AI is coming for the consultants. Inside McKinsey, ‘This is existential.'
Now McKinsey is trying to steer through its own existential transformation. Artificial intelligence can increasingly do the work done by the firm's highly paid consultants, often within minutes.
That reality is pushing the firm to rewire its business. AI is now a topic of conversation at every meeting of McKinsey's board, said Bob Sternfels, the firm's global managing partner. The technology is changing the ways McKinsey works with clients, how it hires and even what projects it takes on.
And McKinsey is rapidly deploying thousands of AI agents. Those bots now assist consultants in building PowerPoint decks, taking notes and summing up interviews and research documents for clients. The most-used bot is one that helps employees write in a classic 'McKinsey tone of voice"—language the firm describes as sharp, concise and clear. Another popular agent checks the logic of a consultant's arguments, verifying the flow of reasoning makes sense.
Sternfels said he sees a day in the not-too-distant future when McKinsey has one AI agent for every human it employs.
'We're going to continue to hire, but we're also going to continue to build agents," he said.
Already, the shape of the company is shifting. The firm has reduced its head count from about 45,000 people in 2023 to 40,000 through layoffs and attrition, in part to correct for an aggressive pandemic hiring spree. It has since also rolled out roughly 12,000 AI agents.
'Do I think that this is existential for our profession? Yes, I do," said Kate Smaje, a senior partner Sternfels tapped to lead the firm's AI efforts earlier this year. But, 'I think it's an existential good for us."
Consulting is emerging as an early and high-profile test case for how dramatically an industry must shift to stay relevant in the AI era. McKinsey, like its rivals, grew by hiring professionals from top universities, throwing them at projects for clients—then billing companies based, in part, on the scope and duration of the project.
AI not only speeds up projects, but it means many can be done with far fewer people, said Pat Petitti, CEO of Catalant, a freelance marketplace for consultants. Junior employees will likely be affected most immediately, since fewer of them will be needed to do rote tasks on big projects. Yet slimmer staffing is expected to ripple through the entire consulting food chain, he said.
'You have to change the business model," Petitti said. 'You have to make a dramatic change."
One immediate change is that fewer clients want to hire consulting firms for strategy advice alone. Instead, big companies are increasingly looking for a consultant to help them put new systems in place, manage change or learn new skills, industry veterans say.
'The age of arrogance of the management consultant is over now," said Nick Studer, CEO of consulting firm Oliver Wyman.
Companies, Studer added, 'don't want a suit with PowerPoint. They want someone who is willing to get in the trenches and help them align their team and cocreate with their team."
At McKinsey, Sternfels is trying to cement the notion that the firm is a partner, not adviser, to clients. About a quarter of the company's work today is in outcomes-based arrangements: McKinsey is paid partly on whether a project achieves certain results.
Advising on AI and related technology now makes up 40% of the firm's revenue, one reason Sternfels is pushing McKinsey to evolve alongside its clients. 'You don't want somebody who is helping you to not be experimenting just as fast as you are," he said.
The firm's leaders are adamant that McKinsey isn't looking to reduce the size of its workforce because of AI. Sternfels said the firm still plans to hire 'aggressively" in the coming years.
But the size of teams is changing. Traditionally, a strategy project with a client might require an engagement manager—essentially, a project leader—plus 14 consultants. Today, it might need an engagement manager plus two or three consultants, alongside a few AI agents and access to 'deep research" capabilities, Smaje said. Partners with decades of experience might prove more indispensable to projects, in part, because they have seen problems before.
'You can get to a pretty good, average answer using the technology now. So the kind of basic layer of mediocre expertise goes away," Smaje said. 'But the distinctive expertise becomes even more valuable."
How McKinsey changes is a topic of much interest inside the firm. In October, roughly 2,500 McKinsey partners will descend on Chicago, where the company was founded in 1926, when a University of Chicago professor named James O. McKinsey began advising businesses.
The meeting will open a year of centenary celebrations inside the firm. In between the dinners, speeches and historical reflections, AI is expected to be a topic coursing through the multiday gathering.
AI-proofing McKinsey means taking on new work, too. The firm is targeting projects once the realm of boutique firms, such as helping companies to identify and groom future executives. McKinsey has long had its own reputation as a 'leadership factory," training CEOs and bosses, and Sternfels said the firm can apply its internal expertise to others.
