Thought leadership is a phrase that is overused in consulting.

I first encountered it at the Forum Corporation as a descriptor for the instructional designers that conceived of the idea for a training program and structured the research upon which the program was built. Later, at other firms, it became the descriptor of a different career ladder, i.e., you could rise to partner through service offering development as opposed to sales.

At Gemini, service offering development was controlled by the disciplines, strategy, operations, organization, etc. Some service offering development occurred as collaborations between disciplines. For example, I was on the post-merger integration team, that developed that service offering that was sold to many different industries. Gemini’s Business Transformation service offering designed by Francis Gouillart and published in his book written with James Kelly, Transforming the Organization, was an example of thought leadership.

Business Transformation was called thought leadership at the time. It was composed of an analytical framework, the transformation map that showed the current state of every discipline and part of the organization and the desired state of that vector. Plans were developed and actions were taken. The book used a Cigna project as a case example. The transformation map was used on the service offering description using the Leonardo Da Vinci Vitruvian Man, circle in the square, drawing in the center. Many at Gemini mocked the drawing calling him the ”naked guy.” Later it was the paperback cover.

When Gemini Consulting alumni gather, Business transformation is variously described as:

• “ Misguided. I never met a client who said their business needed to be transformed. This was the sole reason for the decline of Gemini Consulting.”
• “Brilliant, but misunderstood. Francis never said you had to or even could do everything at once. Gemini Business Development Executives just saw the dollar signs of ‘whale projects.’”
• “Ahead of its time. It forms the basis of ‘digital transformation’ today.”

By the time I got to Katzenbach Partners, thought leadership was a part of the performance appraisal discussion at most major consulting firms.

So perhaps it is worth talking about. There are a few true thought leaders in consulting firms, Francis Gouillart at Gemini, Tom Peters and Jon Katzenbach at McKinsey, Fred Reichheld at Bain. These folks and others do come up with service offerings, but they also write books and speak about their ideas. Most ultimately leave their firms, join a university or go out on their own.

In fact, being a published thought leader is the single best path to continuing to work as a consultant into you eighties and nineties.

However these cases are rare.

Thought leadership for the mid-career consultant or even the old hand means solving a client’s problem in a unique but replicable way. There are three parts to that:

Solving the client’s problem, this means that the client must be not just satisfied, but enthusiastic about the results, perhaps even to the point of wanting to co-author an article in the Harvard Business Review.

Unique, this means that the firm’s partners haven’t seen a problem solved this way before, and that most people think, “Wow, I never thought of that.”

Replicable, means that others at your firm can understand what you did and copy it. It must be therefore easy to explain and imagine how it might work.

Thought leadership is innovation in consulting. Like all innovation, it comes from seeing things in one context and transferring them to another, analogy. It comes from seeing a need that seems impossible and asking how could that work, visioning. It comes from one of dozens of ideation techniques, to arrive at an idea that is then tested and developed, and executed.

Thought leadership is not talking the most or loudest in a meeting, or using  fifty cent words and quoting obscure academic theories, hoping people will say “he’s so smart” when what they really mean is “I haven’t got a clue what he is talking about.

It definitely isn’t saying “here’s another idea” in the middle of a tight delivery. If is not a designation that one uses to self-describe (“I’m a thought leader.”) nor a defensive response, (“Hey, I’m just trying to contribute a little thought leadership here.)

But if you want to be a consulting thought leader:

Read a lot of business articles, trade press, and academic journals. I think all consultants should do this, but if you are going to be a thought leader, you have to be a researcher first.

Collaborate. There are people who invent things on their own in a basement, but they are typically not the type of people who become management consultants.  Collaborate with colleagues, with university and business school professors and with clients. Every Steve Jobs needs his Woz (Steve Wozniak.) Every Francis Gouillart needs his James Kelly. (Kelly was the president of Gemini, a salesman,  and was widely assumed to have simplified and clarified Francis’s ideas for the general market).

Experiment and find clients who will let you experiment, not with half-baked ideas, of course, but gathering data that you may publish or co-publish later.

Teach – the best consulting thought leaders refine their thinking and share their thinking by training other consultants and the world at large.

There are some who would say that the decision to become a thought leaders is a “Grow or go” decision at the partner career juncture, but I say this is something that mid-career consultants must decide much earlier. They must consider whether they want to continually sell as they progress or whether they want to develop client relationships through research and innovation reported and taught to others

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The man was old. His skin was lined and brown like tooled leather. His clothes were worn but well mended. They now fit him loosely and it wasn’t clear if they always had fitted him this way, Perhaps he wore loose robes to keep him cool in summer and warm when the biting wind blew down along the road from the mountains. Or had his body age-wizened leaving him with loose clothing.

