McKinsey made about $10B in 2018, BCG about $7.5B, and Bain about $4.5B. The value of strategy is now obvious to every company. Today, nearly 200,000 students graduate with MBAs every year in the US. Between 19, the number of MBAs granted per year rose from 25,000 to 90,000. The MBA became, for the first time, a truly respectable career choice. Those consultancies pioneered many of the major tools and frameworks companies still use today to develop corporate strategy: the 2×2 matrix, the Experience Curve, SWOT (Strengths, Weaknesses, Opportunities, Threats) diagrams, Porter’s Five Forces, and many more.Īs they found success, BCG, McKinsey, and Bain began hiring the brightest, most technical business school students they could find. They helped companies build more efficient supply chains, improve their product positioning, figure out which markets to exit and which to enter, and more. As business became more complex and global in the 1960s and 1970s, consultancies brought cutting-edge methods of market research and data analysis - as well as access to academic and industry experts - to bear on the major challenges of business. The first management consultants changed that. “What companies didn’t have before the strategy revolution was a way of systematically putting together all the elements that determined their corporate fate… the pre-strategy worldview lacked a rigorous sense of the dynamics of competition.” - Walter Kiechelīefore BCG, McKinsey, and Bain, those who owned and ran businesses in America generally dismissed “strategy” as something for generals and political campaigns. Those companies were not, however, thinking analytically and rigorously at a high level about the classic three Cs of strategy: their customers, their costs, and their competitors. Disrupting the disruptors in the management consulting industryīefore Bruce Doolin Henderson opened the doors of Boston Consulting Group on July 1, 1963, the concept of competition barely existed in American business culture, let alone strategy.It may be a slow and gradual change, and the big names may well endure - no matter how thinned their ranks - but a change is coming. If you dig deeper into the specific types of services that these firms offer their clients today, however, it’s clear that a tectonic disruption is hitting management consulting just as it has hit many other industries before. These consultancies offer a highly brand-driven, prestigious, and hard-to-quantify product to Fortune 100 companies with plenty of cash to spend. McKinsey, Bain, and BCG have weathered existential crises before. Any of these weaknesses alone would suggest coming disruption - possessing all of them points to a major fight ahead. The increasing pace of technological change means that, more and more, consultants’ recommendations are out of date nearly as soon as they’re made.Ĭonsulting, in other words, is inefficient, inflexible, and slow to adapt. Hourly or per diem billing, rather than outcome or value-based pricing, is still the general rule (even as industries like law move away from billable hours). Management consulting is primarily human-driven. “e’re still early in the story of consulting’s disruption… More likely than not, alarms won’t sound until it’s already too late in the game.” - Clayton Christensen But the big three consultancies - McKinsey, Boston Consulting Group (BCG), and Bain - are ultimately no more immune to the forces of disruption than any other industry. Consulting itself is a $200B+ industry, per CB Insights’ Industry Analyst Consensus. Over the last 60 years, the large management consultancies have grown and maintained their status through prestige, branding, and long-time client relationships. Oddly, management consulting is rarely named in discussions about industries vulnerable to disruption (unless you ask Christensen), despite the fact that it meets all of the above qualifications. The industries that have proven the most vulnerable to disruption have been those with: