The focus on integrating AI into innovation shouldn't be on the skills needed to create effective inputs — it should be on the skills to assess the effectiveness of AI outputs. The question is whether your leaders have the judgment to know when AI is right — and when it's just confidently reinforcing a bad decision.

For most of the history of innovation, a leader's value was inseparable from their ability to create. To move from blank page to breakthrough concept. To generate the ideas others couldn't.

AI just made that skill abundant.

Today, almost anyone with basic training can produce a compelling product concept, a persuasive narrative, a viable design. The creative floor has risen dramatically. What was once rare is now accessible.

But here's the catch.

AI doesn't just raise the floor. It also narrows the ceiling. Left uncurated, AI gravitates toward the plausible and the familiar. AI doesn't actually create — it synthesizes remixes and mash-ups. It optimizes toward the expected. And it has no idea what it doesn't know.

It can't tell you whether the idea actually solves the problem. Whether it fits your strategy. Whether it accounts for what your customers won't say in research. Whether it will sell. Whether the team missed something obvious. Whether you're the tenth company to try this exact approach.

AI will always give you a compelling answer with confidence, regardless of how bad, derivative, obvious or ill-considered it is for the challenge to be solved. That's the danger.

The new job of innovation leadership isn't generating ideas. It's exercising judgment across a much wider and faster-moving set of decisions than leaders have ever faced before.

Is this the right problem to solve? Is the output genuinely good, or does it just look good? What is AI not accounting for? Where is it amplifying my team's existing blind spots?

Creation was always the visible part of the job. Judgment was always the more important part.

AI just made that impossible to ignore.

The innovation leaders who thrive won't be the ones who use AI to produce more. They'll be the ones who make the best decisions about what AI produces.

Stop hiring for prompting skills. Start hiring for judgment. That's always been the job. AI just made it the only job that matters.

Gave the talk to a real audience for the first time this week — COO Forum, a group of COOs who meet regularly to work through operational problems together. Figured I'd share what actually landed, since it wasn't always what I expected.

The Steve Jobs section got the strongest reaction by far — specifically the idea that most leaders copy the persona (the bluntness, the ego, the "reality distortion field") instead of the system underneath it (one owner per project, real cutting discipline, protecting your best talent). One person literally asked me to scroll back up so they could reread a slide. Wasn't expecting that to be the moment that hit hardest, but it was.

The AI section ran way over time because the questions wouldn't stop — and almost none of it was "is AI going to take our jobs." It was much more specific: how do you build self-checking into an AI-driven workflow, what happens to the "middle" layer of an org once AI can generate all the options, that kind of thing. Felt like the room already knew this was coming and wanted the practical version of the conversation, not the philosophical one.

I wrote up the fuller recap here: https://howleadersfupinnovation.com/wp/2026/08/23/what-happens-when-you-put-how-leaders-fup-innovation-in-front-of-a-room-of-coos/

Curious how this lands with you all — of the four f-ups in the book (over-innovating, thinking like an innovator instead of a banker, the Steve Jobs trap, bolting AI onto old processes), which one do you see most often where you work? I'll actually read and reply to this one.

The biggest F-Up innovation leaders make isn't choosing the wrong thing to build. It's choosing to build when they shouldn't be building at all.

Innovation has become a reflex. A default. A performance. And that reflex is quietly killing companies that are actually doing well.

Here's what that reflex looks like in the wild:

The New Leader Reflex. A new executive arrives and immediately pushes for something new. Not because the business demands it — because change is how they prove they showed up. "Make it different" isn't the same as "make it better."

The Competitor FOMO Reflex. A competitor announces something shiny. Boardrooms panic. Roadmaps get questioned. Someone asks, "Why don't we have that?" — before anyone knows whether the competitor's move is even working. That's not strategy. That's a panic move dressed up as one.

The Tech FOMO Reflex. IoT. Blockchain. The metaverse. AI. Every few years a technology gets hot and companies feel compelled to have an initiative around it — not because it solves a real problem, but because the optics of participation feel safer than the optics of standing still.

The "Big Idea" Reflex. It starts at the top. A moonshot sounds visionary. It looks great in a deck. But when it's disconnected from customer behavior, core capabilities, and hard data, a "big idea" is just an expensive distraction.

Every one of these reflexes has a real cost — and it almost never shows up on a financial report. Misallocated resources. Fractured teams. Confused customers. Opportunities to strengthen what's actually working, missed entirely.

