McKinsey's Marvin Bower - Elizabeth Haas Edersheim

[Saluki]

I'm usually leery of books written by corporate insiders, like "Nuts" the Southwest Story, because they obviously don't have an unbiased view, but I was very curious about McKinsey, where Marvin Bower almost singlehandedly created the consulting industry that we know today.  McKinsey had a Chicago office and a small NY office when the founder, McKinsey, died. Back then consultants tended to advise in a particular industry and hired experienced execs from that industry.  Rather than rename McKinsey, which any other consulting shop would do, he kept the name because he didn't want people coming to the business because they wanted Martin Bower, he wanted the firm to be like a white shoe law firm that had a reputation for excellence that lived on past it's founders.  

 

Under his leadership, it became an international powerhouse with offices all around the globe. He started the practice of hiring newly minted MBAs and teaching them the firm's process rather than the accepted practice of hiring people with decades of industry experience who were knowledgeable but not good at thinking outside the box. He was also responsible for the remarkable culture there of putting the client first, and wanted McKinsey to be a profession, not a business.  When they decided that no partner should own more than 5% of the firm, he sold his shares (40%?) for book value, passing up millions because he wanted to signal his commitment to the idea that they should be looking out for the future of the firm, not their own personal enrichment. 

 

The writing is just okay. The author is not going to be mentioned with names like Neil Gaiman, but she did access to and extensively quoted many people who worked closely with Bower and were aware of his thought process and ethics. It's an interesting read for a few reasons. Most importantly for the idea that a lot of organizations like Berkshire, Southwest Airlines, Apple etc, have a distinct and strong corporate culture that is traced to it's founder.  That culture only survives if it's lived and constantly reinforced, not just reprinted in the marketing materials. 

 

The other fascinating this was Bower's ability to turn a weakness into a strength. When they expanded to London, they had no clients and no connections, but when the Bank of England needed someone to do work for them, but didn't want a British firm because they had ties to other banks, they went with McKinsey.  Similarly, when Royal Dutch Shell needed a consultant, they didn't want someone who was partial to the British or Dutch factions, so McKinsey was a great choice.  After a few things like that, they were a player on the continent.  

 

It's useful to read about strong cultures like this in industries that seemingly have no moat.  I think Berkshire, and some other places with a strong culture have similar DNA. At McKinsey some of the older partners occasionally ask "is this how Marvin would have handled it?" and that's probably true at Apple or Disney too.  I probably wouldn't have gone out and bought this book (my better half gets books on McKinsey for free from work and gave it to me), but it was there and I read a lot and if you are a voracious reader like me, it's worth a read.