How did management consulting get to be where it is? Did firms like McKinsey, Bain, and Boston Consulting Group simply appear out of nowhere, fully formed, to foist re-engineering on companies everywhere and snap up graduates of the top business schools? Well, no. To find out what really happened you need to read “The Lords of Strategy: The Secret Intellectual History of the New Corporate World,” by former HBR editor Walter Kiechel, a well-written, cheeky history of the birth and growth of the modern consulting industry.
Kiechel paints vivid pictures of industry pioneers like Bruce Henderson of BCG and Bill Bain, and cannily outlines the keys to their success (in Henderson’s case, a passion for using mathematics to analyze business; in Bain’s, an ability to build relationships with CEOs and a willingness to tie project compensation to increased stock price). He also traces the next wave of strategy emerging from universities, most prominently the ideas of Michael Porter and their impact, through the re-engineering craze to the current day.
But most importantly, he puts into context what the strategy revolution, as applied by the firms he focuses on, meant to US (and eventually worldwide) business. One, a belief in the power of analytics; and two, the value of models to spread learning (i.e., best practices).
The book ends with a whimper rather than a bang. The last couple of chapters, looking ahead at the future of strategy and discussing the impacts of the financial crisis, are not up to the standards of the rest of the book, as if the events of 2007-2008 derailed Kiechel’s intended story arc. As a result, the summing up is a bit disoriented, as I suppose we all are in business after those cataclysmic recent events.
I also wish the book were more carefully sourced. After reading several chapters, it becomes clear that much of Kiechel’s source material comes from direct interviews with key members of the consulting world. The book would be better if those sources were identified and end-noted, and that other assertions connected back to their sources as well. Why this wasn’t done is a mystery to me and undermines the book’s authoritativeness.
Nonetheless, “The Lords of Strategy” is a valuable addition to the business bookshelf. It shines a light on and humanizes a part of the business world that operates in secret but which has significant influence on businesses the world over.