With the sun he rose and after a small breakfast went to the gate of the walled city. The road that passed the gate was well-travelled, but not by many. There was another city a half-day walk in either direction down the dusty road. Most of the travelers walked; a few had loaded beasts or pulled loaded two-wheeled carts. There were no horses here.

The old man fitted himself into a niche by the gate and read. In late morning a young boy would come with his mother. They would bring cistern of water and offer it to travelers without charge. They sold small vegetable cakes for a copper each.

The city was the halfway point. Most drank, the water ate the cake, and walked on. The old man read what most assumed was scripture.

From the road, a man would call out “You there, Old man,” To these,  the woman and boy seemed invisible. The old man would raise his head and smile,. “How can I help you traveler?”

The man would complain about the heat or the cold and say he was thinking about an early end to the day..

“What kind of people live in this city?”

“Where are you coming from?” the old man would cheerfully inquire and the traveler would tell.. “Oh, what kind of people did you find there?”

The traveler would sneer, “They were venal and mean. They looked like they would beat me, Everyone tried to cheat me, but I was too smart for that. They served me garbage and day old food and thought that I would sleep on last month’s straw, telling me it was all they had.. It was awful!.”

“Alas, traveler. This city is filled with those people as well. It’s best to walk on down the road. Perhaps you’ll have better luck there.”

Some such travelers thanked the old man or threw a copper in the dirt at his feet. Most did not. The old man went back to reading.

On occasion a person would buy something from the boy and his mother, smile and converse with them.

Then this person would siddle over toward the gate and say, “Excuse me, Grandfather. I am sorry to disturb your study.”

The old man would look up and smile, “’Tis naught but some old poems. How can I help you traveler?”

The traveler would then ask about the poems or tell his own name and ask the old man’s. Eventually pleasantries would be dispensed with and the conversation would proceed as before.

“What kind of people live in this city?”

“Where are you coming from?” the old man would cheerfully inquire and the traveler would tell. “Oh, what kind of people did you find there?”

“Oh ‘twas wonderful! Everywhere people offered to help me. Our dealings were always fair. They fed me well and I slept on the same straw they themselves used.”

“You will be most welcome here traveler for here you will find people of the same kind. Please come in..”

This story is old. I believe it is a story told by Sufis, the Islamic mystics who used stories to teach lessons of right living, but the story may be older than that.

I first heard it from a trainer in a management training program. The lessons he taught were that people often perform according to your expectations.

It is a story about life orientations. If you expect to find people “venal and mean” you will find plenty. If you expect that people will be helpful, giving and fair, you will find them so.

Of course, the old man, the gate keeper, has a different perspective. It is his job to sort those who join his community. If people find others venal and mean then they are likely so themselves and he sends them elsewhere.

If they find others helpful, giving and fair he warmly welcomes them.

The gatekeeper was the keeper of the culture; he conducted screening interviews.

I worked at a small consulting firm that conducted many selection interviews. To many applicants it seemed like they “interviewed with everyone at the company.” In the beginning that might have literally true, but even as we grew it wasn’t unusual to have more than ten interviews.

I remember one candidate. This person had been a partner in a large firm and was put-out to be “interviewing with kids.” A former partner with a track record as a “rainmaker,” was something the firm needed.

The junior associates universally said “No.” They found this person “arrogant, demeaning, and not respectful to them and to clients talked about during the interview.”

The partner who brought in the applicant was angry, sputtering “Perhaps junior associates can bring in million dollar projects?!” In the end, the firm made no offer to the rainmaker. Protecting the culture was more important.

This was around the time that Robert Sutton published The No Ass-hole Rule: Building a Civilized Workplace and Surviving One That Isn’t. Several people at the firm used the book’s title as a way of justifying culture building and culture protection.

These days there is quite a lot of discussion and lamentation about working for bullies, narcissists, sociopaths, psychopaths and other generally unpleasant people.

I recently responded to one social media post:

First, Don’t be that guy.

If you find out you are that guy, get help. Change or stay home.

If you work for that guy and you are close -tell him -ever-so-gently- “Hey, you know- you might be that guy.” It might be a good idea to get help from colleagues before you do this because jerks can be vindictive. (In any case, don’t expect to be thanked.)

