Read those two numbers together. CEOs know the constraint is people, not technology. Three in four of those people are not using it regularly. The capability gets bought, handed to IT or a data team, and launched. The rest of the organization is never authorized to act on what it produces. A model only IT can act on does not change how the company decides. It changes what the company spends.
This is the second Pillar 1 concept in the Enterprise Value Playbook, and the arc now returns to where it started. The first five concepts built the inputs: a documented strategy, accountable leaders, documented processes, trusted financial visibility, and a growth plan every function can explain. This concept asks whether the decisions made against all of it are getting faster and better. AI accelerates whatever decision-making pattern already exists. Applied to a disciplined process, it compounds good judgment. Applied to a fragmented one, it produces confident, fast, wrong answers.
YOUR 2027 BUDGET IS LAST YEAR WITH A HAIRCUT.
Every October, management rolls forward last year’s run rate and negotiates percentages. That produces a budget. It rarely produces enterprise value.
This month I published a piece on why. A budget should not be a forecast of what the company will spend. It should be a decision about what the company is trying to become, and which investments will increase its value.
Before your plan goes to the board, I will run one Capital Allocation Review with your leadership team. You leave knowing where your capital is compounding and where it is habit. If we do not find at least one line you would fund differently, you have lost one hour.
I am holding a limited number for October. Reply “Capital Review” to reserve one.
THE PRINCIPLE
This week’s concept sits in Pillar 1, Strategy + AI: you use data and technology, including AI where relevant, to make faster and better decisions.
Where You Stand
Ask your leadership team to name one decision made last quarter that went differently, in direction or in speed, because of a data or AI capability you own. Then ask who outside IT is authorized to act on what that capability produces. If the room goes quiet on either question, that is your actual score.
The Failure Pattern
AI gets treated as a bolt-on tool assigned to IT rather than a capability embedded in how decisions actually get made. Leadership adopts a dashboard or a model, celebrates the launch, and six months later cannot point to a single decision that changed because of it. The tool exists. The decision-making pattern underneath it never did.
Kotter’s Step 5, Empower Broad-Based Action, is the relevant failure point here. Organizations frequently hand a powerful new capability to a narrow group, usually IT or a data science function, without removing the structural barriers that prevent the rest of the organization from acting on what it produces. A predictive model nobody outside of IT is authorized to act on is not a decision-making improvement. It is a report nobody reads. Identify the three highest-stakes, highest-frequency decisions in the business before selecting any tool. Map how those decisions get made today, who is involved, what data they use, how long it takes. Apply AI specifically to accelerate or improve that mapped process, not as a separate initiative competing for leadership’s attention. The tool serves the decision. The decision never serves the tool. Budget season is the natural moment to apply it: before another AI line item gets funded for 2027, name the decision it is meant to change and the people authorized to act on it.
The Win Condition
Leadership can name a specific decision that changed, in direction or in speed, because of a data or AI capability in the last quarter. The tool has a named owner accountable for adoption, not just for implementation.
FROM THE CHAIRMAN
“Tell me about a decision this quarter that would have gone differently without the data or AI capability you are describing. If you cannot name one, you have bought a tool, not changed how you decide anything.”
MARKET INTELLIGENCE
Three signals from this week across Venture Capital, Private Equity, Family Offices, and Capital:
KKR / Gen II Fund Services. KKR agreed to acquire Gen II Fund Services from Hg and General Atlantic at a total enterprise value of $5.1 billion. Gen II administers funds for more than 275 private capital managers representing over $2 trillion in assets. Since Hg and General Atlantic invested in 2020, Gen II’s revenue and EBITDA have quadrupled, and Hg credits the team with driving AI and automation across client onboarding and bank reconciliations. KKR plans further investment in AI-enabled solutions and a broad-based employee ownership program. (General Atlantic press release, October 6, 2026: https://www.generalatlantic.com/media-article/kkr-to-acquire-gen-ii-fund-services-for-more-than-5-billion-from-hg-and-general-atlantic/) My read: Look at where the AI went. Not a strategy deck, not an innovation lab. Two named, high-frequency processes: onboarding a client and reconciling a bank account. That is the right order: pick the decision, then the tool. The employee ownership program matters as much. Kotter’s Step 5 is about removing the barriers that keep the broad organization from acting. Ownership gives every employee a reason to act on what the tools produce.
