Equal-Opportunity Hallucinator

Large language models can't distinguish fact from fiction. That's hardly news. Mildly intelligent college students know as much. They understand the risks of using AI chatbots willy-nilly to crank out term papers. Yet, the fact that ChatGPT and its ilk routinely hallucinate somehow evaded senior leadership at a top-tier consulting firm.

In today's post, I'll explain why. But first, here's a quick primer on how the consulting industry works.

Consulting 101: Profit Pressures and Turf Wars

Boutique consulting shops with a few dozen employees pick a lane and stick to it; internationally recognized advisory ones with thousands of workers do not. Rather, they offer different arrays of services and solutions because their clients are so different. Boeing requires different consulting services than Chase and Banner Health do. One size does not fit all.

Take a job at Accenture, BCG, KPMG, McKinsey, PwC, and other big-ticket professional-service firms. You'll quickly discover that they tend to organize themselves into segments—or verticals, to use their parlance. Common examples include healthcare, retail, financial services, manufacturing, higher education, and the public sector.

These verticals operate as quasi-autonomous businesses within their massive parent companies. By themselves, they would be enormous enterprises. Exhibit A: Deloitte's public-sector vertical generated more than $12 billion last year—about one-sixth of the company's total revenues.

Impressive, but that amount is never enough. Pressure to increase each vertical's bottom line is incessant, especially at publicly traded firms. Can someone say stock options?

Regardless of whether John Q. Public can buy its stock, firm mandates to each vertical are clear: