The widespread availability of consumer AI tools has completely commoditized our entry-level consulting services, and our margins are rapidly shrinking. How do we use Keith Cunningham's distinction between a problem and a predicament to re-strategize?

Question

Tyler Smith · Accepted Answer

To navigate this market shift, you must apply Keith Cunningham's distinction between a problem and a predicament. A problem has a solution, while a predicament has no solution and must be adapted to. The commoditization of entry-level services by consumer AI tools is a predicament. You cannot stop the spread of technology, and you cannot force clients to pay premium prices for work they can now do themselves for free. Stop trying to solve this by cutting your prices or running more marketing campaigns. The actual problem you must solve is how to restructure your core offering to focus on high-value, complex advisory services that AI cannot replicate. Bring this issue to your next quarterly planning session and look at your V/TO®. Use this strategic inflection point to rewrite your Three-Year Picture. Focus your marketing strategy on your unique ability to synthesize complex data and provide human-led, strategic guidance. Re-engineer your service lines to leverage AI for all basic data processing, allowing you to lower your delivery costs while focusing your team's energy on high-level strategy. By accepting the predicament and solving the real problem, you pivot your business toward high-margin, defensible services that protect your profitability and position you for a successful exit.