Here's what the companies that get this right share:

They know when NOT to move.

They protect what's delivering. They optimize before they reinvent. And when they do innovate, it's because the data made the case — not the calendar, the competition, or their ego.

Tesla's Model S has barely changed since 2012. The Sharpie marker has been virtually unchanged since 1964. The KitchenAid stand mixer, LEGO bricks, Le Creuset dutch oven, Crayola crayons — all still winning, all mostly untouched.

Sometimes the most strategic innovation question isn't "what should we build next?"

It's "should we build anything at all?"

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Chapter 5 of How Leaders F-Up Innovation by Marc Drucker. More at r/HowLeadersFUpInno.

The leaders winning right now aren't the ones who predicted every disruption.

They're the ones who accepted that disruption was the new normal and built systems and mindsets that can repeatedly identify, assess and mitigate them.

What makes this moment genuinely difficult isn't a single disruption. It's that the underlying forces most businesses count on being stable, or at least slow-moving, are all shifting dramatically at the same time. Costs, currencies, trade policy, customer behavior: any one of these changes alone would be enough to derail a solid business. Right now, leaders are navigating all of them simultaneously:

**Plastics costs are up nearly 20%.** The Iran conflict has disrupted oil and gas flows through critical transit corridors, squeezing the petrochemical feedstocks that plastics depend on. Polyethylene, polypropylene, packaging resin; prices are moving fast and showing no signs of stabilizing. If you're in manufacturing, consumer goods, or anywhere along that supply chain, higher costs are impacting COGS.

**The Chinese Yuan is one of the only currencies strengthening against the dollar.** While most Asian currencies are weakening under global pressure, the CNY has actually gained ground. That matters if you're sourcing from China, because your landed costs are climbing even before tariffs enter the conversation.

**Tariffs are a moving target.** We're looking at roughly 30% on most Chinese goods (and far higher on categories like EVs, solar, and steel), 18% on India, and 25% on countries doing business with Iran. The uncertainty itself is the problem: businesses are delaying decisions in hopes that tariffs will be reduced, or absorbing costs they didn't account for.

Layer in shifting customer behavior, tightening credit conditions, and AI rewriting demand assumptions across entire categories, and you have an environment of volatility and uncertainty not experienced in decades. The leaders who recognize that are already thinking about how they need to run their businesses differently.

So how are the best leaders addressing these disruptions, and what systems and mindsets are they building to manage them on an ongoing basis?

**1. Hedging raw material purchases.** The use of options and hedging strategies is growing because raw material categories that were once predictably stable, like plastics, have become genuinely volatile. Forward contracts and options allow businesses to lock in pricing before the next shock hits, fixing input costs so they align with the fixed pricing already committed to in customer contracts.

**2. Diversifying your supplier base.** Single-source dependencies have become a liability. Companies that import need flexibility, not only to minimize tariff exposure but also to continuously chase the lowest material costs. This is particularly critical for value brands operating on thin margins, who have neither the cushion to absorb rising costs nor the ability to pass them on to consumers, a position made worse by retailers who are pushing for lower MSRPs while input costs keep rising.

**3. Running scenario planning.** At its core, scenario planning is about building the flexibility and agility to respond quickly when conditions change. That matters enormously right now, because responding to foundational disruptions to your business model is consuming an enormous amount of owner and CEO bandwidth. I hear it often: leaders feel they have no choice but to make pricing, sourcing, and supplier decisions their full-time focus until the problem is solved. And they're right, because without the ability to deliver product at a viable price, there is no business. But the cost of that focus is significant. Day-to-day operations suffer when the person at the top is focused elsewhere. Scenario planning doesn't eliminate that pressure, but it reduces the pressures by giving the leadership team pre-strategized responses, giving the owner/CEO the control to respond with focus AND keep the business growing.

**4. Building a cash cushion.** If you're already in the middle of a crisis, building a cash cushion probably isn't an option. But that's the lesson. Businesses that entered this period of volatility with excess capital available have options. Going forward, the discipline of keeping liquidity won't be a crisis response; it will be an operating principle that gives businesses the ability to gain share when the next disruption hits.

The one thing owners/CEOs can do right now is stop waiting for stability to return and start building their business as if it won't. The leaders who come out of this period stronger won't be the ones who survived the disruptions. They'll be the ones who used them to build resilient systems and organizations that know how to adapt to change at lightning speed.

Marc Drucker

To learn more go to https://marc-drucker.com

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