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The use of AI has been a boon for business owners, because it enables them to analyze large amounts of data quickly and inexpensively, which accelerates their decision-making process without the need to consult others. This expansive, fast input can make it appealing for business owners to consider replacing their human business partners with an AI subscription, i.e., securing the same wisdom but without any hassles. The temptation to jettison human partners for an AI substitute, however, poses serious risks, including (1) the loss of access to capital, (2) the lack of real-world experience that challenges the owner’s views, and (3) increasing the isolation that many business owners already feel in leading their companies. This post reviews benefits for business owners who incorporate AI into their operations but also considers negative outcomes that may result if owners abandon their human partners and place sole reliance on digital guidance.

The Benefits of Implementing AI for Business Owners

The targeted use of AI provides business owners with significant value.  AI tools can quickly analyze data regarding sales, pricing, manufacturing, labor and other costs, and they can also provide owners with detailed financial projections and guidance on a 24/7 basis regarding strategic options that are available to expand their business. The incredible speed at which AI processes information permits business owners to make decisions on an expedited basis. The takeaway is that business owners can deploy AI tools to improve their bottom line by achieving cost cutting or increasing profits, or some combination of the two.

But if business owners opt for the use of AI in a way that eliminates or sharply reduces the role of their human partners, this decision can lead to dire consequences for the business, which are discussed below.

Loss of Access to Capital

As businesses grow, they often need to secure additional capital to fund the costs of their expansion and avoid becoming burdened by excessive debt. That is one of the reasons why a private company owner may add business partners who can contribute capital, as well as opening doors to other new sources of capital for the business. 

While AI is a helpful digital resource that can identify potential new sources of capital for the owner to consider, AI cannot directly open doors for business owners to secure capital from human partners. Stated another way, AI cannot write checks, and securing an AI subscription will not create introductions to a new network of friends and colleagues who have capital to invest in the business. As a result, an AI strategy that deemphasizes human partners may close off or reduce access to new capital sources the business needs to expand.

Lack of Real-World Experience

AI has vast amounts of knowledge and analytical capacity, but it does not provide input based on actual life experience. Experience in life is often the best teacher, but AI has not gone through a market downturn, laid off employees or scaled back a business in response to adverse market conditions. We learn more from our mistakes than our successes, and partners who have experienced setbacks have invaluable life experience they can tap into, which they can rely on to help business owners avoid repeating the same costly mistakes the partner made in the past.

A couple of examples may help make this clear. AI can evaluate a resume and point out the pros and cons of a potential lateral hire for a management position. But a business partner who has experience in the industry will have a strong sense of what personality and skill set is necessary for success, and in addition, the partner may have industry contacts who know the candidate and may be able to offer inside information about the specific applicant. This type of real-world experience may help avoid hiring someone who would be a disaster for the business.

Similarly, AI can analyze various performance indicators, compare compensation structures, and offer guidance to the business owner about how to create a strong company culture. But an experienced business partner can assess what is not working in the company’s culture and offer suggestions that will help build a more vibrant and cohesive work environment. From popular culture, the recent Top Gun remake featured Tom Cruise taking his pilots to the beach for a touch football game. The flight commander wanted the pilots back in the classroom, but Cruise’s character knew that team bonding on the beach would bring them closer when it counted. Here, AI may offer ideas that make sense on paper without appreciating what truly fosters human connection. 

The Echo Chamber Effect — AI as Cheerleader

Depending on the AI model, the results may be supportive without offering hard-hitting and necessary critique. AI is a composite of huge amounts of data that can be analyzed at breakneck speed. But it does not have skin in the game as it has not invested time or money in the business, and it could be weighted toward confirmation bias. When a critical decision requires the application of informed judgment rather than mathematical certainty, does the business owner want to trust the information that AI provides to one of its subscribers? Or would the owner place more trust in advice offered by someone who shares the same risk of success or loss in the business?

In short, human business partners are likely to be more accountable than AI on key decisions such as the hiring or firing of employees, investing in new areas of the business, or deciding on which potential new business partners to bring into the business. Will AI provide the business owner with a firm “no” when a key decision has to be made, and if so, will the answer be trustworthy? Ultimately, the business owner must decide whether to accept advice that is being offered solely by AI or whether to insist on also obtaining thoughtful input from another experienced businessperson. 

Isolation and Its Consequences

A final issue for the business owner to consider is whether using AI to the exclusion of human partners will become more isolating. Running a business can be lonely when the buck stops with the owner who has to make final decisions frequently. A business owner who consults solely with AI in making decisions to the exclusion of human partners may become more disconnected and disengaged, which is not healthy. A study conducted by the University of California, San Francisco, found that 49% of entrepreneurs deal with at least one mental health condition. Common issues include anxiety, depression, and burnout.

AI can help the business owner make decisions far more promptly. But creating a business model that involves seeking collaboration and consensus with others who are part of a management group can create a much stronger sense of teamwork for the owner and the company as a whole. Engaging in this collective teamwork also will help the business owner avoid experiencing burnout and depression.

