Management consulting faces a credibility crisis
Context and Chronology
Prestige that once allowed elite consultancies to convert reputation into premium fees is under sustained pressure from a run of ethics controversies, publicised misconduct and, in some cases, legal penalties that limit eligibility for public tenders. Those episodes have hardened buyer-side governance: procurement teams at large corporates and governments are treating consulting as a replaceable input rather than an automatic source of strategic judgment.
At the same time, firms are deepening investment in automation and generative tools. Internally, firms have disclosed sizeable deployments — for example, McKinsey has reported roughly 20,000 automated agents supporting about 40,000 consultants — and consultancies say the economic mix of advisory work now combines algorithmic, data/tech and human inputs in roughly a 10/20/70 split for commercial return in many engagements.
That technical progress both drives down the marginal cost of routine analysis and accelerates clients' ability to repatriate repeatable work into internal analytics teams. Employer-side adoption of hiring automation and scaled AI/cloud infrastructure (industry estimates place core AI and cloud spend near $1.5tn by 2025) is compressing the market for traditional entry-level on‑ramps and mid-tier staffing vendors.
Consultancies are responding along two fronts: cultural repair to rebuild interpersonal trust (tighter senior–junior pairing, renewed investment in listening, leadership and client stewardship) and productising technology-led services (apprenticeship-style on-ramps, 'pods', reskilling and partnerships with HR‑tech vendors). Staff surveys show a behavioural tilt back to human connection — around 56% of consultants say they want more in-person engagement — reinforcing the case for visible human leadership in client-facing work.
Market forecasters are divided. Some research houses (Source Global Research) expect near-term sector revenue growth — roughly 6% — as firms translate tech investments and cultural fixes into billable work. Yet the reputational headwinds and procurement conservatism imply a longer-run redistribution of opportunity: specialist boutiques with clean track records and demonstrable technical depth are winning work previously captured by brand alone, while networked audit–advisor groups face compounded risk where audit-linked exposures leak into advisory sales.
The net effect is a more contested commercial environment: clients demand clearer, measurable outcomes, shorter retainer cycles and tighter compliance; incumbents face longer sales cycles and margin pressure; and buyers increasingly view advisory as contestable, shifting discretionary spend toward internal centres and niche suppliers. For further reading, see the original analysis here.
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