It is better if you can keep jerks outside the gates to begin with.

“What kind of people were at the last place you worked?”

Please scroll down to comment.

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The brothers were close in age, identical twins in fact, born two minutes apart. This was a source of pride and pain as the “older” twin was always saying “Respect your elders!” The younger twin didn’t like that teasing much, but his frowns were not long-lived.

People usually had some difficulty telling the boys apart; they seemed to be exact physical copies of each other, but these boys did not grow up with the fun of the pranks of exchanging places as some twins do. For as identical as they were physically, whenever they spoke it was apparent that they were completely opposite in attitude.

The “older”  complained a great deal. He saw the defects in anything. A spring cloudless day was “a little cold.” A person’s friendly gesture caused him to wonder “What does he want?” When the family was making plans, he often said things like, “Let’s consider the worst-case scenario,” which sounded strange when he was six.

His brother’s disposition was completely opposite. He expected good from everything and everyone. On a day dark with rain clouds he would say,  “I think the sun is poking through.” When it poured, the youngest twin would say, “It’ll be over soon, in fact, I think it’s stopping.”

The neighbors called the boys “Dark” and “Sunny” though those were not their names. When unsure of something they would joke, “Let’s ask Dark and Sunny and then pick what’s in between, that’ll be closest to the truth.” Everyone would laugh.

Once when the boys were eight years-old, they overheard  a group of neighbors tell.one of these jokes. Dark was unhappy. “They like you better than me. They think I’m depressing. Why do they call me Dark?” Sunny tried to comfort his brother, “Come-on, bro, they’re only joking, let’s go walk the bridge railing.” “Too dangerous,” moaned Dark.

The parents grew concerned about their boys. The twins ninth birthday was approaching and the parents hatched a plan. The adults had always given their boys gifts that were the same or complementary, similar toys, games they could play together, matching clothes, with small differences so they could tell them apart in the wash.

This year they decided would be different.

The birthday came. The parents took Dark into a room with nine brightly wrapped presents that contained toys, and clothes.

They handed Sunny an old shovel and told him to clean the manure from the barn.

The birthday wore on. Dark opened each present. He thanked his parents for each one, but he also fault with each and all. This toy was “poorly made”. That one had “sharp edges.” This sweater was an inconsistent color. He hesitated to play with toys that might break or wear clothes because he might ruin them.

The parents despaired, but decided to check on Sunny.

They found the younger twin at work on the load of manure that they parents had delivered. The dung pile filled the barn  and the boy worked furiously. He was sweating, but smiling as he shoveled. “How’s it going?” They asked.

“Great!” the boy enthused.

“I figure with all this manure, there’s gotta be a pony in here somewhere.”

This is an old story. I often find that old stories are Sufi stories, teaching vehicles of the Islamic mystics. But I am not sure about its origins.

It is usually told as the optimist-pessimist contrast. “Isn’t it much better to go through life with a positive orientation. Don’t be a ‘Debbie Downer’” (of Saturday Night Live fame).

I first heard the story when I joined Analysis & Design at Gemini Consulting. A&D was Gemini’s turbo-charged sales process for reengineering projects. An A&D was a smaller project sold “at cost” (usually at a 15-20% margin vs. a 60-70% margin for normal projects). The objective as told to the client was to do detailed analysis to diagnose problems and to design a solution – a project design to deliver results.

Of course, Gemini hoped to deliver the results, so the A&D objective was to sell the second project. But it was a client decision point. The client could choose to deliver the results on their own and not hire Gemini for the Results Delivery (RD) project.

Most can see that this process, A&D to RD, is open to abuse and conflicts of interest and I certainly witnessed some of that. But Gemini in its heyday had an 80% conversion rate of A&Ds that sold the larger RD project and Gemini’s clients were by and large happy with their work.

The A&D team was under a lot of pressure. A&D projects were usually eight weeks long. They needed to word hard and fast and find process defects that were costing the company money. The team was usually on-site at 7:00 a.m. and often didn’t leave till 10:00 p.m. Consultants frequently flew out Sunday night and home Friday night. It was a meat grinder that many Geminites avoided.

But A&D had esprit d’corps. They believed that they “fed the firm.” They took pride in their workaholism. (I did mention that I was part of this unit, right?)

