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!"
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".
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...?
Yes. Part of why you use a consultant like McKinsey is because they are talking to everybody else. So when they tell you "best practices" they are telling you what everybody else is doing.
In a way that cover's everyone's ass legally* of course. But that's what they're doing.
EDIT: * - by "legally" I mean allow information to be shared in a way that precludes legal repercussions but I do not necessarily mean adherence to the law.
Private equity firms and large management consulting firms gain extreme visibility and influence into an entire sector. If mckinsey recommends raising prices, its likely everyone in your sector is raising prices. If everyone in the sector does the same action, then no one loses out.
I wouldn’t call it collusion but, of course, they’re aggregating what leading companies find to be best practices—although they presumably don’t share individual company IP. Not much different really from when tech folks go to conferences.
Companies benchmark and consider industry best practices all the time. If they don’t they’re idiots.
Im not a huge fan of management consultants generally, but consultants and analysts can provide useful third party perspectives, in part because they talk to a lot of companies that you may have mess directly with access to.
Take a look at publicly traded companies post pandemic to see this effect.
Take McDonalds for an example, they are running around 30% margins and you see on social media customers complaining about prices.
Why don't those customers seek an alternative business?
The rest of them also follow pricing "best practices" so you have no where to run to.
Yum Brands is at ~20% profit margins, Shake Shack is at 3% or less profit margins, and QSR is at 10% to 15% profit margins.
There must be a reason McDonalds earns so much more. As far as I understand, McDonald’s has a significant real estate component to its business (which is technically selling its brand/real estate to franchisors, not selling food), bolstered by its very strong brand with loyal customers (that the others don’t).
> The cost of running a business, especially a restaurant, can really eat into its profits. At the end of the day, McDonald's only keeps around 16 percent of the revenue its company-owned stores make, but it keeps 82 percent of the revenue franchisees pay out to it.
That’s what excellence looks like. I think chik-fil-a has similar net margins. QSR is more typical for their industry. I think Starbucks is down around 10-12% net margins too.
20% used to be considered a high margin business, like luxury vehicles. That's a shockingly high margin in food.
Because the margin isn’t in food. It’s in franchising (selling a platform and brand) and real estate.
Yes their libraries are their most valuable asset. They also collect benchmarking data across companies to help you gauge how you are doing. You cannot ask aws about their practices but you can ask McKinsey about the market leader benchmark practices
AWS is probably guarding their IP, there is a chance McKinsey is just making things up, you can't verify it.
The way that it works is that if you want access to the benchmarks you need to provide your data.
But in general there is no way to verify whether the consulting company is lying or not. They have been caught pants down multiple times recently.
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.
Sounds like the spherical cow market?
Big players can collude. The CEOs can know each other by name and call around. Steve Jobs etc. did that.
Is this how we ended up with an entire generation of business managers being taught that competing on price is bad?
That's a part of it. The other part was the federal government not enforcing anti trust law for decades, enabling consolidation. Matt Stoller writes extensively about this at https://www.thebignewsletter.com/ and in his book "Goliath: The 100-Year War Between Monopoly Power and Democracy." Consolidation and monopolies are good for shareholders and management, competition is good for consumers and labor, broadly speaking.
Business consultants exist for a purpose that can be described as "how can we squeeze this enterprise or deal for as much as we can?" Sometimes that's squeezing your customer base through anti competitive practices. Sometimes thats offshoring (labor arbitrage). Sometimes it is M&A (realizing "efficiencies"). Sometimes it is squeezing your existing labor pool as hard as you can. Or a combination of the above.
Competing on price is something all business do anyway, at least as long as there is competition.
What McKinsey and the rest of the scumbags have taught CEOs is to be aggressive, cheating and ruthless at cutting costs no matter what. That's how we ended with almost all manufacturing and associated know-how getting shipped over to China (sometimes literally - they bought an entire steel manufacturing plant in Germany's Ruhrpott, tore it down and reassembled it in China [1]!), that's how we ended up with the clown show that is Boeing, that's how we ended up with "employee loyalty" not being a thing any more in either direction.
> Competing on price is something all business do anyway
Not if none of the competitors do, that was the point of the comment if they all think the competitors aren't competing on price then it becomes an informal price fixing scheme.