'That is something I don't think will be disrupted by AI," he said.
As McKinsey recruits, it is looking for people who can demonstrate they are fast learners. 'Increasingly, you're going to have to learn over a career at a rate you and I have never seen," he said.
It also wants something else: People who can work well with others.
'It may sound pretty obvious, but it's an increasingly important skill if you want to drive change in an organization," Sternfels said.
Write to Chip Cutter at chip.cutter@wsj.com
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You have still arrived as a prolific content creator, if one could call you that…. I want to clarify: I know the word content creator and influencer and some other words like that have unfortunately got stuck with me. I am essentially raising awareness. I even wrote a book 11 years ago, where I was educating people on labels. When you raise awareness using any particular platform, you get labeled with that platform. So, if you raise awareness with a book, you become an author. When you raise awareness online, you become a content creator. I don't personally see myself as a content creator in that traditional form. I'm using a medium of communication which is widely used to spread awareness, and that happens to be online (social media) because that is where most people currently are. That label of content creator and influencer often puts me in a very different bucket from what I would like to try to do. Given a choice, what would you label yourself as? I would say there's no clear answer, but a change-maker is a safe word, I would say. Yeah, so I would say something like that—anyone who's just trying to create awareness. That's pretty much it. Of course, because my videos have gotten a bigger response than my book, I'm called a content creator, not an author. So it's fine, whatever medium of communication works. And in the social media space, which medium actually resonated the best for you? The one which works best for me so far is Instagram . Is that necessarily where you first upload your content? Maybe not, because now Instagram has my biggest audience. So, sometimes I like to test my video on a smaller platform to see if there is hypothetically, potentially, any possible mistake or anything. Then I get a response on some smaller platform, and then I'll correct the mistakes and then I'll upload it on Instagram. But yeah, Instagram is my number one platform. What differentiates me from some other people in this space is that I often make my videos with the purpose of reaching a non health-conscious person. There are doctors and health experts and various people online who are targeting the top 1-5 per cent in their videos – either the people who are going to the gym or people who at least at some point even once contemplated going to the gym. I am making videos for people who are not at all health conscious, but I'm trying to get them to become health conscious, which is why Instagram works, because Instagram is not where you click, it just shows up. It's not an intention-based platform. On YouTube, you click. So, for someone who's clicking a video, it means they're health conscious, they care about that, that's why they're clicking. I am trying to focus on children. Many of my videos are about the "sugar board" movement and all are popular amongst children. So they don't want to watch a video on health. So I'm fighting against the algorithm in some ways, but it helps because you reach a much wider audience. So that's how it's worked for Instagram; it has worked well for me. Although, of course, I would like to grow on YouTube because I think YouTube is a much more serious audience, and you can make longer videos, long form, right? Instagram sometimes unfortunately does not allow the nuance in a one-minute video. Since, you mentioned that the word "change-maker" is what you would love to be known as, and usually change-makers come with some idol in their life. Do you have any such idols? Not any one idol. Genuinely, I feel like no one should have one person who they are obsessed with, because then it just becomes an obsession, and you become a fanatic. So there's no one person. I would say there are qualities of various individuals that I like. In current times, I like Yuval Noah Harari, the Israeli intellectual and author. I like Peter Singer (Australian philosopher). And then there are a few other people, even 10 years ago, like Rajiv Dixit (the evangelist of Ayurveda for rural and urban Indians). I may not agree with every single thing Dixit said, but the aggressiveness with the way you should not worry about names – like, you should name brands openly – that part, you can say, is inspired by him. So, there are certain things where I've been inspired by, but it's not that I am following one particular person's path or anything like that. I may disagree with the same people who I also like, in many ways. Was creating a brand that would be healthy always a part of the plan, or did it just happen? You cannot predict what happens. When I left the US, I was making a lot of money, and I left everything, came here and started making videos. There were cases happening against me, and a lot of the chatter that was all over Google, sort of, "this guy will never ever get a job again". You Google my name and it was negative things and things like that. So, the point is that I just kept following a particular path of showcasing the truth. And there's a very, very strong community I've built of more than 50 lakh people. And people would often give me feedback that, 'You never tell us what is good. And there's a lot of mistrust in the protein space, that people are like, 'Protein is steroids'. So, we would want you to highlight