Management Consulting

In 1886, Arthur D. Little, of MIT, founded the first management consulting company. Despite a 2002 bankruptcy, it still exists today. Little consulting tended to focus more on technology than management or strategy. Booz started his firm in 1914, focused on management.

In 1933, Bower, a Harvard lawyer and MBA, went to work for McKinsey’s Chicago office, founded by University of Chicago Prof. James McKinsey.

Bower clashed with senior McKinsey partner A.T. Kearney about the direction of the firm. After a short time, McKinsey died in 1937, at 48 years old, and Bower and Kearney split. Kearney kept the Chicago office, renaming it after himself. Bower moved to New York to create a new branch, effectively a new firm, naming it after his deceased mentor McKinsey. Clarifying, Bower effectively founded what today is known as McKinsey. The original McKinsey firm morphed into A.T. Kearney.

Bower transformed management consulting from a field that hired older, oftentimes retired businesspeople to younger people, often just out of school. His belief was consulting firms should look and function like law offices rather than traditional businesses.

Bruce Henderson was a Westinghouse VP for 18 years then joined Arthur D. Little as VP for management services. He left after four years, in 1963, to become CEO of “The Boston Company,” a consulting division of a Boston bank. Searching for a competitive edge Henderson settled on “strategy” because the meaning was vague, so definable as an area of expertise. The firm was eventually renamed the Boston Consulting Group. Eventually, Henderson created an Employee Stock Ownership Plan that allowed him and others to buy BCG from The Boston Company.

In 1973, Bill Bain left BCG to form Bain & Company.