Why the Consulting Industry is Harmful to Economies
AI-driven change through applied intelligence: ai | ap3 software
Acclaimed professor Mariana Mazzucato in her most recent book titled THE BIG CON — How the Consulting Industry Weakens Our Businesses, Infantilizes Our Governments, and Warps Our Economies; says that the overuse of consultants, both by private businesses and governments around the world “stunts innovation, obfuscates corporate and political accountability, and impedes efforts to fight climate change.” In short, big consulting is harmful to robust growth and hinders innovation because it concentrates ideas and knowledge in the hands of a few big consulting firms, who implement their neoliberal economic ideology upon others. Regardless of if it’s in the client’s best interest or not.
According to Forbes “Businesses are better off internalizing their strategy
process, consultants are basically telling you what you already know, and much of the information we can find ourselves.”
Forbes goes on to say that the people who are doing the bulk of the
work, are fresh out of college or business school, with little-to-no work experience. They know absolutely nothing coming in about your industry, company, situation or particular issues. More interestingly, the director or partner on the project is not a subject matter expert either. And that consultants can never actually make the tough decision. No outsider can ever truly understand the needs of the various stakeholders. No outsider has as much at stake personally and professionally. So consultants stifle innovation and reduce diversity and real experiences, weakening enterprises and governments — economies and societies.
Further, Harvard Business Review (HBR) in an analysis report titled Digital Transformation (DT) Is Not About Technology — Putting the Cart before the Horse. The analysis shows how companies, institutions, and governments alike continue pouring millions into “digital transformation” initiatives — but a high percentage (over 70%/$1.3 trillion) fail to pay off. Harvard pointed out that one of the major factors for failure is that “Organizations that seek transformations (digital and otherwise) frequently bring in an army of outside consultants who tend to apply one-size-fits-all solutions.” Harvard went on to say that it would be better to “leverage insiders” — local staff who have intimate knowledge about daily operations and skin in the game. And arm them with the necessary knowledge-technology ecosystems enabling them in doing their jobs better.
In recent news, Jensen Huang, the Chief Executive Officer and co-founder of Nvidia (makes the semiconductors…processors needed to train the technology — large language models — that powers the new artificial intelligence tools.) He gave a commencement speech on May 28 at the National Taiwan University in Taipei. He was blunt: companies and people who don’t want to take an interest in AI and learn about it are going to become obsolete. Noting that this revolutionary technology will transform businesses and virtually every job.
If we look at Nvidia’s stock price over the last year, we see a 200% gain which correlates to the developments in AI, most noted in the fall of 2022 when the startup OpenAI launched ChatGPT. The stock has been on a tear since then, and a recent gain of 27.5% in the two trading sessions following the release of its fiscal first quarter results on May 24. This dramatic leap has brought the company closer ($963 billion at last check) to the very select club of companies with over $1 trillion in market capitalization: Apple, Amazon, Microsoft, Saudi Aramco, and Alphabet/Google.
Accordingly, in the digital era — the 5th Industrial Revolution (5IR) which is evolving and defining the future of work — new work practices and culture: whereas Industry 4.0 is considered to be technology-driven, Industry 5.0 is value-driven. So the 5IR combines the use of technology — big data and AI to enhance human capabilities in optimizing value creation in the future of work.
Those who are paying attention in the present but have learned from the past, understand the transformational power that new technology can have on society and change. So informed individuals in transitional times become entrepreneurial and get ahead to catch those new opportunities flowing downstream. So, as the father of Capitalism, Adam Smith wrote way back in 1776 — enterprises and societies do better when they pursue their own challenges through innovation, and strive to make things better for themselves. Self-improvement to improve one’s lot in life was fundamental to capitalism Smith said. Maximizing your own value versus giving it to others to do goes against the basic principles of value and wealth creation — it only diminishes your worth and increases the income of the consultant.
