Will McKinsey Be Replaced by AI: Missing the Point of Money and Power

May 12, 2023

Vea4_thumb_thumb_thumb_thumb_thumb_tNote: This essay is the work of a real and still-alive dinobaby. No smart software involved, just a dumb humanoid.

I read a very unusual anti-big company and anti-big tech essay called “Will AI Become the New McKinsey?” The thesis of the essay in my opinion is expressed in this statement:

AI is a threat because of the way it assists capital.

The argument upon which this assertion is perched boils down to capitalism, in its present form, in today’s US of A is roached. The choices available to make life into a hard rock candy mountain world are start: Boast capitalism so that it like cancer kills everything including itself. The other alternative is to wait for the “government” to implement policies to convert the endless scroll into a post-1984 theme park.

Let’s consider McKinsey. Whether the firm likes it or not, it has become the poster child and revenue model for other services firms. Paying to turn on one’s steering wheel heating element is an example of McKinsey-type thinking. The fentanyl problem is an unintended consequence of offering some baller ideas to a few big pharma outfits in the Us. There are other examples. I prefer to focus on some intellectual characteristics which make the firm into the symbol of that which is wrong with the good old US of A; to wit:

  1. MBA think. Numbers drive decisions, not feel good ideas like togetherness, helping others, and emulating Twitch’s AI powered ask_Jesus program. If you have not seen this, check it out at this link. It has 64 viewers as I write this on May 7, 2023 at 2 pm US Eastern.
  2. Hitting goals. These are either expressed as targets to consultants or passed along by executives to the junior MBAs pushing the mill stone round and round with dot points, charts, graphs, and zippy jargon speak. The incentive plan and its goals feed the MBAs. I think of these entities as cattle with some brains.
  3. Being viewed as super smart. I know that most successful consultants know they are smart. But many smart people who work at consulting firms like McKinsey are more insecure than an 11 year old watching an Olympic gymnast flip and spin in a effortless manner. To overcome that insecurity, the MBA consultant seeks approval from his/her/its peers and from clients who eagerly pick the option the report was crafted to make a no-brainer. Yes, slaps on the back, lunch with a senior partner, and identified as a person who would undertake grinding another rail car filled with wheat.

The essay, however, overlooks a simple fact about AI and similar “it will change everything” technology.

The technology does not do anything. It is a tool. The action comes from the individuals smart enough, bold enough, and quick enough to implement or apply it first. Once the momentum is visible, then the technology is shaped, weaponized, and guided to targets. The technology does not have much of a vote. In fact, technology is the mill stone. The owner of the cattle is running the show. The write up ignores this simple fact.

One solution is to let the “government” develop policies. Another is for the technology to kill itself. Another is for those with money, courage, and brains to develop an ethical mindset. Yeah, good luck with these.

The government works for the big outfits in the good old US of A. No firm action against monopolies, right? Why? Lawyers, lobbyists, and leverage.

What’s the essay achieve? [a] Calling attention to McKinsey helps McKinsey sell. [b] Trying to gently push a lefty idea is tough when those who can’t afford an apartment in Manhattan are swiping their iPhones and posting on BlueSky. [c] Accepting the reality that technology serves those who understand and have the cash to use that technology to gain more power and money.

Ugly? Only for those excluded from the top of the social pyramid and juicy jobs at blue chip consulting firms, expertise in manipulating advanced systems and methods, and the mindset to succeed in what is the only game in town.

PS. MBAs make errors like the Bud Light promotion. That type of mistake, not opioid tactics, may be an instrument of change. But taming AI to make a better, more ethical world. That’s a comedy hook worthy of the next Sundar & Prabhakar show.

