A Timely Exchange
Earlier this week, I published “The Revenue Trap” paper—an analysis of why procurement technology implementations have failed at a consistent 80% rate across four decades, despite massive advances in the technology itself.
The paper argues that the failure isn’t technological. It’s structural. The revenue models across the ecosystem—analysts, consultants, vendors—don’t reward the walk-away conversation. They reward forward momentum, regardless of organizational readiness.
Duncan Jones, a software company investor and advisor with deep analyst experience, pushed back:
“Your description of Analysts’ revenue model is totally incorrect. Buyers’ needs always trump vendors’ wishes. Helping clients choose vendors is a tiny part of what we do. Long term renewable revenue is key, & independence is a core value. We frequently tell clients that they & a product aren’t ready for each other.”
I appreciated the engagement. I responded that if he’s telling clients when they’re not ready, he’s operating in the 20% success zone—and that the Revenue Trap equation actually validates his approach.
His follow-up was revealing:
“An 80% failure rate means too few firms follow analysts’ advice, which is expensive, but cheaper than ignorance. Also cheaper than consultants’ self serving ‘advice.’… Forrester’s survey data showed a clear correlation between using analysts in vendor selection and project success. In procurement, all vendors had successful clients, so failure must be down to bad implementation, not bad product.”
I want to sit with that last sentence: “failure must be down to bad implementation, not bad product.”
Duncan, we agree. That’s literally my thesis.
The question is: whose job is it to assess whether an organization can implement successfully before they sign the contract?
Then This Headline Appeared
The same week Duncan was defending the analyst model, the Financial Times reported:
“Top consultancies freeze starting salaries as AI threatens ‘pyramid’ model.”
McKinsey, BCG, Bain, and the Big Four have frozen starting salaries for the third consecutive year. PwC announced it will miss its target to add 100,000 employees globally by 2026—a goal set five years ago, before generative AI.
The reason? AI can now do what junior consultants do: research synthesis, benchmarking, slide creation, data analysis, and first-draft recommendations.
As Namaan Mian, COO of Management Consulted, put it: “The ability to wring more value from fewer junior employees is putting downward pressure on salaries.”
The traditional pyramid—thousands of junior analysts at the bottom supporting a handful of partners at the top—is collapsing. Industry experts are now predicting alternative structures:
- Obelisk: Fewer layers, less reliance on junior staff
- Hourglass: Pinched in the middle as AI automates routine tasks
- Box model: Fewer hierarchical layers, more reliance on experienced professionals
The Irony Duncan Should Consider
Duncan defended the analyst model in the same week the firms that employ analysts signaled their economic foundation is unsustainable.
Here’s the structural problem:
The profit margin in consulting has always lived in the spread: bill a junior at $400/hour, pay them $75/hour equivalent. When AI eliminates the junior, the economics collapse.
But here’s the deeper question: If the people who execute recommendations are being displaced, who ensures the organization can actually absorb what’s being recommended?
This is the implementation gap I’ve been documenting since 1998. And it’s about to get worse, not better.
What the Pyramid Collapse Reveals
The pyramid model was never about implementation success. It was about deployable labor.
Think about what consulting firms actually sell:
- Benchmarking (AI does this)
- Best practices research (AI does this)
- Market analysis (AI does this)
- Slide decks with frameworks (AI does this)
- Vendor shortlists (AI does this)
What they rarely sell—because it’s harder to bill and impossible to scale—is the patient, unglamorous work of assessing whether an organization is ready to absorb change.
That work requires:
- Understanding organizational politics
- Reading stakeholder alignment (or misalignment)
- Recognizing when “yes” means “no”
- Walking away when readiness isn’t there
AI can’t do this. And apparently, neither can the pyramid model.
The 80% Failure Rate Has Always Been a People Problem
Duncan wrote: “failure must be down to bad implementation, not bad product.”
Exactly right. But “bad implementation” isn’t random. It’s predictable. It follows patterns I’ve documented across four technology eras:
The technology kept improving. The failure rate kept climbing. Because the problem was never the technology.
The problem is that no one in the revenue chain gets paid to say “stop.”
The Revenue Trap, Revisited
Here’s the equation from the paper:
S = R · A + (1 – R)(1 – W) · B
Where:
- S = Overall success rate
- R = True readiness (proportion of organizations genuinely ready)
- W = Walk-away rate (how often unready organizations don’t proceed)
- A = Success rate when ready (~95%)
- B = Success rate when not ready (~10%)
The industry-wide success rate (S) is approximately 20%. The only way to improve it is to increase W—the walk-away rate.
But here’s the structural trap:
- Vendors get paid when contracts close
- Consultants get paid when projects proceed
- Analysts get paid when firms renew subscriptions
None of them get paid to say: “You’re not ready. Stop.”
Duncan says Forrester frequently tells clients they’re not ready. I believe him. But if that’s true, why hasn’t it bent the industry curve in 40 years?
Because individual exceptions don’t change structural incentives.
What the Pyramid Collapse Means for Procurement
If consulting firms reduce junior headcount by 50%—as some Big Four executives estimate—who performs the detailed implementation work?
