Best of LinkedIn: Strategy & Consulting CW 30/ 31

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00:00:33: So we are jumping right into a pretty massive unfreezing moment today for our deep dive in to the top strategy and consulting trends across LinkedIn.

00:00:41: Yeah, exactly.

00:00:42: And I mean The core theme We're seeing.

00:00:44: is this just crazy widening gap between?

00:00:46: This sheer mountain of cash being spent on AI Right now and the actual value hitting the bottom line?

00:00:51: great It's huge disconnect.

00:00:53: plus

00:00:53: On top all that how geopolitics.

00:00:55: it's Just completely redrawing the map For global business.

00:00:58: It really is a stunning paradox.

00:01:00: I mean you have boards authorizing these unprecedented tech budgets on one side of the ledger, right?

00:01:05: While the external operating environment it's just fracturing into tariffs and sanctions...

00:01:09: Yeah that's wild!

00:01:10: The fundamental rules are being rewritten live.

00:01:13: so we need to figure out what actually drives value in this environment.

00:01:17: for YOU The listener, let's start with the money.

00:01:19: Let's do it because It is staggering.

00:01:21: we are looking at a projected two point five three trillion dollars expected to be spent on enterprise AI by twenty twenty six.

00:01:29: Wow

00:01:30: Trillion yeah With a T.

00:01:32: Which brings us to that shocking reality check you mentioned earlier.

00:01:36: Sumundra Mahanti points out, right now, ninety-five percent of these enterprise generative AI pilots show absolutely zero measurable P&L impact.

00:01:46: Zero I mean the ninety five percent is basically all them

00:01:49: Literally zero.

00:01:50: Their research notes that companies are desperately trying to restructure into these Palantir-like deploy codes, like they want to be this hyper efficient software deployment engines but their doing it before the technology is even fully baked.

00:02:02: Okay let's unpack for a second because I mean its buying a fleet of Formula One cars and only driving them in grocery store parking lot.

00:02:12: You've got all this raw power, but the environment around it just isn't built to handle it at all.

00:02:17: Yeah

00:02:17: and The stats back that up completely.

00:02:19: I mean eighty eight percent of organizations are using AI somewhere But the share of companies actively abandoning their initiatives That jumped from seventeen percent.

00:02:29: two forty-two percent in Just a single year.

00:02:32: wait forty two percent almost half or just giving Up.

00:02:35: basically yeah The patience is just running out at the board level.

00:02:38: So, okay if the spend is drastically outrunning the value how are the successful minority actually making it work?

00:02:45: Well Rodney Coutinho shares this framework for capturing ROI and it reveals something pre-counterintuitive.

00:02:50: Okay bought AI tools actually land value roughly twice as often as homegrown builds

00:02:56: really.

00:02:56: but I mean everyone always says data is the new oil right.

00:03:00: you'd think building your own custom model would give you the ultimate edge.

00:03:03: It sounds great in theory, but in practice homegrown builds are a total trap for most enterprises because building your own requires incredibly scarce AI talent.

00:03:13: Oh right which is super expensive!

00:03:15: Exactly.

00:03:16: But Continuo notes that buying the tool is really only step one.

00:03:20: The real failure point here Is that boards are entirely ignoring operating model redesigns.

00:03:26: So they buy this shiny new tool and just slap it onto a break in process.

00:03:29: Exactly, And even if you do by the tool there are still these massive hidden traps waiting for you.

00:03:35: Look

00:03:35: what?

00:03:36: Diana Kern's Manolatos highlights a trend that should honestly terrify CFOs.

00:03:40: It is the rise of toll gating fees.

00:03:42: Toll gating I mean like a highway toll.

00:03:44: Yeah exactly Like That!

00:03:45: It completely upends The traditional data ownership model.

00:03:49: Vendors Are starting to charge companies unexpected fees Just to access their own historical Data so They can scale Their AI.

00:03:55: Wait hold on.