Exactly, and there are plenty of examples within the tech industry. Apple/Android app store fees didn't end up at 30% because of ruthless competition that drove margins down to almost nothing. If a market is controlled by a duopoly the two parties can easily keep prices absurdly high and everyone else has to just deal with it.
Never thought of it like that. Mabey they are also saying this is what you should price this product at per the "market"
> 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).
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.
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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.
> 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.
> 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.
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.
> 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.
The website is India-based, so they may be talking about the consulting offices in India.
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.
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.
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.
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.
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.
He didn't say that because he was a moron, in that context it sounds more like a threat to me.
agree -- fifty percent of managers manage through fear.. at McKinsey bump that number upwards ...
The consulting firms have just realized they can outsource everything save their core competency - taking the blame.
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.
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.
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.
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.
The makes you an an observers orchestrator in a rudimentary agentic system. What happens when that layer of abstraction for scheduling, managing and instructing of agents is better suited for an LLM or group of LLMs? I think a lot of people are going to get screwed.
You sound like you're having a bad day. Go take a walk, its just someones side project on HN.
You can say the same thing about all abstractions. React? So you are just an orchestrator react code that will do the actual work. Etc.
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.
Your junior doctor sucks. I visited a endocrinologist who did the same thing repeatedly during a routine visit. Uninspiring was an understatement.
The ability to iteratively observe and inquire to explore the state and the limits of the patient is NOT something automated docs will be able to do anytime soon. Diagnosis is a trivial task compared to learning who the patient is and how involved they actually will be in managing their own health.
> shrink to 15 hours thanks to advances in automation
That effectively happened. Then we invented staff meetings & quality circles.
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.
If you even see a doctor. More and more, physician assistants and nurse practitioners will be the first line of healthcare.
> 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.
Half the global population lives on less than $7 a day. I admire your optimism, but it's perfectly possible to keep large swathes of people living in abject poverty.
$7 a day is a step up from the olden days for those people. They're pleased with that.
$7 a day would be a step down for first-world (and second-world) economies. I think people would be very unhappy. Very very very unhappy.
The most likely outcome of AI displacing skilled labour unfortunately.
yeah doctors and lawyers are safe because of how their lobbies make them necessary as rubber stamps.
> 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.
> 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.
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.
Dexterous robots do already exist. But there are many tasks they have not been taught to do yet, clearly.
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
Nurses aren't going anywhere. They're more central to the operation of the hospital. Janitors aren't going anywhere either.
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.
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
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.
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
Hol up, they managed to make management consultants even more redundant?
Redundancies all the way down
> 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.
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.
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.
Because the consultants real job is to be a glorified sales rep and you need a person to do that.
Why would “sales rep” be immune to the magical singularity AI that will be 9000 IQ points smarter than all of humanity combined?
Because most people still prefer to receive (fake) compliments from humans and still prefer to get dined by humans
That’s a cynical way of saying that maintaining relationships and trading information are the things of value. Accepting this will make any job more fulfilling- even with AI.
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.
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Do public companies disclose hiring consulting companies like McKinsey?
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.
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.
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.
That's not how Archive works - it saves pages using people's browsers. Try archiving a page yourself and you can watch it do so.
What it shows you is a progress report of what it is doing on the server. If you queue something for it to archive and close your browser and then come back later the page will be archived.
I never even heard of this website/magazine and even they have a Paywall.
It's almost as if their desire for getting paid for their work is unrelated to your awareness of them.
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]
?
It looks like the website is based in India.
Instead of the ones(10^0)-thousands(10^3)-millions(10^6)-billions(10^9)-... system followed in most other parts of the world, the Indian numbering system uses ones(10^0)-thousands(10^3)-lakhs(10^5)-crores(10^7)-...
So, for example, half a million subscribers (500,000) would translate to 5 lakh subscribers (5,00,000).
Does this website also have a print version, and maybe counting those subscribers? Not really familiar.
Another day, another trivia tidbit :-) Love HN. Thanks for sharing.
It's the Indian English convention for placing commas in numbers -- one comma after the first three digits, then one comma after every two digits thereafter. e.g.
1,23,45,67,890.
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.
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!"
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".
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...?
Yes. Part of why you use a consultant like McKinsey is because they are talking to everybody else. So when they tell you "best practices" they are telling you what everybody else is doing.
In a way that cover's everyone's ass legally* of course. But that's what they're doing.