Three scenarios:
Scenario 1: Clients Do It Themselves Organizations absorb implementation work internally. But they’re already stretched thin. This increases failure rates.
Scenario 2: AI Does It AI handles the mechanical work, but can’t navigate organizational politics or stakeholder resistance. Implementation becomes faster but not better.
Scenario 3: A New Model Emerges Firms that focus on readiness assessment and change absorption—rather than deployable labor—capture the gap.
I’ve been building toward Scenario 3 since 1998.
The Hansen Method Alternative
The Hansen Method doesn’t compete with McKinsey for slide decks. It doesn’t compete with Gartner for benchmarking. It doesn’t compete with vendors for technology.
It competes for the question no one else is asking:
Is this organization ready to absorb this change?
The answer determines everything else:
- If yes: proceed with high confidence
- If no: remediate first, or walk away
This isn’t a technology assessment. It’s an organizational readiness assessment. And it’s the missing Phase 0 that should precede every procurement technology initiative.
The pyramid model couldn’t deliver this because it wasn’t designed to do so. It was designed to deploy labor at scale.
AI kills the labor model. It doesn’t kill the readiness model.
The Question for Duncan
I genuinely appreciate Duncan’s engagement. He’s right that failure is about implementation, not product. He’s right that analysts sometimes tell clients to wait.
But here’s my question:
If analysts have been telling clients they’re not ready—and if Forrester data shows correlation between analyst engagement and success—why is the industry-wide failure rate still 80% after four decades?
The answer isn’t that analysts are wrong. It’s that the structural model doesn’t reward the walk-away conversation at scale.
Individual practitioners like Duncan can operate with integrity inside a broken system. But individual exceptions don’t change aggregate outcomes.
The Pyramid is Crumbling. What Replaces It?
The Financial Times article quotes Rob Hornby of AlixPartners:
“In the Industrial Revolution and the internet revolution, there were losses before there were gains, so there was a gap in the middle. And that could happen.”
That gap is the opportunity.
The consultancies are admitting their model is broken. They’re scrambling to figure out what comes next. Some are betting on obelisks. Some on hourglasses. Some on boxes.
I’m betting on something simpler: expertise that AI can’t replicate.
Twenty-seven years of pattern recognition. Longitudinal data across four technology eras. A methodology that measures organizational readiness before contracts are signed.
The pyramid sold labor. The future sells judgment.
Conclusion
Duncan Jones defended the analyst model the same week the pyramid began to “officially” crumble.
Duncan is a stand-up guy who, I do not doubt for a moment, genuinely tells his clients when they’re not ready. But individual integrity doesn’t fix structural misalignment.
The 80% failure rate persists because the revenue model rewards momentum, not readiness. AI is now eliminating the labor force that executed that momentum. What remains is the gap between technology selection and successful implementation.
That gap is where the Hansen Method lives.
The pyramid is crumbling. The question is what replaces it. Now you know the answer.
Jon Hansen is the creator of the Hansen Method and the Hansen Fit Score (HFS) framework for procurement transformation. His research dates to 1998 with Canada’s Department of National Defence, where agent-based modeling achieved 97.3% delivery accuracy and 23% cost savings. Download “The Revenue Trap” paper free until January 7, 2026, using code LINKEDIN25.
Procurement Insights
The Pyramid is Crumbling: When Defenders Become Evidence
Posted on December 12, 2025
0
A Timely Exchange
Earlier this week, I published “The Revenue Trap” paper—an analysis of why procurement technology implementations have failed at a consistent 80% rate across four decades, despite massive advances in the technology itself.
The paper argues that the failure isn’t technological. It’s structural. The revenue models across the ecosystem—analysts, consultants, vendors—don’t reward the walk-away conversation. They reward forward momentum, regardless of organizational readiness.
Duncan Jones, a software company investor and advisor with deep analyst experience, pushed back:
I appreciated the engagement. I responded that if he’s telling clients when they’re not ready, he’s operating in the 20% success zone—and that the Revenue Trap equation actually validates his approach.
His follow-up was revealing:
I want to sit with that last sentence: “failure must be down to bad implementation, not bad product.”
Duncan, we agree. That’s literally my thesis.
The question is: whose job is it to assess whether an organization can implement successfully before they sign the contract?
Then This Headline Appeared
The same week Duncan was defending the analyst model, the Financial Times reported:
“Top consultancies freeze starting salaries as AI threatens ‘pyramid’ model.”
McKinsey, BCG, Bain, and the Big Four have frozen starting salaries for the third consecutive year. PwC announced it will miss its target to add 100,000 employees globally by 2026—a goal set five years ago, before generative AI.
The reason? AI can now do what junior consultants do: research synthesis, benchmarking, slide creation, data analysis, and first-draft recommendations.
As Namaan Mian, COO of Management Consulted, put it: “The ability to wring more value from fewer junior employees is putting downward pressure on salaries.”
