AI transforms major consulting firms from Pyramids to Obelisks says McKinsey

Artificial Intelligence (AI) is rewriting the rules of the consulting industry, transforming its decades-old “Pyramid” structure, built on armies of junior analysts, into a leaner, tech-augmented “Obelisk” model focused on speed, expertise, and insight, according to a report from Harvard Business Review. For years, consulting’s pyramid model has relied on a wide base of junior consultants conducting research, modelling, and analysis to support senior leaders at the top.

But as Harvard Business Review’s article by David Duncan, Tyler Anderson, and Jeffrey Saviano explains, “AI is undermining the traditional model consulting firms use to fulfill it.”

Generative AI systems can now perform many of these core tasks more quickly and cost-effectively, often with superior results. Major players are already embedding AI deep into their workflows. McKinsey’s proprietary AI assistant Lilli is used by more than 70% of its workforce, cutting research time by roughly 30%. Bain’s Sage, BCG’s Deckster, and Deloitte’s Zora AI agents are similarly reshaping internal operations.

As AI handles more analytical work, firms no longer need large entry-level cohorts, collapsing the pyramid’s base and challenging its economic core.

According to Duncan and colleagues, consulting firms must “evolve their delivery model or risk becoming irrelevant.”

Their proposed alternative, the consulting obelisk, features smaller, flatter teams composed of AI facilitators, engagement architects, and client leaders.

This model emphasizes human judgment and client trust over scale, enabling firms to deliver more insightful solutions faster and with lower overhead.

This transformation is not just theoretical; it’s already reshaping global markets. Reporting by The Logic found that management consulting firms are facing an “AI reckoning” as governments and corporations tighten budgets and adopt AI themselves. Accenture’s new bookings dropped six percent to $19.7 billion, while its CEO Julie Sweet emphasized that “GenAI is just being more and more embedded into everything we do.”

Meanwhile, Boston Consulting Group’s Scott Wilder said 90% of BCG employees use AI regularly, adding, “We don’t get paid to write slides. We get paid to create insight and drive value.” But the shift comes at a human cost; global consulting job postings have fallen sharply, with non-senior roles in Canada down 40% from early 2022.

A consultant posting on Reddit captured the anxiety running through the industry: “I’ve seen AI systems perform tasks that used to take me (or my team) weeks to complete - and they do it with startling accuracy.”

They warned that if AI replaces layers of consulting hierarchy, “the bottleneck shifts to managing clients and interpreting AI outputs effectively - roles that require far fewer people than the current model.”

The consulting industry’s AI-driven reinvention echoes transformations underway in the outsourcing sector. Just as consulting firms move from pyramids to obelisks, outsourcing companies are evolving from labor-intensive delivery models toward AI-enabled, outcome-based partnerships.

Both industries are learning that survival now depends less on scale and more on adaptability - how effectively human expertise can guide intelligent machines toward smarter, faster, and more valuable outcomes.

As Duncan, Anderson, and Saviano conclude, “This is not a moment for incrementalism. The winners will be those who move first and reimagine the industry before someone else does it for them.”