are changing: they care less about their daily calcium intake and more about protein. The phenomenon of putting high-protein labels on any and all food and drink products has swept the internet into a health frenzy. Misleading claims about the nutrition on TikTok have also taken a toll: In one representative video, a self-identifying nutritionist who posts high-protein recipes, listed all the reasons she doesnt drink oat milk for her gut health, including claiming that inflammation from ingredients like canola oil and sugar spikes due to amylase, an enzyme used to break down the oat’s starches into sugars that aid in achieving a creamy texture. Instead, she opts for coconut or other alt-milk types that have no “filler oils” like canola and sunflower. Others on the platform cite, without much evidence, skin concerns and blood sugar spikes, as reasons they’ve gone back to dairy from plant-based options. Critics call seed oils “toxic,” and according to the Cleveland Clinic, these oils can contribute to some inflammation. But the real concern, experts say, is the fact that seed oils are mostly used in processed and ultra-processed foods, like packaged snacks and candy. In moderation, and when not heated at high temperatures, seed oils can be a part of a healthy diet. Oatlys products specifically use rapeseed oil, also known as canola oil, in varying levels for texture purposes. The oil, when mixed with the oats, lends itself to a creamy texture, and, in Oatlys Barista edition, a better froth. The company even defends its processed nature, stating the catchall term doesnt take into account that some products need to be processed to exist at all. After all, you cant milk oats in your hands. Other popularly ultra-processed foods include tofu, breakfast cereals, and cheeses. Still, the stigma surrounding over-processed and oil-filled products has spread to every corner of the internet. And this has started to prove as a major advantage for cows milk companies, particularly organic ones. Rick Simington, chief commercial officer of Organic Valley, a farmer-owned milk cooperative producing organic milk, says these trends have allowed for dairy products to “shed the demonized tone from the 2000s”. [Consumers] want to know where their product comes from, the benefits, and that there are clean ingredients,” Simington said. “Those three things together are really whats allowing us to unleash our growth as well as our execution. But alt milks aren’t going away completely Despite these challenges, the nondairy indstry is still expected to continue to grow. Research firm Mordor Intelligence says the plant milk industry is expected to grow 12.33% a year over the next five years, to a more than $10 billion market. Over the same time period, the U.S. dairy milk market is expected to grow by 3.5% a year. Even with dairy growing at a lower percentage rate, nondairy alternatives still have a lot of ground to cover if they’re going to catch up. Some of the newer and trending alt-milk products include pistachio, a nut that is notably having its moment. Brands like Táche claim to use zero added oils and be lower in sugars, calories, and carbs than Oatly. Hemp milk is also reportedly making headway as the fastest growing alt-milk option, with a growth projection on 14% over the next four years. Generally speaking, plant-based milk choices are still considered better for the environment because they use less water and land, and produce less carbon emissions. They also appeal to those looking to avoid the hormones added to cows milk, due to a proposed link to increased cancer risks. And some just say that cows milk is for calves and not humans. And though dairy milks that are whole, organic, and lactose-free are doing well in current markets, non- and lower-fat milks such as skim and 1% have all fallen in consumption. Each have steadily declined since their peaks in the late 1990s, with skim milk falling more than 75% in sales from 1998 to 2024, and 1% milk declining more than 50%. In response to its recent dip in revenue and the rise in dairy-milk sales, Oatlys North American President, Helge Weitz, says he isn’t concerned. He says new Oatly offerings are selling well, and that the brand is finding new ways to reach American consumers. Our latest creative campaign shed light on a recent study suggesting that five times more peopleover 50 million Americansmight prefer Oatly in their coffee over cows milk, Weitz said. They just havent tried it yet.
Category:
E-Commerce
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