How AI is creating a rift at McKinsey, Bain, and BCG

https://the-ken.com/story/bcg-and-mckinsey-sell-speed-as-ai-shakes-up-consulting-so-why-arent-consultants-buying-it/

by rustoo • 1 year ago

103 94 1 year ago

the-ken.com

therobot24• 1 year ago

paywall

esalman2• 1 year ago

I never even heard of this website/magazine and even they have a Paywall.

treetalker• 1 year ago

I mean, what's an extra $120–$299 per year to subscribe to this website, especially when it's of such high quality that it already has

5,00,000+ subscribers [sic]

jaredwiener• 1 year ago

It's almost as if their desire for getting paid for their work is unrelated to your awareness of them.

vantassell• 1 year ago

https://archive.is/mJJOx

PaulHoule2• 1 year ago

Doesn't work for that site. Archive/Whatever only works if a site lets Google have free access so Google can index it and that one (like most off-brand news blogs) doesn't.

alabastervlog2• 1 year ago

Welcome to management consulting in 2025, where much of what you see on a consultant’s deck has been outsourced to generative AI tools—including, funnily enough, the deck itself.

I’m sure they are talking about the meaning of the deck, but they’ve already long offshored the creation of the decks to India. They make notes during the day, send the notes to India, receive decks the next morning.

Dunno about the rest, can’t see it.

rchaud6• 1 year ago

The website is India-based, so they may be talking about the consulting offices in India.

WorkerBee28474• 1 year ago

The consulting firms have just realized they can outsource everything save their core competency - taking the blame.

rchaud6• 1 year ago

If McKinsey took the blame, businesses would stop working with them. They haven't. McKinsey has too much influence on Wall St, the SEC, FTC and Capitol Hill tor companies to ignore them. Corporate execs come and go, but McKinsey's presence is eternal. They are the closest thing America has to centralized economic planning.

game_the0ry• 1 year ago

I thought this would go without saying, but once SWE jobs are automated by AI (if it were to happen), then every job can be automated.

Even sales - I hear of companies building bots that do outreach with human voices.

But the professional careers that were once considered "prestigious" (strategy consulting, investment banking, law, medicine) will be the most disrupted bc labor costs are the highest in those.

Imagine a lawyer doing discovery in minutes, rather than days or weeks. Imagine a doctor that can diagnose you from your smart phone.

The world is not ready for those changes.

tharne2• 1 year ago

I thought this would go without saying, but once SWE jobs are automated by AI (if it were to happen), then every job can be automated.

I think this is exactly right, and possibly a good thing relative to the alternative. If AI were able to automate 20% of office-type jobs, you'd have a lot of people out of work, but likely not enough for anyone to do anything about it at a societal level. Those people would just be given some platitude in the same way out of work coal miners or assembly line workers were snidely told to "learn to code".

If every or nearly every office-type job gets automated, it would force us to address the issue in a meaningful way.

flipthetable• 1 year ago

Doctors aren’t going anywhere anytime soon. Their jobs often go far beyond diagnosis.

For instance, in paediatrics one of the trickiest types of case to deal with are those relating to safeguarding. The tact required to navigate those situations, eg. correctly identify whether an unexplained bruise is a signal to flag a safeguarding issue or has a reasonable explanation, is not something that can be automated and would likely receive a lot of pushback.

It is worth noting that in 1930 Keynes predicted that the work week would shrink to 15 hours thanks to advances in automation.

I have great confidence in our abilities to create more work for each other.

cglace2• 1 year ago

Yeah, my job is now automating tasks using AI and code instead of automating tasks with just code. The code part has gone down, and the abstraction has moved up a layer, but I have more work than ever.

laweijfmvo• 1 year ago

Maybe not fully, but a typical non-emergency visit to a doctor in the U.S. basically involves them taking a glance and prescribing whatever the most common drug to treat the issue is. Then, if it doesn't work, they might send you somewhere else or see you again and actually think about it.

SpaceManNabs4• 1 year ago

yeah doctors and lawyers are safe because of how their lobbies make them necessary as rubber stamps.

cbozeman2• 1 year ago

I have great confidence in our abilities to create more work for each other.

This is because we have a lot of people who don't like the idea of having to go work while others sit around on their ass getting checks. I get it. It's the most natural thing in the world, but we've got to evolve past it and we've got to evolve past it right now. Not 50 years from now, not 10 years from now, right now.

