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Best of LinkedIn: Strategy & Consulting CW 06/ 07 · Best of LinkedIn: Strategy, M&A & Investments

• 0:00
  Speaker 1: provided by Thomas Allgaier and Frennus, based on the most relevant LinkedIn posts about strategy in consulting from CW six-and-seven.
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  Speaker 1: Frenness specializes in B to B market research for strategy and consulting teams with a focus on tech and ICT.
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  Speaker 1: You know usually by mid February The business world has kind of settled into a rhythm.
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  Speaker 1: you've got your budget Your Q one targets And just you execute.
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  Speaker 1: but looking at the strategy and Consulting Feeds From Weeks Six and Seven Of twenty twenty-six I just don't see any rhythm, i see a scramble.
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  Speaker 0: Scramble is probably the polite word for it!
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  Speaker 0: It feels more like floorboards are being ripped up while everyone still trying to dance?
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  Speaker 0: Exactly
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  Speaker 1: and that's what we're unpacking today with our listeners in private equity M&A and venture capital.
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  Speaker 1: We aren't looking at incremental trends.
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  Speaker 1: No
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  Speaker 0: not at all
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  Speaker 1: structural breaks in the data.
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  Speaker 1: First, the economics of AI have shifted from pilot mode to infrastructure and that has a massive price tag attached.
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  Speaker 0: A price tag?
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  Speaker 0: And it completely new way of valuing companies
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  Speaker 1: right.
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  Speaker 1: second The geopolitical map isn't just messy.
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  Speaker 1: It is fundamentally rewired into something people are calling a multi nodal system.
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  Speaker 0: hmm We'll get into that.
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  Speaker 1: and third the operating models the way humans actually do the work or just creaking under the pressure of all this change.
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  Speaker 0: It's a heavy mix, but I think we have to start with AI piece because The shift in tone on length and this week was well it Was undeniable?
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  Speaker 0: They
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  Speaker 1: really was.
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  Speaker 1: for the last two years the safe sea.
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  Speaker 1: sweet talking point was We're exploring use cases
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  Speaker 0: were running a pilot
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  Speaker 1: Exactly.
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  Speaker 1: Yeah, but Jim Rowan highlighted the twenty-twenty six chief strategy officer survey from Deloitte and I mean that era is just over.
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  Speaker 0: The numbers are stark.
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  Speaker 0: rowing notes that ninety five percent of Chief Strategy Officers say AI Is materially shaping their priorities this year?
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  Speaker 0: This
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  Speaker 1: here not next year.
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  Speaker 0: right now exactly.
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  Speaker 0: But you know the key insight Rowan draws isn't Just the percentage it's the categorization.
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  Speaker 0: Right...This no longer a capability discussion It's A competitive Discussion.
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  Speaker 1: That is such a huge distinction.
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  Speaker 1: A capability discussion is, can we install this software?
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  Speaker 1: A competitive discussion is if we don't build this do we cease to be relevant?
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  Speaker 0: precisely it's the difference between buying a typewriter and uh buying a printing press.
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  Speaker 0: one helps you write faster The other changes the entire business model.
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  Speaker 1: And this lines up perfectly with what Hannah M Mayer reported from the McKinsey Tech CXO conference.
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  Speaker 0: Yeah, she noted top performers are increasing tech budgets by over ten percent.
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  Speaker 0: But and this is critical for investors listening.
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  Speaker 0: they aren't just buying more chatbot licenses
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  Speaker 1: They're betting on agintic AI
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  Speaker 0: Agentic AI.
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  Speaker 0: that's the buzzword of The Quarter but we really need to define it because It changes the capital requirements completely.
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  Speaker 1: So if I'm understanding the post correctly We're moving from a bot That answers the question To an agent that actually executes workflow
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  Speaker 0: Correct.
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  Speaker 0: It's the difference between asking, how do I reconcile this invoice?
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  Speaker 0: and telling the software reconcile all invoices from Q four?
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  Speaker 0: And flag any discrepancies.
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  Speaker 1: that's a huge leap.
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  Speaker 0: it is an mayor notes That half of all companies now prioritize This above every other tech investment and interestingly she also mentions that two-thirds Of CTOs are now stepping directly into corporate strategy roles
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  Speaker 1: which makes sense.
