Artificial Intelligence vs. Management/Strategy Consultants
Prof. Al Naqvi
Management Consulting is an industry that claims to improve and automate every other industry – but has not done anything for itself. The same old PowerPoints, the same old fresh recruits from top schools, trained to be the mindless foot-soldiers of an army equipped with 2X2’s, archaic project management tools, and colorful templates. The same old nervous chuckles and political games. Enough!
But despite all that highly romanticized efficacy of the consulting profession, it seems as though the profession has run its course. After decades of weed-like bloom, it appears that the consulting will go to seed.
I was once asked to identify the single biggest risk to the global economy and I said, “in my opinion, it is management and strategy consultants”. From McKinsey’s alleged infamous role in the spread of the opioids to the firm’s alleged assistance to the Saudi government in identifying the dissenters (like the journalist Khashoggi murdered in the Saudi embassy), it appears that the value destruction of management consultants far outweighs their utility. But that’s not why the demise of the management consulting is on the horizon.
As the business world becomes more data centric and scientific – and decision-making leaves the realm of idealized subjectivity and embraces objectivity and scientific rigor –management consultants find themselves sidelined by the rise of a new type of professional. This new professional, a unique blend of quants and creatives, is the Data Scientist/AI professional. And its sudden rise from the left field has left the consultant dumbfounded.
The War Begins: Ivy League MBA’s vs. Data Science PhD’s
The typical persona of the strategy consultant, i.e. the MBA-types in the consulting firms, the well-poised, the suits, the shiny-branded-shoes, the business-class-only travelers, equipped with jargon such as “competitive advantage”, bloated with pride about their ivy league education, boastful about their superior intellect – is now threatened by the rise of the new type of a business problem solver: the Data Scientist.
And this new breed of business problem solver has the power to dislodge the PowerPoint tigers.
In the inflated egotistical world of the strategy PP Tigers, only two types of intelligence exist in the humankind. The first is the Neanderthal equivalent higher intellect and is found in the strategy practices of the mid-tier management consulting firms. The second is the superior intellect, akin to homo sapiens, and it exists in the top tier strategy consulting firms. The rest of world (exception claimed for the demigods VC, PE, and Investment Bankers), in the mind of the strategy PP tigers, is proliferated by the low level, ape-equivalent, intelligence carriers.
The previous attempts to dislodge the strategy PP Tigers by the technologists were brutally squashed. It was relatively easier to crush that uprising. Then, the technologist was just a programmer, spoke English with a foreign accent, ignored to wear the right deodorant, and chose capitulation over challenge in order to clamor for his or her chance to get the right visa. The PP Tiger banished the technologist back into the alleys of isolation and crowned himself as the client facing project king who was entitled to speak for the technologist. The PP Tiger made sure that in the minds of the clients, the technologist was perpetually tarnished as the people-skills-lacking, non-leadership-material, non-strategic, good-for-programming-only …. but a necessary evil.
Never mind that in the Silicon Valley, the same technologist was creating and leading multi-billion-dollar enterprises, but in the minds of the PP Tigers and their old economy clients, the technologist was the blue-collar worker who needed to be led by the PP Tiger.
Spoiled by the nepotistic fake meritocracy, the strategy PP Tiger wanted to inundate the data scientist with the same tactics of control. After all, these tactics worked for the “IT guy”, why wouldn’t they work for the data scientist?
For one, because the data scientist has a PhD, knows science (unlike the PP Tiger’s executive-survey-based pseudoscience), speaks the language of business, is far smarter than the average ivy league MBA, and is not impressed by the soft skills in the era of scientific rigor.
She is self-confident and understands the demands of the AI economy. She carries no insecurities.
As the following scene is being played in many firms, the decline of management consulting is becoming clearer.
Overwhelmed, the PP Tiger invokes his basic maneuvers. He tries to drown her (the data scientist) with his business jargon. She is unimpressed.
Puzzled, he tries to throw in the IT terms “agile” and “integration” and “infrastructure”. She laughs and says “this is not an IT software development project, at least not yet; it is data science. It is not deterministic. It is stochastic.”
“Damn!” he says in his head. “What the heck was that?”
His face turns red, he recomposes himself and says with a loud voice, “Hmmm, can we develop the software by the end of the week and put it through testing?”
“No, it is not software development. It is training the algorithm. I have to preprocess the data, do feature extraction using Particle Swarm Optimization, and then run different algorithms to see which one works best”
“Is it like what the quants do in the hedge funds?” Clueless, he asks timidly.
She smiles and answers confidently “well, if that helps you understand it, it’s something like that.”