A shitload of people are going to be out of jobs very soon. Sooner than anyone thinks, actually.

And there's really only two paths this goes. We institute Universal Basic Income and some kind of program or programs to help you learn a skill that doesn't lend itself to automation well... or... the wealthy continue to horde everything and half the population starves to death... which doesn't happen, because when people get hungry, they start to kill the wealthy. And frankly even with a swarm of murderdrones, good luck stopping 200,000,000 people from killing you.

Evolving towards Star Trek's Federation is the way to go, I just hope rich people aren't too damn stupid to do it.

Oras• 1 year ago

Well, my recent visits to GP convinced me that unless you need a surgery or further checks such as X-Ray, MRI, blood tests, then you don’t really need a human.

These recent visits I saw junior doctors, one of them literally pulled Google to ask a question.

Any job that requires “memorising” things can be automated with generative AI.

youworkwepay• 1 year ago

shrink to 15 hours thanks to advances in automation

That effectively happened. Then we invented staff meetings & quality circles.

Workaccount2• 1 year ago

I'm on the classic side of engineering and we still do a lot of work with our hands. The designs are done on the computer, but the things also still need to be built in the drastically less ideal environment of reality. So we at least would need some dexterous robots too.

im3w1l• 1 year ago

Dexterous robots do already exist. But there are many tasks they have not been taught to do yet, clearly.

probably_wrong• 1 year ago

I hear of companies building bots that do outreach with human voices.

I asked Gemini today how to use my (paid) credits to get more RAM. The conversation was roughly like this: "You have to click on this option". "That option doesn't exist". "You are right, that option doesn't exist. You should consider paying for an upgrade".

My theory about chatbots is that, in general, they are only replacing humans in tasks in which no one really cares whether the problem is solved at the end: if I'm unhappy about my internet connection and the company has a monopoly, then all my call does is ensuring that the company doesn't spend more than legally necessary on a problem they never intended to fix.

All AI is doing is making it easier for you and I to be ignored at scale. So while I don't doubt that some doctors will diagnose people from my phone, they will be shit solutions to the wrong problem.

Havoc• 1 year ago

The first part of that prediction seems on track.

Think we’re still a while away on many of the other knowledge work ones. Often they just don’t have a good source of training data that has similar depth to GitHub/stack overflow etc.

eg law - yes you have law books. But that doesn’t have the same 1:1 relationship as code does. A lawyers output is not law books

goatlover• 1 year ago

Nurses aren't going anywhere. They're more central to the operation of the hospital. Janitors aren't going anywhere either.

tharne2• 1 year ago

I don't think AI will have much of an impact on management consulting, since it's really just executive insurance. If anything, management consulting might be the perfect use for generative AI in its current state.

If you're a CEO running a company, you can go out and hire McKinsey and tell the board, "I'm a great CEO, that's why I brought in McKinsey. They're the BEST". McKinsey then proceeds to charge you a bunch of money and leaves you with some very slick powerpoints containing a bunch of advice, roadmaps, org charts, and action items.

If your company has a few good quarters after that you can say, "Look at what a great CEO I am, I brought in some best in class consultants and now our stock price is through the roof!". If on the other hand your company struggles, misses earnings targets, etc., you can say, "It's not my fault we're doing badly, I brought in a team of best in class consultants and even THEY couldn't help us turn things around yet - it must be the macro economy, industry headwinds, etc. Imagine how much worse we'd be doing if I didn't bring McKinsey in!"

cglace2• 1 year ago

In this article: https://medium.com/@takafumi.endo/how-ai-is-redefining-strat...

You can see how AI is already transforming consulting at the Big 3.

alabastervlog2• 1 year ago

They're not just executive insurance.

They're also a normalized industrial espionage and wink-and-nudge collusion service. They call all that stuff "best practices".

upghost• 1 year ago

Ok... you got me. Can you unpack this a bit? Are you saying the consulting services, like, launder techniques and IP from their clients and reuse it other clients or...?

_ea1k• 1 year ago

Is this how we ended up with an entire generation of business managers being taught that competing on price is bad?

bko• 1 year ago

There's a market. Almost everyone is a market taker.