A.I. algorithms can analyze vast amounts of data, identify trends and patterns, and provide insights that can help organizations make informed decisions quickly. This is what consultants say they offer, however, a consultant can’t ever compete with the computational power of a machine. This means businesses can now move the strategy development process internally, within the organization and make decisions themselves with reliability and speed. Eventually, traditional consulting becomes obsolete!
Like a virus, consultant contracts span the entire value chain and sectors, across countries and continents, affecting all levels of society. The industry has contributed to dysfunctional governments and businesses around the world, but nowhere has it been more harmful than in the former colonial nations. Leaving whole governments gutted, timid and hollowed out with no capacity and capabilities — unprepared and incapable of building economies to prosper and ride the new global economy wealth curve.
Nevertheless, the advent of the digital age offers us an opportunity to escape, rethink, and do better. Big data and artificial intelligence ecosystems can be optimally applied through the applied intelligence process, supported by ap3 software in building economies that are fit for purpose. The applied intelligence framework, for example, will allow developing political economies to set their own climate objectives and integrate them into their overall enterprise and export-growth-economy agenda. Climate change mitigation is a massive transformational growth opportunity for a zero-emissions-based economy. The Caribbean region, for example, will no longer have to be beholden to Neo-colonialism funding schemes that restrain them from pursuing their own development interests. Where Western-conceived and directed climate “projects” are disingenuously funded to fulfill signed climate agreements or accords of these Western countries.
The consulting industry began by identifying and providing solutions by throwing everything into a model, economic and management theories. But unlike AI, humans can’t compute millions of data points in seconds and provide useful and robust fact-based insights. Models were created to fit problems nicely, but their misguided oversimplification is the classic priori hypothesis, starting with preconceived notions or ideas and going out to prove them. Consulting also ignores or doesn’t give respect to stakeholders, and local knowledge. And according to economist Prof. George F. DeMartino, this situates consultants and economists “as societies harm accountants, and give to the [consultants] the authority to make decisions that won’t bear on them but that’ll have a profound impact on the lives of others… which is deeply distressing and paternalistic.”
However, we are in the digital age now and we no longer have to suffer superfluous solutions, intuition and fake morality-played agendas. We must be exhaustive and robust and account for as many of the complex variables as possible in the transformational growth equation. This math can only be processed by machines and is the natural evolution of the consulting industry, impacted by advancing technology.
Therefore, applied intelligence positions ordinary people as value creators in the future of work — augmented by AI in their natural work environment. Combining individuals with real-world practical experience and skin in the game makes for powerfully innovative enterprises.
So when we think about designing the future, we must shift our thinking about believing that economists and consultants, can predict the future. In reality, they’re just making best guesses about the future but the future is forever unknowable. AI itself can’t even come close to attempting to predict the future either but it is dramatically more useful, resourceful and reliable as a tool in helping organizations design the future value that they seek.
The chart below tells us it is impossible to predict the future, as the range of possible future worlds is infinite.
As a consequence hubris dominates the consulting world which holds back productive internalized innovation, creativity, and strategy development. Therefore, as the real value of AI presents more of itself, the consulting industry can’t exist as we now know it. And it will be a hard-to-turn, big legacy ship filled with consultants/partners who have gotten rich and will resist change. Because change means less income and job losses, which is already underway at many of the big consulting firms globally. So what will we do with all those superfluous consultants? It’s too late to make a sharp turn without hitting an iceberg.
Recently BT (British Telecom) announced it will axe up to 55,000 jobs by 2030 as it pushes into AI. However, it is noteworthy to mention that 30,000 of those job cuts are listed as consultant contractors through third parties. Therefore, the writing is on the wall for consultants as they are the closest in proximity to being useless to enterprises and governments in the digital era.
Therefore, the AI revolution is shaking up nearly every economic sector. But the most redundant, specialization and knowledge-based jobs like consulting, will be the most at risk of being decimated by AI. On the other hand, for workers and entrepreneurs, it can be the best of times for those willing to learn and engage in opportunity spotting. Aligning with AI will enhance your human value proposition in the future of work. Forward-looking people who can play things smartly won’t have to worry about their jobs and can be the big winners. So ap3 is positioned as an augmenting tool for the future of work. Likewise, organizations are extensions of their people and those organizations too will be big winners when they invest in people and technology intelligently.
Therefore, the policy and strategy decisions that affect actual people and enterprises must be made by those same people. In other words, those who are bearing the outcomes of decisions must be the ones making their own decisions. People know best what is in their best interest, and as Steve Jobs once said, “It’s not about putting faith in technology it’s about putting faith in people.” In the same way, we should no longer be putting any faith in consultants, but replace them instead with internalized capacity and strategy building through applied intelligence.
Jobs continued: “Technology is nothing. What’s important is that you have faith in people, that they’re good and smart — and if you give them tools, they’ll do wonderful things with them.” Put another way, Jobs believed that to achieve great success and create revolutionary changes in the world, we must learn to prioritize the intersection of technology and social problems because problems are solved by finding the best ideas to apply to problems.
The world remains forever uncertain so we must manage uncertainty by engaging in logical thinking and quantitative action-taking; there are a couple of ways to do so:
- We can’t know the future so rather than try and project and predict future policy, and strategy, via intuition, ego and the hubris of consultants and economists. We should apply rigorous quantitative analysis and relentless iteration and testing.
- applied intelligence takes the view that it should always be about the stakeholders and that they must be the primary decision-makers when it comes to figuring out what strategies and risks to take.
We don’t need consultants coming in with oversimplification models and running cost-benefit analyses, instead, we replace them with big data and AI ecosystems that can process vast amounts of data and provide real insight through the applied intelligence process. Then leaders can make decisions and build strategies confidently.
Douglas Blackwell Inc. — applied intelligence ai | ap3, positions itself in the AI ecosystem supply chain as an effective tool to enhance human capacity for efficient production relative to innovative value creation. It also solves the inherent Gap-problem —by interweaving human intelligence with artificial intelligence, to maximize value creation — a platform for human-AI collaboration with embedded risk management and social impact functionality included.
So…ap3 is a highly functional Insight Engine for capacity and capabilities building to underwrite effective organizational strategy development, to lead change. It fills the gap between the value functions available from big data and artificial intelligence and the critical human element of executive decisioning. The applied intelligence process guides clients through a disciplined six-step ai process that retrieves relevant factual information from reputable and reliable sources and turns it into valuable insight. It identifies risks and rewards scenarios for management to zero in on, to pull strategic-growth opportunities out of the whitespace.
…ai | ap3 comprises data science and AI-powered research capabilities. It
harnesses computational engines that can identify emerging innovations,
mega-demand trends and supply chain optimization opportunities.
Because it is highly focused on your organizational objectives it is customized to your specific subject matter agenda and goes significantly deeper than existing applications like ChatGPT. Which only supply cursory answers to unsuspecting users who’ve been conditioned on Siri and Alexa and assume that the smooth-talking ChatGPT is somehow tapping into reliable sources of knowledge, but it can only draw on the (admittedly vast) proportion of the internet it ingested at training time — limited pre-2021.
In the words of one of the founding fathers of AI, Vint Cerf, who received the top Turing Award prize in computing, has recently said that ChatGPT AI is “snake oil,” a “bullshitting machine” that makes stuff up. Cerf went on to say that it is “riddled with factual errors and doesn’t match source documents to its outputs, [so it] could just be fabricated bogus.”
On the other hand — ai | ap3 is a real-time insight-gathering engine for consequential decisioning! A robust functionally intelligent utility tool, deep and meticulous, built on concretely sourced comprehensive and quantitative complexes of empirical facts, which can identify certain verifiable features that can be extracted as reliable, reputable, and highly warrantable. In creating demand and capturing uncontested market space — making the competition irrelevant!
ai | ap3 is for winning the future!
