Future Ready Leadership With Jacob Morgan · 2026-10-30 · 36 min
Key moments - from our scoring
Substance score
41 / 100
Five dimensions, 20 points each
Jacob Morgan examines three converging crises in tech and work. The NASDAQ's 3.5% decline and trillion-dollar losses reflect not an AI bubble burst but a fundamental repricing of tech companies - from profitable software models to capital-intensive infrastructure businesses comparable to utilities. The "deal that built the internet" is breaking: Google's AI overviews answer questions directly, costing publishers like Reddit a million search visits weekly and reducing ad clicks. Meanwhile, per-seat software licensing (ServiceNow, Workday, Oracle) faces disruption as AI agents reduce headcount needs. Morgan notes that not a single CHRO in his recent advisory group loves their current HCM platform, driving some enterprises to build in-house solutions. On engagement, Morgan pushes back on Gallup's alarming 29% headline - noting U.S. engagement has only moved 3 points in 26 years, and the crisis is concentrated among remote workers facing return-to-office mandates. The final story references an employee winning the legal right to opt out of AI, raising uncomfortable questions about performance reviews when workers decline tools that affect productivity.
Hosted by Jacob Morgan. The show scores 61.0/100 on substance across its analysed episodes. See the full show profile.
Tech stocks are repricing because AI adoption requires massive capital expenditure (Amazon and Alphabet spending $200-220B annually) with returns measured in years, transforming companies from profitable software vendors into capital-intensive infrastructure businesses valued like utilities rather than growth stocks.
Google's AI overviews answer questions directly on the search results page without sending users to websites, causing publishers to lose traffic (Reddit lost a million search visits weekly) and reducing ad clicks for Google itself, breaking the 25-year-old web monetization model.
Per-seat licensing breaks because fewer employees means fewer licenses sold; ServiceNow already derives 50% of new business from non-seat-based pricing, forcing all HCM vendors to charge for outcomes rather than headcount.
No - U.S. engagement is only 3 points above the 26% baseline since 2000, fits within a 10-point historical band, and the drop is concentrated among remote workers facing return-to-office mandates rather than broad job dissatisfaction; by global standards, 29% is among the world's highest.
Recent cases show employees can opt out of AI, but this creates unprecedented challenges for managers in distinguishing workers unable to do the job from those refusing new methods, and unclear performance management standards when AI adoption impacts reviews.
Our reviewer’s read on each dimension, with quotes from the episode.
Three segments each contain at least one non-obvious analytical move - the 'three broken business models' framing, the Gallup 10-point-band deconstruction, and the AI-exemption-to-performance-review pipeline - but roughly a third of the runtime is padding: Halloween preamble, a skincare routine anecdote, and repeated filler phrases. Density is real but uneven.
Big tech pretty much used to be the perfect business. You build software, you build it once, and you sell it endlessly... These companies are looking a lot more like utility companies, like railroad companies.
the entire history of this employee engagement metric, from the very low to the very high, fits inside of a 10-point band. And something that I think barely moves through a pandemic and the biggest tech shift in generations isn't a very sensitive alarm.
The Bartleby framing and the Gallup counter-narrative are genuinely creative angles, but the tech-stock commentary is essentially mainstream financial journalism dressed with a 'futurist lens' label, and the AI-exemption section tracks predictably from the legal ruling to job-description implications.
that boss is the most relatable manager in American literature because he had no playbook. He had never faced someone who wasn't lazy, wasn't rude, wasn't incompetent, and simply just declined to do the job.
Something that I think barely moves through a pandemic and the biggest tech shift in generations isn't a very sensitive alarm.
This is a solo monologue with zero guests; the host is a self-described 'future of work speaker' rather than an operator who has done the thing at scale. CHRO anecdotes are secondhand and fully anonymized, removing the accountability that makes practitioner testimony valuable.
we had our Churro group meeting And we got a bunch of CHROs together and we were talking about... I'll anonymize the names of the companies that were in there.
We had Patrick Lencioni join our CHRO group a couple of months ago
The episode is notably data-rich for a commentary format: specific EPS misses, named stock moves with percentages, a named Supreme Court case, and historical Gallup baselines all anchor the analysis. The weakness is that some numbers (e.g. interstate highway cost comparison) are cited without a source, and the CHRO anecdotes are fully anonymized.
Bank of America now values Google's search business at about 10 times earnings. And this is cheaper than the S&P 500 at 18.7 and cheaper than energy stocks at 13.
religious discrimination charges that were filed with the federal government. And this jumped from around 2400 in 2021 to nearly 14000 in 2022.
There is no conversation: this is an uninterrupted solo monologue where the host poses rhetorical questions to himself and answers them without friction. The 'futurist lens' segments are declarative and unchallenged, and there is no interviewee to push back on or probe.
Can you tell the difference as a leader between those people?
So what does all this mean for you?
Computed from the transcript - who did the talking, and the words that came up most.
October 31, 2026: I get into why tech stocks are getting absolutely massacred with the NASDAQ down more than 3.5%, Intel losing 30% of its market cap, Alphabet down 12.6% in its worst day since going public in 2004, and the NASDAQ 100 on pace to lose more than $1 trillion in market value. I look at Gallup's report showing employee engagement hit a 15 year low at 29%, why I think this headline is more dramatic than the reality since engagement started at 26% in 2000 and is now 29% after a dot com crash, financial crisis, pandemic, remote work, and AI, and why a metric that barely moves through all of that isn't a very sensitive alarm. Finally, I unpack the case of David Derman, a research administrator at the University of Kentucky who became the first known humanist to receive a religious exemption from using AI, why the 2023 Supreme Court case Groff versus DeJoy raised the bar for employers to deny religious accommodations, and why religious discrimination charges jumped from 2,400 in 2021 to nearly 14,000 in 2022 during COVID vaccine mandates.
Transcribed and scored by The B2B Podcast Index.
In 1853, Herman Melville, he published a short story about a law clerk whose name was Bartleby. His boss hands him paperwork and Bartleby looks up and he says five words to him. I would prefer not to. He keeps saying it to every task and to every request that his boss makes of him.
I would prefer not to. Now, most people might remember Bartleby, but almost nobody remembers what his boss actually did about it. He tried reasoning with him. He tried bribing him.
He tried ignoring him, and none of these things ended up working. In the end, the boss packed up and moved his entire office to a new building just to get away from the one employee who wouldn't cooperate. Now, that boss is the most relatable manager in American literature because he had no playbook. He had never faced someone who wasn't lazy, wasn't rude, wasn't incompetent, and simply just declined to do the job.
And managers, I think, are about to be in that same position and not over AI alone. Now, every big shift at work, I think, creates a group of people who would prefer not to do something, not to change, not to evolve, not to use something like AI. Some just don't want to be part of the new system. Some won't want to come back to the office.
Some won't want to take the promotion that comes with managing people. Okay. And for most of the last century, I think the answer to this was pretty simple. You either adapt or you end up leaving the organization.
Now, in a world where expertise is becoming more scarce and jobs keep getting redefined, the answer works less and less and less. We can't just simply say that anymore. And so I think the managers who are going to do well over the next decade and beyond, they're not necessarily going to be the ones who force everyone onto the same path. They're going to be the ones who can tell a person who can't do the work from a person who just wants to do it differently.
And who knows which one they're actually dealing with. Are you dealing with somebody who just doesn't want to do the work? Or are you dealing with somebody who doesn't want to do the work differently? Can you tell the difference as a leader between those people?
Also, today's other two stories I'm going to get to. Tech stocks are getting absolutely brutally massacred, destroyed. There's no other way to put this. I think there's a lot of crazy stuff that's happening.
The NASDAQ is down. I don't know. Honestly, the last time it has been down this much. It's down more than three and a half percentage points, which is insane.
In one day, for example, Intel. They lost 30 of their market cap. Alphabet, the parent company behind Google in the last few days, also just getting shellacked. Amazon, everyone out there is just getting torn to pieces.
Core weave, I think, down this year around 60% or so. So what's actually happening? What does this mean for AI? What does this mean for business?
What does this mean for you? And the last story of the day that I'm going to get to, This is a worker wins the right to say no to AI, which raises, I think, a harder question about what happens to his performance review. What happens to employees who say no to AI when it actually impacts their performance? So those are going to be the top three stories of the day.
It is Friday, October 30th. Tomorrow, of course, Halloween. If you're watching the video version of this, you can see me in my nice little Halloween costume here. I'm a cowboy.
My wife is obviously going to be a cowgirl if I'm the cowboy. My daughter is a skeleton and my son, no surprise, he has something with electricity. He's got this little battery pack that's connected to a skeleton suit that lights up. He's got light up shoes.
He wanted something that is to deal with electricity. So that is his costume, this one is mine. So let's get into the top three stories of the day, starting off with the first one, actually. This is gonna be the tech stock story.
It is a brutal, brutal day. So let me unpack a little bit about what's happening. Then we will get into the futurist lens section of this. Well, I'll give you a little bit more of my analysis on this.
So the NASDAQ 100 on pace to lose more than $1 trillion in market value today. I think it's already surpassed that, actually. The NASDAQ composite earlier was down 2.6%.
It was like 2.4%, 2.5% when I woke up. It's now down an additional percent.
It's 3.5% now. S&P 500 down over 1.5 percentage points.
The Dow... Not quite one point, but close. And the selling isn't about one company and one company having a bad quarter. There are a lot of things happening here that are, I think, playing off of each other.
So it started off actually with Alphabet on Thursday. Google's parent company, they fell by 12.6%, which was the worst day since it went public in 2004. This erased almost half a trillion dollars in value.
The old record was an 11.6% drop in March of 2020. Early earnings were $2.12 a share against expectations of $3.
02 a share. Revenue was also under forecasts, but Google Cloud, that revenue more than doubled to $30.7 billion. Search, which is Google's biggest business, grew 12% to $63.
35 billion, but that still ended up missing expectations. So, you know, there were people who were very, very skeptical on those numbers. ServiceNow. Also, actually, let me pull up their stock ticker here because they took a huge beating over the last two days.
Okay. ServiceNow in the last five days is also down 35. They were a couple of days ago, they were trading at around $150 a share. Today, they are barely hovering above $100 a share, $103.
67. So lots of organizations are getting hit by this. Then Reddit, to add on top of all of this, Reddit issued a warning about search. So on their earnings call on Thursday, their CEO, Steve Huffman, said that search referral traffic dropped significantly in the third quarter.
In October, Reddit was losing more than a million search visits a week on average. Huffman blamed Google's AI overviews and AI mode, which basically answers questions, if you haven't seen this, right within the search page without actually having to send people to a website. Okay. His words, quote, AI mode does not drive traffic.
He also used web search. He also said web search is becoming a destination instead of a gateway to the web. And so basically what that means is a lot of people are now going to these AI tools instead of to search engines like Google. So again, they had a terrible earnings call.
Their stock got beat up. fell 25% this morning. Snap fell 5%. Pinterest fell 4%.
Meta also dropped. Amazon, they reported after the bell yesterday, revenue grew by 12%. Earnings came in at $1.89 a share.
Both of these were below estimates. So they went down. As of this morning, Intel down by over 30% after it forecast a fourth week quarter results and it warned about burning a lot of cashflow this year. Long story short, a lot of companies in the space, in the tech space, in the AI space, all just getting punched in the face and it's bringing everything down.
Absolutely everything down. So the futurist lens here, I want to unpack a little bit about what this means, the story behind all of this. Now, the easy headline I think that a lot of people are turning to is that the AI bubble is bursting. And the numbers though behind this, I think actually say something different.
So the demand is actually real for AI because if you look at Amazon's cloud business, it grew by 39%. Google's grew by 103 and Reddit's revenue still grew by 53%. So I think what's breaking here, it's not so much AI, it's business models, three very specific business models that used to work and were very profitable over the last 20 plus years that are now being broken. So let's unpack what these actually are.
So the first one, who pays for AI and when do they pay for AI? So Amazon, for example, they plan to spend $220 billion this year. Alphabet committed to around $200 billion. So this is two companies who alone have committed to over $400 billion in a single year.
Now, by common estimates, this is close to what the United States spent building the entire interstate highway, the entire highway over the United States over 35 years. This is in today's dollars. So big tech pretty much used to be the perfect business. You build software, you build it once, and you sell it endlessly, and you end up keeping the cash from what you sell.
And so now... These companies are looking a lot more like utility companies, like railroad companies. You pour concrete, you buy power, and you have to wait years now to get the payback from them. And so markets value these types of businesses very, very differently.
And I think this is the repricing that we're starting to see in a lot of these tech companies. And so investors are not saying AI doesn't work. I think they're instead coming back and they're saying, get back to me when we start to see a payoff here. Because these are going to take...
years to show the return. These are commitments that these organizations are spending over the next 5, 10, 15, 20 years. And you're being evaluated on that now on how much you're spending. Now, the second element here, the deal that built the internet, I think is completely breaking down.
And this is impacting a lot of companies in the tech space. So for 25 years, If you think about it, the entire web ran on a very simple trade. And that trade was that websites would let Google read their content, index everything, learn everything about the websites. And in return, Google would send visitors back to your page.
I mean, you go to a search engine, you type in, for example, future of work speaker. And ideally, you're going to come to my page, you're going to click on it, and you're going to go to my website. And so publishers, podcasters, recipe sites, review sites, forums, anything you can think of, they all build businesses based on trying to drive traffic to their site. And the idea is that when you drive traffic to somebody's site, that should then turn into revenue.
People will book you, they'll buy something from you, etc. And Reddit, they just put a number on how fast that is actually ending. They are losing a million, they've lost a million visits a week. A week, it's staggering.
And the twist behind this is that Google is also hurting as a result. In the search revenue for Google, they missed expectations. And Google itself said this week that AI mode, it searches, the AI mode searches, meaning when you go into Google, you type something in, you get AI mode where you interface directly with the AI browser. You don't actually go to anybody's website.
As a result of doing that, those searches earn less than regular search when you actually click through to go to somebody's site. And so when AI basically answers a question for you directly, it's a good question. There are fewer ad clicks for everybody. I don't need a click to go to anybody's website.
Bank of America now values Google's search business at about 10 times earnings. And this is cheaper than the S&P 500 at 18.7 and cheaper than energy stocks at 13. And so the market, I think, is pricing the most profitable business of the internet era, like an old oil company.
And so this model, I think, is completely changing. And there are arguments that some people are making, some analysts are making that this is going to be the end of search. Is this going to kill search altogether? Now, to be honest, I mean, ask yourself, when is the last time you actually went into a search engine to look for something?
From my perspective, I can't remember when I've done that. When I have a question now, I go to Claude or I go to ChatGPT, I use voice mode, I ask it a question and it gives me the information right in front of me. I can ask it for links to sources. It'll give me the links to those sources.
That to me is my default now. I don't go to Google anymore and say, for example, best restaurants near me. I need a plumber. Who should I?
I don't go to search engines anymore. The other day, for example, I was looking for a skincare routine for me. My wife is always getting on my, you got to moisturize, you got to use cleanser, you got to use sunblock. And, you know, I've been doing this for a while, kind of stealing her products.
And so finally I'm like, darn it, I'm going to create my own skincare routine for the mornings and for the evenings. I didn't go to a search engine. I didn't go to Google and type in, hey, give me a skincare routine and then read some blogs. I went to Claude and it immediately said, here's what you should do every evening.
Here's what you should do every morning. Here are the products that you should buy. Here's how much you should use. Here's why you should use these particular products.
And I said, okay, well, give me a comparison between a high and expensive version and a cheaper version. It did everything for me. Much more efficient than actually going to a browser. So again, the argument that a lot of people are making is that web traffic in the regards of search is going to disappear.
And obviously that's going to impact a lot of businesses that have built their entire revenue models on driving traffic. So that is kind of the second one. The third one here, the per seat model is starting to wobble. And this is where companies like ServiceNow, the Workdays, the Oracles, all these different types of companies come in.
Because for many decades, all of these companies, the way that they made money is that you would pay per seat. You hire 100 people, you buy 100 licenses. And this quietly ended up tying the software revenue that any like ServiceNow software revenue is tied to the headcount. How many seats?
are they selling? And so if AI agents are now doing more of that work, companies need fewer seats. And software companies have to charge for the results instead of for the people, instead of for the seats. ServiceNow has already said, I think it was earlier in July, that half of its new business comes from pricing that is not based on seats.
And most people see this as a software industry problem. So it's actually, I think, a future of work signal. Because for the first time, a lot of the tools that enterprises are using for work are being priced more on what gets done, not how many people are doing it. And so if you look at the entire tech space, the entire internet space, it's tremendous disruption.
It's disruption in terms of search that's impacting business models and revenue. It's disruption in terms of software companies like ServiceNow and Oracle and Workday in terms of how they charge. These are the foundation companies that make up the NASDAQ. These are the foundation tech companies that are making up so much of the growth that we're seeing in the US economy now.
And so when that narrative is getting challenged, they are just getting massacred and destroyed, I think across the board. In fact, a couple of days ago, we had our Churro group meeting And we got a bunch of CHROs together and we were talking about, we were reviewing tech stacks and different organizations that were on the call, different CHROs were talking about different tools that they're using, pros and the cons, whether it's a workday or a service now. We went over hiring, listening tools, employee experience tools.
And there are a few things that really struck me and I'll probably do an article about this. And of course, I'll anonymize the names of the companies that were in there. But one of the things that really, really struck me from this call is that not a single CHRO said that they love the software that they're using. And again, this is the service now, is the work days, the core HCM platforms.
Not a single company that was on our call said that they loved the software that we're using. In fact, one CHRO very specifically said that our approach is we focus on the core things that we're trying to do a really good job of. And we just have to expect that everything else that the software vendor provides is just going to be. And to me, that's such a crazy choice that a CHRO has to make.
You can only pick maybe two or three areas where you want to do a great job and you just have to accept the fact that everything else is just going to not be good. How can you run a business like that? So I think a lot of these vendors, a lot of these software companies are in for a very, very rude awakening. One CHRO said that they're actually in the process of really considering building their own platforms, building their own data center and building their own HCM, potentially their own listening tools, their own, like building everything in house.
Because they can control it, they can own it, they can build it to their specifications. They don't need to rely on other vendors and they make it exactly the way they want. And especially with these AI tools that are out there, open source, building your own, bringing these things internally, you can do that. You have to be comfortable becoming a tech company, but you can do it.
So what does all this mean for you? I think for business leaders, if your company is getting customers through search, oh my goodness, plan for less traffic. That's for sure. You got to build direct relationships with customers, with suppliers, with whoever you need.
You know, for workers, obviously, if you're an SEO, you know, I don't think we have a lot of people who listen to this show in that space, but just be prepared for a lot of change and a lot of disruption. But more broadly speaking, what does this mean for AI? I think that this is, I'm hesitant to even say this, a little bit of a healthy correction. I don't think it's a collapse.
I think this is the market that it's really going to be, it's going to be forcing discipline. on all these AI companies, on all these vendors, and on you. If you're a company that's using AI internally, this is going to force organizations who are dependent and relying on these tools to be more disciplined. Disciplined in terms of spend, disciplined in terms of revenue, disciplined in terms of ROI, in terms of justification.
And so I think the first phase where AI starts to show a return, we're just... getting into that phase. The second phase is where technology is actually going to change how work gets done. That's going to be the phase that's coming next.
That's going to be 2028. Second story of the day, engagement hits a 15-year low. So Gallup's measure of US employee engagement fell to 29% in the third quarter of 2026, its lowest level since 2011. That's a two-point drop from last quarter or about 3.
2 million fewer engaged workers. And the share of actively disengaged employees went up from 17% to 18%. Gallup says this is the first time in 15 years that engagement has dropped below 30%. The drop was not even.
Engagement among fully remote workers fell five points compared with two points for hybrid. And one point for onsite. For context, engagement peaked at 36% in 2020 and has fallen since to 31% in 2024 and 29% now. So the futurist lens here.
I want to push back a little bit on this headline because it sounds terrible. Everyone hates their jobs. Everyone's disengaged. And I don't think this is dramatic as it sounds.
So first, let's look at the full story here for Gallup. They started measuring U.S. employee engagement in 2000.
And the first reading when they did it in the year 2000 was 26% engaged. Today, that number is 29% engaged. So after 26 years, after a dot-com crash, after a financial crisis, after a pandemic, after remote work, after AI, after all these things that happened, the number is actually three points higher than where it started. The all-time high was 36% in 2020.
And so that means that the entire history of this employee engagement metric, from the very low to the very high, fits inside of a 10-point band. And something that I think barely moves through a pandemic and the biggest tech shift in generations isn't a very sensitive alarm. I mean, if it's not moving that much during these things that we're experiencing, it's not that, I think, useful of a metric. Second, let's look at the size of the move.
Two points in one quarter. On-site workers fell about one point, which Gallup says is within the margin of error. The only changes that Gallup calls statistically meaningful are among remote and hybrid workers. So the honest headline isn't American workers are checking out.
It's that remote workers are having a tough quarter. And it's very understandably so. Because a lot of organizations around the world are telling employees to come back to the office. And so obviously, if you've been working remotely for months or years and your company says it's time for you to get back to the office and then you have to take a survey, you're not going to be very happy.
So that can easily explain that drop. Next, let's look at the definition. Engaged in Gallup's language does not mean satisfied. It also does not mean doing good work.
Engaged simply means strongly agreeing with statements about your job, your manager, and your workplace. So the 53% in the mill, the not engaged people, these are not saboteurs who are inside your organization trying to burn it to the ground. Many of them are people who do their jobs, they go home, they just don't love the job. Now, is that a crisis or is that just kind of normal adult life?
Do we really expect most people to be enthusiastic about their work every single day, to love their job? Sometimes you have amazing days. Sometimes you have bad days. But how many people actually out there really love their job?
And love, let's put in the context, I mean, words have meaning here. There's a big difference between, yeah, I like my job. I love my job. That is, to me, like a 9 out of 10 or a 10 out of 10.
I think if you're 8 out of 10, 7 out of 10, even 6 out of 10, you like your job. But having a 9 out of 10 or a 10 out of 10, it's perfect. It's amazing. My manager is great.
My pay is great. The company is great. The culture is great. The perks.
I love everything. I don't know. I know there are some people out there that love their jobs. I've talked to some of them.
I never had a job that I loved. I love what I do now because I build it. I own it. I create it.
When I think about the jobs that I had working for other people, I never loved them. I liked some of them. I never loved any of them. So I don't know.
Is this really a crisis that more people don't love their job? I don't know. Maybe it's just normal adult life. A lot of people like their job.
They do their job. They go home. But they love their family. They love their friends.
They love their community. They love what their job allows them to do. But work is work. Next, put it in the global context.
Gallup's own global numbers put worldwide engagement at 20%. And Europe at 12%. The US and Canada are tied for the highest in the world at 31%. So by global standards, this 15-year low, American workers are still one of the most engaged workers on the planet.
Obviously, lastly, we need to talk about Gallup's a research firm, blah, blah, blah. They make money with consulting. That's obvious. So does any of this really matter?
Yes, but not in the way the headline suggests. Yes. I think the national average is probably the least useful number in this report. I never care about these numbers, just like I never care about the best place to work, the great place to work, the most engaged, the most innovative, the most blah, blah, blah, blah.
I don't care about any of those things. But to me, when I look at this report, the thing that matters is maybe the gap between groups. Remote engagement is falling five points while on-site barely moved. So that tells you that AI rollouts, AI rollouts are potentially landing badly where communication ends up being thinnest.
And that is usually in the remote workforce. And Gallup's own data showed that workers who used AI, who understood the plan, who felt supported by their manager were engaged at about 53%. So the difference between the 53% and the 29%, this is about leadership. This is about management.
I think the second thing to remember here is the job market. In a hot job market, what happens? Disengaged people leave and you see it in your turnover. And right now, hiring and firing are both low.