For instance, a company has to figure out how much to pay people. If McKinsey comes in and says "pay them less and we'll tell everyone else to pay them less" that just doesn't work. Why would any company that is 1 of N decide to pay them less when they can just pay them slightly more and attract the talent from all these other places. There is an incentive to cheat and without a legally binding agreement all collusion services will collapse. And this even ignores new entrants. You can have individual (illegal) agreements between companies like Google and Apple where they agree to not hire their employees, but those break down and have nothing to do with consultants (why would you want a middle man in an illegal activity?)

The reality is there is a market for most things. To hire an analyst it'll cost you X. McKinsey and other try to discover that and tell their clients. But they can't change the nature of the market as much as someone installing an HVAC unit can change your temperature but giving you a rigged thermostat.

rajin112• 1 year ago

Never thought of it like that. Mabey they are also saying this is what you should price this product at per the "market"

SpaceManNabs4• 1 year ago

since it's really just executive insurance

But now you just need 2 associates instead of a team having you as part of their portfolio of clients. The fact that many the consultants are going "AI won't come for us" has me betting against the consultants lol.

tqi• 1 year ago

I don't think AI will have much of an impact on management consulting, since it's really just executive insurance. If anything, management consulting might be the perfect use for generative AI in its current state.

I think your second point is actually the reason why this will have a big impact on the industry, since McKinsey et al generally operate on a billable hours basis, and automation / AI will exert significant downward pressure.

Initially, I imagine they will staff smaller teams at a higher hourly rate (mostly by replacing some number of analysts and associates with automation/AI). Long term, I can imagine some firms will attempt to make up for the loss of revenues by expanding into SMBs ("Own a struggling Plumbing business? Get help from McKinseyAI!") or by dramatically reducing the size of their staff (as you noted, their product is mostly executive insurance, and for that you really only need the Partners).

nlawalker• 1 year ago

Totally agree - the industry will thrive (unlike some others that could be totally obsoleted in an AI-powered economy), but it will need far fewer paid humans to run it.

The retention of accountability and access to otherwise-inaccessible information will continue to be among the hottest commodities.

If you’ve ever wondered what makes “shady data brokers” so powerful in cyberpunk stories, it’s not their collections of stolen credit card numbers - it’s insider knowledge of what your trillion-dollar competitor is doing.

sheepscreek• 1 year ago

Did you even read the article? You might have missed the main point entirely. It’s not discussing the job security of management consultants, but rather the job satisfaction.

Particularly for junior professionals, the expectations placed on them have suddenly increased tenfold, while the expectation to utilize generative AI for the most intellectually and creatively demanding tasks has diminished the mental reward. As a result, the most unsatisfying manual tasks are only ones left to be done - needing most of their attention.

pradn• 1 year ago

This is such a meme on Hacker News. How much evidence is there really for this? There might be some, but saying its the primary reason CEOs hire consultants is an even stronger claim that needs justification.

riku_iki2• 1 year ago

executive insurance It's not my fault we're doing badly, I brought in a team of best in class consultants and even THEY couldn't help us turn things around yet - it must be the macro economy, industry headwinds,

its unreliable insurance, since board may not buy this excuse.

belter• 1 year ago

That is from the Secrets of Consulting :-)

https://www.goodreads.com/book/show/566213.The_Secrets_of_Co...

alephnerd• 1 year ago

A lot of very dismissive takes on consulting within this thread.

That said, the article is on point about how junior and associate roles are now on the line.

You can be dismissive all you want on here, but at the end of the day, FAANG, MBB, YC, and BBs - not MBAs - are the LDPs of the 21st century, and if you don't like leadership at companies today, it's only going to get worse, because the people who survive this will be even more mercenary.

conartist62• 1 year ago

I'm not sure that's true. This particular brand of idiocy could go extinct in something close to a heartbeat. A few trillion dollars gone when the bubble pops and suddenly many of these leaders will look more like gang leaders than visionaries

conartist62• 1 year ago

It seems to me that these CEOs are all-in on the bubble. They're simply not worried about inflating the tech beyond it's real value.

They'll force it down people's throats and then claim that they have tons of users. They don't even both trying to sell the idea that their product is good for humanity. They're doing their level best to kill art, to kill journalism, to kill medicine, to end the job market as a source of opportunity...

Let's be clear: the AI playbook is the same playbook SV always has. Get a lot of people to come in and look around, then lock them inside and start to exploit them for your gain. It's just the scope of the control they seek now is orders of magnitude more than they ever have before. They are trying to convince people to stop thinking for themselves, to stop doing art, to stop valuing art, and in general, for the engineers and employees they've already locked into their power structure, never to question that this is the way of the future

rchaud6• 1 year ago

That's like saying war is bad for the construction industry because there won't be any demand for real estate development.

