Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

McKinsey wonders how to sell AI apps with no measurable benefits

theregister.com

Post reply on HN
Print view View original

121–130 of 165 posts

Re: McKinsey wonders how to sell AI apps with no measurable benefits

#121

Post by apwell23 »

arethuza wrote: post #93
nostrademons wrote: post #83

Earlier quoted context omitted.

I've wondered sometimes what the root of this dynamic is, and why corporations are as inefficient as they are. I've come to the conclusion that it's deliberate. When I look at top-level decision-makers at my Mag-7 employer, they are smart people. Many of them were go-getters in their earlier career, responsible for driving some very successful initiatives, and that's why they're at the top of the company. And they're…

Have you seen the "sociopath, clueless, loser" model? https://www.ribbonfarm.com/2009/10/07/the-gervais-principle-...

these articles uses to be so popular in HN back in the day. now its back to "let pretend we are meritocracy. politics is just learning how to work with other ppl" .

Re: McKinsey wonders how to sell AI apps with no measurable benefits

#122

Post by [deleted] »

alberth wrote: post #45

McKinsey has pitched my company on projects where their compensation is entirely outcome-based — for example, if a project generates $20 million in incremental revenue, they would earn 10% of that amount. I have to admit, the results they demonstrated — which we validated using our own data — were impressive. The challenge, however, is that outcome-based contracts are hard for companies to manage, since they still ne…

[deleted]

Re: McKinsey wonders how to sell AI apps with no measurable benefits

#123

Post by visarga »

btbuildem wrote: post #22
_fat_santa wrote: post #9

Earlier quoted context omitted.

I find it all quite strange: - AI companies of course will try and sell you that you can reduce headcount with AI - CEO's will parrot this talking point without ever talking a closer look. - Everyone lower down on the org chart minus the engineers are wondering why the change hasn't started yet. - Meanwhile engineers are ripping their hair out cause they know that AI in it's current state will likely not replace any…

I am still of the conviction that "reducing employee head count" with AI should start at the top of the org chart. The current iterations of AI already talk like the C-suites, and deliver approximately same value. It would provide additional benefits, in that AIs refuse to do unethical things and generally reason acceptably well. The cost cutting would be immense! I am not kidding. In any large corps, the decision ma…

> I am still of the conviction that "reducing employee head count" with AI should start at the top of the org chart. The current iterations of AI already talk like the C-suites

That is exactly what it can't do. We need someone to hold liable in key decisions.

Re: McKinsey wonders how to sell AI apps with no measurable benefits

#124

Post by rchaud »

McKinsey 2 years ago:

> The firm’s earlier research suggested that 2027 would be the first year when AI technology would be able to match the typical human’s performance in tasks that involve “natural-language understanding.” Now, McKinsey reckons it will happen this year."

> "Generative AI will give humans a new “superpower”, and the economy a much-needed productivity injection, said Lareina Yee, a senior partner at the firm and chair of McKinsey Technology, in the report.

- https://archive.is/mhYIn

Re: McKinsey wonders how to sell AI apps with no measurable benefits

#125

Post by apwell23 »

josefritzishere wrote: post #113
btbuildem wrote: post #60

This is because they're trying to reduce the wrong headcount. The largest inefficiencies in corpo orgs lie in the ways they organize their knowledge and information stores, and in how they manage decision making. The rank and file generally have a really good grasp on their subset of the domain -- they have expertise and experience, as well as local context. Small teams, their managers -- those are the ones who actua…

Management will not volunteer to replace themselves. So that would mean that if that's all that Ai is trully good at... the product is unsalable.

do you mean a VP laying off a middle manager would send a signal that he can be similarly replaced?

Re: McKinsey wonders how to sell AI apps with no measurable benefits

#126

Post by deaux »

sofixa wrote: post #106
deaux wrote: post #52

Earlier quoted context omitted.

> The incentive structure for managers (and literally everyone up the chain) is to maximize headcount. More people you managed, the more power you have within the organization Ding ding ding! AI can absolutely reduce headcount. It already could 2 years ago, when we were just getting started. At the time I worked at a company that did just that, succesfully automating away thousands of jobs which couldn't pre-LLMs. Th…

> The bigger and older the company, the more ossified the structures are that have a want to keep headcount equal, and ideally grow it. I don't know, most of the companies doing regular layoffs wheneveer they can get away with it are pretty big and old. Be it in tech - IBM/Meta/Google/Microsoft, or in physical things - car manufacturers, shipyards, etc.

Through top-down, hard mandates directly by the exec level, absolutely! They're an unstoppable force, beating those incentives.

The execs aren't the ones directly choosing, overseeing and implementing these AI efforts - or in the preceding decades, the software efforts. 9 out of 10 times, they know very little about the details. They may ""spearhead"" it in so far that's possible, but there's tonnes of layers inbetween with their own incentives which are required to cooperate to actually make it work.

If the execs say "Whole office full-time RTO from next month 5 days a week", they really don't depend on those layers at all, as it's suicide for anyone to just ignore it or even fake it.

Re: McKinsey wonders how to sell AI apps with no measurable benefits

#127

Post by Spoom »

afavour wrote: post #90
rkachowski wrote: post #69

Earlier quoted context omitted.

whoa I'm out of the loop, what the fuck happened to redis?

Venture capital

Redis had (may still have?) a billboard on the 101 saying something along the lines of, "my boss really wants to you know we're an AI company", which I thought was pretty funny. Hope this bubble pops soon and we can go back to making products that solve problems for people.

Re: McKinsey wonders how to sell AI apps with no measurable benefits

#129

Post by rchaud »

add-sub-mul-div wrote: post #29

It has to be tough for them. They can't not be in on the grift, it's too big and they're too big. But the grift doesn't really benefit them.

If there was a nuclear apocalypse, McKinsey would still be there offering advice on how to grow crops on irradiated soil.

Re: McKinsey wonders how to sell AI apps with no measurable benefits

#130

Post by flumpcakes »

caminante wrote: post #68
alberth wrote: post #45

McKinsey has pitched my company on projects where their compensation is entirely outcome-based — for example, if a project generates $20 million in incremental revenue, they would earn 10% of that amount. I have to admit, the results they demonstrated — which we validated using our own data — were impressive. The challenge, however, is that outcome-based contracts are hard for companies to manage, since they still ne…

What's upfront about a backloaded earnout? You model it as a fixed %, variable cost and run revenue sensitivities. It either meets your investment criteria or doesn't.

Perhaps their advice needs expenditure up front - for example if they suggested using blue photocopiers and you only have pink ones. You would have to spend the money on blue photocopiers before you see the return, and before they see their services fee paid?
Post reply on HN