The thinking organization

In January, Walmart CEO Doug McMillon stepped down after 12 years leading the world's largest company.

AI was a central factor, he said. He was ready to hand the role to someone "faster."

In a conversation with CNBC, he was direct: he could start this next transformation, but he could not finish it.

Within weeks, Coca-Cola CEO James Quincey followed. Like McMillon, he named AI as the driving factor and said his successor would need the energy for what he called a completely “new transformation of the enterprise.”

Adobe CEO Shantanu Narayen stepped down the same month after 18 years, amid investor pressure and a stock price that had dropped more than 20%.

And at Workday, the board made the call before the CEO did. Carl Eschenbach had been brought in as an operator. Scale the company. Strengthen discipline. Improve efficiency. 

He lasted 13 months. The stock dropped roughly 40%. The board replaced him with co-founder Aneel Bhusri, who returned with an explicit mandate to lead the company into a fundamentally different era.

In 2025 alone, S&P 1500 companies named 168 new CEOs. The highest total in more than 15 years.

This is a clear pattern. 

We may look back on this period as the moment the proof became undeniable: the mode of operating that made these organizations successful for decades is no longer the mode that will keep them successful.

None of these leaders were incapable. 

McMillon led Walmart through one of the most successful periods in its history. Quincey grew Coca-Cola's revenue to record levels. 

These were not leaders who failed. They were leaders who understood that the playing field beneath them had changed.

And it is going to cascade across every industry and every kind of company. 

What changed is the relationship between execution and regeneration.

In yesterday's economy, execution was the primary purpose of the organization. 

Find an advantage. Harvest it. Scale it. Protect it. 

Regeneration happened too. But it was episodic. An annual innovation budget. A quarterly offsite. 

Regeneration was always in service of execution. You regenerated so you could find the next thing to execute on.

That relationship has flipped.

In tomorrow's economy, execution is in service of regeneration. You still execute. But execution is no longer the purpose.

The purpose is to continuously regenerate new advantage, because advantage now decays faster than it ever has.

AI accelerates execution. That advantage get copied, commoditized, and competed away faster. 

But the velocity works both ways. It also lets you create new advantage faster. 

That is what is changing the competitive landscape. Not the technology itself. The economics underneath it.

As McMillon told the Harvard Business Review after stepping down: “You have to set yourself up to change all the time, not just once.” 

That is the regenerative economy. It is an economy that rewards the ability to continuously originate new advantage. 

The execution mode still creates value. But it is table stakes value. The floor. AI makes the floor faster, cheaper, and more abundant every day. Everyone on the playing field will have it.

The canvas is the space beyond execution where new advantage gets originated. New ideas, new possibilities, new value. The canvas requires thinking. Real thinking. Human thinking. The kind that has not yet been copied by a competitor or commoditized by a machine.

What gets created on the canvas does not stay there forever.

 Over time, new advantage gets codified, scaled, and eventually commoditized. It moves to the floor. That is the Regenerative Loop we explored in the last edition. 

And it means the canvas has to be continuously reinhabited. New thinking. New advantage. Again and again.

Shopify's Tobi Lütke has been operating something close to a regenerative organization for years without using that language. Annual re-qualification. Continuous reinvention as the expectation. He felt the terrain before most.

Jack Dorsey at Block has been restructuring to create the conditions for it. He removed coordination layers and put humans at the edge for creative and ethical decisions. He is actively trying to build an organization where execution goes to machines and thinking stays with humans, even if he has not fully built the conditions for humans to inhabit the canvas yet. 

McMillon, Quincey, Narayen, and the Workday board represent the third signal. 

The leaders of some of the largest organizations on earth looked at their companies and understood: this organization, as currently designed, cannot do what the playing field now requires.

One leader felt it coming. One is trying to build for it. Four just admitted they cannot get there themselves.

That progression is the economic pressure of the regenerative economy making itself felt at the highest levels of global business. And it will not stop there.

So what kind of organization can operate on this playing field?

Not one that simply uses AI well. Not one that treats AI primarily as productivity infrastructure. 

Most organizations right now are doing exactly that. They are treating AI as execution infrastructure. 

That is where the investment is going. That is where the executive and board attention is going. AI as a productivity tool. Execution-mode language. Execution-mode terrain.

But it is not where new advantage comes from.

While most organizations pour resources into the floor, almost no one is investing in the canvas. 

The organizational redesign. The conditions for thinking. The development of people's capacity to originate. 

The kind of organization that can operate on this playing field is a thinking organization.

Every organization has always had two modes: execution and thinking. 

But in the execution economy, thinking was subservient. It served the harvest. 

Now, thinking has to come into equal focus with execution, and eventually become the primary mode. The canvas has to become the purpose. The floor serves it.

A thinking organization is an organization whose primary operating mode is thinking. The purpose of the regenerative organization is continuous regeneration of advantage. The mode that makes regeneration possible is thinking. 

You cannot regenerate without it. You cannot originate new advantage without creativity, curiosity, and imagination. Those three are the building blocks of thinking. They are what remains scarce when execution becomes abundant. 

And in an economy where AI makes execution cheaper and more abundant by the day, what remains scarce is what the economics reward.

A few weeks ago, I spoke with a creative director at a major broadcaster. We were talking about what organizations need to build for what comes next.

I told her something I still stand behind: “Creativity is going to be a paramount organizational capability, not just a function.”

Today, most organizations still treat creativity the way they treat legal or compliance. It is a department. A budget line. A team you call when you need it. 

That model made sense when the most important mode of creating value was execution. You did not need everyone to be creative. You needed people to be reliable.

But tomorrow, creativity will be one of the building blocks of thinking that produces new advantage. 