War is extremely lucrative because there will be "reconstruction" contracts once the dust settles. For McKinsey, these are equivalent to "restructuring" businesses after economic recessions.

Trillions were lost in the March 2000 dotcom collapse and the September 2008 crash. McKinsey, Bain etc emerged unscathed. There's plenty of business to go around even if the economy is in shambles.

gessha• 1 year ago

Do public companies disclose hiring consulting companies like McKinsey?

rchaud6• 1 year ago

If they're in the S&P 500, you can assume that they do. McKinsey's influence isn't just via consultants either, plenty of execs are former McKinsey people. Sundar Pichai and Sheryl Sandberg being two big names.

randcraw2• 1 year ago

Yeah. BigCo administrators universally point to business intelligence arising from competitors as the 'second pillar' in justifying policy, especially related to internal corporate organization or HR standards.

Seattle3503• 1 year ago

Instead of making their life easier, AI has resulted in drastically reduced timelines and ebbing appreciation for creativity.

I've felt this personally as a dev. We are getting squeezed to move and deliver faster because we have AI.

rchaud6• 1 year ago

I liken AI hype to crypto hype. There will be always be some wide-eyed techno-optimist rube waxing poetic about how AI will open the door towards a 4-day workweek, just like how crypto will strengthen civil society by reducing the influence of banks in handling commerce.

The reality is a lot simpler (and darker) when you realize who the buyers of this technology are, and what they want from it. And what they want is always the same...more, and faster.

newfocogi• 1 year ago

I'm close with someone who is on the Digital side of McKinsey, and they said they attended some meeting where a partner was asked what he was excited about for the future, and he said something like "the opportunities from AI agents replacing software developers". The audience was a room full of McKinsey's software devs.

cbozeman2• 1 year ago

This just proves to me that we do not actually have a meritocracy, because only a fucking moron would say that, in that environment, and a moron would not rise to the level of partner in a legitimate meritocratic environment.

CrossVR• 1 year ago

He didn't say that because he was a moron, in that context it sounds more like a threat to me.

SpaceManNabs4• 1 year ago

AI agents are more likely to replace associates at these firms than software devs lol.

AI agents can't do sql queries a lot of the time, but they sure can autofill the remainder of most excel sheets (and AI agents can't really autocomplete sql queries yet for some reason lol).

Yes, I use claude to code sometimes, but I use claude much more as an assistant to brainstorm tasks and mindmap than actually doing software engineering because vibe coding builds brittle projects. Whereas one-off decks are a perfect use case

Now replacing people that require a license or some other sort of credentials like lawyers, doctors or accountants... That is much harder.

tonyedgecombe• 1 year ago

That reminds me of a presentation the CEO of one of my former employers gave. Somebody asked why we weren't expanding into Europe and he said because it's harder to fire people there.

rchaud6• 1 year ago

So? Everybody at McKinsey knows how the company earns its fees. Everybody there knows what they signed up for and it wasn't to help companies grow their opex costs. They knew it when execs were excited about "offshoring expensive domestic labor" 25 years ago.

SpaceManNabs4• 1 year ago

What stops these consulting firms from replacing the bulk of their consultants with AI if the associates are all just outsourcing every detail anyways?

These people should be a lot more worried lol.

disqard• 1 year ago

All it'll take is for one firm to break ranks (fire consultants and replace them with AI), and for the stock market to reward that behavior.

Then, it'll be checkmate.

etempleton• 1 year ago

Because the consultants real job is to be a glorified sales rep and you need a person to do that.

elicksaur• 1 year ago

Why would “sales rep” be immune to the magical singularity AI that will be 9000 IQ points smarter than all of humanity combined?

justlikereddit• 1 year ago

Instead of overpaid and incompetent Consultant-people making choices on the payroll of politicians using taxpayers money, to implement costly and enshittified project recommendations. That the actual end-user that was never asked anything about. We can now replace the cuntsultants with an incompetent AI making the same faulty recommendations at ten times the speed and same cost, but ten times wider profit margin.

Splendid.

mawadev• 1 year ago

Hol up, they managed to make management consultants even more redundant?

bravetraveler• 1 year ago

Redundancies all the way down

How AI is creating a rift at McKinsey, Bain, and BCG

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