HBR IdeaCast – Where McKinsey—and Consulting—Go From Here

Date: January 6, 2026
Host: Adi Ignatius (A), Alison Beard (B)
Guest: Bob Sternfels (C), Global Managing Partner at McKinsey & Company

Overview

This episode explores the transformation of management consulting in the age of AI, with a special focus on how McKinsey & Company is evolving as it celebrates its 100th anniversary. Host Adi Ignatius interviews McKinsey's global managing partner, Bob Sternfels, covering the firm’s legacy, the impact of AI, changing consulting skillsets, dealing with reputational crises, and what the next decade at McKinsey may look like.

Key Discussion Points & Insights

1. McKinsey’s 100-Year Legacy: Creation vs. Best Practices

• Co-Creation as a Model:
  Bob frames McKinsey’s work as a co-creation partnership with clients, involving both novel innovation and global best practice sharing.

  “Maybe the way we frame is we're co-creating with clients to help them come up with things that they may not have come up with themselves…” (03:01)

• Investment in Thought Leadership:
  Significant investments in proprietary IP and institutes (e.g., McKinsey Global Institute, McKinsey Health Institute) exemplify a commitment to novel thinking, not just best practices.

2. AI and Consulting’s Business Model

• AI Shifts Both Client Solutions and Internal Operations:
  AI is driving monumental changes inside McKinsey and for its clients, requiring rewiring of both.

  “There's a unique moment to help all our clients reimagine themselves leveraging this technology. And to be able to do that, we have to rewire ourselves.” (05:17)

• Economic & Organizational Change:

  “What we're finding is half, if not more of the secret sauce is organizational change as opposed to technology implementation.” (07:06) Using AI as an impetus for organizational flattening and cross-departmental work.

• Growing Role of AI Agents:
  McKinsey’s workforce includes 20,000 AI agents alongside 40,000 humans—up from 3,000 agents 18 months ago.

  “I now update this almost every month, but my latest answer to you would be 60,000. But it's 40,000 humans and 20,000 agents.” (08:46)

• Shift Toward Outcomes-Based Consulting:
  The traditional fee-for-service advisory model is being replaced by outcome-based partnerships.

  “It's moving to much more of an outcomes-based model where we say…we will underwrite the outcomes of that business case.” (09:25)

3. Evolving Skills: What Makes a Modern Consultant?

• Shift in Talent Assessment:
  Analytics revealed overemphasis on credentials, not enough focus on resilience, teamwork, or learning agility.

  “We were too focused on did you have perfect marks versus did you have a setback and recover?” (13:03)
  "The applicant who had a setback and recovered was more resilient and more likely to be a higher probability of making partner in McKinsey." (13:13)

• Emphasis on Liberal Arts and Creativity:
  AI’s limitations (judgment, creativity, aspiration-setting) are ironic drivers for the resurgence of liberal arts profiles.

  “We're going back to liberal arts degrees and kind of saying, hey, let's come back to some of the things that might have been deprioritized in the past to see if we can get a little bit more creativity.” (15:57)

• Key Skills for the Future:
  • Resilience
  • Teamwork
  • Ability to learn
  • Leadership (setting aspiration)
  • Judgment
  • Creative, discontinuous thinking

4. Addressing Scandals and Public Image

• Learning from Failures:
  Humility and courage are both necessary: learning from mistakes (e.g., opioid crisis, South Africa controversies) while sometimes courageously pushing back on misperceptions.

  “Some of the ones that you mentioned fall clearly in the humble camp…. what we learned is that we have to have a higher diligence around client selection.” (18:43)

• Stronger Compliance & Risk Oversight:
  McKinsey invested heavily in compliance staff and systems, borrowing leadership from companies like Apple and Walmart, aiming to meet or exceed public company standards.

  “We invested about a billion dollars. I brought in the head of internal audit from Apple, the head of compliance from Walmart, to basically kind of modernize us.” (19:31)

• Maintaining Integrity:
  Controls and compliance considered necessary for preserving the firm’s professional ethos.

  “It's painful for a partnership to give up some of that autonomy, but I think… it's worth giving up that autonomy to actually preserve the integrity of the enterprise.” (23:06)

• Pushing Back on Reputation Issues:
  McKinsey is willing to disagree publicly about work in controversial sectors when aligned with their principles.

  “If you're going to be committed to climate transition, you have to work with the hardest to abate sectors.” (21:41)

5. From PowerPoint to Impact: Shifting Client Value

• Beyond Presentations:
  Aim to tie McKinsey’s compensation to the long-term outcomes, not just advice.

