The History of Management Consulting

In this episode of Lochhead on Marketing, let us talk about something that I get asked about all the time. That is, can service firms do Category Design? Simple answer, Yes. I would even say that the most legendary services companies are almost always created or led by a legendary Category Design. Long answer? Well, listen to this episode to find out. The Management Consulting Category Design There was a point in time where there was no such thing called Management Consulting. Remember, everything is the way that it is because somebody changed the way that it was. So, McKinsey and Company is the firm that created and designed the Management Consulting category. The interesting thing is the guy that built McKinsey into what it is today is a guy named Marvin Bower. McKinsey started out as a group of bean counters and accountants doing accounting stuff, and nothing like what McKinsey is today. The Aha moment that Bower had is that he noticed that while clients were paying for accounting services with accountants, and legal services with lawyers, what they often wanted and valued more from their accountant was actually business advice from a trusted source. With that idea, Marvin became the category designer of a new services category called Management Consulting. Marvin Bower as a Language Master Marvin is an incredible kind of master at Languaging. He intuitively understood that in order to create a new category of Services Firm, he had to language it differently. That is to say, you can't talk about a new thing with old language. Under his leadership, projects were not called jobs, they were called engagements. It’s a word that is much more relational than it is transactional. Internal groups within McKinsey with specific industry or functional expertise were not called groups, they were called practices. Bower borrowed a term from doctors to demonstrate a level of professionalism to elevate these “groups”, or now practices within McKinsey. Finally, he made sure that nobody ever referred to McKinsey as a business: McKinsey was a firm. He highlighted the core values that held the company together. Today, there are very few firms who are rigorously committed, some might say consciously committed to the original language that Marvin Bower put into place. All of these distinctions, all of these differences, help McKinsey thrive. It also help to position McKinsey in a new category: not a law firm, not an accounting firm, but this new thing called a Management Consulting Firm. To hear more on how Service Firms do Category Design, download and listen to this episode. Bio Christopher Lochhead is a #1 Apple podcaster and #1 Amazon bestselling co-author of books: Niche Down and Play Bigger. He has been an advisor to over 50 venture-backed startups; a former three-time Silicon Valley public company CMO and an entrepreneur. Furthermore, he has been called “one of the best minds in marketing” by The Marketing Journal, a “Human Exclamation Point” by Fast Company, a “quasar” by NBA legend Bill Walton and “off-putting to some” by The Economist. In addition, he served as a chief marketing officer of software juggernaut Mercury Interactive. Hewlett-Packard acquired the company in 2006, for $4.5 billion. He also co-founded the marketing consulting firm LOCHHEAD; the founding CMO of Internet consulting firm Scient, and served as head of marketing at the CRM software firm Vantive. We hope you enjoyed this episode of Lochhead on Marketing™! Christopher loves hearing from his listeners. Feel free to email him, connect on Facebook, Twitter, Instagram, and subscribe on Apple Podcast! You may also subscribe to his newsletter, The Difference, for some amazing content.