Schneider Electric / PTC. Schneider Electric agreed to acquire PTC, the Boston maker of computer-aided design and product lifecycle software, in an all-cash deal valued at $22.6 billion. PTC shares closed up 33%. Schneider shares fell 10%. Both companies are adding AI features to make better use of the data their software collects, and analysts described the combination as a large industrial data-management platform. (The Boston Globe, October 5, 2026: https://www.bostonglobe.com/2026/10/05/business/schneider-electric-ptc/) My read: Schneider did not pay $22.6 billion for a model. Models are available to everyone. It paid for the engineering and operating data that tells a model what is true inside a specific product and a specific plant. A model without that context produces confident, fast, wrong answers. The 10% markdown is the board-level question in public: will the combined company change how its customers decide, or will it sell them more software?
Wittington Investments / Boots. Wittington Investments, the Weston family holding company behind Loblaw and George Weston Ltd., agreed to buy UK pharmacy chain Boots from Sycamore Partners for US$8.9 billion (about C$12.7 billion), including debt. Fairfax Financial will contribute up to US$2.3 billion and hold 50% after closing. Wittington keeps operational control, and Galen Weston becomes chairman. One analyst expects the two businesses to share best practices, and possibly infrastructure, with Shoppers Drug Mart. (The Canadian Press, via BNN Bloomberg, October 7, 2026: https://www.bnnbloomberg.ca/business/company-news/2026/10/07/family-behind-canadas-biggest-grocery-chains-buys-uk-drugstore-boots/) My read: The Westons have owned a national pharmacy chain in Canada since 2014. They are not buying Boots to learn how pharmacy decisions get made. They already know which decisions matter. Family capital split the economics and kept the decision rights in one place. That is the sequence this concept demands: know the decision first, then bring the capital and the tools to it.
SAM SPEAKS
Later this month I deliver “The Unrealistic Leader: Achieve Real Results by Being Unrealistic” to members of the Association of Revenue Cycle Professionals (ARCP). I speak to executive audiences on three core topics:
Scaling and Exiting the Business for Maximum Value. The leaders who capture maximum value at the table treat the exit as a strategy, not an event.
The Unrealistic Leader. The most dangerous thing a leader can do is become reasonable too early.
The Price Pressure Playbook. Buyers have a playbook. This talk gives sellers the 20 moves that counter it.
If your professional association or an upcoming conference is building its agenda to close out 2026 or plan 2027, let us connect: speaking@tipofthespearventures.com
FROM THE TIP OF THE SPEAR
Eighty-three percent (83%) of CEOs say AI success depends more on people’s adoption than on technology. The same CEOs say twenty-five percent (25%) of their workforce uses AI regularly. That gap is the failure pattern in two numbers.
A tool is not a decision capability. It becomes one when someone names the decision it serves, maps how that decision gets made today, and authorizes the people closest to the work to act on what the tool produces. Until then, AI sits with IT, produces reports, and changes nothing but the budget line.
This week the market showed what the alternative looks like. KKR paid $5.1 billion for a fund administrator that pointed AI at two specific processes, onboarding and reconciliation, and plans to put ownership in its employees’ hands. Schneider Electric paid $22.6 billion for the engineering data that gives industrial AI something true to work from. The Weston family bought Boots with a pharmacy operating playbook already in hand, and kept the decision rights in one place.
Budget season is where this gets decided. Every 2027 plan has an AI line in it. Ask the Chairman’s question this week: Tell me about a decision this quarter that would have gone differently without the data or AI capability you are describing. If you cannot name one, you have bought a tool, not changed how you decide anything.
100% GUARANTEED.
Executive Performance Coaching for CEOs and senior leaders who are scaling something real. We define the results in writing before we start. If you are not satisfied with them, you do not pay.
DO NOT PAY ME UNLESS YOU GET RESULTS.
Reply “Coaching” or reach me directly: sp@tipofthespearventures.com
UNTIL NEXT TUESDAY
From the Tip of the Spear is my weekly publication for executives who are building something real. One issue, every Tuesday. A field report from active operator engagements, one principle with supporting data, and market intelligence from across my VC, PE, and family office network.
