Thursday, February 24, 2005
Consultant's profile-The Legacy of Marvin Bower
Marvin Bower: Quality, Integrity and Principles
When Marvin Bower was born in 1903, consulting simply didn't exist. By the time he died on January 22, 2002 consulting was a major force in global business and the firm of McKinsey and Company was considered by many to be the premier management consulting firm on the planet. Marvin Bower could take credit for both.
Bower joined the firm of McKinsey and Company in 1933 and began work in McKinsey's New York office. By 1937 he was running the show there. That's the year that the company founder, James O. McKinsey died, at age 48 of pneumonia.
After McKinsey's death the firm split in two. The Chicago office became one firm, run by and later named for A. T. Kearney. Bower took over the New York office. He kept the name McKinsey and Company.
McKinsey's firm was made up of engineers and accountants. Like other "consulting" firms of the time it was rooted on the shop floor. They did time and motion studies. They were called efficiency experts and industrial engineers. It was not the kind of firm Marvin Bower wanted to build.
Before coming to McKinsey, Bower had worked at the prestigious Cleveland law firm of Jones, Day, Reavis and Pogue. That's where his work with bondholder committees for bankrupt companies convinced him that businesses needed advice on organization, management, marketing and distribution as much as they needed legal and accounting advice.
He wanted to build a firm that was professional like a law firm. But he wanted that firm to dispense advice on management issues.
Bower understood that being treated as a professional had as much to do with how you looked and talked and thought about yourself as it did with services rendered. Dress must be professional. Language mattered. McKinsey was a firm, just like a law firm. They had clients, not customers. The firm did not take jobs. Instead it had engagements.
Bower understood that it was important to define principles. McKinsey consultants were always to put the client's interests ahead of the firm's. That meant speaking the truth even when it might cost the firm an engagement. McKinsey would only do work that was necessary and that the firm could do well. That sometimes meant turning down work that was lucrative. Over the years those principles set McKinsey apart.
By the time Bower was done the old terms like "efficiency expert" and "industrial engineer" would be mostly historical relics. His term "management consultant" would be the term of choice. Consultants would work for firms. The firms would have engagements. But it didn't happen overnight.
When Bower signed on with McKinsey a little bit of insight went a long way. A consultant could look like a wizard simply by understanding a couple of basic mathematical formulas and business principles. That began to change rapidly during World War II.
When America went to war there was a need for all kinds of advice and insight. McKinsey helped major companies gear up for wartime production. The wartime effort was a national one and so McKinsey expanded to where the clients were, adding offices in Chicago, Los Angeles and San Francisco.
That was when Bower began talking about seeing the firm as a nationwide talent pool. The firm would pull together resources and people from several different offices to develop a team that would give the highest value to a client.
As business expanded after the war, so did McKinsey. Bower was convinced that the way to success was to hire the brightest people he could find, give them opportunities to perform and pay them well. He structured McKinsey as a meritocracy. Do well and you continued to rise to partner level. Start to under perform your peers and you'd be asked to leave.
He found the best and brightest at the nation's business schools. McKinsey set the pace for other firms by aggressively recruiting Masters of Business Administration and then throwing them into project teams working for what were now mostly giant clients.
McKinsey was beginning to emerge as the premier strategy consulting firm in the world. They worked with governments and nonprofits and a huge percentage of the world's largest businesses. In the sixties the firm worked hard to solidify its position. In 1964 they added a professional journal, the McKinsey Quarterly to gather articles by McKinsey consultants that showed off the best thinking on a variety of business issues.
In 1967 Marvin Bower surrendered the post of Managing Director, though he remained with the firm. The seventies became a time for McKinsey to take stock, to change and to develop resources.
In 1982 two McKinsey consultants, Tom Peters and Bob Waterman, wrote a book called In Search of Excellence. The book went to the top of the New York Times best seller list and stayed there. That was unheard of for a business book.
Books were great ads for the firm and the firm had lots of consultants who became authors. Richard Foster wrote Innovation and Kenichi Ohmae authored The Mind of the Strategist. Both books sold well. All the books by McKinsey consultants showed off the firm's expertise and gave it gobs of publicity. Ironically, though, this publication boom would set in motion changes in the consulting profession that made a mockery of Bower's basic principles.
By the time Marvin Bower retired for the last time in 1992 those changes were taking hold. It was the Age of the Guru. Best selling business books and best selling business book authors became necessary to consulting firm success.
Gurus, of course, produce Stupendous Ideas. Those ideas became management fads and the US became the fad capital of the management world. Firms that had stuck to their knitting moved quickly to re-engineer, then downsize and right size and on and on until by decade's end many were worn out and too tired to chase their cheese that someone else had moved.
What Marvin Bower had envisioned back in the thirties was a firm of professionals like a law firm, but one that gave advice on business management. He saw the route to success as delivering quality and maintaining professional standards. For Bower management consultants were professionals first.
In the nineties many firms saw things differently. Consulting firms went public. And the heads of those firms began to see themselves as businesspeople who were professionals. The shift in language is a distinction Marvin Bower must have appreciated. He would have known that when you're a businessperson first, profits take precedence over professional standards.
There's an ad running on TV now that shows two men talking. One says that he's found a "moral loophole." That was something Marvin Bower never looked for. Instead he just concentrated on doing the right things in the right way.
In his obituary Business Week magazine referred to Bower as an "ethicist." He wasn't that either. Instead he was a practitioner with principles that guided his practice and his life.
In the end the story of Marvin Bower is about building a consulting firm and setting the standard for a profession. It is about delivering quality and value while looking out for your client's welfare before you check the bottom line. It is about speaking the truth because that is more important than any particular engagement. It is a story that tells us that people and integrity matter.
That's a great model for building a consulting firm, or any kind of business, or even a life.
Marvin Bower was the author of two books. The first of those, The Will to Manage, was published in 1966 and is currently out of print. His later book, written in 1997, is The Will to Lead. This is an especially helpful book if you're managing a company of professionals. Bower calls it "Running a business with a network of leaders" but you'll find lots of good examples, stories and advice for you no matter what kind of business you have.
Ethan M. Rasiel has written two books about McKinsey on the basis of his three year stint at the firm. The first one was The McKinsey Way. There are several nuggets here that may help you manage better, but this book is mostly what you want if you want some insight into McKinsey in the post-Bower years. His second McKinsey book is called The McKinsey Mind with the subtitle "Understanding and Implementing the Problem-Solving Tools and Management Techniques of the World's Top Strategic Consulting Firm" This is an empty suit of a book.
Far better than either of the Rasiel books is The Witch Doctors by John Micklethwait and Adrian Wooldridge. These staff editors at the Economist will give you a well written and well researched tour of the big league consulting business. There's a lot here about McKinsey and about consulting, but there's also a lot about management theories and the practice of management on a global scale.
When Marvin Bower was born in 1903, consulting simply didn't exist. By the time he died on January 22, 2002 consulting was a major force in global business and the firm of McKinsey and Company was considered by many to be the premier management consulting firm on the planet. Marvin Bower could take credit for both.
Bower joined the firm of McKinsey and Company in 1933 and began work in McKinsey's New York office. By 1937 he was running the show there. That's the year that the company founder, James O. McKinsey died, at age 48 of pneumonia.
After McKinsey's death the firm split in two. The Chicago office became one firm, run by and later named for A. T. Kearney. Bower took over the New York office. He kept the name McKinsey and Company.
McKinsey's firm was made up of engineers and accountants. Like other "consulting" firms of the time it was rooted on the shop floor. They did time and motion studies. They were called efficiency experts and industrial engineers. It was not the kind of firm Marvin Bower wanted to build.
Before coming to McKinsey, Bower had worked at the prestigious Cleveland law firm of Jones, Day, Reavis and Pogue. That's where his work with bondholder committees for bankrupt companies convinced him that businesses needed advice on organization, management, marketing and distribution as much as they needed legal and accounting advice.
He wanted to build a firm that was professional like a law firm. But he wanted that firm to dispense advice on management issues.
Bower understood that being treated as a professional had as much to do with how you looked and talked and thought about yourself as it did with services rendered. Dress must be professional. Language mattered. McKinsey was a firm, just like a law firm. They had clients, not customers. The firm did not take jobs. Instead it had engagements.
Bower understood that it was important to define principles. McKinsey consultants were always to put the client's interests ahead of the firm's. That meant speaking the truth even when it might cost the firm an engagement. McKinsey would only do work that was necessary and that the firm could do well. That sometimes meant turning down work that was lucrative. Over the years those principles set McKinsey apart.
By the time Bower was done the old terms like "efficiency expert" and "industrial engineer" would be mostly historical relics. His term "management consultant" would be the term of choice. Consultants would work for firms. The firms would have engagements. But it didn't happen overnight.
When Bower signed on with McKinsey a little bit of insight went a long way. A consultant could look like a wizard simply by understanding a couple of basic mathematical formulas and business principles. That began to change rapidly during World War II.
