Daybreak - McKinsey, Bain, and BCG welcomed AI with open arms. Creativity is the first casualty

Episode Date: April 14, 2025

Welcome to the world of consulting in 2025. AI is everywhere—from writing reports and making decks to crunching numbers. But you’d think the likes of McKinsey, Bain, and BCG would be worried about AI, right? Because AI reduces the knowledge gap between them and their clients. Turns out, instead of resisting it, they’re going all in.The ones feeling the heat are junior most employees—the consultants. Timelines are shrinking and expectations are going up. Creativity? Who cares about that anymore. A former Bain manager told The Ken about an instance when a senior partner wanted a full client assessment by the next day. Normally, this would take weeks to pull off. The result? Rushed work and fancy words that sound good but don’t really say anything substantial. And worst of all—there is no  time to fact-check. There seems to be a real disconnect between what senior leaders think AI can do, and what it actually does. So what happens when the industry famous for having all the answers is now taking shortcuts using a chatbot? Also, what happens when clients find out?Q for listeners: If 90% of your job could be done by AI, what would you focus on to stay valuable?Send us your answers as texts or voice notes on Daybreak’s WhatsApp at [phone]. Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

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Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Recently, a junior consultant at BCG, one of the big three management consultant companies, was pulled up by their manager. The manager wanted to know why they were trying to solve the problem from first principles instead of where, where,

using chart GPD. Now, the funny thing is that they did use chat GPD. They just didn't tell the manager that. Welcome to the world of consulting in 2025. AI is everywhere. It's writing reports, it's making slides, it's crunching numbers, and the famous decks. It's helping make those two. But you would think that the likes of McKinsey, Bain and B.C.G would be worried about AI, right?

because AI reduces the knowledge gap between them and their clients. Turns out, instead of resisting it, they are going all in. And the ones feeling the heat are the junior-most employees, the consultants. Timelines are shrinking, expectations are going up, and creativity, who cares about that anymore? A former Bain manager told my colleague, the Ken reporter Abhiramiji, about an instance when a senior partner wanted a full client assessment done by the next day. Normally, something like this would take weeks to pull off.

The result, rushed work, and fancy words that sound good but don't really say anything substantial. And worst of all, there is no time to fact check. There seems to be a real disconnect between what leaders, senior leaders, think that AI can do and what it actually does. So what happens when the industry, famous for having all the answers, is now taking shortcuts using a chatbot. Also, what happens when the clients find out? Welcome to Daybreak, a business podcast from the Ken.

I'm your host, Nick Das Sharma, and I don't chase the news cycle. Instead, every day of the week, my colleague Rahal Philipose and I will come to you with one business story that is worth understanding and worth your time. Today is Monday, the 14th of April. From time in the middle of last year, the big three consulting firms fully endorsed AI. McKinsey has said that 40% of its new projects now involve AI. Bain and BCG predicted that AI consulting would make up 20 to 30% of their business this year. Both companies have actually been working with Open AI since 2023.

They use Chad GPT Enterprise and Ours. other tools built for business. At BCG, consultants also use something called deep research. It is basically an open AI tool that scans texts, images and PDFs from across the web and then generates deep dive reports. It covers everything, from quantum computing to cancer immunotherapy. And it's working. Deep research outperformed both Open AI's older model and DeepSeek R1, a Chinese open source model in a key benchmarking test called Humanity's Last Exam. McKinsey, meanwhile, has built its own generative AI platform called Lilly. It works with OpenAI's large language models, but it can also plug into other LLMs.

The idea is to stay flexible. So, where is all this love for AI coming from? From the top. A Bain manager put it pretty straightforward. to us. They said, and I'm quoting, I don't see any downsides. It made my life much easier. If my team gives me some research, I can just use AI to double check it. But not everybody is thrilled, especially the junior consultants who do the actual work. A BCG consultant told again how timelines for everything from research to making slides have shortened a lot. What they had earlier a whole

day to do now has to be done in an hour, no thanks to AI tools. And the frustration runs deeper. A McKinsey consultant told Abhirami how managers only see the final result and think, wow, Gen AI is amazing. But they don't see the dozens of failed prompts behind that one good output. It's like watching Messi score nine out of 10 free cakes and ignoring the 15,000 misses in practice. In 2023, BCG studied how Gen AI affected its consultants, and they found that it boosted creative problem solving by 40%. But it made business problem solving 23% worse. Why?

