OUR BEST IDEAS FOR THE C-SUITE

Welcome to the latest edition of The CEO Shortlist, a biweekly newsletter of our best ideas for the C-suite. In this issue, we take up two pressing questions about AI: Are agents earning their keep? And as AI assumes entry-level work, how will the next generation learn? We appreciate the opportunity to connect and hope you find our perspectives useful and thought provoking. You can reach us at Alex_Panas@McKinsey.com and Becca_Coggins@McKinsey.com. Thank you, as ever.

—Alex and Becca

Cheaper tokens, costlier work. Ninety-three percent of respondents to a recent McKinsey survey report exceeding their AI budgets—even as the sticker price of AI keeps falling. The culprits are rework and variance: Roughly 60 percent of the cost of an agentic task goes to checking and repairing the first answer, and an identical assignment can cost 30 times more depending on the model used. Our colleagues argue that the CEO’s job is not to squeeze tokens but to govern machine work—allocating intelligence like capital and measuring agents against business outcomes, not technical metrics. 

The vanishing bottom rung. Expertise has long been forged on the bottom rung, in the routine research and first drafts that teach judgment by repetition. This is precisely the work AI now absorbs, multiplying the output of experienced people while slowing down novices, who cannot immediately tell when the machine is wrong. A third of employers say AI has already thinned the tasks juniors once learned from. But a company that dismantles the base of its pyramid will, in a decade, have nobody left to promote. In a new article, our colleagues show how this pipeline can be rebuilt.

We hope you find these insights helpful. See you in a couple of weeks with more McKinsey ideas for the CEO and others in the C-suite.

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