The traditional pyramid—thousands of junior analysts at the bottom supporting a handful of partners at the top—is collapsing. Industry experts are now predicting alternative structures:
The Irony Duncan Should Consider
Duncan defended the analyst model in the same week the firms that employ analysts signaled their economic foundation is unsustainable.
Here’s the structural problem:
The profit margin in consulting has always lived in the spread: bill a junior at $400/hour, pay them $75/hour equivalent. When AI eliminates the junior, the economics collapse.
But here’s the deeper question: If the people who execute recommendations are being displaced, who ensures the organization can actually absorb what’s being recommended?
This is the implementation gap I’ve been documenting since 1998. And it’s about to get worse, not better.
What the Pyramid Collapse Reveals
The pyramid model was never about implementation success. It was about deployable labor.
Think about what consulting firms actually sell:
What they rarely sell—because it’s harder to bill and impossible to scale—is the patient, unglamorous work of assessing whether an organization is ready to absorb change.
That work requires:
AI can’t do this. And apparently, neither can the pyramid model.
The 80% Failure Rate Has Always Been a People Problem
Duncan wrote: “failure must be down to bad implementation, not bad product.”
Exactly right. But “bad implementation” isn’t random. It’s predictable. It follows patterns I’ve documented across four technology eras:
The technology kept improving. The failure rate kept climbing. Because the problem was never the technology.
The problem is that no one in the revenue chain gets paid to say “stop.”
The Revenue Trap, Revisited
Here’s the equation from the paper:
S = R · A + (1 – R)(1 – W) · B
Where:
The industry-wide success rate (S) is approximately 20%. The only way to improve it is to increase W—the walk-away rate.
But here’s the structural trap:
None of them get paid to say: “You’re not ready. Stop.”
Duncan says Forrester frequently tells clients they’re not ready. I believe him. But if that’s true, why hasn’t it bent the industry curve in 40 years?
Because individual exceptions don’t change structural incentives.
What the Pyramid Collapse Means for Procurement
If consulting firms reduce junior headcount by 50%—as some Big Four executives estimate—who performs the detailed implementation work?
Three scenarios:
Scenario 1: Clients Do It Themselves Organizations absorb implementation work internally. But they’re already stretched thin. This increases failure rates.
Scenario 2: AI Does It AI handles the mechanical work, but can’t navigate organizational politics or stakeholder resistance. Implementation becomes faster but not better.
Scenario 3: A New Model Emerges Firms that focus on readiness assessment and change absorption—rather than deployable labor—capture the gap.
I’ve been building toward Scenario 3 since 1998.
The Hansen Method Alternative
The Hansen Method doesn’t compete with McKinsey for slide decks. It doesn’t compete with Gartner for benchmarking. It doesn’t compete with vendors for technology.
It competes for the question no one else is asking:
Is this organization ready to absorb this change?
The answer determines everything else:
This isn’t a technology assessment. It’s an organizational readiness assessment. And it’s the missing Phase 0 that should precede every procurement technology initiative.
The pyramid model couldn’t deliver this because it wasn’t designed to do so. It was designed to deploy labor at scale.
AI kills the labor model. It doesn’t kill the readiness model.
The Question for Duncan
I genuinely appreciate Duncan’s engagement. He’s right that failure is about implementation, not product. He’s right that analysts sometimes tell clients to wait.
But here’s my question:
If analysts have been telling clients they’re not ready—and if Forrester data shows correlation between analyst engagement and success—why is the industry-wide failure rate still 80% after four decades?
The answer isn’t that analysts are wrong. It’s that the structural model doesn’t reward the walk-away conversation at scale.
Individual practitioners like Duncan can operate with integrity inside a broken system. But individual exceptions don’t change aggregate outcomes.
The Pyramid is Crumbling. What Replaces It?
The Financial Times article quotes Rob Hornby of AlixPartners:
That gap is the opportunity.
The consultancies are admitting their model is broken. They’re scrambling to figure out what comes next. Some are betting on obelisks. Some on hourglasses. Some on boxes.
I’m betting on something simpler: expertise that AI can’t replicate.
Twenty-seven years of pattern recognition. Longitudinal data across four technology eras. A methodology that measures organizational readiness before contracts are signed.
The pyramid sold labor. The future sells judgment.
Conclusion
Duncan Jones defended the analyst model the same week the pyramid began to “officially” crumble.
Duncan is a stand-up guy who, I do not doubt for a moment, genuinely tells his clients when they’re not ready. But individual integrity doesn’t fix structural misalignment.
The 80% failure rate persists because the revenue model rewards momentum, not readiness. AI is now eliminating the labor force that executed that momentum. What remains is the gap between technology selection and successful implementation.
That gap is where the Hansen Method lives.
The pyramid is crumbling. The question is what replaces it. Now you know the answer.
Jon Hansen is the creator of the Hansen Method and the Hansen Fit Score (HFS) framework for procurement transformation. His research dates to 1998 with Canada’s Department of National Defence, where agent-based modeling achieved 97.3% delivery accuracy and 23% cost savings. Download “The Revenue Trap” paper free until January 7, 2026, using code LINKEDIN25.
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