what's good, because you represent trust. So, if you do something like this, it could be pretty cool'. Does listening to the community always lead to the right decision? And I'll tell you one thing: I make some erratic decisions based on public votes. So, for example, I don't do any paid food brand deals. So, I put out a post to my audience on Instagram stories, and I asked people what should I do next, and I gave various options, and options were also based on what people had suggested to me earlier. One of which was clean food alternatives. Another was, "Should I start a health education company? Sort of doing online health courses?" And there are again, there are many people in the finance space who do finance courses and they are making insane money. So there were a lot of people like that who told me that I should do something like that. There were four or five options I gave to the public. However, 72 per cent of people voted that I should start healthier alternatives, try to create healthier alternatives, which is what led me to this path, and that's how it happened. And then I did a voting on what space should I start in, and they were like, "Protein is what we're deficient in." How long did the elections happen? Within protein, I did another vote, which is proteinated or whey protein: then isolate or concentrate. People voted for concentrate. So, like that, we did voting on every small aspect, and that's how we got to the answer. Elections are ongoing in the sense that, for example, what is the next flavor? Like, we launched only one product and one size – cocoa only. And now the election is, what should we make next? Should it be coffee or mango or something? And what is the category we should also do next? Should we do biscuits or should we do vitamins or plant protein, or what should we do next? So, my point is it's an ongoing thing. And with even the smallest, "What should the color of our package be?" – we've taken voting on various things. So, it's an ongoing process. And one more thing, of course, I also tell the people that "These are the pros and these are the cons." So, it's not that people can vote for something like, for example, one very interesting example is... or two examples, like I did whey protein concentrate voting. Now, Isolate is technically better, but people still voted for 'concentrate' because it's more affordable. I told them that you can vote for isolate if you want, but just remember, when I launch it, then you have to pay a higher price as well. So people were sensible enough to not vote for isolate. So I try to give the pros and cons. Three-four months ago, when we were deciding a name. I put out a poll that I really like the word "Take Charge". I thought that should be the name, because throughout my journey I've been taking charge of the public's health and taking charge of the situation and things like that. So "Take Charge" is a great name. It got very average votes. Everyone was like, "Take Charge sounds like an energy drink." Then someone suggested "Only What's Needed," and then that got significantly better votes, and that's how we came up with Only What's Needed. When you conduct business in full public view, don't you end up tipping off your competition? Honestly, I think India is too big to worry about competition. It has so many people, and so many diverse preferences and tastes. I don't think you can copy this. And yes, you can maybe even launch the same four ingredients the public voted for, but that entire story line that you built with the public, that will not be there. You also will not have the advantage of the 50 lakh followers. So it will be hard to replicate the honesty and the intention and all of that. I don't think they'll be able to get the public's confidence in the same way. And it's not just the ingredients, it's more than just selecting the right ingredients. It's the entire way you communicate. So, my goal has been to try to create the world's most transparent label, not India's most transparent label – the world's most transparent label. I have reviewed thousands of labels in my life. So I did a lot of surveys, asked people about what the problems are, and they gave me a lot of suggestions on how we should design it. Probably, we are the first company to put a nutrition label in the front of a pack. This is our logo, and even bigger than the logo is the nutrition facts. Usually, people put the logo in big letters here. So we have the nutrition facts here. The ingredient list is also in the front in the pie chart. So you can very clearly see how many ingredients, which ingredients we are, and in a bigger font. And only 10 to 15 per cent of India knows how to read English. This is a crazy stat. So we have a QR code scanning here, where you can scan this, and you'll get the entire nutrition label in all major languages of India. But we'll keep increasing it. Also, for the people who are visually impaired, with every pack we are giving a nutrition label in Braille. We started the "sugar board" movement quite some time ago, and it's become massive. CBSE, ICSE have all mandated it. So, with every order, we are also giving a sugar board magnet, a fridge magnet to put in your fridge. So there are many things which are first. And another thing is that most companies test their protein powders one to two times in a year. And once, suppose, because once you get a positive test, you can now use that positive test for the rest of the year. Even though every batch is different, once you get, "okay, there's enough protein," then every batch you are just using the same lab report. We test every single batch, not once a year, not twice a year. Every single batch is tested across these seven categories: protein, heavy