Stephen E Arnold, May 12, 2023

MBAs Rejoice: Traditional Forecasting Methods Have to Be Reinvented

February 27, 2023

The excitement among the blue chip consultants will be building in the next few months. The Financial Times (the orange newspaper) has announced “CEOs Forced to Ditch Decades of Forecasting Habits.” But what to use? The answer will be crafted by McKinsey, Bain, Booz, Allen, et al. Even the azure chip outfits will get in on the money train too. Imagine all those people who have to do budgets have to find a new way. Plugging numbers into Excel and dragging the little square will no longer be enough.

The article reports:

auditing firms worry that the forecasts their corporate clients submit to them for sign-off are impossible to assess.

Uncertainty and risk: These are two concepts known to give some of those in responsible positions indigestion. The article states:

It is not just the traditional variables of financial modeling such as inflation and consumer spending that have become harder to predict. The past few years have also provided some unexpected lessons on how business and society cope with shocks and uncertainty.

Several observations:

  • Crafting “different” or “novel” forecasting methods will accelerate the use of smart software in blue chip consulting firms. By definition, MBAs are out of ideas which work in the new reality.
  • Senior managers will be making decisions in an environment in which the payoff from their decisions will create faster turnover among the managerial ranks as uncertainty morphs into bad decisions for which “someone” must be held accountable.
  • Predictive models may replace informed decisions based on experience.

Net net: Heisenberg uncertainty principle accounting marks a new era in budget forecasting and job security.

Stephen E Arnold, February 27, 2023

Going after the Original Entitled Wizards of Wonder: Blue Chip Consultants

February 14, 2023

I read “The McKinseys and the Deloittes Have No Expertise in the Areas That They’re Advising In.” I think the wildly “that they’re advising in” would make some old-school editors uncomfortable. But grammar and usage aside, the Financial Times, the odd orange newspaper, has identified what might be called “The Once Emperor-Like Are Naked So Let’s Put Them on TikTok.” Well, not TikTok, but the blue chip consultants are in the spot light for a short time.

I noted this passage in an “interview” with the author of the book The Big Con, by Mariana Mazzucato and Rosie Collington:

The Big Con of the book’s title is not a crime; it’s a confidence trick. Consultancies and outsourcers, Mazzucato argues, know less than they claim, cost more than they seem to, and — over the long term — prevent the public sector developing in-house capabilities.

The article presents as “real” financial news something that most former employees of blue chip firms know: Get smart about nanotechnology. We have a client meeting at 9 am.” The sentence is emitted from a sleek partner at 6:15 pm on a Wednesday evening. Yep, that’s why professionals at blue chip consulting firms get paid reasonable money: Get smart fast, spout sentences which seem to be spontaneously helpful, and nod at the right places. The goal: Close a job and start billing and scope change and bill some more.

I liked this statement in the article:

“These are private companies, the McKinseys and the Deloittes, that have no expertise in the areas that they’re advising in.”

Accurate? Yep. Will blue chip consulting firms change? Nope. Will those who hire blue chip consulting firms change their ways? No.

But why?

We can answer the question next week by getting our consulting firm to lead a discussion with the government staff involved in determining next steps. Those next steps require defining a project, a statement of work, a procurement or an add on to an existing contract, and billing.

In short, a validation of the superior intellect of the blue chip firms and their wizards of wonder.

Stephen E Arnold, February 14, 2023

Juicy Consulting War Stories

December 15, 2022

I have a copy of the collection of war stories which make the what and how of blue chip consulting pretty easy to understand. Of course, if you have been RIFed, reorganized to a suburban office park in Alberta, or found yourself wishing you had paid attention in MBA classes—you don’t need to read the book  When McKinsey Comes to Town: The Hidden Influence of the World’s Most Powerful Consulting Firm.

Let me suggest a gloss. Navigate to “In Clover,” an essay by a persona who assert he/she/them worked at Anderson, later Accenture. You remember the accounting outfit that signed off on the Enron confections. Yeah, that outfit.

The essay contains what I would call baby war stories. Some big blue chip consulting firm names are dropped, not just McKinsey. There is a hint of wild and wooly consulting behavior even a bit of regret. I may be imagining that, but my radar bleeped when I read:

The Andersen Consulting new hires were shipped to a programming boot camp in St Charles, a suburb of Chicago. None of us had cars, so the three weeks there were spent entirely on campus, working overtime, getting blind drunk and secretly snogging one another in the stairwells.


But the most interesting passage in the In Clover essay in my opinion is this one:

Thanks to the hegemonic model McKinsey and other management consultants invented, these firms not only make and remake businesses and government in the image of their laissez-faire fantasies, but see homo economicus as the last word in modern selfhood.

Yep. I loved working at Booz, Allen & Hamilton. Hire a blue chip consulting firm and we will try to sell an analysis of your unit to the Board of Directors. Billing is not the spice of life; it is life. Snogging? Not so much.

Stephen E Arnold, December 15, 2022

McKinsey Black Heart: Smart Software Flat Lines!

December 7, 2022

The McKinsey online marketing content machine is chugging along. The service is called McKinsey Black, but I like to think of it as the McKinsey Black Heart. (There are many logo and branding opportunities with my version of the online publication’s name in my opinion.)

The Black Heart made available “The State of AI in 2022 and a Half Decade in Review.” I am not sure who the two or three sled dogs were who assembled the report. I know for sure that one or more managing partners are pulling their their harnesses like the horses bedecking the Brandenburg Gate.

I urge you to read this pontifical document yourself. I want to highlight one possibly irrelevant finding tucked into the mass of content marketing data; to wit:

While AI adoption globally is 2.5x higher today than in 2017, it has leveled off over the past few years.

Is this statement accurate? Come on now. That’s not a fair question due to the sampling methodology, the question formation, and the super analytic procedures used to generate the finding. Pretty boring like most Statistics 101 questions; for instance:

The online survey was in the field from May 3 to May 27, 2022, and from August 15 to August 17, 2022, and garnered responses from 1,492 participants representing the full range of regions, industries, company sizes, functional specialties, and tenures. Of those respondents, 744 said their organizations had adopted AI in at least one function and were asked questions about their organizations’ AI use. To adjust for differences in response rates, the data are weighted by the contribution of each respondent’s nation to global GDP.

Ah, ha. A finger on the scale perhaps? Let’s move on and think about this.

The obvious value of the finding is that if you aren’t doing AI, you may be left behind. You will be like a small child watching the TGV disappear with your parents and nanny toward Nimes as you stand alone on the empty platform at Gare Montparnasse. Bad. How bad? Very bad which means, “Hire McKinsey.”

For me the idea that one of the most hyped, wild and crazy techno jargon crazies has gone flat line. Now that’s not just very bad; it is downright truly bad.

Why is the Black Heart report presenting a graph which does not look like a hockey stick. McKinsey wants to move people along the hockey stick handle, not report that the growth looks like the surface of the ice rink in the Patinoire de Nimes.

And what are the killer applications? How about making customer service great again? The idea is that smart software can replace expensive, litigious, unreliable, and non-McKinsey grade humans with digital magic. Think about your most recent brush with “customer service.” Those big company chatbots are wonderful, super wonderful.

The write up has one additional feature designed to cement the Black Heart content into your work life. You can sign up for “new artificial intelligence articles.” Presumably these will not be written by smart software. Real live Black Heart experts will share their insights.

Remember. AI is not doing the hockey stick thing. My view is that some fancy dancing was required to find violets and daisies sprouting in the opioid waste refinement system.

Imagine. A flat line. After all the pension fund money, all the hype, and all the excitement for workers who can be replaced. Here’s a question? Can those text generators replace a small McKinsey team?

That’s a good question.

Stephen E Arnold, December 7, 2022

Blue Chip Consulting: An Interesting Question with a Painfully Obvious Answer

November 30, 2022

I read “Why Is Booz Allen Renting Us Back Our Own National Parks?” The author is asking a BIG question with what may be a tiny answer.

The essay states:

Today I’m writing about how the giant government contracting firm Booz Allen and 13 government agencies have been renting back to the public access to our own lands by forcing us to pay junk fees to use national parks.

The essay runs through some historical information about land. Interesting, but I tuned that type of information when I had to take a class in US history as a freshman at the third-rate outfit which accepted me as a student. Sure, the professor became a US congress person and had influence. But the lectures about land, Henry Clay, and Manifest Destiny did not compute. (In 1962 I was trying to figure out how to get an IBM computer to accept a program to index Latin sermons. Land was a fungible, and I was and remain on the intangible side of life.)

A US government Web site becomes a point of reference in the essay. Now you may think that US government Web sites are no big deal. Rest assured that in preparing annual budgets, Web sites are indeed a big deal. Did you know that US national laboratories want traffic because click data let’s some labs say to a Congressional committee: “We are pulling in eyeballs because our research is Number One with a bullet.” Believe me. Some people’s jobs depend on getting an elected official to see Web traffic as germane to pulse weapon funding or more esoteric activities.

The Web site referenced is not involved in nuclear research information. Recreation.gov becomes a way for a government agency to demonstrate that it is [a] serving citizens, [b] demonstrating that it is operating as a business, not a service organization, and [c] in step with hip digital trends. The write up points out that my former employer Booz Allen does a great deal of business with the Federal sector. The write up points out that Booz Allen has been involved in interesting and often big dollar projects. Some of these projects are so-so; others not so so-so; and a number of them are home runs. Booz Allen is an organization of hitters, not sitters.

I noted this passage in the write up:

In 2017, Booz Allen got a 10-year $182 million contract to consolidate all booking for public lands and waters, with 13 separate agencies participating, from the Bureau of Land Management to the National Oceanic & Atmospheric Administration to the National Park Service to the Smithsonian Institution to the Tennessee Valley Authority to the US Forest Service. The funding structure of the site is exactly what George Washington Plunkitt would design. Though there’s a ten year contract with significant financial outlays, Booz Allen says the project was built “at no cost to the federal government.” In the contractor’s words, “the unique contractual agreement is a transaction-based fee model that lets the government and Booz Allen share in risk, reward, results, and impact.” In other words, Booz Allen gets to keep the fees charged to users who want access to national parks. Part of the deal was that Booz Allen would get the right to negotiate fees to third party sites that want access to data on Federal lands.

Then the essay notes:

Yes, Booz Allen gets to steal some pennies, but we have a remarkable system of public lands and waters that are broadly available for all of us to use on a relatively equal basis. And we can still see the power of George-ism in the advocacy of hikers and in the intense view that members of Congress had when they passed the Federal Lands Recreation Enhancement Act in 2004, which strictly regulated fees that Americans would have to pay to access our Federal lands.

Then the essay includes a statement which baffles me:

We are in a moment of institutional corruption, but these moments are transitory as institutions change.

Now let’s answer the question, “Why is Booz Allen renting us back our own national parks?”

My answer is my personal opinion, and you may choose to disagree:

  1. Government professionals directly or indirectly created a statement of work designed to help a unit of a government agency meet its annual objectives; for instance, cost recovery so citizens benefit without the agency spending government money. Remember that Booz Allen gets paid to create a fee generation system which pays Booz Allen and makes users of Recreation.gov really happy. At the same time, the agency officials get credit for a job well done and possibly some power or money related benefit.
  2. Booz Allen (in its present form) was shaped in the mid 1970s specifically to capture government contracts of any type. The purpose of the capture is to generate fee based revenue from professional services and in some cases by creating a fungible thing like a cartridge ejection mechanism. The object is to bill in accordance with the tasks set forth in the statement of work and implement applicable scope changes in order to respond to the client agency’s needs.
  3. The projects — whether Recreation.gov, the structure of the US Department of Navy, or providing inputs to space warfare analysts — give the professionals working in US government agencies a wide range of interesting work tasks. These tasks include, but are not limited to, attending meetings, meeting with sub-contractors, coordinating with other government entities, and in the case of national park projects, a field trip, maybe many field trips.

Thus, the answer to the question is that Booz Allen does not rent back national parks. Booz Allen plus a small number other blue chip consulting firms create work for Federal employees and for those paid directly by Booz Allen. Think of Booz Allen as the engine room of the government machine.

The march through history, the precedents for land use, and the other History 121 topics are completely irrelevant to making an essentially unmanageable and functionally impaired national park system appear to work reasonably well.

I would ask the author of the essay: What would be a better method? Would it be possible to find an optimally performing government agency and transport those systems and methods to those entities involved in Recreation.gov? How about using the Internal Revenue Service as a model? What if one snags the Social Security Agency or Health and Human Services as a model? We can jump branches and emulate the Senate sergeant at arm’s management methods? Do any of these provide a model?

To answer these questions my thought is that some government agencies will hire either Booz Allen or a similar firm.

Why? Booz Allen can do work, give government professionals tasks to complete, and send invoices.

The BIG question has a small, simple answer. Plus one can reserve a space for vanlifers whose rides conform to the National Park guidelines. That’s a deliverable.

Stephen E Arnold, November 30, 2022

Ommmmm, the Future

August 29, 2022

Everyone wants to predict the future, but no one and nothing can do that with 100% accuracy. When it comes to the future of technology and its relationships with humans, tech journalist Om Malik shared his thoughts: “The Future of Tech As I See It.” Malik discussed four points on the future and technology.

In the first, Malik explained he tried to find the inherent value in all technology. He believes people focus too much time trying to figure out what will be the next big tech boom to make a buck. Focusing too much on the “next big thing” distracts from the current use and value of technology. In other words, Malik wants people to concentrate more on the present. He could also try using TikTok.

M1 computer chips will give users more powerful computers equivalent to 25% of IBM’s Watson output. This will allow users to interact with computers in a manner different than anything we currently know. Malik states kids are being trained for a brand new world we can only conceptualize in the likes of the new Star Wars films, not the old sci-fi classics like 2001: a Space Odyssey.

Malik makes a good point that authenticating your identity will be how companies like Google and Facebook make their revenue in the future:

“What’s one thing you’ve barely noticed about living in the mobile phone world? How often do you “Login with Facebook” or “Login with Google” because it’s more convenient than setting up an account? There is a lot of value in whichever company makes authentication easy in this world.

What if Apple offers a Metamask-like product as an authentication system and in-exchange charges a small subscription fee? I would happily pay for the convenience alone. Authentication and payments can be critical to a post-app store world. Facebook, too, is hoping to ride the payments and authentication gravy train to the future.)”

The bigger question is how will technology authenticate people? Blood samples? DNA?

Malik ends on the point that the United States no longer shapes the entire world when it comes to technology. India, China, Africa, and Russia are bigger players than most western nations realize, but that is not new information. People who aren’t ostriches are aware of this.

Whitney Grace, August 29, 2022

The Metaverse? Not This Dinobaby

August 15, 2022

How many hours a day will this dinobaby spend in the metaverse? The answer, according to a blue chip consulting firm, is four hours a day. Now the source of this insight is McKinsey & Co., a firm somehow snared in the allegations related to generating revenue from a synthetic compound. I am not sure, but I think that the synthetic shares some similarity to heroin? Hey, why ot ask a family which has lost a son or daughter to the alleged opioid epidemic?

The McKinsey information appears in “People Expect to Spend at Least 4 Hours a Day in the Metaverse.” I learned:

Gen Z, millennials, and Gen X consumers expect to spend between four and five hours a day in the metaverse in the next five years. Comparatively, a recent Nielsen study found that consumers spend roughly five hours a day watching TV across various platforms.

If we assume that an old-fashioned work day is eight hours, that becomes about 1,000 hours a year of billable time plugged in or jacked in to the digital realm. I don’t know about you, but after watching students at a major university, I think the jack in time is on the low side. The mobile immersion was impressive.