In a thinking organization, creativity is not a soft skill  or personality trait. It is the raw material of regeneration. The irreplaceable human fingerprint.

Her reaction was telling. There was genuine excitement at the possibility, but also genuine discomfort. 

How do we even start that conversation? What does it look like? How do we make it happen?

The honest answer is: we do not know yet.

What I do know is that it will require a fundamentally different structure across the organization. 

Because as much as leaders have always talked about innovation and creativity and bringing your best ideas forward, the reality is that most organizations were never designed for it. 

They were designed for execution mode. They were designed so that thinking served the harvest.

Here is a way to test this idea in your own realm. 

Imagine tomorrow is day one at your organization. AI exists. You are designing everything from scratch. No inherited structure. No legacy roles. No "that's how we've always done it."

What would you build? Do you still have the same functions? The same job titles? The same incentive and compensation models? What survives when yesterday's structure is not the default?

Most leaders have never done this exercise. They are applying AI on top of yesterday's processes and yesterday's mental models, the same assumptions about how value gets created and how it gets sustained. 

They are speeding up the floor. Making execution cheaper. And they think that is the transformation.

The consultants most organizations are turning to are reinforcing that belief. They are selling the same change management frameworks they have been selling for decades. Productivity. Efficiency. ROI on the floor. They are not talking about the canvas because there is no playbook for the canvas. And every dollar and every hour spent optimizing the floor while the canvas sits uninhabited is opportunity cost that compounds.

No one has fully built a thinking organization at scale. Not yet. Shopify is the closest cultural precedent. Block is the closest structural attempt. The CEO departures are acknowledgments that the shift is necessary. But this is genuinely new territory. We are discovering the terrain and mapping it at the same time.

That requires a different kind of leadership. A different posture. 

The business world has talked about vulnerability for a long time. What could be more vulnerable than experimenting not with a new tool or a new process, but with the very essence of what your organization is? How it creates value. How it operates. What it is for.

This is not incremental change managed with a familiar playbook. This is sailing into fog. It requires experimentation. It requires courage. It requires the kind of entrepreneurial instinct that most organizations have spent years designing out of their systems. It is stepping onto a playing field with different laws of physics.

Because being a thinking organization is the price of admission to participate in tomorrow's regenerative economy. 

Execution-only organizations do not just underperform on this playing field. Over time, they get eliminated. Because they are optimizing the floor while their canvas sits empty.

And their competitors who figure out the canvas first will create advantage that cannot be matched by building a faster floor.

If that is the case, why is it so hard to get there?

Because cognitive compliance was a feature of yesterday's organization.

Most organizations did not accidentally suppress thinking. They were designed for it. 

Most knowledge work has operated more like a white-collar assembly line than anyone would like to admit. 

Here is our advantage. Here is how we protect it. Here is how we scale it. Here is how we optimize it.

That is cognitive compliance. And it generated enormous value for a very long time.

In the execution economy, we traded our natural human creativity, curiosity, and imagination for alignment with the economic incentives of the execution organization. Compliance gave us security. 

The execution economy aligned our own self-interest with compliance. Show up. Do your job. Do it the way it has been designed. Get paid. Get promoted. That trade worked for most people, most of the time.

The regenerative economy asks us to resolve that tension differently. It asks us to lean into uncertainty. To bring our own thinking rather than execute someone else's. To find belonging through contribution rather than compliance.

That is genuinely hard. The price of thinking is uncertainty. And most organizations have spent years engineering that price out of the system.

But here is what is also true.

The economics and what people actually want to do are finally pointing in the same direction for the first time ever. 

Thinking is the only input that cannot be commoditized. Everything else the execution mode produces trends toward a commodity as AI makes it abundant. 

The organizations that win in tomorrow's regenerative economy will be the ones that make thinking the work. That create the conditions for thinking to emerge, to be rewarded, to be incentivized.

And thinking is what humans want to do. 

Every leader should ask themselves: am I using AI to think more, or to avoid thinking? 

And then look at what they are asking their organization to do. 

Is your AI investment focused on the floor, or also on the canvas? Are you deploying AI as execution infrastructure, or also as thinking infrastructure?

The practice of this is what I call thinking-ship.

Thinking-ship is the human act of directing, sculpting, and evolving thought through the irreplaceable fingerprint of your individual and collective creativity, curiosity, and imagination, while delegating execution to machines.

It is the capability that makes the thinking operating mode possible. Without it, the regenerative organization is just a concept. With it, the canvas comes alive.

In the next edition, I will share the full Thinking-ship Doctrine. It defines the concept, the practice, and what it demands of us.

Here are the questions I am sitting with right now. Take them with you.

If your organization's primary purpose shifted from execution to regeneration tomorrow, what would break first?

What percentage of your AI investment is going to the floor, and what percentage is going to the canvas?

When was the last time someone in your organization was rewarded for thinking that disrupted the harvest?

Is your organization rewarding the people who think, or the people who comply?

– Nish

P.S. My notes from the field.

The AI tool trap.

A leader I was speaking with recently admitted something that stuck with me.

He said he used to coach his team on mindset and how to think about problems. Now he just tells them about AI plugins.

"I'm not sure that's healthy," he said. It isn't.

Tools live on the floor. The real shift is what happens above it. Nurturing that mindset is the work that needs to happen on the canvas. 

Nobody has a map for this.

In a recent conversation with a group of senior leaders, someone said something that stopped the room: "Every other time in history, a business transformation had a model. This time, nobody's sure of the endpoint."

That is the fog. And the organizations that move through it first won't be the ones with the best tools. They'll be the ones willing to think without a playbook. To have the courage to navigate through the fog. 

Where I am this week and in the coming weeks: