Good read by Chip Cutter. You need a WSJ subscription for the full article but here are a few points I found interesting:
1. McKinsey CEO says the firm is adjusting their fee structure, “taking on more work in which it defers payment until companies reach agreed-upon results.” This can only be a good thing, given how notorious strategy consulting firms for delivering “information” over outcomes. I’m not sure if they’re already charging this way but at least they’re talking about it. I think I even heard Julie Sweet, CEO of Accenture allude to this pricing model a few years ago.
As an independent consultant or boutique, you want to ensure you too explore pricing models where you charge based on measurable outcomes as opposed to time and materials or arbitrary fixed-fee assignments. Negotiating your fees so you participate in the upside would make your engagements worthwhile for your business. Yes, there’s risk but it’s only fair to charge based on client outcomes.
2. A summer intern asked Hilton Segel, McK’s chief client officer for tips on how to succeed at the firm, she advised her to be an “outstanding prompt engineer”.
Yes, this is a no-brainer. I believe having a keen understanding on how to use generative AI along with AI agents and perhaps even no-code software can undoubtedly make you a more effective and competitive consultant.
3. I really liked this. Segel says consulting is a misnomer. “I have not figured out the new word. What we do is we effect change: change in results, change in capabilities.”
Enough said.
Now, I know McKinsey’s had a tough time with major lawsuits and bad PR lately (seen the piece by comedian John Oliver? See comments). Articles like these are likely a part of a broad PR push to alleviate the damage. However, the firm is saying the right things and if they follow through on them, it can only be a good thing for our much-maligned industry.
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