Will We Ever See New Branches on Consulting’s Tree?
Last week’s news that Bill Bain — the namesake and founder of Bain & Company — had passed away was met with surprisingly muted response within the industry. He was 80 and hadn’t been active in the firm for more than 20 years. Still, the firm’s posting on its website regarding his legacy included this cogent observation:
“With a vision to redefine the consulting industry from selling hours of advice to selling profits at a discount, Bill pioneered the approach to developing long-term relationships with his clients, bringing data-led perspectives on their most critical issues and aligning with management as a trusted partner.”
Back in 1973, when Bruce Henderson’s star pupil at BCG bolted along with a few other partners to form Bain & Company, management consulting was still as much theoretical as practical. The premise of Bill’s vision — management consulting that provided demonstrable and exponential “results”– was considered improbable. Consultants advised, but ultimately could not control client outcomes.
That a firm would stake its livelihood to its clients in such direct fashion was near-heresy. In fact, Bain felt so strongly about immersing itself with clients that one of the original principles prohibited the firm from EVER working with direct competitors in the same industry — no Pepsi for you if you worked with Coke!
Such an idea is ludicrous now. And Bain’s own inhibitions went by the wayside as the firm narrowed its definition of competitors to allow for growth.
For all the talk of results, Bain’s real contribution was breaking the old guard’s hypocrisy between capital investment and management consulting. The two had long been considered kissing cousins. But Bain directly linked both worlds and literally put the partners’ money in their mouths by investing in clients through Bain Capital.
Bill’s own protégé, Mitt Romney, made his bones growing that business. Certainly there were some controversies along the way (e.g. Guinness circa 1987) that, while no wrongdoing was revealed on Bain’s part, put a spotlight on perceived conflicts of interest between consultant and client when the two shared the same bed.
From those lessons, Bain managed to adapt and find an acceptable line between investor and consultant. Others consultants followed suit and today, success-based billing or taking a stake in clients doesn’t even warrant a blush.
We can thank Bill Bain for that.
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