Who needs consultants in the age of AI? 

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In the age of artificial intelligence, what happens to people who sell the human variety? It’s a pressing question for a lot of professions (not least opinion writers), but is especially acute for strategic consultants, who not only sell ideas but charge a lot for them. In other professional services industries such as law and accounting, the provider is paid in part for taking on legal responsibility. Someone has to sign off on accounts or legal opinions, whether they were drafted by an AI model or not. Strategy advice lacks this virtue. It’s simply good or bad, useful or pointless. If a large language model can do it better, faster or cheaper, we should use the model and fire the consultant. 

The threat is big, but not necessarily existential. Before saying why, it’s worth being clear about what we mean by strategic consultants, and what they do. 

Firms such as McKinsey, Bain & Company and Boston Consulting Group work closely with senior executives to solve high-level business problems. This is in contrast to consultants who focus more on technology or business process implementation and outsourcing (the share prices of Accenture, Tata Consultancy and Capgemini reflect a lot of AI disruption worries there, too). The underlying service the strategics provide is a matter of debate. There are at least three theories; in descending order of cynicism, they are: providing a nominally objective and prestigious stamp of approval to choices management has already made; acting as a conduit for best practices to move between companies without resorting to industrial espionage; and helping managers make their companies more productive.

These are not mutually exclusive accounts, and whichever you like best, you can see how AI presents a threat. Doing industry research and presenting it clearly; isolating broad patterns among the strategies of multiple companies; and recommending options for action are all things the strategics have charged for. AI is brilliant at all of them. If it can go into a slide deck, it’s almost certainly turning into a commodity. 

But that’s not where the value has been for a long time, according to the consultants. The analytic or technical challenge — describing the problem and reimagining the company in a way that solves it — is now the easy part. The hard part is getting the organisation to make the recommended changes. Everyone in an executive suite or in a boardroom has different beliefs, acts under different incentives and worries about different things. Not all of them will speak openly or even honestly. Gaining the trust of the ones who matter and extracting compliance from dissidents, and then guiding a process that enacts change from top to bottom, is the job. “AI continues down the path of making strategy and recommendations easier. The competitive advantage is how well you orchestrate change,” Kristy Ellmer, a managing director and partner at BCG, told me. A former senior consultant put it more plainly: “this is a contact sport.”

Luis Garicano, an economist and co-author of Messy Jobs, frames the consultant’s challenge as an information problem. The knowledge needed to plan a corporate transformation is dispersed among different people and is often tacit rather than explicit. People who have it often hide or distort it for their own benefit. And it may not even be grasped until people sit down and talk things through. So the problem is not just that an AI model cannot do the face-to-face work of building consensus behind a plan. It’s that the dataset that would be needed to train an AI to design the plan does not exist; it only comes into existence when humans engage in the planning struggle. Garicano compares those who think AI can solve this sort of problem to the socialist central planners who — as the economist Friedrich Hayek pointed out — wrongly believed they could do without the local knowledge revealed in market prices.  

To sum up, in the age of AI, strategic consultants don’t actually sell intelligence at all. They sell a process.

Even if you believe this argument, the strategic consulting industry seems certain to get smaller. Analytic and technical work was the bulk of the meal the industry once served to customers, while the bespoke process of helping management adapt to change was the special sauce. Now there is just sauce. The challenges will be how to train young consultants when there is not much bulk analytic work to be done, and reforming the fee model. On the latter front, change has begun. More firms are charging not for their time, but by desired outcomes. This is the future. Per diem work is on a burning platform. 

Doctors are notoriously bad at taking their own medical advice. It will be interesting to see how the strategics do at transforming themselves. Consultant, advise thyself. 

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