How McKinsey Netflixed Bain & BCG to shatter HBR’s monopoly
Headlining Consulting Best-Practices
Editorial
As we prepare to release our Strategy Consulting Rankings, our analyses of the Top-19 consulting firms’ marketing strategies exposes one incontrovertible trend; the Harvard Business Review is losing its importance to the spread of management consulting ideas. This is a huge, unexpected and stunning shift. It is the equivalent of saying the Bible is no longer the source of scripture within a Church.
Since before we were born, when we joined consulting and when we made partner, there had been one universal foundation on which consulting careers and consulting ideas are granted legitimacy. A prominent partner had to publish a feature piece in the Harvard Business Review, preferably two a year and keep that steady stream going. He would thereafter build a collection of books, seminars and methodologies around the theme in the articles. This would lead to work with clients.
***
Our editorials are read widely, including within the leadership of the major consulting firms. We know this because some firms write to us. These critiques may be hard to read but they have the sincere purpose of helping the firms improve. The history of management consulting is one of many great firms that either failed and/or were unable to survive as independent concerns, or were tainted by scandal. As you read this the firms are constantly making decisions, some of which may lead to the same fate.
Rather than getting upset about these pieces, it may be more useful to think about the real problems we discuss and how you can play a role in fixing them. It is not healthy for you to assume the firms are perfect nor are we attacking the firms by pointing out their areas for improvement. Other case interview preparation services choose to avoid these topics because it hurts their business. Our clients go on to join all these firms. We hope they take a hard look at what they find and try to make the firms even greater than they currently are.
***
This approach was manna from heaven for the marketing departments who did very little actual marketing. The marketing departments did not create any demand. They left that to HBR. All they needed to do was wait for the chatter to erupt around an HBR piece and ride it all the way to a client’s office. It was a tried and true method.
McKinsey shrewdly began upending that model from the mid 1990’s and we can see the results in 2014.
Across January to August 2014, McKinsey only published one article in HBR, when Dominic Barton penned a fairly pedestrian piece along with Mark Wiseman, CEO of the Canadian Pension Plan Investment Board. In that period BCG published one article, Bain published three, Accenture and IBM published two and Deloitte published one piece in HBR.
That certainly looks like a victory for Bain and the like, and we are sure they are quite proud of themselves.
But is it a victory to get so many articles into the Harvard Business Review?
To determine the usefulness of an HBR publication strategy, it is crucial to remember that being published in HBR is not the prize. It is the means to an end. So lets see what that end is, how it is typically reached and if HBR continues to be the best route to that end goal.
A HBR feature piece was previously considered a home run. It was the equivalent of Mickey Mantle stepping up for the New York Yankees and delivering a stunning home run with the bases preferably loaded. Everyone would be talking about it for weeks and months. And that is what consulting firm’s wanted with the publication. They wanted to dominate, at least for a time, all the digital chatter among executives.
To reference the gist of Anita Elberse’s insightful book, the HBR article was a consulting firm’s tent-pole event in that it was the centerpiece of a firm’s marketing efforts. Everything revolved around this article like it was the star performer circling the proverbial tent-pole at Cirque du Soleil.
Getting into HBR was so important that a firm would deploy a significant amount of a senior partner’s time, and a significant amount of research dollars and support-hours to test the idea with clients. This was done to validate the piece for publication in the HBR. The publication looked for the ideas that have been implemented and the insights extracted from that experience. A consulting firm’s research not aimed for the HBR would receive a disproportionately less portion of the investment dollars.
This is very similar to a movie studio that would invest the bulk of its resources behind a few blockbuster movies like the Harry Potter or Batman franchises, while allocating far lower investment to movies that have no chance of being a blockbuster. As Elberse proves in her entertaining book, this strategy works.
Consulting firms, in particular Bain and Deloitte S&O, may not even realize they are pursuing a strategy perfected in the movie industry. Until McKinsey started shifting the dial in the early 1990’s, this worked mightily and the payoff was massive when it succeeded. It could change a firm’s fortunes.
Think of Chris Zook and the impact his tent-pole articles had on Bain. The man has published so many articles and books on the theme of profiting from the core, around the core, adjacent to the core, if you can get a visa to the core, take a cruise around the satellite of a the core, marry into the core, divorce from the core but marry another relative of the core etc., we honestly do not think anyone but him can remember the differences between the articles.