So when I heard this story in A&D it was in it’s extremely truncated version, just a piece of the punchline really. . . ”Whatcha doin’?” . . . “Lookin’ for the pony in the barn.” Sometimes analysts just said “lookin’ for the pony.” That communicated “I don’t have time to talk , but I will emerge from all this shit with a smile on my face and a ‘finding’ in my hand.”

Mostly, when I heard the entire story told the “Sunny” character was the hero. Everyone would rather be around the optimist. So I’ve heard the story in leadership workshops and personal growth webinars. The message is always how my sister used to answer questions about her blood type, “B-positive and that’s my attitude in life!”

However, once I heard a process improvement trainer tell this storymto a group of internal process improvement consultants. He let the laughter at Sunny’s pony quest die down and then he said:

“The twins grew up. Dark went into quality control. Sunny became a salesman.”

He then proceeded to conduct a discussion of using everyone’s strengths on an improvement project. Sunnys were good at management presentations and funding requests. Darks were good at seeing unintended consequences of a plan. “Everyone has a role,” he said, and then he showed this Hagar the Horrible comic strip.

Hagar the Horrible comic strip 1979 drawn by Dik Browne, used with permission of Chris Browne

 “Tell me, what did you learn?”

It was the last team meeting of my first consulting project. The team was entirely composed of London Business School first year MBA students. We had just spent the summer studying the UK commercial vehicle market to determine the feasibility of two new truck lines. The client was ERF, a Cheshire assembler of heavy duty forty-four-ton articulated lorry cabs (called tractor-trailers or semis in the US). ERF asked us to study whether they should build a thirty-two-ton,  eight-wheel vehicle (think garbage truck or road construction dump truck) and a sixteen-ton box van (used for grocery distribution and U-Haul rentals). As the “data secretary” for the team, I felt that the question was directed at me.

I stumbled a bit over the words but launched into a summary of the findings. “In the market for the sixteen-ton distribution vehicle there is no premium end of the market. There is a substantial penalty for vehicle weight because margins are razor thin. . . .”

“No, what did you learn?”

The questioner, Basil, had been the team’s advisor while the project leader, Dick, went to the south of France for four weeks. Basil was a tall lanky man, a bit craggy of face, and a kind, almost professorial demeanor. In our weekly meetings with Basil, he would quietly listen as we reported findings, his long fingers steepled, touching his lips. He only lowered his hands slightly to make the occasional quiet suggestion; we students were pretty much on our own. I had no idea what he was looking for, but commenced again.

“By contrast, the thirty-two-ton market does offer a premium for durability, and the power of Gardiner drivetrain has a certain cache. . . .”

“No. . . what did you learn?” Someone else jumped in to describe how the British Leyland Chieftain was the clear price leader in the sixteen-ton market and no competitor seemed to be able to underprice them, nor establish a premium, for even six months without dramatically impacting their own sales.

“No, no, no. . . well. . .”  Basil intoned in a gently condescending way. “Let me tell you what you should have learned. Perhaps, you learned how, with very little prior industry experience or knowledge, to get yourselves to the point where you could have intelligent business conversations with people who had worked in this industry for their entire careers.”

I looked around the room. It was clear that all my fellow students were simultaneously coming to the same realization that we had in fact done that.

“If you did learn that,” said Basil quietly, “It will feed you for the rest of your lives.”

Thinking back on that first project, how did we learn enough about the UK truck market to be credible to industry insiders? We read a lot and talked to friendly industry people before we ever talked to a client.

For me, the excitement of starting a new project and the steepness of the learning curve are what kept me in consulting for thirty-seven years.

After so many years in the field, I’ve recognized that each phase of the consulting process has its own learning requirements:

From Discovery to Decision the learning requirements are technical and project-specific. Disengagement is hard. Many consultants want to pitch more work and forget that the client must implement.

But in Entry the learning curve is the steepest because the consultant must learn enough about the industry and company to earn the right to proceed.

I worked with some consulting firms and project managers who were really good at preparing the team to learn quickly.

I also worked with consulting firms and project managers who didn’t spend enough time preparing the team. They sent consultants to initial interviews with little prep and clients felt like the consultants were “borrowing their watch to tell them the time.”

Some consultants feel the need to demonstrate how smart they are, which gives all consultants the reputation for arrogance.

