How McKinsey Plans to Survive AI (and Reinvent Consulting)

Sternfels reports that CEOs worldwide are torn between enthusiasm for AI's potential and frustration with the pace of value realization. While technology leaders push for aggressive adoption to avoid disruption, finance chiefs question the return on massive AI investments. McKinsey's research points to a surprising culprit: organizational structure.

The firm finds that successful AI implementation requires fundamental rewiring — flatter hierarchies that eliminate middle management layers, consolidated workflows that break down departmental silos (like collapsing four or five mortgage process departments into one), and new operating models that can actually capture productivity gains. Banks, for example, have traditionally organized around process steps — origination, credit scoring, servicing — but AI-enabled workflows make those boundaries obsolete.

This organizational half of the equation is proving harder and slower than the technology half. Companies that focus only on deploying models without reimagining structure are the ones whose CFOs and CIOs remain at odds. Those that tackle both in parallel are beginning to see the enterprise-level value that justifies the investment.

Sternfels acknowledges that McKinsey's work advising opioid manufacturers and partnerships in South Africa were failures that demanded humility and structural change. The firm's traditional model gave individual partners broad autonomy to commit the enterprise, with minimal central oversight — a structure that scaled poorly as the firm grew and regulatory scrutiny intensified.

In response, McKinsey invested roughly $1 billion to bring in compliance and audit leaders from Apple and Walmart, building a client selection framework that evaluates country risk, topic sensitivity, institutional integrity, individual actors, and operating environment before engagement. Partners no longer commit the firm alone; they work alongside risk professionals. Sternfels framed the goal not as remediation but as setting the standard for professionalism in consulting.

At the same time, the firm pushed back on criticism it considered unfair — particularly attacks on its work with hard-to-abate sectors on climate transition. Sternfels argued that solving climate change without engaging high-emission industries is «naive,» and that McKinsey would not retreat from difficult work simply to avoid controversy. The dual posture — humble accountability for genuine failures, courage to defend legitimate but controversial choices — reflects the firm's attempt to navigate heightened institutional scrutiny without abandoning its mission.