When America went to war there was a need for all kinds of advice and insight. McKinsey helped major companies gear up for wartime production. The wartime effort was a national one and so McKinsey expanded to where the clients were, adding offices in Chicago, Los Angeles and San Francisco.
That was when Bower began talking about seeing the firm as a nationwide talent pool. The firm would pull together resources and people from several different offices to develop a team that would give the highest value to a client.
As business expanded after the war, so did McKinsey. Bower was convinced that the way to success was to hire the brightest people he could find, give them opportunities to perform and pay them well. He structured McKinsey as a meritocracy. Do well and you continued to rise to partner level. Start to under perform your peers and you'd be asked to leave.
He found the best and brightest at the nation's business schools. McKinsey set the pace for other firms by aggressively recruiting Masters of Business Administration and then throwing them into project teams working for what were now mostly giant clients.
McKinsey was beginning to emerge as the premier strategy consulting firm in the world. They worked with governments and nonprofits and a huge percentage of the world's largest businesses. In the sixties the firm worked hard to solidify its position. In 1964 they added a professional journal, the McKinsey Quarterly to gather articles by McKinsey consultants that showed off the best thinking on a variety of business issues.
In 1967 Marvin Bower surrendered the post of Managing Director, though he remained with the firm. The seventies became a time for McKinsey to take stock, to change and to develop resources.
In 1982 two McKinsey consultants, Tom Peters and Bob Waterman, wrote a book called In Search of Excellence. The book went to the top of the New York Times best seller list and stayed there. That was unheard of for a business book.
Books were great ads for the firm and the firm had lots of consultants who became authors. Richard Foster wrote Innovation and Kenichi Ohmae authored The Mind of the Strategist. Both books sold well. All the books by McKinsey consultants showed off the firm's expertise and gave it gobs of publicity. Ironically, though, this publication boom would set in motion changes in the consulting profession that made a mockery of Bower's basic principles.
By the time Marvin Bower retired for the last time in 1992 those changes were taking hold. It was the Age of the Guru. Best selling business books and best selling business book authors became necessary to consulting firm success.
Gurus, of course, produce Stupendous Ideas. Those ideas became management fads and the US became the fad capital of the management world. Firms that had stuck to their knitting moved quickly to re-engineer, then downsize and right size and on and on until by decade's end many were worn out and too tired to chase their cheese that someone else had moved.
What Marvin Bower had envisioned back in the thirties was a firm of professionals like a law firm, but one that gave advice on business management. He saw the route to success as delivering quality and maintaining professional standards. For Bower management consultants were professionals first.
In the nineties many firms saw things differently. Consulting firms went public. And the heads of those firms began to see themselves as businesspeople who were professionals. The shift in language is a distinction Marvin Bower must have appreciated. He would have known that when you're a businessperson first, profits take precedence over professional standards.
There's an ad running on TV now that shows two men talking. One says that he's found a "moral loophole." That was something Marvin Bower never looked for. Instead he just concentrated on doing the right things in the right way.
In his obituary Business Week magazine referred to Bower as an "ethicist." He wasn't that either. Instead he was a practitioner with principles that guided his practice and his life.
In the end the story of Marvin Bower is about building a consulting firm and setting the standard for a profession. It is about delivering quality and value while looking out for your client's welfare before you check the bottom line. It is about speaking the truth because that is more important than any particular engagement. It is a story that tells us that people and integrity matter.
That's a great model for building a consulting firm, or any kind of business, or even a life.
Marvin Bower was the author of two books. The first of those, The Will to Manage, was published in 1966 and is currently out of print. His later book, written in 1997, is The Will to Lead. This is an especially helpful book if you're managing a company of professionals. Bower calls it "Running a business with a network of leaders" but you'll find lots of good examples, stories and advice for you no matter what kind of business you have.
Ethan M. Rasiel has written two books about McKinsey on the basis of his three year stint at the firm. The first one was The McKinsey Way. There are several nuggets here that may help you manage better, but this book is mostly what you want if you want some insight into McKinsey in the post-Bower years. His second McKinsey book is called The McKinsey Mind with the subtitle "Understanding and Implementing the Problem-Solving Tools and Management Techniques of the World's Top Strategic Consulting Firm" This is an empty suit of a book.
Far better than either of the Rasiel books is The Witch Doctors by John Micklethwait and Adrian Wooldridge. These staff editors at the Economist will give you a well written and well researched tour of the big league consulting business. There's a lot here about McKinsey and about consulting, but there's also a lot about management theories and the practice of management on a global scale.