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  Speaker 1: i mean if The strategy Is the technology then the cto is effectively the co CEO
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  Speaker 0: right.
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  Speaker 0: Anna Weisinger had a really beautiful phrase for this, also from the McKinsey conference.
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  Speaker 0: She said, I
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  Speaker 1: flagged that post too.
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  Speaker 1: it's so good organizations without edges
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  Speaker 0: right.
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  Speaker 0: if intelligence is infrastructure you stop having these rigid handoffs between marketing sales and finance.
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  Speaker 0: The data just flows end-to-end because agents can talk to each other.
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  Speaker 1: but in here where we need get into weeds for our PE listeners yeah building infrastructure is incredibly expensive.
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  Speaker 0: This is the Jevons paradox point that Diana Kern's Manolatos from Deloitte brought up, right?
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  Speaker 0: Yes
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  Speaker 1: exactly!
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  Speaker 0: The Paradox being as a technology becomes more efficient and cheaper you don't use less of it You Use Exponentially More.
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  Speaker 1: So your unit costs go down but total consumption explodes.
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  Speaker 0: It explodes.
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  Speaker 0: Tokens are the new kilowatt hours, that's the unit of cost measurement now.
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  Speaker 0: and as models get cheaper companies integrate them into every single process.
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  Speaker 0: suddenly your cheap AI pilot turns in to a massive operational expense line item
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  Speaker 1: which brings us to Mark Byer Schroder's analysis.
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  Speaker 1: I thought this was the most actionable piece of advice for investors this week.
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  Speaker 1: he argues you have to stop governing AI like software where you just pay license fee.
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  Speaker 0: He actually puts a number on it, which is rare.
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  Speaker 1: Once you cross that
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  Speaker 0: seventy, eighty billion mark the cost of renting just becomes prohibitive.
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  Speaker 0: At that scale ownership of the infrastructure become structurally cheaper.
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  Speaker 1: That is a massive signal for due diligence.
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  Speaker 1: If I'm a VC looking at scaling sauce company...I have to be asking What's your token burn rate?
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  Speaker 0: You HAVE TO!
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  Speaker 1: Because if they're at one hundred million tokens and still paying open AI or Anthropic every single call They are bleeding margin.
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  Speaker 0: Fireshoda calls it strategic self-harm.
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  Speaker 0: You're basically subsidizing your provider's profit margin instead of building your own asset base.
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  Speaker 1: But the shift to intelligence as infrastructure doesn't just change the cost-base, it changes how we value the output of the Kerm itself.
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  Speaker 1: Oh
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  Speaker 0: yeah...
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  Speaker 1: There was a fascinating if a little terrifying take from James O'Dowd about something called the oblong theory.
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  Speaker 0: Ah yes!
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  Speaker 0: The death of the pyramid.
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  Speaker 1: This hits professional services sector so hard.
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  Speaker 1: For decades this model has been a pyramid A few partners at top A layer of managers and a huge base of juniors billing hours to do the grunt work.
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  Speaker 0: And that model works because leverage is profitable, you pay the junior X You build them out at three x simple.
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  Speaker 1: but Odoud argues That egenic ai just flattens that pyramid into an oblong shape.
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  Speaker 1: The AI does the research.
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  Speaker 1: the Ai builds the slide deck?
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  Speaker 1: The AI runs the basic audit.
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  Speaker 0: so the base of the pyramid the junior revenue engine.
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  Speaker 0: it just It evaporates.
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  Speaker 1: It doesn't just evaporate it becomes a cost center.
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  Speaker 1: if the client knows AI can do The grunt work they won't pay for those junior hours,
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  Speaker 0: right?
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  Speaker 0: Odell's point is the value shifts entirely from time to judgment and architecture.
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  Speaker 0: Yeah most valuable people are the ones who can scope the problem and orchestrate the agents.
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  Speaker 1: This is so critical For M&A If you're buying A consultancy or an agency in twenty-twenty six And its valuation Is based on headcount leverage.
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  Speaker 0: You're buying a depreciating asset.
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  Speaker 0: your buying a legacy model that's about To hit a wall.
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  Speaker 0: The winners will be the firms that productize their IP and move to outcome-based pricing.
