McKinsey ties pay to outcomes
McKinsey is shifting toward outcomes-based work, reportedly tying about one-third of some engagements’ revenue to client targets — a notable change from pure advisory models (x.com).
McKinsey says roughly a quarter of its global fees now come from outcomes‑based pricing. (africa.businessinsider.com) “We’re doing more performance‑based arrangements,” McKinsey managing partner Michael Birshan told reporters in London, saying clients increasingly start engagements by naming the outcome they want rather than the scope. (msn.com) Kate Smaje, McKinsey’s global leader for technology and AI, told Business Insider that outcomes‑based work suits AI‑driven transformations and that the roughly 20–25% share of fees tied to outcomes has grown in the last few years and is expected to increase. (b17news.com) Smaje described contract scorecards that tie payment to investor targets, hitting revenue or profit milestones within set timeframes, operational KPIs, and customer‑satisfaction measures. (b17news.com) McKinsey’s pivot comes as the firm reported record revenues—about $16 billion in 2023—and has publicly said it has rolled out tens of thousands of internal AI agents alongside its human workforce, giving it scale to underwrite outcome‑linked deals. (africa.businessinsider.com) In a January preview interview, global managing partner Bob Sternfels told Harvard Business Review McKinsey is accelerating the shift toward outcomes‑based work while building teams that blend human judgment with AI capabilities. (hbr.org)