And so unhappy people are not leaving. They're staying and they're just being miserable at your company. So engagement, I think, is going to matter less as a mood reading, I think, and maybe more of a measure of a potential hidden risk inside your company. So my takeaway for a lot of leaders out there is don't pay attention to the national number.
Look at what's going on inside your company. Your employees, where do you see the gaps? By team, by location, by employees being in the office or not, by employees using AI or not. Pay attention to your company data.
The rest of the stuff out there is just noise. The last story of the day, the AI opt-out. This is a very interesting story. And I expect that we are going to see more of these types of cases and discussions coming up.
So David Derman is a researcher, a research administrator at the University of Kentucky. He's the first humanist known to receive a religious exemption from using AI from an American employer. The university's Equal Opportunity Office approved his request on September 25th, and the American Humanist Association announced it on October 26th. The university does not officially have an AI requirement yet.
Dermann said he wanted to get ahead of any move towards one. In August, he filed a request under Title VII of the Civil Rights Act, which covers both religious and non-religious beliefs. He had help from an attorney, Alexandria Huskins of the American Humanist Association. In his words, using AI violates my deeply held humanist beliefs.
Derman may still need to attend meetings where AI is used and submit work through systems that use it. He offered to take and share his own meeting notes. His colleagues are still using AI. He's also not the first person, as far as I was able to find, to win an AI exemption.
Earlier this year, another employee got one based on Unitarian Universalist beliefs. So Dorman's defense here, Dorman's defense here as a humanist and his avoidance of AI in his personal life... you know, is helping his case. And whether or not someone else could win this kind of a case, I think depends on their beliefs and the impact to their employer.
In a statement, the university said it determined it could provide the accommodation while the employee continues performing the essential functions of his job. Okay. So now the futurist lens here, I'm sure a lot of you listening to this and watching this are probably thinking, okay, this is one dude in Kentucky. Who cares?
But the real question I think is not whether or not somebody can opt out of using AI. It's what happens when opting out means the work doesn't get done the same way. And what happens if more and more people start to go down this path? Now in 2023, the Supreme Court, they decided a case of Groff versus DeJoy.
This was a mail carrier, you might remember the story, who didn't wanna work on Sundays for religious reasons. And before the ruling, employers could deny religious accommodation if they caused even a trivial burden. And so the court unanimously raised the bar and they said, now an employer has to show a substantial loss to the business. And now I think these requests are just going to become a lot harder to turn down.
And so think about what happened with COVID vaccines. When companies required COVID vaccines, religious accommodation requests, they exploded. There were a lot of religious discrimination charges that were filed with the federal government. And this jumped from around 2400 in 2021 to nearly 14000 in 2022.
And so if AI mandates spread, expect the same pattern of probably on a smaller scale, though. Now, the part that nobody's talking about here that I think is really important is the performance piece, because notice what the university's exact wording was. Derman can skip AI because he can still do the essential functions of his job. That's the key phrase there.
An accommodation generally changes how you actually do the work. It doesn't excuse you from doing the work. Now, obviously, I'm not a lawyer. This varies case by case.
But that, I think, is the core principle here. So Dermin's role inside the organization was designed before AI. And so his headlines, his deadlines, his output expectations, how he was doing work, this was all designed before the use of AI. But now what happens two or three years from now?
If a teammate using AI writes, for example, a grant report in two hours and the exempt employee needs two days, three days, five days, I think a few things are going to start to happen here. So first, the standards are going to start to rise around the worker's capacity. who want exemptions. I think the performance expectations are quietly going to reset to what people with AI can produce.
Because if you have a team of people, four of them are using AI and one is not, the output, the performance of those four employees is a lot higher and you're the one employee not using AI, your performance is struggling. What's going to happen? It's not that your performance got worse, but you now look slow and not as capable as everybody else on your team. And so the expectation of you as an employee, even if you get an exemption, is going to go up to try to match those who are using these tools.
Second, an employer can deny an accommodation if it causes substantial costs. So today, letting one person skip using AI costs pretty much nothing. Once AI becomes central to a role, then I think covering that gap might mean extra staff, missed deadlines, teammates who have to pick up the slack. Those costs are then going to start to count.
