MBAs Gone Wild: Assertions, Animation & Antics
August 5, 2024
Author’s note: Poor WordPress in the Safari browser is having a very bad day. Quotes from the cited McKinsey document appear against a weird blue background. My cheerful little dinosaur disappeared. And I could not figure out how to claim that AI did not help me with this essay. Just a heads up.
Holed up in rural Illinois, I had time to read the mid-July McKinsey & Company document “McKinsey Technology Trends Outlook 2024.” Imagine a group of well-groomed, top-flight, smooth talking “experts” with degrees from fancy schools filming one of those MBA group brainstorming sessions. Take the transcript, add motion graphics, and give audio sweetening to hot buzzwords. I think this would go viral among would-be consultants, clients facing the cloud of unknowing about the future. and those who manifest the Peter Principle. Viral winner! From my point of view, smart software is going to be integrated into most technologies and is, therefore, the trend. People may lose money, but applied AI is going to be with most companies for a long, long time.
The report boils down the current business climate to a few factors. Yes, when faced with exceptionally complex problems, boil those suckers down. Render them so only the tasty sales part remains. Thus, today’s businesss challenges become:
Generative AI (gen AI) has been a standout trend since 2022, with the extraordinary uptick in interest and investment in this technology unlocking innovative possibilities across interconnected trends such as robotics and immersive reality. While the macroeconomic environment with elevated interest rates has affected equity capital investment and hiring, underlying indicators—including optimism, innovation, and longer-term talent needs—reflect a positive long-term trajectory in the 15 technology trends we analyzed.
The data for the report come from inputs from about 100 people, not counting the people who converted the inputs into the live-action report. Move your mouse from one of the 15 “trends” to another. You will see the graphic display colored balls of different sizes. Yep, tiny and tinier balls and a few big balls tossed in.
I don’t have the energy to take each trend and offer a comment. Please, navigate to the original document and review it at your leisure. I can, however, select three trends and offer an observation or two about this very tiny ball selection.
Before sharing those three trends, I want to provide some context. First, the data gathered appear to be subjective and similar to the dorm outputs of MBA students working on a group project. Second, there is no reference to the thought process itself which when applied to a real world problem like boosting sales for opioids. It is the thought process that leads to revenues from consulting that counts.
Third, McKinsey’s pool of 100 thought leaders seems fixated on two things:
gen AI and electrification and renewables.
But is that statement comprised of three things? [1] AI, [2] electrification, and [3] renewables? Because AI is a greedy consumer of electricity, I think I can see some connection between AI and renewable, but the “electrification” I think about is President Roosevelt’s creating in 1935 the Rural Electrification Administration. Dinobabies can be such nit pickers.
Let’s tackle the electrification point before I get to the real subject of the report, AI in assorted forms and applications. When McKinsey talks about electrification and renewables, McKinsey means:
The electrification and renewables trend encompasses the entire energy production, storage, and distribution value chain. Technologies include renewable sources, such as solar and wind power; clean firm-energy sources, such as nuclear and hydrogen, sustainable fuels, and bioenergy; and energy storage and distribution solutions such as long-duration battery systems and smart grids.In 2019, the interest score for Electrification and renewables was 0.52 on a scale from 0 to 1, where 0 is low and 1 is high. The innovation score was 0.29 on the same scale. The adoption rate was scored at 3. The investment in 2019 was 160 on a scale from 1 to 5, with 1 defined as “frontier innovation” and 5 defined as “fully scaled.” The investment was 160 billion dollars. By 2023, the interest score for Electrification and renewables was 0.73. The innovation score was 0.36. The investment was 183 billion dollars. Job postings within this trend changed by 1 percent from 2022 to 2023.
Stop burning fossil fuels? Well, not quite. But the “save the whales” meme is embedded in the verbiage. Confused? That may be the point. What’s the fix? Hire McKinsey to help clarify your thinking.
AI plays the big gorilla in the monograph. The first expensive, hairy, yet promising aspect of smart software is replacing humans. The McKinsey report asserts:
Generative AI describes algorithms (such as ChatGPT) that take unstructured data as input (for example, natural language and images) to create new content, including audio, code, images, text, simulations, and videos. It can automate, augment, and accelerate work by tapping into unstructured mixed-modality data sets to generate new content in various forms.
Yep, smart software can produce reports like this one: Faster, cheaper, and good enough. Just think of the reports the team can do.
The third trend I want to address is digital trust and cyber security. Now the cyber crime world is a relatively specialized one. We know from the CrowdStrike misstep that experts in cyber security can wreck havoc on a global scale. Furthermore, we know that there are hundreds of cyber security outfits offering smart software, threat intelligence, and very specialized technical services to protect their clients. But McKinsey appears to imply that its band of 100 trend identifiers are hip to this. Here’s what the dorm-room btrainstormers output:
The digital trust and cybersecurity trend encompasses the technologies behind trust architectures and digital identity, cybersecurity, and Web3. These technologies enable organizations to build, scale, and maintain the trust of stakeholders.
Okay.
I want to mention that other trends range from blasting into space to software development appear in the list. What strikes me as a bit of an oversight is that smart software is going to be woven into the fabric of the other trends. What? Well, software is going to surf on AI outputs. And big boy rockets, not the duds like the Seattle outfit produces, use assorted smart algorithms to keep the system from burning up or exploding… most of the time. Not perfect, but better, faster, and cheaper than CalTech grads solving equations and rigging cybernetics with wire and a soldering iron.
Net net: This trend report is a sales document. Its purpose is to cause an organization familiar with McKinsey and the organization’s own shortcomings to hire McKinsey to help out with these big problems. The data source is the dorm room. The analysts are cherry picked. The tone is quasi-authoritative. I have no problem with marketing material. In fact, I don’t have a problem with the McKinsey-generated list of trends. That’s what McKinsey does. What the firm does not do is to think about the downstream consequences of their recommendations. How do I know this? Returning from a lunch with some friends in rural Illinois, I spotted two opioid addicts doing the droop.
Stephen E Arnold, August 5, 2024
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