EDIT: * - by "legally" I mean allow information to be shared in a way that precludes legal repercussions but I do not necessarily mean adherence to the law.
Private equity firms and large management consulting firms gain extreme visibility and influence into an entire sector. If mckinsey recommends raising prices, its likely everyone in your sector is raising prices. If everyone in the sector does the same action, then no one loses out.
I wouldn’t call it collusion but, of course, they’re aggregating what leading companies find to be best practices—although they presumably don’t share individual company IP. Not much different really from when tech folks go to conferences.
Companies benchmark and consider industry best practices all the time. If they don’t they’re idiots.
Im not a huge fan of management consultants generally, but consultants and analysts can provide useful third party perspectives, in part because they talk to a lot of companies that you may have mess directly with access to.
Take a look at publicly traded companies post pandemic to see this effect.
Take McDonalds for an example, they are running around 30% margins and you see on social media customers complaining about prices.
Why don't those customers seek an alternative business?
The rest of them also follow pricing "best practices" so you have no where to run to.
Yum Brands is at ~20% profit margins, Shake Shack is at 3% or less profit margins, and QSR is at 10% to 15% profit margins.
There must be a reason McDonalds earns so much more. As far as I understand, McDonald’s has a significant real estate component to its business (which is technically selling its brand/real estate to franchisors, not selling food), bolstered by its very strong brand with loyal customers (that the others don’t).
https://www.mashed.com/178309/how-much-mcdonalds-franchise-o...
> The cost of running a business, especially a restaurant, can really eat into its profits. At the end of the day, McDonald's only keeps around 16 percent of the revenue its company-owned stores make, but it keeps 82 percent of the revenue franchisees pay out to it.
That’s what excellence looks like. I think chik-fil-a has similar net margins. QSR is more typical for their industry. I think Starbucks is down around 10-12% net margins too.
20% used to be considered a high margin business, like luxury vehicles. That's a shockingly high margin in food.
Because the margin isn’t in food. It’s in franchising (selling a platform and brand) and real estate.
Yes their libraries are their most valuable asset. They also collect benchmarking data across companies to help you gauge how you are doing. You cannot ask aws about their practices but you can ask McKinsey about the market leader benchmark practices
AWS is probably guarding their IP, there is a chance McKinsey is just making things up, you can't verify it.
The way that it works is that if you want access to the benchmarks you need to provide your data.
But in general there is no way to verify whether the consulting company is lying or not. They have been caught pants down multiple times recently.
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.
Sounds like the spherical cow market?
Big players can collude. The CEOs can know each other by name and call around. Steve Jobs etc. did that.
Is this how we ended up with an entire generation of business managers being taught that competing on price is bad?
That's a part of it. The other part was the federal government not enforcing anti trust law for decades, enabling consolidation. Matt Stoller writes extensively about this at https://www.thebignewsletter.com/ and in his book "Goliath: The 100-Year War Between Monopoly Power and Democracy." Consolidation and monopolies are good for shareholders and management, competition is good for consumers and labor, broadly speaking.
Business consultants exist for a purpose that can be described as "how can we squeeze this enterprise or deal for as much as we can?" Sometimes that's squeezing your customer base through anti competitive practices. Sometimes thats offshoring (labor arbitrage). Sometimes it is M&A (realizing "efficiencies"). Sometimes it is squeezing your existing labor pool as hard as you can. Or a combination of the above.
https://www.simonandschuster.com/books/Goliath/Matt-Stoller/...
Competing on price is something all business do anyway, at least as long as there is competition.
What McKinsey and the rest of the scumbags have taught CEOs is to be aggressive, cheating and ruthless at cutting costs no matter what. That's how we ended with almost all manufacturing and associated know-how getting shipped over to China (sometimes literally - they bought an entire steel manufacturing plant in Germany's Ruhrpott, tore it down and reassembled it in China [1]!), that's how we ended up with the clown show that is Boeing, that's how we ended up with "employee loyalty" not being a thing any more in either direction.
[1] https://www.wiwo.de/unternehmen/wiwo-history-tatort-dortmund...
> Competing on price is something all business do anyway
Not if none of the competitors do, that was the point of the comment if they all think the competitors aren't competing on price then it becomes an informal price fixing scheme.