Conclusion

AI is here to stay. The benefits it provides for business owners are profound, and its ease and accelerated delivery of results add to its utility. But jumping on the AI bandwagon should not lead business owners to dispense with their human business partners, whose real-life experience, extensive contacts, and wisdom add value to the company in a host of different ways. The balance that can be struck here, instead, is for business owners to use AI tools to enhance the work they do with their business partners, whose wise input can make the use of AI even more positive and impactful for the business.

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Doing the same thing generally produces the same result, and as the new year arrives, many business owners are considering new steps to help their companies achieve greater success in the year ahead. Leveling up requires change, and this post reviews three resolutions majority owners can implement to obtain better outcomes during 2026 for their companies and also for themselves.  Specifically, these resolutions should incentivize employee productivity, improve the company’s governance structure and help the majority owner become a more effective leader.

Resolution 1: Provide Employees With Phantom Equity or Stock Appreciation Rights

Providing employees with performance incentives is a common way for companies to boost productivity. Bonus structures are typically geared toward individual performance and may not correlate directly correlate with improved results for the company as a whole.  However, other incentive tools are available that more closely align employee rewards with the company’s broader productivity and performance goals. 

One such option is issuing phantom equity or stock appreciation rights.  These incentives do not involve an actual award of stock and do not provide employees with true equity in the business.  Instead, employees receive contractual rights that entitle them to additional payments based on the company’s performance.  Typically, these agreements provide for additional compensation if the company achieves specific revenue or growth targets.  When the company succeeds under these agreements, employees share in that success. 

Providing phantom equity aligns employee performance more closely with the company’s goals while avoiding complications associated with granting actual equity. As discussed in other posts, employees who hold equity in the business may have the right to access company books and records, assert fiduciary duty claims against leadership, and require the company to buy out their interests upon departure. 

Resolution 2: Refresh The Company’s Board or Managers

Private companies often do not operate with the same level of formality as large corporations, which can be beneficial. Less formality allows them to be more flexible, make quicker decisions, and benefit from closer communication among leadership. However, it can also result in little to no turnover at the board or management level, particularly when no defined terms of service exist for those serving in these positions.

When the same board members or managers remain in place for extended periods, stagnation can occur. A lack of fresh perspectives may lead to diminished energy, lack of vision and creativity for the business. To address this, the majority owner should conduct an objective assessment of the current board or management team to identify areas where additional expertise or stronger input is needed.

For example, the owner should evaluate whether the company’s current leadership adequately supports  the business in the following key areas: (i) finance and accounting, (ii) technical expertise, (iii) sales and marketing, (iv) strategic planning and (v) legal matters. If gap exists, the owner may consider transitioning one or more current leaders or expanding the board or management team to bring in new voices. 

Strengthening the leadership group can have a significant positive impact. Beyond introducing new ideas or experience, fresh perspectives reduce the likelihood that the company’s existing practices will simply be rubber-stamped. New board members or managers can inject energy and challenge stale assumptions in ways that existing leadership may not.

Resolution 3: Invest in the Owner’s Own Development as a Leader

In private companies, majority owners often wear many hats, making it challenging to oversee multiple areas of responsibility. This challenge is even greater when owners lack peers who can provide support, feedback and accountability.  Over time, access to trusted external input becomes invaluable for business leaders.

There are many ways majority owners can obtain this type of guidance, including organizations such as Vistage or Entrepreneurs’ Organization, executive coaching and other leadership development programs. Without this support, both the owner and the company may hit a ceiling that is difficult to overcome. Additionally, owners lack external support face a significantly higher risk of burnout due to the pressure of feeling solely responsible for the company’s success. 

Conclusion

The new year brings potential for change and growth, but repeating the same actions while expecting different results remains a flawed approach. Majority owners who want to elevate both themselves and their businesses must be willing to embrace change to achieve better outcomes. The three resolutions discussed here offer pathways to improved employee productivity, a more dynamic and experienced leadership team, and a stronger support system for the majority owner. Majority owners who act on these resolutions in 2026 will position themselves and their companies for success this year and beyond.

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Last week’s post gave me an opportunity to share my thoughts on how choosing to lead a business with a gratitude mindset can have a remarkably positive impact on the company’s performance, as well as on the people who work for or with the business. The post received positive feedback, and several readers expressed interest in learning how to bring more gratitude into their daily lives. Making gratitude a regular practice can be challenging, especially when life often feels overwhelming.

Fortunately, there are low-cost or free tools that can help you build a gratitude practice. Below are links to three different resources. The first is a short article from Teladoc Health that offers realistic steps for incorporating gratitude into your routine. The second is a YouTube presentation by Dr. Joseph Dispenza, titled 21 Days of Gratitude: Transform Your Life With This Powerful Meditation in 2025. The final resource is a book published earlier this year, The Gratitude Effect: Transform Your Life in Minutes a Day Through Mindful Appreciation, which presents a simple solution: dedicating just five minutes a day to mindful appreciation.

I hope you find these resources helpful, and I wish you a healthy and gratitude-filled holiday season. Please feel free to share comments about your own gratitude journey and let us know if you have resources that have been meaningful to you along the way.