Consulting = Generative AI? 🤯
The AI train stops for no-one
👀 What to expect: ~1,400 words / 7 min read
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Exec SumStudy shows BCG Consultants are quantitatively more productive with GPT-4
Consultancies are acquiring AI startups in sign of AI demand to come
Download Todoist to manage your tasks and projects via Time Blocking
Industry News📣 A quick update before diving in: taking on some feedback, I’ve updated the format of the newsletter this week to add a bit more depth. Let me know via the anonymous feedback form or email how you like it! I read and act on all the feedback you send in so really appreciate those who make the effort.
Trending 📈
Study shows BCG Consultants are quantitatively more productive with GPT-4
A combined team from HBS, Wharton and Sloan just released a study in conjunction with the BCG Henderson Institute to measure the effect of AI on Knowledge Workers.
The study:
Focused on the impact of AI on realistic, complex and knowledge-intensive tasks
Split participants into 3 groups: (1) no AI access (2) GPT-4 access (3) GPT-4 access with overview of prompt engineering
Comprised 758 BCG consultants (~7% of the operating workforce)
The KTAs:
Consultants using AI finished 12.2% more tasks on average, completed tasks 25.1% more quickly, and produced 40% higher quality results than those without
The results were significant and robust to every way of measuring performance
AI operates along a ‘Jagged Technological Frontier’ - AI can’t do some tasks that appear to be equally difficult to those it can do, from a human’s perspective*
AI is a ‘Skill-leveller’ - below-average Consultants benefitted more from AI (43%) vs top-performers (17%), equalising performance
There are 2 patterns of successful AI use:
Centaurs - dividing and delegating solution-creation activities to AI
Cyborgs - completely integrating AI into tasks flows with continual interaction
Key quotes:
“On some tasks AI is immensely powerful, and on others it fails completely or subtly. And, unless you use AI a lot, you won’t know which is which.”
“Looking at these results, I do not think enough people are considering what it means when a technology raises all workers to the top tiers of performance.”
*e.g. write a sonnet = easy for AI, write an exactly 50-word poem = hard for AI
Link to the full study / Link to one of the authors’ very digestible overview.
Challenger consultancy Elixirr acquires AI start-up Responsum
Staying on the topic of AI, Elixirr has just acquired US-based generative AI start-up Responsum, reflecting broader sector trends.*
Parties in the transaction:
Elixirr - ~550-person AIM-listed strategy consultancy operating across the US and UK, self-styled as ‘The Challenger Consultancy’
Responsum - ~7-person start-up helping enterprises implement AI solutions for sales, CX and internal data
The KTAs:
Consideration was for a maximum enterprise value of $7.4m, a notable multiple for a 7-person team
The firms had entered into a formal partnership not 2-months prior and previously delivered 40+ projects together, so the value of the partnership was well-evidenced
The transaction complements Elixirr’s existing data & analytics capabilities in its offshore subsidiary iOLAP
The Strategy to Implementation trend:
For years, ‘strat houses’ have been seeking to deliver implementation services off the back of their strategy work, so-called ‘tip of the spear’ or ‘follow-through’ sales
Bringing these capabilities in-house enables firms to (1) win work (2) evidence expertise (3) increase revenue (4) maintain ongoing client relationships
Companies can either ‘Buy, Build or Partner’ to create these capabilities:
Buy - accelerated time to market but expensive
Build - longer time to market but cheaper
Partner - short time to market but less revenue capture
McKinsey acquiring S4G, a Salesforce implementation partner, is exactly this sort of transaction
AI appears to be the most recent example of this broader trend
Market leaders have already made AI acquisitions:
Atos acquires US AI & data science consultancy Miner & Kasch (May 2020)
PwC acquires minority stake in German AI start-up Statice (Mar 2021)
Deloitte acquires US AI consultancy SFL Scientific (Oct 2022)
Capgemini acquires French AI & data consultancy Quantmetry (Oct 2022)
Bain acquires Australian AI consultancy Max Kelsen (Aug 2023)
A sign of AI demand and further transactions to come:
As companies increasingly ask the question ‘What should our AI strategy be?’, consultancies will be the first port of call and will need specialised capabilities to compete in the market
How ‘fast followers’ and ‘laggards’ decide to create these capabilities remain to be seen but, with the pace of change, Buying or Partnering may be required to remain competitive
*the news just seems to keep on coming…
In The News 📰
The market
Consulting x AI
Layoffs & Hiring
M&A
Global players
Deloitte reports $65bn in annual revenue, remaining the largest of the Big 4
KPMG halves pay for US partners on gardening leave amid poaching war
The Boutiques
Reports
This week’s edition is brought to you by:
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Working EffectivelyIdeas to get your evenings back 🌇
Without doubt one of the biggest step-changes you can make to your work life alongside Deep Work, time blocking is a time management technique that divides your day into distinct ‘blocks’ of time
Each block focuses on a specific task and allocates time according to the priority of the tasks, with the most important generally taking up a larger share and happening earlier in the day
Starting with the amount of time you have, rather than all the things you need to do, forces you to prioritise before starting and makes you more likely to achieve your goals
Tech Tools 💾
My personal task manager, you can time block using this tool via its Outlook plugin or calendar feed integration
More broadly, you can integrate any calendar feed into your Outlook calendar, be it your family/personal calendar, task manager or calendar of public holidays
You can now add QR codes to Excel using the QR4OFFICE add-in
P.S. for the techies amongst you, Microsoft is bringing Python to Excel.
Productivity Hacks ⚙️
Telling an LLM to ‘take a deep breath’ or ‘work step by step’ improves its results - add this to your prompts when requesting AI to do complex tasks
Setup Scheduled Summaries for your notifications - setting up non-urgent notifications to arrive at specific points in the day (e.g. every 2-hours) stops you getting distracted and having to work longer
Keyboard Shortcuts 💻
Switch between apps: Alt + Tab
Switch between tabs of the same app: Windows + Tab
Shout out to Steve for referring a fellow consultant this week. Join him and refer with your unique code below:
Interesting detours 🔗
CEO of Renaissance Technologies brags about 2,000 nights slept at the office - I guess there’s a reason you become the best performing hedge fund of all time but still… no thanks
Sack staff who repeatedly click on dodgy emails - a clickbait headline that actually has logic underneath as these staff members pose huge cybersecurity risks
Coming up 🛣️
That’s all folks. Don’t forget your timesheets.
[INSERT CONSULTANT HERE]
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Great issue.
Time-blocking is key to productivity.
I block a couple of hours each morning to tackle the hardest activity I planned for myself for that day. This is normally the task that requires the highest creativity level.
I then bundle meetings sessions in the late morning/afternoon. It works for me!