The Consulting Model Broke. Most Firms Just Don’t Know It Yet

For most of my career, consulting growth has followed a familiar equation: add people, increase utilization, bill more hours, grow revenue.

That model produced excellent work and helped build important businesses. It also created an uncomfortable incentive: the provider could make more money when the work took longer. Customers wanted outcomes. Firms measured time.

I never found that tension easy to accept. I gravitated toward value-based engagements long before generative AI became a boardroom conversation. But AI has turned a philosophical objection into an operating question that firms can no longer postpone.

When research, analysis, prototyping, documentation, and portions of software delivery can be completed dramatically faster, what exactly are we selling? The hours we used to need, or the result the customer actually wanted?

The answer isn't that all time-based pricing disappears tomorrow. Complex transformations still require coordination, judgment, change management, security, and accountability. Some projects genuinely need sustained human attention. But the default assumption that more effort equals more value is increasingly difficult to defend.

I experienced this firsthand. With AI, I could move from an executive conversation to a useful artifact in a fraction of the time I once needed. The constraint shifted. It was less often my ability to produce a first version and more often the customer's ability to review, decide, approve, and adopt it.

This creates a second problem for the old model: faster production does not guarantee faster value. A prototype sitting in an approval queue is not transformation. The best firms will redesign discovery, governance, delivery, and adoption together.

I expect a difficult transition. Firms with large utilization-driven revenue streams have a rational reason to protect them. The problem is that customers have an equally rational reason to ask why the same work still takes the same time and costs the same amount.

My thesis is not that every traditional consultancy will disappear in two years. It is that those unwilling to cannibalize parts of their own delivery model will become less competitive. Some will change. Some will retreat to work that remains labor-intensive. Some will struggle.

What should replace the old equation? Smaller teams with greater leverage. Clearer outcome definitions. Reusable intellectual property. Faster cycles of demonstration and feedback. Commercial models that share the upside of productivity instead of hiding it.

There is a real risk here, too. When production becomes cheap, it becomes tempting to confuse volume with quality. Ten applications are not automatically better than one useful system. Governance, craftsmanship, and customer trust become more important, not less.

The next generation of consulting shouldn't be measured by how many people we can place on a project. It should be measured by how effectively we can turn a business problem into an adopted result.

That is a harder business to build. It is also the one I want to build.