But the consulting firms and project managers who are good at preparing the team all provide some of the same things:

• An industry pre-read deck, which includes Information about:
  • Customers and buying criteria
  • Competitors and their products and services
  • Relevant previous industry project materials, if available
  • Articles about industry history and trends
  • Harvard Business Review industry notes (or similar)
• Company background
  • Annual report and analyst notes if a public company (client-supplied data if a private company)
  • Organization charts
  • Relevant previous company project materials, if available
  • Product/service brochures
• The project proposal or statement of work or the relevant portions of those documents
• An email and telephone list that includes all consultants and clients and rules (e.g., only the project manager is to talk to the CEO)
• An opening meeting to discuss questions from the pre-read and the project plan

Many times all this information isn’t available at the beginning of the project, but a good project manager creates a template and charges the team to help fill it in. Clarify what is confidential material and be careful to “not leave this stuff in the photocopier.”

These materials can’t cover everything, but it can lessen the magnitude of the learning curve, which provides a lot of the “fun” of consulting.

And learning quickly “will feed you for the rest of your lives.”

In Part 1 of this series, I described two distinct streams in the history of consulting: content and process. Historically, content firms (Arthur D. Little, McKinsey, Boston Consulting Group, Bain, etc.) evolved from research to strategy. Content consultants believed in analyzing the market and the firm and providing answers. Process firms evolved from the operations systemization of Frederick Taylor and Frank and Lillian Gilbreth through Dr. Deming and the quality movement  of the 1980s, as well as reengineering to Six Sigma and similar process improvement methodologies today.

It isn’t oversimplifying to say content consultants rely heavily on analytics and provide answers to be implemented by their clients, while process consultants rely heavily on training and ask questions to teach their clients how to find answers to implement. My experience shows that, with some rare exceptions, the only thing these consultants have in common is that they have little use for each other.

Part 1 explains the history of this evolution  with a focus on strategy and operations firms. Part 2 discusses technology firms, largely content in orientation, and human resource firms that are largely process in orientation.

Another kind of content firm -Technology and Systems Integrators

I am the “original late adopter,” so I am probably not the best source for the history of technology consulting. Here is my limited understanding of this industry.

These days, Information Technology (IT) consultants may work for the Chief Executive Officer (CEO) or various business heads or  the Chief Information Officer (CIO). IT consultants deliver such services as IT strategy, IT architecture planning, IT Security, or Enterprise Requirements Planning (ERP) services. Or they may work for various department heads for services such as data analytics, IT implementation, software management and systems integration.

Let’s just think for a minute about what has happened to computer technology in the thirty-seven years that I was a consultant.

• Hardware – Mainframes, mini-computers like DEC PDP-8 and the IBM 360 (for which my mother programmed the operating system in the early ‘60s and was still in operations in the 1980s). Personal Computers (PCs and later Macs) were first desktops and then “portables.” (Does anyone else remember the Compac “portable?” It was the size of a  small suitcase and weighed over fifty pounds!) Then came laptops, tablets, and finally the cool flip-phones became the ubiquitous smart phone.
• Software – Operating systems for all of the above written in multiple languages I only know some names of (Fortran, Cobol, Basic. C, C++, Python, Java, C#).
• Systems and systems software – Financial and Management Accounting, Production Planning, Inventory management, materials requirements planning, Enterprise Requirements Planning (ERP providers like German firm SAP cast a huge shadow), HR Systems, (PeopleSoft and the long awaited SAP HR Module), Customer Relationship Management (Oracle, Salesforce.com), Internet, Social Media, media presence and the algorithms and Big Data analytics that go with them. There are so many; the evolution is mind-boggling.
• Services -There were always services firms – large like Electronic Data Systems (EDS) started by H. Ross Perot (who ran for president against Bill Clinton twice), sold to GM in the 1980s and spun off in the 90s. There were also thousands of small firms.

Accounting systems were the first to be automated so it is easy to understand how the Big Eight and now Big Four got into IT, including Accenture (which was born after Arthur Anderson spun off the consulting business, post Enron collapse).

Then every technology manufacturer (IBM, Hitachi, NTT) got into consulting followed by the Indian Data Center outsourcers Infosys, Wipro and multi-industry, multinational Tata, Now even the Big Three, Booz Allen Hamilton and newer firms like Cognizant, and Virtusa are all chasing “Digital Transformation,” the latest service offering craze.

The forgotten process firm – Organization or Human Resources consultants

Someone once told me, “You know the problem with organizational consultants? You guys can’t get organized.” Bada boom.

There is some truth to this. Much of the specialized content of human resource consulting firms comes from academic and applied research. Perhaps the most famous of these research studies are what came to be known as the Hawthorne studies, named for the Hawthorne factory  of Western Electric, a part of the Bell System.

