How Generative AI will Change Strategy Consulting

Generative AI will fundamentally change how strategy consulting work is completed and, in the process, upend the current ways of working for consulting firms and strategy teams. That upheaval will present an opportunity for small firms and independents affording the opportunity to better compete with larger firms for growth work.

The current model has remained largely unchanged for decades:

• Senior consultants (usually partners at large firms), sell growth strategy projects to clients that involve a multi layered team delivering the work over 8-12 weeks

• Junior team members spend the first half of the project (4-6 weeks) running Google searches, summarizing articles and 10ks and conducting expert interviews

• Mid level team members supervise the juniors and, with collaboration with senior team members, develop insights and follow up research questions from the work product being produced

• Ideally, the client is brought along as the research and insights are developed and, in the final few weeks of the project, is then led through options development and prioritization with the senior consultant and, from there, a strategy is aligned on

• The firm, naturally, charges quite a bit more for the junior and mid level time than what that work actually costs while that work takes up over half of the project timeline

How do independents and small firms compete? Largely with lower prices and compressed margins delivered with much leaner teams. The problem for smaller firms does not lie in the insights and options development: generally, if they can credibly compete for the project, it means that the senior consultant selling the work is experienced and expert enough to lead a C-suite through the strategy creation phases of the work.

The problem lies in the fact that the foundational research and preliminary insights phases of the work are incredibly time consuming while also requiring much lower billing rates than what a senior consultant (even an independent or small firm consultant) prefers to bill themselves at. Why not just hire more juniors? While that is the simple solution for larger firms, independents and small firms often do not want to risk taking on more talent for a single project: what happens when a large enough strategy pipeline fails to materialize to support the new hires?

What if we could use technology to accelerate and reduce the cost of those foundational research and preliminary insights phases? Independents and small firms could suddenly confidently bid on strategy work they might normally shy away from and perhaps even open up new consulting market segments at lower price points.

Generative AI is that technology. Leveraging a chain of specialized AI agents, Chronos Insights can produce the entire draft research work product of a growth project in literal seconds. An experienced consultant still needs to review the research output to identify errors, surface additional questions and re-run AI searches, but in our experience, that process takes one week as opposed to the 4-6 weeks of work in the old project model.

With that accelerated time, a firm can now focus their expertise on developing strategy with the client, produce results in less than half the time and do so with a much leaner team resulting in better margins and/or improved pricing.

Additionally, Generative AI scales wonderfully and can be turned off when the project pipeline slows down. In short: it is a fantastic way for independents and smaller firms to attack more work with reduced risk.

The challenge independents and small firms face when it comes to this technology is having the knowledge and time to build AI agents and refine them. The challenge most AI startups face is the lack of required consulting expertise to apply the technology in this space. 

At Chronos Insights, we’ve put together a team that bridges those gaps. We’ve been in your shoes. We would enjoy connecting with you about how Chronos Insights can help you compete, grow and more effectively serve your clients.