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  Speaker 1: If you're still selling effort in an era of instant intelligence, You are in trouble!
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  Speaker 1: Big
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  Speaker 0: Trouble
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  Speaker 1: Okay.
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  Speaker 1: so we've got a world where Intelligence is expensive infrastructure And the economic models of services Are being totally rewritten.
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  Speaker 1: But Infrastructure has to live somewhere.
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  Speaker 1: It needs data centers it needs chips it needs energy...
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  Speaker 0: ...and That brings us To our second theme.
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  Speaker 0: The map itself Is changing
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  Speaker 1: the geopolitics piece.
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  Speaker 0: Yes, and I know usually when business leaders hear geopolitics they think risk management
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  Speaker 1: right avoiding sanctions
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  Speaker 0: exactly.
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  Speaker 0: but The sources of this week are saying it's deeper than that.
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  Speaker 0: the entire global operating system is being reinstalled.
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  Speaker 1: Peter Jonathan Jameson from BCG had the best term for this.
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  Speaker 1: he called It a multi nodal patchwork?
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  Speaker 0: It's a great mental model.
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  Speaker 0: There's this narrative out there that globalization dead.
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  Speaker 1: You hear it all the time,
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  Speaker 0: but Jameson argues that's just wrong.
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  Speaker 0: trade is actually growing faster than global GDP.
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  Speaker 0: The stuff is still
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  Speaker 1: moving.
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  Speaker 1: It's just moving differently.
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  Speaker 0: its rewiring Its moving through these specific nodes.
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  Speaker 0: you have the US node.
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  Speaker 0: China know the plural lateralist node the bricks plus block.
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  Speaker 1: so instead of a flat world we Have a clustered
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  Speaker 0: World?
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  Speaker 0: We do and Mark Gilbert takes this to his logical conclusion with a prediction That might sound A little dramatic.
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  Speaker 1: I think they know which one he mean
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  Speaker 0: But I think he's spot on.
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  Speaker 0: He says that by twenty-thirty, the multinational corporation with a central P&L is dead.
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  Speaker 1: Don't stop me in my tracks!
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  Speaker 1: Dead is a strong word...
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  Speaker 0: It is.
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  Speaker 0: but think about the logic.
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  Speaker 0: if The world is split into these distinct nodes With different regulations Different data privacy laws Different tariffs You can't optimize for A single global P& L anymore.
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  Speaker 1: So you have to run it as separate businesses.
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  Speaker 0: You effectively have to running a US business, China business and an India business as seperate entities An aggregation of regional models not one global machine
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  Speaker 1: Which really complicates things for investors?
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  Speaker 1: You aren't just buying global exposure anymore
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  Speaker 0: No!
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  Speaker 0: You need know specifically which node your exposed too.
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  Speaker 1: And looking at the data from Janssen Sainjaya who analyzed a McKinsey report The center gravity for those nodes is shifting east Hard.
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  Speaker 0: The numbers are undeniable.
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  Speaker 0: Sanjaya highlights that up to fourteen trillion dollars in trade value could shift corridors by twenty thirty five.
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  Speaker 1: Fourteen trillion!
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  Speaker 0: But look at the specific industries, he points out that thirty three of the world's forty largest semiconductor corridors involve Asia.
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  Speaker 0: Thirty-three
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  Speaker 1: out of forty?
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  Speaker 0: I mean just think about it.
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  Speaker 0: we spent our first segment talking how AI is a new infrastructure while AI runs on chips.
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  Speaker 0: If eighty percent of the chip corridors run through Asia, you cannot divorce your tech strategy from your Asia strategy.
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  Speaker 1: And Sanjay also mentioned that India is evolving.
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  Speaker 1: it's not just a back office anymore.
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  Speaker 0: No he calls it an innovation nerve center.
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  Speaker 0: India is hosting seventeen hundred global capability centers.
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  Speaker 0: New investment is just flooding into India Japan Vietnam.
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  Speaker 0: These aren't just factories they're R&D hubs.
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  Speaker 1: This raises very uncomfortable question for our European listeners.
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  Speaker 1: If the US is a node and Asia is massive, where does that leave Europe?
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  Speaker 0: That was the defining question at the Munich Security Conference.
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  Speaker 0: Dr.
