Management consulting firms - a brief history

Management consulting firms have a rich history that dates back over a century, with new firms emerging and established ones expanding their reach around the world. The story of these firms began with Arthur D. Little, an American chemist who founded the world's first management consulting firm in 1886. Since then, the industry has grown exponentially.

In the early 20th century, McKinsey & Company, founded in 1926, became one of the most renowned management consulting firms in the world. McKinsey pioneered the use of research-based analysis to help businesses make strategic decisions. Its innovative approach, along with the firm's close ties to influential figures in the corporate world, made it a sought-after partner for companies seeking to improve their performance.

Another significant player in the industry is AT Kearney, founded in 1929 by Andrew Thomas Kearney, a former McKinsey consultant. AT Kearney became known for its work with governments and large corporations, offering expertise in areas such as supply chain management, technology, and mergers and acquisitions.

In 1963, Bruce Henderson left Arthur D. Little to establish Boston Consulting Group (BCG). BCG quickly established itself as a leader in strategy consulting, helping clients identify growth opportunities and improve their competitive position in the market. BCG's approach, which focused on identifying and exploiting competitive advantage, became one of the most widely adopted methods in the industry.

Bain & Company, founded in 1973 by former BCG consultant Bill Bain, focused on helping clients achieve operational excellence. Bain & Company's approach, which involved a rigorous analysis of a company's processes and systems, helped clients achieve significant cost savings and operational efficiencies.

In recent years, new consulting firms have emerged, challenging the dominance of the established players in the industry. These new firms bring fresh perspectives, innovative methodologies, and diverse expertise to the table.

One such firm is the Boston-based firm, Analysis Group. Founded in 1981, Analysis Group has grown into a leading economics consulting firm, offering services in antitrust, finance, healthcare, and energy, among others. Analysis Group is known for its rigorous analytical approach and deep subject matter expertise.

Another example is AlixPartners, a global consulting firm founded in 1981. AlixPartners focuses on helping clients navigate complex financial and operational challenges, such as turnarounds, restructuring, and performance improvement. The firm's success in these areas has earned it a reputation as one of the leading turnaround specialists in the industry.

Founded in 1990, L.E.K. Consulting is a strategy consulting firm with a focus on helping clients identify growth opportunities and improve their competitive position in the market. L.E.K.'s expertise spans multiple industries, including healthcare, retail, and private equity. The firm is known for its data-driven approach and deep industry knowledge.

Finally, there is Innosight, a strategy consulting firm founded in 2000 by Clayton Christensen, a renowned expert on innovation. Innosight helps clients develop and implement innovation strategies, enabling them to stay ahead of the curve in a rapidly changing business environment. The firm is known for its innovative approach to problem-solving, which involves combining quantitative analysis with creative thinking.

Throughout the years, management consulting firms have faced their share of challenges. The industry has been criticized for its high fees, lack of transparency, and failure to deliver results. However, these firms continue to play a critical role in the business world, providing expertise and guidance to organizations across a wide range of industries and functions.

In conclusion, the history of management consulting firms is a story of innovation, competition, and evolution. From Arthur D. Little's pioneering work in the late 19th century to the emergence of McKinsey, AT Kearney, BCG, and Bain, to the latest entrants like Analysis.