1181: What AI Means for the Future of Finance Leadership | Yuval Atsmon, CFO & Sr Partner, McKinsey & Company
Yuval Atsmon, Senior Partner and CFO of McKinsey & Company, discusses his unconventional path from law school to leading finance at the world's most influential strategy firm. He explores how McKinsey is navigating AI disruption, evolving its pricing models from billable hours to outcome-based fees, and balancing short-term performance with long-term resilience. He also shares how partnership culture shapes financial decision-making and why understanding — not just reporting — numbers is the core skill of effective finance leadership.
Summary
Yuval Atsmon is a Senior Partner and CFO at McKinsey & Company, based in London. He joined McKinsey approximately 25 years ago directly from law school in Israel, having also worked as a sommelier and served in the military. His career spanned over 20 countries, including six years based in Shanghai, where he became a partner during the post-global financial crisis period of 2009-2010 — a pivotal moment for international companies expanding into China.
Atsmon describes McKinsey's partnership culture as uniquely defined by high autonomy — every partner can commit the firm to clients independently, is evaluated by a global committee rather than local leadership, and is incentivized through a global profit pool that rewards collaboration across geographies. He frames his path to the CFO role as a natural extension of his long-standing interest in firm strategy, capital allocation, and resource optimization, noting he was the first non-US-based CFO in McKinsey's history.
On the evolution of McKinsey's business model, Atsmon traces the firm's pricing journey from billable hours (borrowed from law) to fixed-deliverable project pricing, and now to outcome-based fees where roughly one-third of work is tied to measurable client results such as growth or efficiency targets. He identifies AI as the next major disruptor to the model, suggesting that the current 90% people-based / 10% technology-based revenue mix will shift significantly, requiring new internal pricing structures and a greater tolerance for technology-led delivery.
Atsmon describes a post-COVID demand normalization that created overcapacity in parts of the firm, particularly as companies reduced consulting budgets when returning to in-person operations. He notes that M&A-related consulting slowed in 2023-2024 but is recovering as interest rates fall. Strategy engagements have actually grown over the past four to five years, with individual programs becoming more complex and longer in duration. He sees growing demand for AI implementation consulting as organizations move from skepticism to execution — combining tech expertise with change management.
Within McKinsey's own operations, AI has improved finance functions including forecasting, monthly close, accounts payable, project budgeting, and pricing. Atsmon notes the firm improved its cash cycle meaningfully since he took the CFO role, partly through AI-assisted process acceleration. The firm also recently completed a transition from Oracle to SAP, which has enabled new analytical capabilities for client-facing teams.
On the future of finance talent, Atsmon argues that finance teams will become smaller but more senior and strategic, focusing less on transactional processing and more on real-time resource redeployment insights, pricing optimization, and commercial risk assessment. He notes that AI tools are enabling dynamic dashboards and multi-stakeholder real-time collaboration that were impossible with traditional PowerPoint-based delivery.
Atsmon's most memorable 'finance strategic moment' combines two stories — a failed military navigation exercise caused by a single wrong GPS coordinate, and a Philippines electricity privatization where he identified a recursive pricing formula that would allow unlimited price increases, halting the entire transaction. Both experiences reinforced his core belief that finance leaders cannot delegate understanding: they must personally interrogate numbers and triangulate from multiple sources rather than simply accepting what models output.
Looking ahead, Atsmon's priorities include balancing short-term cost discipline and growth targets with long-term investments in talent pipeline and resilience. He flags under-hiring as one of McKinsey's biggest strategic risks, given the seven-to-eight-year timeline from entry-level hire to partner. He advocates for maintaining optionality in uncertain environments — executing no-regret cost moves while preserving investments that generate upside.
Key Insights
- Atsmon argues that McKinsey's partnership model grants every partner direct authority to commit the firm to clients and negotiate fees independently, creating a culture of autonomy that he describes as 'having no boss' — a defining feature that differentiates McKinsey from competitors.
- Atsmon claims that roughly one-third of McKinsey's work is now outcome-based, meaning the firm is only paid if specific financial or KPI targets are achieved, representing a fundamental shift from both billable hours and fixed-project pricing.
- Atsmon identifies the post-COVID consulting hangover as a significant operational challenge: companies that expanded consulting budgets during remote work returned to normal spending, leaving McKinsey with overcapacity in certain pockets and pressure on economics.
- Atsmon argues that McKinsey's current revenue mix of approximately 90% people-based and 10% technology-based will shift materially as AI enables more automated and product-driven delivery, requiring new internal pricing models that partners are not yet culturally conditioned to accept.
- Atsmon states that strategy engagements have grown more than any other practice area over the past four to five years, partly because individual programs have become longer and more complex — potentially offsetting a reduction in total project volume.
- Atsmon claims that in the last six months, client sentiment toward AI has shifted from skepticism to execution-readiness, creating a surge in demand for implementation consulting that currently exceeds the supply of consultants with combined tech and AI expertise.
- Atsmon describes a recursive pricing formula he discovered in a Philippines electricity privatization that would have allowed infinite price increases — a finding that halted the entire transaction and cost McKinsey fees, but which he frames as the correct outcome, illustrating that finance leaders must be willing to surface uncomfortable truths.
- Atsmon argues that the core irreducible skill of a CFO is the refusal to delegate understanding — he contends that while analysis can be outsourced, the responsible leader must personally comprehend the numbers, because gaps in understanding cascade downward through the organization.
- Atsmon states that McKinsey improved its cash cycle meaningfully since he became CFO, primarily by accelerating every step in the invoicing and collections process through digital and AI tools — suggesting that even a highly people-centric firm can achieve significant working capital gains through automation.
- Atsmon argues that under-hiring poses one of McKinsey's greatest strategic risks, because the pipeline from entry-level hire to partner spans seven to eight years — meaning a hiring shortfall today directly depletes future leadership capacity.
- Atsmon contends that within McKinsey's partnership, mobilizing financial direction is actually easier than managing the volume of unsolicited advice from 3,000 partners who each serve CFOs externally and hold strong opinions on how the firm should be run.
- Atsmon expresses cautious skepticism toward predictions that AI will rapidly eliminate jobs, arguing that new categories of demand — such as AI adoption coaching across age groups and increased need for skilled tradespeople — will create employment that partially offsets automation, though he acknowledges uncertainty about whether net job creation will keep pace over a five-to-ten year horizon.
Topics
Full transcript available for MurmurCast members
Sign Up to Access