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  Speaker 0: Mirko Worschen and Dr.
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  Speaker 0: Matthias Faldato from Kearney shared insights in their session there.
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  Speaker 0: The theme was basically Europe player or playground?
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  Speaker 1: Ouch!
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  Speaker 1: Playground implies you're just terrain with real powers compete.
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  Speaker 0: It's harsh reality check.
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  Speaker 0: They hosted Florence Galb from the NATO Defense College, and the takeaway was that you have to assess assets through this lens now.
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  Speaker 1: How so?
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  Speaker 0: Is the company in a player region that sets the rules like data standards, AI safety protocols trade tariffs or is it in a playground region where just has to comply with rules set by others.
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  Speaker 1: That's critical due diligence item.
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  Speaker 1: You're not buying a companies cash flow.
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  Speaker 1: Your buying its regulatory sovereignty.
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  Speaker 0: Exactly Jameson put it best.
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  Speaker 0: You need to assess real exposure, not just theoretical uncertainty.
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  Speaker 0: Don't worry about world peace generally.
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  Speaker 0: Map your specific supply chain against these notes.
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  Speaker 0: if you're chip supply comes from a node you are politically estranged From?
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  Speaker 0: You have a solvency problem Not a sourcing problem.
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  Speaker 1: Okay let's zoom back in.
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  Speaker 1: We've got the AI revolution demanding massive capital.
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  Speaker 1: we've Got a fragmented multi-nodal World map but at The end of day companies Are run by people And looking at the sources on operating models, it feels like the human element is a point of failure right now.
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  Speaker 0: It's The Friction Point!
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  Speaker 0: Cosgrove argues most operating models are just too rigid for this.
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  Speaker 0: They're designed for stability, not speed.
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  Speaker 1: and Heather Stockton notes that finance is actually leading the charge to change This.
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  Speaker 1: she says CFOs are going all in on embedding a genetic AI into finance functions
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  Speaker 0: Which makes sense?
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  Speaker 0: The cfo controls the purse strings And the data.
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  Speaker 0: if you want to force the operating model to evolve You start with the money.
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  Speaker 1: but here's the problem.
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  Speaker 1: You can't Just mandate adaptation from the top down.
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  Speaker 1: no
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  Speaker 0: you can.
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  Speaker 1: And this brings us to the trust gap.
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  Speaker 1: John Romeo from Oliver Wyman shared a statistic that I think every CEO needs to tape their monitor.
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  Speaker 1: It
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  Speaker 0: is staggering!
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  Speaker 0: Romiya reported that seventy-five percent of executives believe they understand the problems their frontline employees face
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  Speaker 1: Which sounds nice and confident.
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  Speaker 0: Until you ask the employees, only one in five workers feel understood.
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  Speaker 1: That's as a fifty-five point gap.
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  Speaker 1: Leaders THINK THEY GET IT.
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  Speaker 1: The workforce is saying YOU HAVE NO CLUE
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  Speaker 0: And Romeo connects this directly to transformation risk.
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  Speaker 0: If you're trying to deploy agentic AI, which scares people because they fear for their jobs or if your shifting a supply chain to Vietnam You need the front line to execute
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  Speaker 1: and if they don't trust you They won't help you
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  Speaker 0: it creates a silent resistance.
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  Speaker 0: Yes Exactly!
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  Speaker 0: The pressure move fast is only widening that gap.
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  Speaker 0: Gideon Slifkin had provocative post about enterprise architects and ignorance is bliss
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  Speaker 1: trap.
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  Speaker 1: I love that title.
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  Speaker 1: Strategists always want more data before they decide.
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  Speaker 0: We crave certainty, but Slifkin's argument is that in a world moving at the speed of AI waiting for perfect data is death.
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  Speaker 0: he suggests That a simplistic attitude making a decision based on what you know now Is often better than paralysis?
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  Speaker 1: But that speed can alienate The workforce even more.
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  Speaker 1: if You're not careful it's A real tightrope.
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  Speaker 0: It is, and we see this tension in specific sectors too.
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  Speaker 0: Johannes Blumell wrote about the energy sector.
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  Speaker 0: he says flexibility as the operating system now.
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  Speaker 1: Meaning what exactly?
