Recently OpenAI announced the launch of GPT-4o. There was a lot of release of promotional videos and one of them caught my eye. In the video, Sal Khan the founder of Khan Academy got ChatGPT to guide his son on a geometry question. (Link to the video at the bottom)
The video caught my attention because I have always been passionate about learning or more precisely I am passionate about building up human capital. Having something like ChatGPT to tutor the kids is a game changer as it can increase the learning efficiency of children, allowing them to take on more complex learning later. I have some thoughts on this too but topic for another newsletter.
Now if we extrapolate this function, besides impacting the tutoring industry which is a huge business in Asia, GPT-4o or the like is coming for the consulting profession in the longer run!
Consulting Currently
Currently, based on experience and discussions, there are two types of consulting. One is based on advisory which usually leads to a retainer, and the other is working on projects.
For advisory, clients are buying the background, experience, and thought process of the consultant. The consultant is expected to search for ideas and information, and curate and structure a solution based on the background and experience. Having a process is minimal here as compared to working on a medium-term project.
For medium-term projects where there is an output, there is usually a group of consultants coming together, working on the project through the variety of technical skills put together. There will be someone with the experience to put together the team and do the coordination effort. Such folks are usually the highest paid because they are supposed to come up with processes, design, plan, and manage them. These projects are usually charged high fees given the amount of effort required
Consulting in the Future
Projecting the development of GPT-4o and similar, here is what I foresee might happen to the two types of consultation.
For advisory, the expectation of the advisory quality will be increased. Mediocre consultants who just present solutions without putting more critical thought and curation will be eliminated from the market. Consultants that can provide a more customized and feasible solution will be highly desired. What this translates into is that for clients to judge a consultant’s ability to provide the best-customized solution, will be the number of years of relevant experience and also its portfolio of projects. The more the merrier!
For medium-term projects that have an output, given the exorbitant high fees charged, there is a good chance that companies might build up the project internally. Why? The project can be guided by using GPT-4o, from step-by-step instructions to the makeup of the teams, instead of the conductor/manager. Furthermore, team members can be put together accordingly, learn from, and apply the knowledge prompted by multimodal generative models. There will be a downside to such an arrangement but with these models being able to provide guidance, the high fees charged by building externally will be pitted against, building it and, having the skills and experience retained internally which can be the basis and foundation for further work later, rather than relying on the vendor when an audit comes. Expertise and knowledge is retained internally.
Concluding…
GPT-4o being able to prompt (back) and guide students in solving mathematical problems might just be a good glimpse into the future of consulting. We should start to ask ourselves how will it disrupt the profession. If you are a consultant, it is time to ask yourself what is your value add to your clients and work to extend that advantage further before AI erodes a lot of value out of it.
What are your thoughts on this? Does your company hire consultants? What kind of value do they provide? Will love to hear more!
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Here is the video that I mentioned. :)
"Mediocre consultants who just present solutions without putting more critical thought and curation will be eliminated from the market. Consultants that can provide a more customized and feasible solution will be highly desired."
Absolutely true.
Thanks for this article, Koo. You put forward some interesting propositions, e.g. doing project documentation through AI so as to retain the knowledge internally.
In the business world, the thing that is most expensive always gets disrupted first. As you have rightly pointed out, advisory consulting might not see a lot of disruption, but project consulting might, given the high cost. In such this latter scenario, you might end up with a bifurcation of talent on the project team where all the juniors and less experienced staff are replaced by AI (because it can). This creates a boundary point where either you are experienced or skilled enough that you are better than AI, or you are replaced. This may create an unemployment problem. On the flip side, it is the young ones who are good at using AI to augment their abilities, while the older ones struggle at it. So there may still be equilibrium yet! :)