Brains, Grey Hair, and Procedure Firms in an AI World

Imagine you're running a consulting practice and considering hiring a junior consultant. Or maybe you're agonizing over whether to (finally) raise your rates. Or perhaps you're wondering if you should chase that Fortune 500 contact who just dropped hints about working together.

These aren't really tactical questions. They're existential questions in disguise. Symptoms of a deeper choice: Are you selling expertise, experience, or execution?

In the 1990s, David Maister offered a simple framework for answering this. He divided professional services into three types: Brains, Grey Hair, and Procedure firms. Thirty years later, his categories still clarify how consulting businesses work - but technology is blurring the boundaries. Firms that get their position wrong today now risk more than just confusion. They risk their margins, their clients, and their people.

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How the Three Types Work

Maister noticed that consulting work clusters into three types of problems:

Brains firms solve novel problems. We could call them the deep-sea explorers of the consulting world. They dive into uncharted waters where no one has gone before. Clients buy their expertise, not their efficiency. Think of a boutique AI ethics consultancy helping boards navigate new regulatory risks. They keep their teams small and elite, with few junior consultants, and charge the kind of rates that make procurement departments wake up in a cold sweat.

Grey Hair firms solve familiar problems and are seen as guides. The client may face the challenge once a decade, but the firm has seen it fifty times. They're selling pattern recognition, not innovation. Think of that former SAP executive who's implemented the same module 50 times and can spot trouble coming before it even starts. These firms run lean but not skeletal - they need some junior staff, but mainly rely on seasoned veterans who've seen it all.

Procedure firms solve common problems. They take routine work and turn it into a science, doing it better or cheaper than the client could. They're selling reliable execution at scale. Think of a marketing ops shop running "campaign in a box" programs. Their secret weapon (at least when Maister first came up with this distinction) is an army of smart juniors following battle-tested playbooks.

These distinctions might seem academic, but they're not. They determine everything from your pricing to your hiring to which projects you should turn down.

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Why the Framework Still Matters

Let me tell you a story about a consulting firm I knew. They started as a true Brains firm, solving cutting-edge problems in data science. They charged $500 an hour and clients happily paid it. Then they tried to scale. They hired lots of junior consultants and started taking on simpler projects to keep them busy. Two years later, they were bankrupt.

What happened? They fell into the most dangerous trap in consulting: trying to be everything to everyone.

The math is brutal, and I've watched it play out countless times:

• If you price Brains work like Procedure work, you burn out your experts.
• If you staff Grey Hair work with fresh graduates, you lose your clients.
• If you keep partner-level talent on standardized projects, you destroy your margins.

The market punishes this confusion. Hinge Research found firms with clear positioning grew twice as fast as those trying to do it all. There are other publications that confirm the relationship.

This is why Maister's categories matter. They force you to choose your game.

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Real-World Examples

Let's make this concrete. I want to show you what each type looks like in the real world.

Think about McKinsey in the 1960s. Corporate strategy wasn't even a thing yet. CEOs were still running companies on gut instinct and whatever they'd learned in the family business. Then here comes this upstart firm saying, "Actually, there's a science to this." That's a classic Brains firm. Today, you see the same pattern in boutique AI ethics consultancies. Their clients aren't looking for a tried-and-tested solution (because there isn't one). They're buying a thinking partner who can help them navigate uncharted waters.

Or consider a small firm I know run by a former SAP executive. She helps mid-sized manufacturers implement the same modules she's deployed dozens of times before. That's Grey Hair work in its purest form. For her clients, it's a once-in-a-decade project. For her, it's Tuesday.

Then there's the 15-person marketing agency from a friend. They sell "campaign in a box" packages at flat fees. They don't promise marketing revolution - they promise marketing execution. Need a full-funnel campaign launched by next quarter? They'll hand you a menu of options with fixed prices, like ordering from a takeout menu. That's a Procedure firm.

What's interesting isn't just the differences between these firms. It's how clearly their whole business model flows from their type. The AI ethics firm can't hire junior consultants - who would trust a 25-year-old to navigate novel ethical territory? The SAP expert can hire some juniors, but needs experienced project leads. The marketing ops firm lives and dies by its ability to hire smart graduates and train them quickly.

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How Good Ideas Get Commoditized

Here's the part that makes life hard for consulting firms: good ideas don't stay valuable forever. Your brilliant insight today is tomorrow's commodity. It's like watching ice melt in slow motion.

I've seen this pattern play out so many times it's almost predictable:

Act one: A few brilliant people crack a new problem. Maybe they figure out how to restructure a digital organization, or how to market on some emerging platform that's new to everyone else. They charge eye-watering fees because, well, who else can do it? That's Brains work.

Act two: The pioneers' success attracts attention. Other smart consultants start spotting patterns. They might not be inventing new approaches, but they've worked enough cases to know the landmines and shortcuts. They build playbooks and best practices. That's Grey Hair work.

Act Three: Someone (usually a tech startup) looks at all this and thinks, "We can automate this." They package it, standardize it, maybe build software around it. What used to require expensive consultants is now available as a monthly subscription. That's Procedure work.

This keeps happening faster and faster. Look at digital marketing. Ten years ago, firms charged huge fees for social media strategy. Five years ago, they sold proven playbooks. Now you can buy the whole process as a SaaS subscription.