00:03:56: They have to pay a toll just to look at their own digital property.

00:03:59: Yes,

00:04:00: the vendors are building these contractual fences around data and essentially metering access to it...

00:04:05: Wow!

00:04:06: Which completely blows up the original business case.

00:04:09: If accessing your own data suddenly costs a fortune Your ROI goes negative before you even launch.

00:04:16: Precisely So if this broad generic pilots are failing And Data Access is getting weaponized Where's the real value?

00:04:24: Right It has got be moving somewhere

00:04:25: It is, it's migrating deep into the commercial core.

00:04:28: We are seeing a huge shift toward agentic AI.

00:04:32: Okay so moving away from just like passive chatbots to agents that actually execute commercial workflows independently.

00:04:39: Exactly!

00:04:40: Yeah, Ema K points out that a genetic AI and customer-facing functions is scaling three and half times faster than in other areas.

00:04:46: Three and a half times?

00:04:47: That's massive

00:04:48: It is And forty one percent of those are already fully scaled.

00:04:51: By

00:04:51: the way if you want to keep catching these aha moments make sure you subscribe so don't miss future additions.

00:04:56: Yes definitely hit subscribe.

00:04:58: But going back to the commercial core why is it scaling so fast there?

00:05:03: Isabel Huber shed some light on this, specifically in B-to-B sales.

00:05:07: She notes that seventy one percent of top teams raise their AI budgets by double digits.

00:05:11: Okay but are they actually staling

00:05:13: it?

00:05:13: No under ten percent have scaled It because again They're just layering AI onto broken processes instead of Actually rewiring the workflow

00:05:22: automating inefficiency exactly.

00:05:24: But wait I have a major question here.

00:05:27: If the AI

00:05:27: is making commercial decisions on its own like negotiating a contract, who actually gets sued when it messes up?

00:05:33: Yeah.

00:05:34: That's the million-dollar question!

00:05:36: And Sebastian Terwee notes that legal teams are absolutely terrified about this because of the unclear ownership and eroding trust.

00:05:44: Legal has to be design partner from day one now not just final checkpoint.

00:05:48: Right

00:05:48: Because traditional liability relies on human intent.

00:05:51: if an agent goes rogue There's no logic tree to blame.

00:05:54: Exactly, which is why Gary Aurora frames this whole transition around four architecture questions you have to answer before launch.

00:06:01: What are they?

00:06:02: First what does the AI actually own?

00:06:04: second whats its autonomy level

00:06:06: so like?

00:06:07: can it act alone or Does a human need to approve It

00:06:09: right?

00:06:10: third Is what's The source of truth?

00:06:12: and fourth what is Its post-launch behavior meaning?

00:06:15: how Does it drift Or change once it's out in the wild?

00:06:18: exactly You Have To monitor it Constantly

00:06:20: okay?

00:06:21: So If these AI agents are taking over the commercial core and making decisions, what happens to the human workforce?

00:06:29: Are we just looking at mass layoffs.

00:06:31: Actually counterintuitively humans become more important not less.

00:06:36: really

00:06:37: How so?

00:06:37: Bob Sternfelds highlights that one major firm is actually targeting a twenty percent increase in consultant headcount.

00:06:44: A

00:06:44: twenty-percent increase, yeah!

00:06:45: In the middle of an AI boom.

00:06:46: Yeah

00:06:47: They are betting that AI will just supercharge human judgment So they can tackle way bigger problems.

00:06:52: That makes sense.

00:06:53: Mark Byer Shoder points out that AI's real power isn't just productivity It's capturing the tacit experience.

00:07:01: Right, the reasoning behind why a seasoned employee makes specific trade-off.

00:07:05: Exactly!

00:07:06: But to capture that you need healthy corporate culture.

00:07:09: and Naya Baxter outlines four cultural tensions currently blocking AI.

00:07:13: Yeah these are huge.

