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October 1, 2017 9:36
For many, three companies – McKinsey & Company, The Boston Consulting Group (BCG), and Bain & Company, often referred to as MBB (for their company initials) - represent the 'three peaks' of the Management Consulting industry. They consistently rank amongst the most desirable and prestigious places to work and there would be few Fortune 500 companies that do not rely on frequent advice from at least one of them.
In many ways, this is not a surprise: it was McKinsey’s Managing Director from 1950 to 1967, Marvin Bower, who largely defined the propositions and processes of the modern management consulting firm. BCG founder, Bruce Henderson, introduced important competitive concepts such as the 'Experience Curve' and 'Growth Share Matrix' which led to the emergence of the 'strategy consulting' sector. Bill Bain evolved the consultant role from episodic, impartial advisor to long-term development and implementation partner who would pursue the interests of only a single client in each industry.
So - what makes these companies successful? Where are their strengths? Do they have weaknesses? Let’s shine some WhoKnowsAbout analytical light on the MBB complex.
The first observation, which will come as little surprise to anyone, is that these three are very competent management consulting suppliers. In the WhoKnowsAbout Global Management Consulting Capability Rankings McKinsey & Company is placed second, BCG is third and Bain, despite its smaller scale (Revenues of $2.3 billion compared to McKinsey’s $8.8 billion and BCG’s $5.6 billion) ranks ninth. (see Figure 1)
Figure 1 - Top 10 Global Ranking
If we compare McKinsey and BCG in terms of Industry expertise, as shown in Figure 2, McKinsey is scored higher in 11 sectors – the largest advantage is seen in Primary Industries, Power and Utilities, Energy, Healthcare as well as Pharmaceuticals & Biotech – while BCG is stronger in three sectors, especially Retail & Wholesale and Transport & Travel.
Figure 2 - McKinsey vs BCG: Industry Expertise
On topic knowledge, as shown in Figure 3, McKinsey’s advantage is less pronounced. McKinsey leads in nine categories to BCG’s five, but there are only two each where the score difference is greater than ten: McKinsey has significantly more strength in Operations and in Sustainability & Environment, while BCG has greater depth in Strategy & Planning and Transformation & Change.
Figure 3- McKinsey vs BCG: Functional Expertise
When McKinsey is compared to Bain, the differences are more noticeable. As shown in Figure 4, Retail and Wholesale is the only industry category where Bain would outscore McKinsey. On topic expertise, as shown in Figure 3, Bain is also stronger than McKinsey in Strategy & Planning (where it is the top ranked firm, just slightly ahead of BCG) and Transformation & Change (where it just trails BCG).
Figure 4 - McKinsey vs Bain: Industry and Topic Expertise
Strong as these firms are in many areas, there are categories in which they would not be the 'natural supplier'. Table 1 below lays out the categories where the MBBs trail the category leaders by more than 20% in the WhoKnowsAbout competency calculations.
Table 1 – MBB Capabilities vs Best in Category Supplier
In Public Sector and Defence Booz Allen Hamilton is assessed as significantly stronger than the best of the MBB (in this case, McKinsey). Steer Davies Gleave in Transport and Travel, Deloitte in Healthcare and DAI in the Social Sector would all be firms that even habitual buyers of MBB should consider.
Similarly, Deloitte (in ERP Systems, IT Consulting, and Financial & Risk Management), ICF (in Sustainability), RBB (in Economics), FTI (in Corporate Affairs) and Korn Ferry Hay Group (in HR) all offer topic expertise that would match or exceed that offered by McKinsey, BCG or Bain.
So, the message is that these ‘three peaks’ all offer strong capabilities but that prospective clients should understand the differences amongst them and should also recognise that, for some issues, other firms outside the MBB group have more expertise and experience to draw on.
Figure 5 below provides a visual summary of how MBB expertise maps relative to each other and the best in the industry.
Figure 5 - MBB Industry and Functional Knowledge Comparison