Where McKinsey—and Consulting—Go From Here
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
In this milestone episode celebrating McKinsey's 100th anniversary, Global Managing Partner Bob Sternfels discusses how the century-old consulting firm is adapting to the AI revolution while maintaining its position as a leadership factory. Sternfels reveals that McKinsey now employs 60,000 workers—40,000 humans and 20,000 AI agents—and expects to reach one agent per human employee within 18 months (09:00). The conversation explores how AI is reshaping not just client work but McKinsey's internal operations, talent acquisition strategies, and business model.
- Main themes: AI transformation in consulting, evolving talent needs, organizational resilience, the shift from advisory to outcomes-based partnerships, and lessons learned from recent controversies.
Speakers
Adi Ignatius
Editor-in-Chief of Harvard Business Review, bringing over two decades of experience in business journalism and leadership content. Previously held senior editorial positions at various publications and has been instrumental in shaping HBR's editorial direction.
Bob Sternfels
Global Managing Partner at McKinsey & Company, leading the firm through its centennial year and major AI transformation. With over 30 years at McKinsey, he has guided the company through recent challenges while implementing significant changes in talent acquisition, compliance standards, and business model evolution toward outcomes-based partnerships.
Key Takeaways
Embrace AI Agents as Genuine Workforce Members
Sternfels reveals that McKinsey has fundamentally redefined its workforce composition, now counting AI agents as actual employees rather than just tools. The firm has grown from 3,000 agents to 20,000 in just 18 months, with plans to reach one agent per human employee soon (09:00). This represents a radical shift in how organizations should think about AI integration—not as supplementary technology but as core workforce capacity. The key insight is that successful AI adoption requires viewing these systems as collaborative partners rather than simple automation tools, fundamentally changing how work gets distributed and accomplished.
Prioritize Organizational Change Over Technology Implementation
When discussing client challenges with AI adoption, Sternfels emphasizes that "half, if not more, of the secret sauce is organizational change as opposed to technology implementation" (07:37). He provides the example of mortgage processing, where instead of having separate departments for origination, credit scoring, and collection, AI enables breaking down organizational silos. The practical application involves redesigning workflows and organizational structures before implementing AI solutions, ensuring that technology serves reimagined processes rather than simply digitizing existing inefficient ones.
Shift from Advisory to Outcomes-Based Partnerships
Sternfels describes McKinsey's evolution from traditional fee-for-service consulting to underwriting client outcomes, with about one-third of current revenues now tied to results (24:47). This model change aligns consultant and client interests by creating shared accountability for results rather than just providing recommendations. The approach involves jointly developing business cases with clients and remaining engaged until desired outcomes are achieved, moving beyond the traditional "PowerPoint strategy" criticism of consulting work.
Develop Resilience-Based Talent Assessment
McKinsey discovered through data analysis that candidates who had experienced setbacks and recovered were more likely to succeed as partners than those with perfect academic records (13:13). This led to restructuring their assessment process to actively screen for resilience, teamwork experience, and learning aptitude rather than just academic achievement. The practical implication for any organization is to value candidates who demonstrate recovery from failure and adaptability over those with unblemished but untested credentials.
Build Institutional Resilience for Continuous Shocks
Sternfels emphasizes that modern leaders must prepare for "a world of continuous shocks" rather than periodic disruptions (28:22). Using a sports analogy, he describes the need to "play offense and defense at the same time"—maintaining enough buffer to withstand unexpected blows while retaining capacity for bold strategic bets. This requires building organizational margins and flexibility that allow for both defensive stability and offensive innovation simultaneously, rather than choosing between growth and protection.
Statistics & Facts
- McKinsey receives over one million applications per year but hires only 8,000-10,000 people, representing less than 1% acceptance rate (12:20). This statistic, shared by Sternfels, illustrates the extreme selectivity of top consulting firms and the competitive landscape for talent acquisition.
- McKinsey's workforce now consists of 40,000 humans and 20,000 AI agents, totaling 60,000 workers, with the AI agent population growing from 3,000 to 20,000 in just 18 months (09:00). This demonstrates the rapid pace of AI integration in professional services.
- Only one in six McKinsey hires eventually make partner, as revealed during Sternfels' discussion of their talent analytics (13:14). This statistic underscores the challenging career progression even within elite consulting firms.