The write up points out that an expert said:

“[Current AR smart glasses] give you a metaphor that looks like an Android phone on your face. So rectangles floating in space. That’s not enough for [mainstream smart glasses] adoption to happen,” Jared Ficklin, chief creative technologist at Argodesign, a former Magic Leap partner, said.

This dinobaby respectfully refuses to prep for digital addiction.

Stephen E Arnold, August 15, 2022

Now We Know Why Consultant Reports Are Long, Wordy, and Just So-So

July 26, 2022

I noted the research findings (allegedly spot on and reproducible) in “Experts Don’t Always Give Better Advice—They Just Give More.”

Here’s the killer statement:

Top performers didn’t write more helpful advice, but they did write more of it, and people in our experiments mistook quantity for quality…

Several observations:

  1. What is “helpful”? Maybe helpful means that the person listening was sufficiently intelligent to pick out the important bits?
  2. Why more output? Maybe more reflects what the individual thinks he she it knows?
  3. Why fiddle with experts in the first place? Maybe when one needs brain surgery, the doctor should have a bit of a track record whether he she it can talk coherently or not?

How about a simple crowd sourced test? Ask a question on Instagram, TikTok, or YouTube. Pick a short answer. Apply it. Let me know how that works out for [a] tattoo removal, [b] investing in NFTs about psychologists, [c] where to purchase contraband via a Telegram group, or [d] working for a dinobaby who wants a person who thinks, is reliable, and has a good attitude.

Not appealing? Okay, just guess like many MBAs working in high-tech market sectors or blue-chip consulting firms.

Stephen E Arnold, July 26, 2022

How to Point Out a Consulting Outfit Is Often Full of Beans

July 19, 2022

I read a write up in the UK online publication The Register. The article was “IT Departments Often Regret Technology Buying Decisions.” I immediately thought about Google’s mantra that organizations did not need information technology departments. I think the reasoning behind the statement was, “Let Google do it because we are smarter and have scaling, analytics, smart software, etc., etc.” I first heard this mantra in the 2002, maybe 2003 period. I wondered if the article was just recycling Google-type fluff-a-roo?

Yes because I have heard this before. Nope because the mid tier consulting firm is probably unaware of the world before checking TikTok in the last 10 minutes.

The write up pivots on a mid tier consulting firm which has “reinvented” the Google-type mantra with a bit of the rap music beat.

I learned:

Fifty-six percent of organizations said they had a high degree of regret over their largest tech-related purchase in the last two years, according to a new survey of 1,120 executives in North America, Western Europe, and Asia/Pacific.

Ok, almost 60 percent are faced with a persistent problem. This is not technical debt; this is here-and-now craziness.

I found this passage a slightly nicer way of saying what the Google-type mantra arrogantly implied:

… For anyone left picking up the technical pieces, 67 percent of people involved in technology-buying decisions are not in IT, which means that anyone could be a tech buyer for their organization. This is the so-called lines of business phenomenon where someone in marketing, for example, uses the corporate credit card to buy a product or service that IT admins then have to help manage.

Who is best qualified to make technology decisions for an organization? The answer is obvious:

  1. MBAs who can use Excel
  2. Accountants who can use a pencil and paper
  3. Lawyers who can use Word and maybe a time reporting system
  4. Marketing professionals who can use gym equipment, acrylic paints, and art museum audio tour gear.

The outfit creating this report is a mid-tier consulting firm.

Now here’s the way to put the obvious into a for fee report:

Whether anyone has experienced buyer’s remorse after shelling out thousands of dollars for a Gartner report is a question upon which The Register cannot comment.

Bingo. Very obvious report. An expensive mid tier report which could have been summarized by talking to a Googler more than a decade or more ago. And the remarkable inability of experts to perceive that their expertise is a reflection of the present technology environment. Score: Mid tier zero. Register one.

Stephen E Arnold, July 19, 2022

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