metal, pesticides, and other seven things. And if even one of the seven tests fail, we'll reject the entire batch. So the point is to try to create a benchmark in transparency testing. And there is no company, as far as I know, one which is putting the nutrition label in the front, putting the exact ingredient percentage – 97.2%, 92.5% exact. This is not legally required; FSSAI is not saying you need to give this. And no one, as far as I know, is giving it in Braille. And the beauty of this is that it's been designed essentially by the public. Like, they have put in their comments, they've seen, "We want ingredients in the front, we want this font size," and things like that. This is the first draft. So, of course, we'll keep adding things. For example, we launched only one, only cocoa. People expected when I launched that I'll have seven flavors – vanilla, cocoa, strawberry. No, it's just not possible for me to launch and do so many things all at once. And that's why we also launch only on our website – no Amazon, no Flipkart, no BigCommerce. It's not that easy operationally. As activist influencers, it is often very easy to get used by rivals. People always want to shoot from somebody else's shoulder. So how do you then insure yourself against that kind of a possibility? You're very right. People want to do that a lot. I have made a public thing: at least as of now, I won't do paid food brand deals. That reduces some scope, and that is 95% of the deals which I get. I have already killed 95% of my income in some ways through this. So I have made that announcement, which helps. Now there have been some cases where people have approached me saying, "I'll give you XYZ amount of money and you criticise some other company." So, of course, I have not done any of that, but that is, of course, one of the problems with this: once you raise voices, people think your voice has a price to it. So, yeah, that was basically the thing. Of course, review... and I'll tell you an interesting incident: once, a particular company had approached me, and I told them... they gave me a thing, "Say that our product is not harmful because we've gotten into some controversy recently." I said I'm not going to do all this, and I won't make any video. Very interestingly, two days later, I saw someone else who's influential on Instagram make a very similar video as to what they proposed to me. And this person is very well-respected and very considered to be scientific and nuanced and fact-checker and whatever else. So it was just very disheartening to see that. When you were putting your own product out, you know that you have made too many enemies and maybe those 50 lakh anonymous friends or followers. Wouldn't the ones who crossed swords with you, go all out to get you? That's a very good way to put it: 50 lakh anonymous friends and probably 100 very public enemies. Yes. It's very difficult. I do massive fact-checking, massive... especially when you design a pack. I have exposed hundreds of labels. If there's any mistake in my own label, what will happen? So it's a very risky proposition. Now, we did a lot of everything. For example, we have the word "sunflower lecithin" on our ingredient list, calling it "emulsifier." The public does not like the word "emulsifier." Even though there's nothing wrong with it scientifically, most other brands, they're not using the word "emulsifier," because once people read "emulsifier," they don't want to buy the product. We are calling it "emulsifier." So, with everything, we are like, there's no point we can escape from it. Another thing, the smallest of things, basically, we are trying our best to be as actually correct and are trying to be as transparent and doing it with full positive intention. So I am just hoping that that positive intention comes through. Of course, I know that there will be times where people will try to poke holes and try to bring me down and things like that. Earlier, my Twitter account had got hacked, and I had lost all my followers. The palm oil board has been running ads against me. So I know that there are people who may make videos against me, and I've seen recently, especially, there have been some people who've been making videos against me. So I understand some of that will happen. Who knows, there can even be adulteration in my own packet. Someone may put in something, and the blame will come to me, not to them. Of course, there is that fear that what if someone does something shady and the blame comes on me? But we are working with a lot of positive intention. You mentioned that almost 95 percent of the endorsement deals that come your way are from food brands, which you are not comfortable with. But the other five percent are from categories that may have little to do with the cause that you represent as a Foodpharmer. How do you then bring in an authentic connect with your audience? When I launched ' Label Padhega India ' (India will read product labels) one year ago, it was supposed to be a food label movement. But the trust deficit is not only in food, but in so many more things. So people were like I'm now going to start reading labels of toothpastes, perfumes, detergents, and the categories just increased. And it's very shocking, but even things like health insurance, they were like, I'm going to read the terms and conditions. It's sort of like a label, 'I'm going to go into the fine details' and they were like, and I started a mini movement called 'terms and conditions India'. Now people want me to reveal scams in not only food. So I have now become a trustpharmer rather than just a foodpharmer. I'm thinking of a second channel as lifepharmer, where the content is about everything and it's no longer about just food.