At Hawthorne, George Elton Mayo, an MIT professor, and Fritz Roethlisberger from Harvard studied workers in a number of different parts of the plant from 1924-1932. They first studied the effects of lighting and then moved on to a variety of other physical environmental factors. What they discovered was, rather than an environmental factor, the act of paying attention to workers and asking them questions about the best way to do the work, allowed participation, and produced gains in productivity far exceeding any physical changes to the environment. Later this was named the “Hawthorne effect.”

The Hawthorne studies launched a field of study called the Human Relations Movement. Researchers such as Kurt Lewin studied “group dynamics” through techniques called “action learning.” At the Tavistock Institute on Human Relations in the United Kingdom, researchers like Elliott Jacques, and Wilfred Bion demonstrated the effects of participation and supervised group dynamics on motivation and performance. Professor George Litwin and  his graduate student Bob Stringer at Harvard Business School demonstrated that what Kurt Lewin called organizational climate was affected by management practice and drove motivation and performance to a high degree.

Some of the academic findings of the Human Relations Movement made it into what human resource consultants deliver. Much has been ignored by business.

Now consultants that deal with the ”people stuff” fit into many categories: training consultants, organization development firms, organization design firms, headhunters and recruiters, leadership coaches, human resource legal and regulatory advisors, employee benefits,  industrial and organizational psychologists, and organizational climate and culture specialists.

So part of the problem is that organizational and human resources consultants haven’t gotten organized, or that the research that they espouse is viewed as “squishy” compared to strategy or process improvement. Part of the struggle of human resource consultants to get beyond the boutique level is that human resources consultants have subdivided into many different specialties with little overlap or synergy between them.

It’s true that executive recruiters like Heidrick and Struggles and Korn Ferry have expanded into leadership assessment and development. Some training firms like Achieve Forum have moved from management and leadership training into leadership coaching and organizational climate work. However, it is tough for employee benefit firms owned by an insurance company (Aon Hewitt, Willis Towers Watson, and Oliver Wyman/ Marsh McClelland) to be credible in all other organizationa development disciplines. Of these firms, only Oliver Wyman, which includes heritage firms Temple, Barker, and Sloane, Strategic Planning Associates as formal consulting and Mercer Delta, the firm started by David Nadler, have some greater credibility in organizational development.

Otherwise many organizational firms are boutique firms, and many are acquired by the Big Four, or other firms. The top three tier firms all say they are in organizational consulting.

120 years of consulting history – What does it mean to you?

I once observed two Organizational Development gurus arguing. “Spare me the history.” said one. “The only thing that matters is action, what are you going to do?” “No, history is important. It sets the context for action,” said the other.

Here are my  take-aways from this history:

• Every firm is different.  Where a firm came from, and where it sits in the fragmented oligopoly determines how hard it must work to get clients, what kind of jobs it offers, and how it treats their people.

• The disciplines and service offerings you are known for often dictates hiring and the promotion ladder. In these days when every firm seems to do everything, it’s worth looking at Wikipedia and the firm’s website to understand their history, which will have an impact upon culture and the way certain capabilities are valued.

• Content consulting and process consulting focus on different audiences, executives vs. the workforce. They sell different things e.g., answers  and innovation vs. questions, methodology, and improvement.  I’ve been a part of three firms that tried to combine these two approaches; none succeeded.
• New consulting firms are formed and old firms acquired regularly, so your competencies, your knowledge and skill and how you are growing them are important.

When I joined the consulting industry as a newbie,  I didn’t anticipate consultant jokes. From the time of my first project it seemed like every person in the client system had one. One joke speaks to the history of consulting.

A small group is debating the oldest profession in the world.  “Yes, consulting is the oldest profession. God, the engineer, brought forth order from chaos, but who do you think created the chaos?” Bada bing.

The very beginnings: Arthur D. Little and Frederick Winslow Taylor

Most sources agree that the first consulting firm was started by Massachusetts Institute of Technology chemistry professor Arthur Dehon Little in 1886. Arthur D. Little (ADL) is still around today. When I grew up in the 1950s Boston suburbs, if someone’s father worked at ADL kids would joke about the “brains in that family.”

From the beginning ADL offered highly analytic problem solving. Evidently Professor Little believed that each problem was unique and deserved a unique solution and was therefore against systemization and standardization.

