How AI is transforming the strategies of major consultancy firms

The first concerns the fee model. For decades, the pricing of large-scale projects has balanced the insights provided to the client against the need to cover the costs of large, well-paid teams. This structure is becoming increasingly difficult to sustain. Clients have long been calling for the value of consultancy to be linked to results, not to time spent: no longer ‘how much the team has worked’, but ‘what impact it has had’. Artificial intelligence has not invented this pressure; it has simply made it impossible to put off any longer. A few weeks ago, as revealed by the Financial Times, McKinsey has overhauled its remuneration structure through an internal scheme called Project Acorn, shifting a larger proportion of partners’ remuneration from cash to equity. This is a sign that the old balance between billed hours and high margins is coming under pressure.

The second, related transformation concerns the pyramid structure. The traditional model was based on a broad base of junior consultants, a middle tier of managers and a narrow top tier of partners. If many analytical tasks are automated, the entire pyramid comes under strain: fewer people are needed at the base, learning pathways change, and the implicit trade-off between initial sacrifice, growth and future reward is altered.

The third transformation concerns demand. For a long time, strategic consultancy was primarily the trusted advisor whispering in the ear of the chairman, the board or the chief executive: an impartial third party, capable of facilitating that crucial step back needed for unpopular decisions, backed by external analysis and independence. What is now in crisis is not that relationship of trust — which remains the most precious asset — but its flagship product: the generalist strategic plan. Clients are demanding precise, targeted solutions in specific areas, and increasingly fewer general guidelines.

The advisory industry has responded with a rapid brand extension, building a network of vertical firms specialising in IT architecture, analytics, procurement, marketing and corporate branding. This expansion has generated revenue, but has weakened the historically most lucrative channel. The result is a profound shift in the structure of revenue streams: more complex and diverse organisations, with less cohesive internal cultures and incentive models that are difficult to design.

 Be careful, however, not to sound the death knell too soon. As a leading strategic consultant told me a few years ago, “the more complicated the world becomes, the more it will need us”. It is hard to deny this: entropy and complexity show no sign of slowing down, and there will always be a place for problem solvers capable of making a measurable impact. Although many barriers to entry have fallen, large companies retain advantages that are difficult to replicate in the short term: financial capital, the established trust of major clients, a global presence and premium brands. Artificial intelligence makes the small players stronger, but it does not automatically weaken the big ones.

The most likely risk, then, is not the industry’s disappearance, but a slow process of disintermediation: clients bringing artificial intelligence in-house and retaining the major advisers only for the very top of the pyramid — board advisory, extraordinary transactions, and far-reaching transformations. A less dramatic but more insidious scenario, in which the industry survives by becoming polarised: smaller and more expensive at the top, fragmented at the bottom.

Today, the strategic consultancy sector is being called upon to rethink itself, learning to work with artificial intelligence in a genuinely new way – not merely in a narrative sense. In this arena, large firms probably have the resources to succeed, and many have already begun to do so, positioning themselves no longer merely as strategic advisers but as AI-enabled transformation platforms — a path along which Accenture and Deloitte have moved with particular commercial vigour. A strong signal has also come from the Boston Consulting Group, which has redefined its positioning with a new tagline: “Where Strategic Clarity Meets Applied AI”. These moves signal just how much the major firms have realised that they are not facing a mere challenge, but a genuine burning platform.

The second cause for concern is external, and perhaps more insidious. The real risk will not only be getting lost along the way, but encountering other players on that very same path: players who are already familiar with artificial intelligence, have access to enormous capital, can access data on a global scale, possess advanced infrastructure and have links with major corporations. At present, these are small-scale beta tests (such as the OpenAI Deployment Company, launched a few weeks ago). But one only has to close one’s eyes to see others on the horizon: Anthropic Consulting, Gemini Advisory, Perplexity Solutions… For now, it is in these players’ interests to sell the infrastructure, rather than compete with those who buy it.

But the distance needed to change one’s mind has never been so short.

*International Advisory Board, GSOM, Politecnico di Milano