Because consultants did not trust AI enough in areas where it was actually good and overtrusted it where it wasn't. What is even more worrying, the study showed that AI reduced data. diversity of thoughts by 40%. But that did not stop BCG or the others from going ahead. Another McKinsey consultant told us that they are being discouraged from thinking things through. They actually tell them to work with AI. They said, and I'm quoting, my manager does not even ask me to do the task anymore.

They just say, get Lily to do it. And this is where things get messy. Consultants spend 30 minutes feeding prawns. to the chat bot just to get a first draft. And then they spend the next couple of hours just fixing it. The consultant termed this as a sunk cost fallacy. Because they end up wasting so much time prompting the bot that they believe they could have done a better job themselves.

Still, McKinsey says that over 70% of its employees use Lilly and that it cuts down time spent on research and synthesis by up to 30%. But for many consultants, the shine is already wearing off. Stay tuned for more on this. Two months ago, Bain teamed up with NASCOM to release a report called India at 2047, transforming India into a tech-driven economy. It is a 78-page deep dive into how different sectors are shaping India's tech economy. When Abhirami read this report, she thought there was something off about it.

You know, the writing felt strange. A bit robotic. So she ran just the intro of the report through an AI detector. And guess what? It flagged 91% of the report as AI generated. Now, to be fair, these detectors aren't always completely reliable. But the language used does sound quite AI generated. A consultant and Bain said that AI is usually just used to structure ideas or tweak a few lines.

not to write full reports. One possible explanation, Abirami says, is that Bain might be using an internal tool that rewrites plain text into its own house style. This includes phrases like dampening of exit activity or strategic headcount reductions. Another consultant said that at least one other top tier firm does the same. But using AI tools outside the company's ecosystem,

system, that is a big no. It's mostly about data privacy. For example, BCG banned the use of deep seek after employees started using it in their work. So, where does this leave consultants? A Bain manager told us that the job comes down to four things. Client interaction, research, Excel models and slides and insights. And all of those, he pointed out, can be automated. Even client emails, AI can generate them in minutes. Which brings us to the big question, what is the future of consulting if AI can do all of this? Bain and BCG did not respond to the Ken's questions. But a McKinsey consultant explained it to us. They told us, before AI, consulting firms used to rely on something called information asymmetry, basically access to data that clients did not have. But now AI,

is closing that gap very fast. And to stay ahead, consulting firms are doing the obvious, selling AI solutions. Roughly, 30% of their revenue now comes from helping clients integrate AI, especially in non-tech industries like manufacturing or chemicals. Bain, for example, struck a deal with Open AI in early 2023. It even advises IT service companies on how they can upsell AI. But still, there is real anxiety in the industry. A BCG consultants said that some believe entry-level consultants will be replaced.

Others think that it will be middle managers. Of course, no one thinks that they will be the ones who will be made redundant. A former Bain manager said that most of the 200 roles cut in June 2024 have still not been refilled. Campus hiring was like two, apparently only around. 25 MBA grads were brought in last year. The firm is now leaning on more lateral hires with experience. McKinsey, meanwhile, believes that the key to a future with AI is being more hands-on with clients, not just giving advice, but staying through the execution, like helping build AI tools like knowledge bases or chatbots. And how will we know if all of this really worked? I guess we will

have to find that out in the next MBA placement season. That is all for today, dear listener, but before I sign off, here is a question for you. If 90% of your job could be done by AI, what would you focus on to stay valuable? I would love to hear about this from you, so please do send me your answers as texts or voice notes on daybreak's official WhatsApp number, which is 89711,08379. I'll repeat that again. 89711-08379. Also, what did you think of this episode?

Do let us know and if you liked it, do share it with your friends and family. Also, do not forget to give us a rating and hit follow on whatever podcast platform that you're tuned into. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-onement. the offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. To subscribe, head to the ken.com and click on the red subscribe button on top of the Ken website. Today's episode was hosted by Snigda Sharma and edited by Rajiv Sien.