Frederick Winslow Taylor, the author of Scientific Management (1913), believed in systemization. Taylor analyzed time and motion of workers to find the one-best way first, then would standardize the process across all workers. As his practice grew he took these standard processes to other clients.

Each in their own way, these two men started two different streams of consulting that still exist today, content (Little) and process (Taylor).

Professor Little was a college professor; Taylor refused to go to Harvard and joined a factory in Philadelphia. Little’s clients were executives and technical managers; Taylor’s clients were plant managers and he worked directly with front line workers. This may be the precedent for one division in the industry today:

• the Strategy firm, content consulting, which brings new ideas, often focused on innovation, new products, markets and technologies and
• the Operations firm, process consulting, which focuses on continual incremental improvement, repeat buying and share of wallet, and automation technologies (improved cycle time).

I may be overdrawing a connection here and certainly there are many overlaps and hybrids over the history of consulting, but bear with me for a bit. Let’s look at a few historical events and examples and see how this plays out.

Content stream continues

In 1914 Edwin G. Booz, with a masters in psychology and a bachelors in economics from Northwestern University’s Kellogg School, founded Business Research Service, which became Booz, Allen Hamilton. Booz’s original mission statement states that senior managers needed “candid advice and an outside perspective on their businesses.” The firm became the first to work for both corporations and governments and served both markets until it spun off Booz & Company, the corporate business, to focus on government. (Booz & Co became Strategy &, which acquired Katzenbach Partners long after I left. Both are part of PwC today.)

In 1926 James O. McKinsey, a University  of Chicago professor, founded, McKinsey and Company Accountants and Consulting Engineers. McKinsey’s clients were executives and his first partner was Andrew Thomas Kearney  who ran the Chicago office. Upon McKinsey’s unexpected death in 1937,  the firm split up.

Marvin Bower, the second McKInsey partner, who ran the New York office, ultimately bought the name McKinsey & Company and the Chicago office became AT Kearney or just Kearney as it is called today.

People at McKinsey have an almost religious reverence for Marvin Bower, who resurrected the New York office and built the firm. Bower served as Managing Director of McKinsey & Company from 1950-1967, but had a major role in the firm and remained a director until 1992 even though he voluntarily sold his shares back to the firm at age 60 in 1963. Bower is widely credited with the “professionalization” of the consulting field.

The process improvement stream continues

Frederick Taylor collaborated with Morris Cooke. Cooke had an engineering degree from Lehigh University in Pennsylvania, but went to work as a machinist for his first few years and formed a consulting firm in 1903. Later, he was quite active in the rural electrification projects of the 1920s and 1930s.

Another of Taylor’s team was Henry Gantt, another degreed engineer (Johns Hopkins) who worked as a machinist and draftsman. Gantt met Taylor at Midvale Steel and Bethlehem Steel. Gantt is known for the ubiquitous project management tool the Gantt chart, which he created so that workers could understand the timing of their work and relationships to others’ tasks.

Frederick Taylor’s major competitor was Frank Bunker Gilbreth. Gilbreth founded Frank B. Gilbreth, Inc with his wife Lillian in 1903, and they were known as consulting engineers, or efficiency experts. Like Taylor, Gilbreth began work as a manual laborer, a bricklayers assistant, but his work grew into looking for the “one best way.” Taylor and Gilbreth had what was often called a “war,” so when Gilbreth died in 1924, apparently Taylor rejoiced a bit. Then Lillian Moller Gilbreth took over the business and ran it successfully for years. The Gilbreths had twelve children and were the subject of two books by their son Frank and daughter Ernestine, Cheaper by the Dozen and Belles on their Toes. Both books were made into feature films in the early ’50s, (not to be confused with much later Steve Martin movies of the same name).

The Gilbreths are widely credited as the parents of contemporary process improvement. This stream of consulting runs through Walter Shewhart of Bell Labs, who created statistical process control and Plan-Do-Check-Act in the 1920s. It includes the work of Dr. W. Edwards Deming and Dr. Joseph Juran. Deming and Juran were both graduates of the Bell System and learned from Walter Shewhart. Deming focused on statistical process control and is widely viewed as the father of the US continuous improvement methodologies.

Juran discovered the little known work of Vilfredo Pareto, a nineteenth century Italian engineer who discovered that 20 percent of pea pods produced 80 percent of the harvest. He conducted a study to show that 20 percent of the Italian population controlled 80 percent of the country’s wealth. Juran continued this research and demonstrated that 20 percent of causes produced 80 percent of the effects of a problem. Juran popularized the Pareto Principle, also known as the 80/20 rule and the “trivial many and critical few.”