This is terrifying for consulting firm founders. Your brilliant insight today could be a commodity next year. If you're not constantly finding new problems to solve, you're selling melting ice.

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Where the Framework Fails

Time for some uncomfortable truths about where Maister's neat framework starts to crack.

I'm thinking of this cybersecurity firm I work with. They'll dive deep into never-before-seen threats (that's their Brains hat), pull out battle-tested incident response playbooks when needed (Grey Hair mode), and run your day-to-day security operations if you want (pure Procedure play). Messy as hell. But it works brilliantly for them, since they’re tightly positioned by serving only mid-side healthcare orgs.

There's also the speed problem. Back in Maister's day, you could watch ideas mature from Brains to Procedure work like wine aging in a barrel. Now it's more like watching a TikTok trend explode and die in a week. Technology is accelerating everything. Remember when contract review was this expensive necessity only specialized lawyers could do? Now it's a button in Microsoft Word, powered by AI.

I believe the biggest blind spot is about people. Maister's model assumes clients buy expertise, experience, or execution. But what they're really buying is the ability to make change happen in complex organizations. The smartest solution in the world means nothing if it's collecting dust in a PowerPoint deck.

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The New Threats

The world Maister wrote about is gone. Three things changed everything:

First, there's the AI elephant in the room. Remember when clients would pay premium rates for market analysis or financial modeling? Now ChatGPT can spit out a decent first draft in seconds. I made a public bet that the cost of 50-80% of the tasks from a typical engagement will go to near-free, and I haven’t lost the confidence in it yet.

Second, there’s what I call the "platform squeeze." Imagine you're a HubSpot implementation consultant, making good money helping companies use the platform. Then one day, HubSpot announces they're including implementation services in their subscription. For free. This isn't hypothetical - it's happening right now. Salesforce does it. AWS does it. That codified implementation and lite strategy work where thousands of consultancies made their living is being swallowed up by the execution platforms.

Last but not least, clients got smarter. They show up having read all the free content, checked the benchmarks, and talked to peers on LinkedIn. They're not buying knowledge anymore - they can Google that. They're buying something harder: the ability to drive change in complex organizations.

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How to Survive

So you're running a consulting firm in 2025. The platforms are coming for your lunch, AI is nibbling at your breakfast, and your clients are getting smarter by the day. What's your play?

I'm watching the smartest firms do two things:

First, they're getting surgical about mixing types. Take this firm I advise: They hook clients with a high-impact strategy sprint (Brains work). Then they smoothly transition into a proven transformation program (Grey Hair territory, where their battle scars really shine). Finally, they lock in long-term managed services contracts (Procedure work that keeps the lights on). They're crystal clear with clients about which hat they're wearing at each stage. No confusion, no messy middle.

Second, they're playing offense like their lives depend on it (because they do). Every quarter, they take a hard look at their service catalog and ask: "What parts of this will be a commodity by next year?" Then they make a choice: either climb upmarket to tackle thornier problems, or sprint downmarket to productize their services before someone else does.

I believe the former is the best path for most solo and boutique consultancies for a few reasons (you can read more about it here), but the most important thing is to make a proactive decision and pursue it with focus.

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The Questions That Matter

If you run a consulting firm, here are the questions you should be asking:

"Are we actually delivering what we claim?"

This one's brutal because it demands raw honesty. Last year, I watched a firm implode because they insisted they were doing cutting-edge strategy work when they were really just running well-worn playbooks. Their pricing screamed "Brains" but their delivery whispered "Grey Hair." The market always figures out this disconnect, and it's never pretty.

"What are we going to lose to technology?"

The scary thing about consulting is that your most profitable services today might be worthless tomorrow. Remember those financial modeling wizards who charged $400 an hour? Now Excel and Python can do their party tricks. Or those SAP gurus who knew every module's quirks? They're being replaced by better UIs and AI assistants that never sleep." Where do our clients actually place us?" Not where you think you are, but where they put you. I've seen firms proudly call themselves innovators while their clients see them as reliable implementation partners. That gap kills businesses.

"What do our clients really think we are?"

Not what your website says. Not what your pitch deck claims. But what your clients tell their peers over drinks. I'll never forget sitting across from a CEO who had just fired a consulting firm. "They kept talking about innovation," he said, "but all we wanted was someone to implement the damn software." That perception gap is a business killer.

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The Real Game

After years of watching consultancies grow and go broke, here's what I've come to believe: We've been reading Maister's framework all wrong. These aren't static categories to sort firms into - they're more like evolutionary stages that smart firms learn to dance between.

Think of it like surfing. The best firms I know aren't trying to plant their flag on some permanent piece of consulting territory. Instead, they're riding waves of innovation and commoditization. They're scanning the horizon for the next big problem that nobody knows how to solve yet. When they catch that wave, they're already thinking about how to turn their custom solution into a repeatable process. And before that process becomes stale, they're either productizing it or moving on to the next wave.

A friend and founder put it perfectly over our catch up call last week: "The question isn't “what kind of firm are we?” anymore. It's '“what kind of firm do we need to become next quarter?” And the quarter after that. And the quarter after that."

In a world where AI can now write decent strategy decks and platforms are swallowing implementation work whole, standing still is the riskiest bet.