00:07:14: First is agency problem.

00:07:16: people won't experiment if they don't feel safe.

00:07:18: Second is erosion of apprenticeship model.

00:07:21: Oh because the AI doing all the grunt work juniors used learn from?

00:07:25: Exactly how do they learn?

00:07:27: Third is leadership workforce gap.

00:07:29: and fourth is what she calls culture debt.

00:07:33: Here's where it gets really interesting, Culture Debt...is like sleep deprivation for a company.

00:07:39: Oh that's a great way to put it

00:07:40: Right!

00:07:40: Like you can function on low-sleep for awhile You could push through the exhaustion But eventually The fatigue breaks the whole system.

00:07:47: Yeah..the burnout is real.

00:07:48: And Pear Kilfors adds this by pointing out why human presence Is such durable advantage

00:07:54: Because AI can process info but It doesn't have mirror neurons

00:07:58: Exactly.

00:07:58: It can't replicate those shared physical rituals that build actual trust between people,

00:08:03: right?

00:08:03: And trusts is everything internally But what happens when trust breaks down externally on a global scale?

00:08:10: well That shifts us to our final theme.

00:08:13: while leaders are you know obsessing over their internal AI architectures The external map of global business is being completely redrawn by geopolitics.

00:08:22: Yeah We are in this structural transition.

00:08:24: per

00:08:24: Christian Hong makes a great point here.

00:08:26: The situations in the Persian Gulf and the Strait of Hormuz, they are just temporary energy crazies.

00:08:32: No!

00:08:33: They're proof-of concept for a new era of conditional trade.

00:08:37: Right.

00:08:37: Strategic leverage is the game.

00:08:40: And Morgan Montaignee and Sarah Adam point out a massive strategic blind spot here.

00:08:45: Critical minerals.

00:08:46: Huge blindspot...

00:08:48: But wait I mean Doesn't the low cost of these minerals on a balance sheet mean we can just easily source them elsewhere?

00:08:54: Oh wait, that's exactly The Trap.

00:08:56: That is the trap.

00:08:57: their low-cost completely hides there absolute power to halt production On like everything.

00:09:02: fighter jets auto lines you name it.

00:09:04: Wow It's incredible leverage and the trade realities are just hitting us rapid fire right

00:09:09: now.

00:09:09: Yeah they really are.

00:09:10: Just look at the EU.

00:09:11: Mariavar Patarch notes they just launched their massive twenty-first sanctions package against Ressa.

00:09:16: The Twenty

00:09:16: First?

00:09:17: Yeah,

00:09:17: and this one completely bans crypto evasion from third countries!

00:09:21: That is aggressive... And on the US side drew to long warns that the hundred fifty day U.S.

00:09:26: tariff stopgap is expiring

00:09:28: which triggers a fast rollout of section three.

00:09:31: oh one and two hundred thirty two actions.

00:09:33: Right targeting forced labor chips pharma whole landscape.

00:09:38: it's shifting under

00:09:39: our feet.

00:09:39: It really is.

00:09:40: So bringing this all together, what does actually mean for you the listener?

00:09:44: Well to synthesize all of these we are essentially in an unfreezing moment.

00:09:49: Competitive advantage is no longer just about throwing money at tech or assuming that global remains stable.

00:09:54: it's about organizational design human leadership and truly mastering your supply chain choke points.

00:10:02: You know its funny.

00:10:03: if AI can now capture the tacit knowledge decision making experience.

00:10:10: Will a company's unique human culture eventually just become the training data for its own autonomous agents?

00:10:16: Oh

00:10:16: wow, that is a wild thought to leave off on.

00:10:19: It is right.

00:10:20: Well if you enjoyed this episode new episodes drop every two weeks.

00:10:23: also check out our other editions on venture capital M&A and private equity.

00:10:27: Thank You so much for hanging out with us for this deep dive And don't forget to subscribe.

00:10:31: catch your next time.