A Brief History of MBB Consulting
150 years ago, the phrase “management consulting” had little to no meaning. Yet today, McKinsey, Bain, and BCG are famed far and wide for their expertise in business transformation of all kinds. Where did they start? We’ve put together a short history of the Big Three (and their predecessors).
Early Consulting Firms
Commonly called the first management consulting firm, Arthur D. Little was established by its eponymous founder in 1886 to provide technical research and analysis to clients. Though Little himself was a chemist, his firm has long been hailed as the pioneer of professional services and consulting, and ADL set off a business trend that has only grown in its influence on business practices. Booz Allen Hamilton, founded in 1914 by Edwin G. Booz also claims to have invented the modern management consulting profession–and was the first to engage with government clients, serving NASA as a client since its founding in the 1950s.
The Big Three
In 1926, Chicago professor and accounting expert James O. McKinsey (notice a trend here?) founded McKinsey with the intention of focusing on finances, but quickly shifted gears toward management. His successor Marvin Bower established McKinsey’s reputation company that held itself to the highest standards of professionalism and encouraged commitment to personal values among its employees, values for which McKinsey is still well-known to a great extent. McKinsey was, for a time, the only “pure management” consulting firm.
Competitors were soon to follow. In 1963, an Arthur D. Little employee named Bruce Henderson decided to break off and found his own company, which would become Boston Consulting Group. BCG adopted strategy as its focus from the very beginning, and in 1968 created the Growth Share Matrix, which still influences how companies plan profitability.
Much as Henderson broke off of ADL to found his own organization, William Worthington Bain Jr. left BCG (taking many of his colleagues and clients with him) to found Bain & Company in 1973. Bain was quite secretive about processes and projects for the first few years but expanded internationally quite rapidly thanks to prominent clients and carefully recruited employees. While the most famous “Bainie” of the modern era may well be Mitt Romney, who saved the firm from a financial precipice as interim CEO in the 1990s, the firm has contributed to the development of business strategy in many groundbreaking ways, including the invention of the Net Promoter Score metric.
McKinsey, Bain, and BCG have established themselves as the most prestigious management consulting firms, despite the many new companies that have sprung up especially in response to the new needs of the digital age. Their success is a testament to their high caliber and to the vision and of their earliest leaders.