Using the last arrow in his quiver, he attempts the final control tactic, “you have a very nice accent, where is it from?”
“Carnegie Mellon” she answers with a straight face and goes back to work.
Clients should watch out: PP Tigers Unleashed
Remember the ERP implementations? If you don’t, just know that there was a time when companies rushed to implement ERP systems, when projects ran over budget and over schedule, when management teams were fired and replaced – and then fired again – for projects gone bad. As companies lost millions, the only ones who benefited were the management consulting firms. PP Tigers knew that once you were pregnant with ERP, there was no way to abort the project. The game was on. The perfect client was the one who was most vulnerable. As PP Tigers sunk their teeth into the jugular veins of vulnerable clients, the tab increased from millions to tens of millions, to hundreds of millions, and then billions. The plundering went on unchallenged – and only declined when CRM became the new leash on clients.
And the same scenario is unfolding again. Strategy PP Tigers are sharpening their tools for the AI revolution. It seems they are developing narratives to fool you into believing that you need them unconditionally. But this time around, they can’t hide their incompetency for too long. The spell is breaking as government agency after agency, and company after company, are realizing that management consultants are not equipped to handle the AI economy. For intelligent automation, executives should be cautioned about the following narratives that are being fed to them:
“RPA is AI”: PP Tigers are telling you that RPA is AI. It is not. RPA, while important, is not AI. You are being fooled into believing that RPA is your gateway to AI. You are being told that once you adopt RPA, you now have the brag rights to claim that you are the leading edge adopter of AI. You are not. RPA is not AI.
“You need a COE”: When projects fail to materialize in value, your PP tiger tells you that you need a COE. He wants you to raise the stakes. The question you must ask you PP tiger is that what exactly did he deliver in the first place that now he wants you to have “excellence”. Was his initial work not “excellence”?
“Invest in Sensors”: Your PP tiger is telling you to blindly start investing in sensors. He recognized that if he can distract you for few years, it may just buy him enough time to figure out the AI world. Stop! You can install a million eyes, ears, nose, tongues, and touch sensors, but if the organism doesn’t have the nervous system, what good is all that. Don’t fall for that. Have a comprehensive automation strategy – but don’t depend upon PP tigers to develop that for you.
“Use Cases Are Your Friends”: If someone tries to show you use cases, show them the door. You can do a use case here and a use case there – what good is it for your firm? You know that your real competitive challenge will be coming from an AI startup that has already been launched and that will redefine your business model. Do you really think your cute little chatbot is going to protect your firm from that onslaught? You have been warned.
“Implement the AI Platform”: Your strategy PP tiger will try to convince you that there is such a thing as an AI platform. In his imagination (and he will try to convince you of that), it is like CRM or ERP and that once he brings that “platform” into your firm, he will configure it with his team, and voila, you’ll be all automated. Seriously? AI is different. Every automation project is different and is a function of the data you have, the approach employed, and the nature of your problem.
“Deep Learning is the way to go”: Your PP Tiger who doesn’t really understand AI, and has read few articles on AI, will tell you that you need Deep Learning for everything, that Deep Learning is hot, and that he will get you the Deep Learning “solution”. The solutions in AI are a function of your problem. For some problems, even rule-based expert systems offer a better solution than deep learning. The only deep learning needed here is for your PP tiger to learn deeply that he shouldn’t be misleading you.
So, Mr. or Ms. Client, don’t fall for the PP Tiger’s new gimmick. Reach out to AI centric firms. There are many. It is time to finally challenge the status quo.
As I wrote this article, two things happened that serve as a strange proof for my above narrative. First, a Fortune magazine article appeared with the title “Why Most Companies are Failing at Artificial Intelligence” – and btw the irony, that the article is based upon the research conducted by MIT Sloan Management Review and BCG, doesn’t escape me.
Second, a mid-tier consulting firm recently laid off data scientists. On a website where management consultants go to lament, some wondered why in this day and age when data scientists are in high demand, they are being laid off. Some geniuses commented that data science is a hoax. Others claimed that they don’t need data scientists because all they require is to access some APIs and they’ll be fine. But the real reason, as clarified by some, was that the consulting firms do not know how to sell the AI projects. For them, the on-the-bench data science resources were an unneeded overhead. And that is where the truth is. Management consultants don’t get the AI revolution … or in other words PowerPoint Tigers Don’t Have the Fangs for AI.
Prof. Al Naqvi teaches AI (technology and business courses) at the American Institute of AI. He has pioneered several AI Strategy, Analysis, Design, and Project Management tools. He helps executives on how to build their companies around AI.