  “We’re on a change journey of moving, quite frankly, from a model that was advisory to one that underwrites outcomes.” (24:19)

6. Where Leaders Go Wrong and Future Management Paradigms

• Common Leadership Missteps:
  • Overconfidence and stasis
  • Lack of information-seeking from all levels
  • Failure to collaborate
  • Insufficient speed in decision-making

  “Whenever you get too confident, too overconfident, I think change for the negative is going to come...faster organizations outperform slower organizations.” (25:24, 26:39)

• Paradigm Shifts for Today’s Environment:
  • Navigating AI and technology transformation
  • Building institutional resilience (“playing offense and defense at the same time”)
  • Rethinking organizational structures, especially the matrix model

  “There’s going to be a world of continuous shocks. And so in a world of continuous shocks, do I have enough institutional resilience…?” (27:37)

7. McKinsey’s Aspiration for the Next Decade

• Leadership Factory:
  Continuing to develop leaders who go on to make an impact elsewhere.

  “We produce more CEOs than any other institution in the world. And I hope that's still the case in 10 years.” (30:26)

• From Advisor to Impact Partner:
  Becoming known for co-owning and achieving outcomes with clients, not just for giving advice.

  “We designed a business case together, and these guys underwrote the same outcomes that I took to the board. And we went on this journey and we kept at it until we got to someplace I didn't think I could get to.” (31:25)

Notable Quotes & Moments

• On adapting to AI internally:

  "I originally thought it was going to take us to 2030 to get to one agent per human. I think we're going to be there in 18 months." — Bob Sternfels (08:53)

• On hiring for resilience:

  “It turned out we had some bias in our system...the applicant who had a setback and recovered was more likely to be a higher probability of making partner in McKinsey.” — Bob Sternfels (13:13)

• On liberal arts:

  “We’re going back to liberal arts degrees and kind of saying, hey, let's come back to some of the things that might have been deprioritized in the past.” — Bob Sternfels (15:57)

• On addressing high-profile controversies:

  “I brought in the head of internal audit from Apple, the head of compliance from Walmart, to basically kind of modernize us around these processes.” — Bob Sternfels (19:31)

• On the future of consulting:

  “We're on a change journey of moving, quite frankly, from a model that was advisory to one that underwrites outcomes.” — Bob Sternfels (24:19)

• On speed in organizations:

  “Faster organizations outperform slower organizations, even if they make more mistakes.” — Bob Sternfels (26:40)

Timestamps for Major Segments

• [03:01] McKinsey’s methods—co-creation, innovation, global best practices
• [05:17] Internal impact and opportunities of AI
• [08:46] Rise of AI agents at McKinsey; productivity and workforce evolution
• [09:25] Shift to outcomes-based consulting
• [11:28] Changing consultant skill profiles and talent analytics overhaul
• [15:57] The resurgence of creativity and liberal arts backgrounds
• [18:26] Addressing high-profile ethical and reputational crises
• [21:26] Firm growth, compliance, and preserving professional ethos
• [24:15] From PowerPoint to impact: ensuring lasting client value
• [25:24] What leaders get wrong—learning, collaboration, and speed
• [27:10] Institutional resilience and future organizational models
• [30:09] McKinsey’s aspirational future

Summary Table: Evolution of Consulting at McKinsey

| Aspect | Past Model | Present/Future Model | |--------------------------|-------------------|---------------------------------------------| | Service Focus | Advisory, best practices | Impact co-creation, outcomes-based | | Workforce | Elite, credentialed, often technical | Diverse, resilient, creative, adaptive | | Use of AI | Minimal | Integrated, both client-facing and internal | | Engagement Structure | Fee-for-service | Joint business cases, risk-sharing | | Ethics Compliance | Traditional partnership model | Public-company standards, robust oversight| | Leadership Development | Implicit outcome | Explicit mission (“leadership factory”) | | Thought Leadership | Proprietary IP | Broader, cross-disciplinary, creative |

Conclusion

This episode delivers a dynamic look at the pressures and opportunities facing management consulting, particularly for firms as large and influential as McKinsey. AI is not just automating work—it’s reshaping the very skills, models, and mindsets required to stay relevant. Sternfels is candid about mistakes and proactive about changing both internal culture and business practices, with a clear focus on resilience, creativity, and partnership for impact. Listeners are left with a sense that consulting’s future will look very different—and uniquely human—despite, and perhaps because of, the rise of powerful AI.