McKinsey and AI: What They're Doing and Why You Should Be Skeptical

McKinsey's AI Transformation: Or Just a Fancy Way to Hide Their Failures?

So, McKinsey & Company is "rethinking the nature of the work" they do, huh? That's what Kate Smaje, global leader of tech and AI at McKinsey, told Business Insider. Let's be real, that's consultant-speak for "we screwed up, and now we're trying to sound innovative while we scramble to stay relevant." According to AI is reshaping how McKinsey makes money, McKinsey is adapting to what clients want.

The claim is that AI is changing what clients want, and McKinsey is adapting. Fine. But the big shift is how they're charging – moving towards "performance-based arrangements." Meaning, instead of billing by the hour (which, let's be honest, was probably padded to hell and back), they're tying their fees to actual results. A quarter of their global fees are already based on this model. So what took so long?

The "Transformation" That Smells Like Desperation

Outcomes-based pricing didn't start because of AI, but the type of work AI transformation demands suits it? Give me a break. It suits them because they probably realized their old model was unsustainable. Clients are finally waking up and saying, "Wait a minute, you're charging us millions, and all we got was a PowerPoint presentation full of buzzwords?"

They want us to think this is some brilliant, forward-thinking strategy. But isn't it just a way to cover their asses when their "expert" advice leads to disaster? "Hey, look, your scorecard with your board is our scorecard," Smaje says. Yeah, and if the scorecard is a flaming pile of garbage, who takes the blame? McKinsey, offcourse, won't be taking the fall.

The Consulting Industry's Identity Crisis

Raj Sharma from EY (another one of these "consulting" giants) is saying similar things – AI agents might call for a "service-as-a-software" approach. Translation: AI is automating the basic tasks that junior consultants used to bill hundreds of hours for. So now they need a new way to justify their existence.

All this talk of "partnership" and "transformation" sounds awfully cozy. "We're not a supplier, we're not a vendor, we're a genuine partner," Smaje claims. If you have to say you're a genuine partner, you probably aren't. It sounds like a desperate attempt to avoid being seen as just another overpriced temp agency.

Wait, are we really supposed to believe that these firms are suddenly altruistic partners? Or are they just trying to find a way to keep the gravy train rolling in the face of automation?

The Future is... Uncertain?

The article mentions that "straight strategy advice" is less than 20% of McKinsey's work now. So, what are they actually doing? "Deep implementation expertise" and "multi-year transformation projects." Which sounds suspiciously like they're moving into the territory of actual software development and IT management. But if I wanted software, I'd hire a software company.

The changes unfolding at McKinsey reflect the broader shift across the consulting industry, as AI disrupts talent strategies, organizational structures, and business models at leading firms. The fastest learners are going to win in this space. But I'm betting the fastest liars will do even better.

So, What's the Real Story?

This whole "AI transformation" narrative feels like a smokescreen. The McKinsey & Company and the rest of the consulting world, they're not transforming out of the goodness of their hearts. They're scrambling to adapt to a world where their traditional business model is becoming obsolete. And honestly, I'm not convinced they'll succeed.