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lords of strategy

Summary: Summarizes the rise of strategy consulting as a discipline starting with Bruce Henderson founding the Boston Consulting Group and then popularizing the use of data for comparative analysis to guide strategy.

Notes:

  • BCG, founded by Bruce Henderson, pioneered the gathering and use of comparative data (on costs, market share, etc) within an industry in order to create strategy
  • Key development was the experience curve which showed the generally the longer the a firm was doing something (producing a widget), the lower their costs.
  • The experience curve was complemented by the growth/share matrix that showed that generally the higher the market share, the lower your costs.
  • Thought leadership (conferences and papers) as business development were key to BCG growth
  • Bain was spin-off of BCG – in response to “sea gull” consulting model, they worked with only one client in an industry, on a retainer, for the long term, with an emphasis on partnering with the client

Discussion Takeaways:

  • Bain quote is gold: “We don’t sell advice by the hour, we sell profits at a discount”
  • Is the job of a strategy consultant to deliver competitive advantage, plain and simple?
  • The idea of profit/returns as singular focus seems outdated. Now people are looking for additional kinds of impacts (and measures of them)
  • Picking the right clients is key if you want them to play a hands-on role. Tools you can provide them play a key role in this
  • Many consultancies’ success seems to stem from creating a useful way to frame (tame?) a previously complex issue (e.g.: growth/share) matrix, then pushing it like crazy through conferences / articles and using it in everything they do (relates to Hedgehog concept in Good to Great)