Third, I think, is the essential functions piece. This becomes a moving target because when a job description says, and I think more of them are going to say this, quote, uses AI tools to analyze data. If that's in the job description, then what that essentially means is that AI no longer becomes something optional that you have to use. This is going to be a requirement.
It's part of the job. So job descriptions, I think, in a lot of ways are about to turn into legal documents. In a lot of ways that most companies haven't talked about. I mean...
I think there's no other way around that. So the window for AI exceptions, for these AI exemptions, I think this is the biggest window now over the next one, maybe two years. And then that window is going to be shut. So the more AI becomes how a job gets done, the harder it's going to be for an employee to request an exemption.
because you're not going to be able to do the job. So what does that mean actually for work? What does that mean for you? I think companies are really going to be forced to answer a question that a lot of them have been avoiding.
Do we judge people on the tools that they use or do we judge people based on the results that they're able to produce, the impact that they're able to make? If an exempt employee can hit the same quality and the same output as an employee who's using AI... Fantastic. Great.
No problem. Results are ultimately what matter and the method, how they want to do it, that's their business. But the question then becomes that they can't. Then the conversation shifts to becoming much more about performance instead of about belief.
And performance conversations need to be very clear. Written, measurable standards. And this is what a lot of organizations don't have. So I think you can expect to see three things going forward.
Number one, job descriptions. They're going to get rewritten to spell out whether or not AI is a core part of the role. In fact, I think every job description that's going to be written starting in 2027 and beyond is going to mention AI. Even if you don't have to be amazing at it just to cover your bases, everything's going to say AI.
Technology, AI tools, blah, blah, blah, analyze with AI, LLMs, whatever you want to call it. Every job description is going to start to have that, or at least the majority of them. Performance reviews are also going to move more towards outcomes. Impact.
because asking somebody, did you use AI is a much weaker and I think a much legally riskier question than asking somebody, did you deliver on what you were supposed to do? I don't care what you use. Did you do your job? And yeah, I think there's going to be a small human-made niche roles that emerge.
Some roles, some customers, some employees, they will value work that's going to be done without AI. We had Patrick Lencioni join our CHRO group a couple of months ago, and we talked about this idea of organic fruit. Some employees and customers, they're going to want the organic fruit, not touched by pesticides or AI. So opting out, I don't know, it's not going to fit every role.
But maybe in some roles, it's going to be a selling point. Maybe the judgment calls, the counseling, the human relationship. I don't know. Maybe in those types of areas, opting out of AI is going to be a selling point, something that's unique.
And so I think the underlying point that this Derman case raises is that people should stay accountable for their decisions. This is the one thing that every company should take seriously, regardless of the tool that you're using. So my advice for leaders out there is don't wait for something like this to land on your desk. Decide now which roles truly depend on AI and which ones don't.
Should you have AI in your job descriptions? Should you not? Write down the standards. Be clear about them.
And then when somebody says, hey, I'd prefer not to, then you're going to have an answer that's fair to them, fair to the teammates, and it's going to be defensible to anybody who asks and who challenges it. So those are the top three stories of today. If you like this podcast, you like this content, please subscribe on Apple Podcasts on YouTube or wherever you watch the show. The podcast, of course, futureofworkpodcast.
com. The newsletter, I just put up the latest newsletter today. It is futureofworknewsletter.com.
The latest post, huge post. I did a deep dive. And the title is Your Best New Managers Have No Direct Reports. It really unpacks how AI, how agents are going to impact organizations in terms of org structure, pay, all sorts of stuff.
There's frameworks, there's visuals. This thing took several weeks to put together. Again, that is at futureofworknewsletter.com.
And if you're a chief human resource or chief people officer and you want to join a group of your peers, you can go to futureofworkleaders.com. That is futureofworkleaders.com.
Our next event in person will be January 13th and 14th in the Bay Area. So I hope you have a wonderful, wonderful weekend and amazing Halloween. We're going to be trick-or-treating obviously tomorrow. So we're going to be out collecting as much candy as we possibly can.
And then I will be back again on Monday. Have a wonderful, wonderful weekend. Talk to you soon.
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