Exactly, and there are plenty of examples within the tech industry. Apple/Android app store fees didn't end up at 30% because of ruthless competition that drove margins down to almost nothing. If a market is controlled by a duopoly the two parties can easily keep prices absurdly high and everyone else has to just deal with it.
Never thought of it like that. Mabey they are also saying this is what you should price this product at per the "market"
> 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).
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.
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.
> 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.
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.
That is from the Secrets of Consulting :-)
https://www.goodreads.com/book/show/566213.The_Secrets_of_Co...
> 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.
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.
> 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.
The website is India-based, so they may be talking about the consulting offices in India.
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.
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.
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.
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.
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.
He didn't say that because he was a moron, in that context it sounds more like a threat to me.
agree -- fifty percent of managers manage through fear.. at McKinsey bump that number upwards ...
The consulting firms have just realized they can outsource everything save their core competency - taking the blame.
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.
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.
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.
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.
The makes you an an observers orchestrator in a rudimentary agentic system. What happens when that layer of abstraction for scheduling, managing and instructing of agents is better suited for an LLM or group of LLMs? I think a lot of people are going to get screwed.
You sound like you're having a bad day. Go take a walk, its just someones side project on HN.
You can say the same thing about all abstractions. React? So you are just an orchestrator react code that will do the actual work. Etc.
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.
Your junior doctor sucks. I visited a endocrinologist who did the same thing repeatedly during a routine visit. Uninspiring was an understatement.
The ability to iteratively observe and inquire to explore the state and the limits of the patient is NOT something automated docs will be able to do anytime soon. Diagnosis is a trivial task compared to learning who the patient is and how involved they actually will be in managing their own health.
> shrink to 15 hours thanks to advances in automation
That effectively happened. Then we invented staff meetings & quality circles.
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.
If you even see a doctor. More and more, physician assistants and nurse practitioners will be the first line of healthcare.
> 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.
Half the global population lives on less than $7 a day. I admire your optimism, but it's perfectly possible to keep large swathes of people living in abject poverty.
$7 a day is a step up from the olden days for those people. They're pleased with that.
$7 a day would be a step down for first-world (and second-world) economies. I think people would be very unhappy. Very very very unhappy.
The most likely outcome of AI displacing skilled labour unfortunately.
yeah doctors and lawyers are safe because of how their lobbies make them necessary as rubber stamps.
> 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.
> 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.
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.
Dexterous robots do already exist. But there are many tasks they have not been taught to do yet, clearly.
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
Nurses aren't going anywhere. They're more central to the operation of the hospital. Janitors aren't going anywhere either.
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.
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
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.
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
Hol up, they managed to make management consultants even more redundant?
Redundancies all the way down
> 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.
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.
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.
Because the consultants real job is to be a glorified sales rep and you need a person to do that.
Why would “sales rep” be immune to the magical singularity AI that will be 9000 IQ points smarter than all of humanity combined?
Because most people still prefer to receive (fake) compliments from humans and still prefer to get dined by humans
That’s a cynical way of saying that maintaining relationships and trading information are the things of value. Accepting this will make any job more fulfilling- even with AI.
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.
Do public companies disclose hiring consulting companies like McKinsey?
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.
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.
paywall
https://archive.is/mJJOx
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.
That's not how Archive works - it saves pages using people's browsers. Try archiving a page yourself and you can watch it do so.
What it shows you is a progress report of what it is doing on the server. If you queue something for it to archive and close your browser and then come back later the page will be archived.
I never even heard of this website/magazine and even they have a Paywall.
It's almost as if their desire for getting paid for their work is unrelated to your awareness of them.
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]
?
It looks like the website is based in India.
Instead of the ones(10^0)-thousands(10^3)-millions(10^6)-billions(10^9)-... system followed in most other parts of the world, the Indian numbering system uses ones(10^0)-thousands(10^3)-lakhs(10^5)-crores(10^7)-...
So, for example, half a million subscribers (500,000) would translate to 5 lakh subscribers (5,00,000).
Does this website also have a print version, and maybe counting those subscribers? Not really familiar.
Another day, another trivia tidbit :-) Love HN. Thanks for sharing.
Seems to be using the Indian numbering system:
https://en.wikipedia.org/wiki/Indian_numbering_system
It's the Indian English convention for placing commas in numbers -- one comma after the first three digits, then one comma after every two digits thereafter. e.g.
1,23,45,67,890.
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.
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