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What works in one place will work in another, according to the underlying tenet of consulting.
But does that apply from one century to the next? And do the methods of the consulting industry’s founding fathers have any relevance today?
“The DNA of a consulting firm tends to explain its core competences as well as the evolution of competition within consulting over many years,” says Chris McKenna, author of The World’s Newest Profession — a history of management consulting. The practice began in the early years of the last century with the application of scientific management principles to production lines.
Arthur Little, who founded Arthur D Little, one of the first strategy consulting firms, in 1909, was a chemist who taught papermaking at Massachusetts Institute of Technology. He specialised in technical research, “management engineering” and conducted analytical studies, precursor of the consulting studies for which his firm would later become famous. But according to Mr McKenna, Little opposed the systematic sharing of ideas. Each challenge, he believed, demanded a unique solution.
Other consultants did not waste the opportunity. When Dupont, GM and Standard Oil found success reorganising around product rather than functional divisions, many consultants built successful practices transposing this idea from one company to another.
A former major in the US army, Edwin Booz’s consulting firm, Booz Allen Hamilton, aimed to bring industry experience to government. Hired to prepare the US navy for the second world war, Booz Allen recommended changes such as replacing old chains of command with new management units. It continues to provide consulting service to the US government in defence and intelligence.
We can only imagine what Major Edwin would have thought of Edward Snowden — a Booz Allen-employed contractor when he blew the whistle on the National Security Agency in 2013.
Likewise, it was while spotting inefficiencies among military suppliers to the US Army Ordnance that James McKinsey, a young accounting professor at the University of Chicago, saw potential in using accounting principles as tools of managerial decision making.
It was not his only bright idea. McKinsey, who once diagnosed a client’s problems just by looking at its letterhead, devised the General Survey Outline (GSO) that probed why managers did things, not just how.
But McKinsey didn’t waste time with niceties. One colleague recalled him saying: “I have to be diplomatic with our clients. But I don’t have to be diplomatic with you bastards.”
He may have contributed to today’s caricature of McKinsey consultants, summed up in the words of one former partner as possessing “lots of IQ, not much EQ”, a reference to a perceived lack of emotional intelligence.
However, it was his successor, Marvin Bower, who is considered the father of modern management consulting thanks to his principled insistence on impeccable professional standards in substance, ethics and style.
“The broader history of strategy consulting firms has been the emergence of an elite group of three — McKinsey, Boston Consulting Group (BCG) and Bain & Co — and each employs a different strategic orientation,” says Mr McKenna.
“McKinsey offers deep industry knowledge, BCG spans disparate industries to offer novel economic models, while Bain offers careful counsel within each organisation. These orientations derived from the vision of their founders,” he says.
Bruce Henderson, a mechanical engineer who left Arthur D Little to found BCG in 1963, brought new concepts to the profession such as the “experience curve”, “growth-share matrix” and the “ rule of three and four”.
John Clarkeson, who succeeded BCG’s founder as chief executive, recalls Henderson as an intellectually driven, rigorous thinker with a passion for writing. “On every flight, he would carry a Steno pad for writing and reworking his short essays,” says Mr Clarkeson.
Bill Bain, who quit BCG in 1973 to start his own firm, adopted another approach. Instead of parachuting in teams of consultants, it was Mr Bain’s idea to work for only one firm in an industry, on a retainer, and develop a long-term relationship.
Over time, the big firms’ values and methods have earned them sobriquets — deserved or otherwise — from some of those who have observed their working practices. McKinsey consultants have been branded “vainies” who lecture clients on the McKinsey way. BCG consultants are the “brainies” who quote academic theory, while “Bainies” are more interested in delivering quick results than reports.
“The firms that still bear the imprints of their founders are those that have maintained considerable continuity in what they do for clients, how they govern themselves and the type of people they hire,” says Walter Kiechel, author of Lords of Strategy. Of course, the relationship between founders and their firms was not always harmonious.
“Both BCG and Bain had fairly tortured relations with their founders, eventually showing them the door,” says Mr Kiechel.
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