Both Deming and Juran, founders of the quality movement, found no clients in the United States, but Japanese manufacturers welcomed them with open arms. They spent the 1950s through much of the 1970s improving Japanese businesses. In the late 1970s and early 1980s Japanese imports were dominating many US industries and suddenly Demming and Juran were in demand at home.

The process improvement stream of consulting took on new life in the early 1970s. Dr. Deming’s return to the US caused or coincided with the birth of the quality movement of the 1980s, which led to Lean and Six Sigma from the 1990s to the present day. Firms like Alexander Proudfoot, which bought the firm of Phil Crosby, author of Quality is Free. The combined firm evolved into United Research Company, founded by David Teiger in 1973. In 1989 Teiger bought The Management Analysis Center (The M.A.C. Group) and launched Gemini Consulting, where I worked toward the end of the re-engineering craze. The 1990s saw an explosion of re-engineering projects for Gemini and competitor CSC Index. Jim Champy wrote the book Re-Engineering the Corporation with Michael Hammer in 1993. Jim Champy’s Index was bought by Computer Sciences Corporation and CSC Index and Gemini were very hot firms for a while. The Gemini merger was funded by the French computer firm Sogeti, which owned the combination of the French computer firm CAP and the US firm Gemini Computer Services. The firm is today called Cap Gemini, one of the leading firms in the “digital transformation” space.

The 1960s and 1970s: BCG and the rebirth of content

During the late 1940s and 1950s McKinsey, Arthur D. Little, and Booz Allen Hamilton did a lot of export market studies  and organizational design for US companies. Organization design projects often consisted in at first of replicating the departmental structure learned at DuPont and then copying the product/market structures learned from Alfred P. Sloan at General Motors, i.e., “a car for every wallet.”

In 1963, Bruce Henderson left ADL to create an internal consulting firm for a bank. After the project was done Henderson formed the Boston Consulting Group (BCG) as a strategy firm. Their strategic frameworks seem very simple by today’s standards:

The Boston Box was a simple two by two matrix used to rationalize current strategic activities.

The Growth Share Matrix was used to rationalize a portfolio of businesses.

“Milk Cash Cows, Invest In Stars, Divest Dogs, and Fix Problem Children.”

The Experience Curve showed how learning occurred with cumulative production volume thereby reducing costs. Some thought this happened automatically; the wise realized that you had to evaluate learning and adopt the lessons to reduce costs.

These simple concepts revolutionized strategy consulting.

As we’ve already seen, the industry grows when consultants leave and start new firms.

In 1973, Bruce Henderson decided to accelerate with a little internal competition. He created three internal firms – red, blue, green. The leader of the blue team, Bill Bain, developed a different model of consulting with a key client, Union Carbide.  Rather than the usual six-to-eight week study, Bain sold a $25,000 per month retainer and took responsibility for longer term results. Henderson and other BCG partners objected to the risk. Bill Bain left (with Union Carbide) and formed Bain & Company.

The model was extraordinarily successful; Bain grew exponentially. When I worked for Forum, Bain was a client and we were invited to the Bain holiday party. I remember a lot of people my age passionately singing “BAIN -we’re gonna grow forever!” to the tune of the anthem from the 1980 film “Fame.” Bain is now one of the Big Three, all of whom have some retainer contracts. They also created Bain Capital to capitalize on the long term results they were achieving with a private equity model.

The industry often grows by dispersion: ADL spawned BCG ; which spawned Bain which spawned LEK and Parthenon. McKinsey tended to keep its partners in the firm after the split with AT Kearney, but I worked for Katzenbach Partners, started by Mckinsey senior director Jon Katzenbach, when he was over the mandatory retirement age with the firms blessing. Often spinoff firms run into trouble at the first recession and are acquired. Katzenbach Partners was acquired by Booz in 2007 and is now a part of PwC.

Consulting history – So what?

I wrote this article and the one that follows it for new consultants and those investigating the field. I wish I had known more about the history of consulting when I began. The Internet has made industry research easier than it was when I joined consulting, but I think it has also made the immediacy of the current day more prevalent. Witness the fact that there are many books and articles on how to “ace the case interview,” but very few on industry history.

Every firm is different and knowing that will help the newbie find his or her best fit. In Part 2 I examine technology and human resource firms.