McKinsey & AI: Reshaping Business, and What It Means for You

AI Rewrites the Rules: How McKinsey's Reinventing Consulting (and Why You Should Care)

Okay, folks, buckle up. Because what's happening at McKinsey & Company right now isn't just another business story; it's a glimpse into a future where AI fundamentally transforms how we solve problems and create value. We're talking about a paradigm shift, a real "rewrite the rules" moment, and I, for one, am absolutely buzzing with excitement.

The headline? McKinsey, one of the world's most influential consulting firms, is changing how it gets paid. Instead of billing by the hour—that old, tired model—they're increasingly tying their fees to outcomes. In other words, clients are saying, "Here's what we want to achieve," and McKinsey's compensation depends on actually delivering those results. About a quarter of their global fees are already tied to this pricing model, and it's expected to increase.

The AI-Driven Transformation

Now, you might be thinking, "Okay, Dr. Thorne, that's interesting, but why should I care?" Here's why: This shift is being driven by AI. As Kate Smaje, global leader of technology and AI at McKinsey, said, AI is changing what clients want from consultants, and McKinsey is "really rethinking the nature of the work that we do." People may still think of consultants as delivering straight strategy advice, but that now makes up less than 20% of the company's work. Instead, clients are turning to them for "deep implementation expertise" and multi-year transformation projects that require support across the business from data to workforce policies.

Think about it: AI isn't just automating tasks; it's enabling entirely new kinds of solutions. Multi-year, multidisciplinary, transformation-based work for clients, is what McKinsey is doing. Clients who were undertaking "big career bets" appreciated the company saying, 'Hey, look, your scorecard with your board is our scorecard, and we're both successful when this transformation works, so let's share in the upside," said Smaje. Success is typically measured against a scorecard that includes factors such as investor targets, hitting revenue or profit goals within a set timeframe, operational measures, and customer satisfaction scores, she said. AI is reshaping how McKinsey makes money

This isn't just about McKinsey, either. Raj Sharma, EY's global managing partner for growth and innovation, noted that AI agents may soon call for a "service-as-a-software" approach, where clients pay based on outcome. It's like the shift from buying individual songs to subscribing to a music streaming service—a fundamental change in how value is exchanged.

What does this all mean? Well, for one thing, it means the consulting industry is about to get a whole lot more accountable. No more endless reports that gather dust on a shelf; now, consultants have real skin in the game. But more importantly, it signals a broader shift in how all businesses will operate in the age of AI.

Imagine a world where every service provider—from your doctor to your financial advisor—is incentivized to deliver actual results, not just billable hours. That's the promise of this AI-driven transformation. It's a move to a service-as-a-software approach where clients pay based on outcome. "This is a moment where many of the fundamentals of the professional services model are coming under challenge," Smaje said in the media briefing. "The fastest learners that are going to win in this space."

Of course, with great power comes great responsibility. We need to ensure that these AI-driven solutions are ethical, transparent, and aligned with human values. What happens when the "scorecard" prioritizes profits over people? How do we prevent AI from exacerbating existing inequalities? These are questions we must address as we move forward.

It's a bit like the invention of the printing press. Before that, knowledge was hoarded by a select few. The printing press democratized information, but it also created new challenges—misinformation, propaganda, etc. AI is a similar force multiplier, and we need to be ready for both the opportunities and the risks.

But when I first read about this shift, I honestly just sat back in my chair, speechless. This is the kind of breakthrough that reminds me why I got into this field in the first place.

The Dawn of Results-Based Everything

So, what's the real story? AI is poised to usher in an era of unprecedented accountability and value creation. It's not just about McKinsey reinventing its business model; it's about a fundamental shift in how all businesses will operate in the years to come. And honestly, I couldn't be more excited to see what happens next.