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  Speaker 0: Meaning it's not about building one static power plant and walking away...it's about monetizing distributed flexibility.
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  Speaker 0: EVs heat pumps storage units you need an operating model that can handle thousands of moving parts constantly shifting its dynamic not static.
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  Speaker 1: And in retail, Marco Perone from KPMG highlighted that while CEOs are obsessed with AI, .. two percent say supply chain resilience is their biggest headache which
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  Speaker 0: brings us full circle.
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  Speaker 0: yeah you have the digital layer of the AI speeding up but the physical there.
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  Speaker 0: The supply chain is getting harder to manage because of the geopolitical nodes we talked about.
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  Speaker 1: this CEO is pressing the gas pedal on AI But the wheels are stuck in the mud at the supply chain.
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  Speaker 0: That's a great way.
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  Speaker 1: There is one more layer to this human element that we should touch on, specifically for our listeners managing assets in the EU or looking at global compliance.
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  Speaker 1: Evan Benjamin posted about The Rights Gap.
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  Speaker 0: Yes!
• 14:35
  Speaker 0: This is the regulatory curveball.
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  Speaker 0: Benjamin points out that AI oversight isn't just a technical challenge it's A Human Rights
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  Speaker 1: Challenge.
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  Speaker 1: Okay
• 14:43
  Speaker 0: He argues that technical audits are not enough.
• 14:46
  Speaker 0: You need active involvement of equality bodies and national human rights structures.
• 14:50
  Speaker 1: So you can't have your IT guy check the code for bugs, you have to check the output for structural discrimination.
• 14:57
  Speaker 0: Exactly!
• 14:58
  Speaker 0: If your buying a company that relies on AI or hiring and lending or policing You will have massive liability risk if black box violates human rights laws.
• 15:08
  Speaker 0: It's not just PRRU it is legal one.
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  Speaker 1: So let us try to synthesize all of this.
• 15:13
  Speaker 1: We've covered a lot ground from token economics to asian chip corridors to psychology of front line worker.
• 15:20
  Speaker 1: If I'm partner at PE firm What's my Monday morning memo?
• 15:22
  Speaker 0: I think it comes down to structural redesign.
• 15:25
  Speaker 0: You can't just tweak your way through twenty-twenty six, okay.
• 15:27
  Speaker 0: first on AI stop treating It as a tool.
• 15:30
  Speaker 0: govern in his capital.
• 15:31
  Speaker 0: watch that eighty billion token threshold.
• 15:34
  Speaker 0: if you aren't owning Your infrastructure you are leaking value
• 15:37
  Speaker 1: about it.
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  Speaker 1: second
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  Speaker 0: second on geopolitics Stop trying to be a global firm.
• 15:43
  Speaker 0: Be a collection of regional firms.
• 15:46
  Speaker 0: pick your nodes US Asia Europe And build resilience within them, not just between them.
• 15:52
  Speaker 0: Third and third on the organization You have to close that trust gap.
• 15:57
  Speaker 0: if your people don't believe you understand their reality They will break under the speed of the change you're trying to drive.
• 16:03
  Speaker 1: It really feels like The era Of the generalist strategy is over...you can't Just apply a standard playbook.
• 16:09
  Speaker 1: I think Josh Emdy put it perfectly in one of the posts Architecture is business strategy now.
• 16:13
  Speaker 1: That's
• 16:14
  Speaker 0: the line to underline, you can't design a strategy in a boardroom and then hand it to IT later.
• 16:19
  Speaker 0: The architecture that data flows, security, AI agents defines what the strategies are capable of.
• 16:26
  Speaker 1: If I get this wrong, they're just a PowerPoint deck
• 16:29
  Speaker 0: Exactly
• 16:30
  Speaker 1: And on that note we'll wrap up A huge thank-you for everyone who shared their insights.
• 16:35
  Speaker 1: We literally couldn't do this show without that collective intelligence.
• 16:38
  Speaker 0: Absolutely, it's fascinating to watch the conversation evolve in real time.
• 16:42
  Speaker 1: If you enjoyed this episode new episodes drop every two weeks.
• 16:45
  Speaker 1: Also check out our other editions on private equity venture capital and M&A.
• 16:49
  Speaker 1: Thanks for listening And we will catch You On The Next Deep Dive.