That is not to say the pieces have no merit. They do and the point is that he has stuck to this one theme by constantly refining it with major and minor adjustments. Why leave a winning theme?
Bain used the articles to arrange client meetings, get into the press, arrange exclusive seminars, write books and build entire practices off the article. The strategy page for Bain is a shrine to Zook and there are sub-sites and sub-sites of sub-sites to his work. It is a dizzying array of interlinked sites. His work, a pillar of Bain thinking, was the gift that kept on giving client billings.
Bain must surely have dedicated marketing and digital assets just to keep Zook’s work alive on the site.
So, every Bain partner wants to copy Zook’s success, or luck. Darrell Rigby and Fred Reichheld, among others, are probably the closest to achieving this though even they are far away.
Yet, has it worked? Is Bain dominating the digital chatter and corporate corner office’s with their HBR onslaught? These are the questions that ultimately matter.
Here is the strange thing about McKinsey’s relative silence in HBR this year; the firm has not suffered in terms of being quoted, referenced, and cited or even owning an issue in the media through the year. As part of the Top-19 Strategy Firms Rankings analyses, we count the number of times each day that a prominent publication like the Wall Street Journal or the New York Times cites each firm’s research, interviews a partner or exclusively discusses the research of a firm across a variety of platforms including the news site and social media.
While McKinsey’s contributions to HBR have dropped, they completely dominate the media reference metric by a whopping margin. Therefore, while it is true that Bain bet on a few tent-pole HBR articles that were published, they bombed at the box office-equivalent of media domination.
Basically, for every 1 reference made about BCG or Bain in prominent publications, McKinsey gets between 3.5 to 5 references per day, on an average day. It is usually more, When Bain published an article in HBR we saw the references surge and then fall very quickly thereafter. Yet, the surge never takes them past McKinsey.
So Bain puts in a lot of work to basically come second on their best day.
That is what matters. Given the relatively limited and unsustainable media upside from Bain’s HBR strategy there should not be so many article sequels for Bain in the HBR. Yet, as we will explain below, they have no choice but to publish via HBR, even if the route is not very productive.
So what has McKinsey done differently?
The difference is that McKinsey’s media presence has a different structural foundation and no matter how many articles Bain publishes in HBR, unless it changes its structure to engage the public and its clients, it will continue falling further and further behind.
McKinsey has forward-integrated to control the channel through which their ideas are delivered to their C-suite client and general readers. They have a solid foundation in the McKinsey Quarterly and McKinsey Global Institute carpeted by a warm, cozy and formidable social media presence. They are like social butterflies fluttering from reader to reader because they completely control the last intellectual mile into a readers mind. McKinsey can choose when, where, how and on what terms to engage their audience. That puts them in an enormously powerful position and avoids the unpredictability of the HBR editors who naturally want to avoid one firm dominating a particular issue.
This forces Bain, and other firms who do not control their delivery channel, to take media share from McKinsey through the only influential channel they have left: constantly churning out HBR pieces.
This reliance on HBR leads to significant negative leadership consequences for Bain and any other firm which does not control their delivery channel.
Logic would dictate that senior partners have the best chance of being published in the HBR. The last time we looked a junior consultant had never anchored a major article in the HBR. Due to this Bain is forced to rely on just a few partners who have the highest probability of being published in the HBR. They are forcing those few partners into writers block, since no one can sustain the quality and pace needed for constant publications. Moreover they are not training enough consultants like the junior partners and rising stars to write effectively.
For example, we find just a few senior partners, like Darrell Rigby; dominate the list of authors in HBR.
What happens when these partners retire? A a few star partners who produced these tent-pole articles are maintaining the Bain brand. Bain’s intellectual brand is being held up by just a handful of eminent but aging partners. This is not healthy for the firm. Management consulting is about building a vast pipeline of ideas from numerous sources withing the firm. The firm’s brand must always be bigger than any one person. In effect, Bain Strategy is Zook Strategy and Bain Retail is Rigby Retail. That is great for Zook and Rigby but not so much for Bain.
There is a chain of critical dependencies. Zook is dependent on HBR to keep his ideas alive. Bain is dependent on Zook to sustain their intellectual property. Being so dependent on HBR is bad enough, but Bain is dependent on to few partners for major intellectual impact.
What about the younger partners who want to create a brand but are unable to? Their lack of a serious and credible avenue to nurture their thinking does not speak to strong intellectual depth on Bain’s side.
However, if Bain owned its own platform like the McKinsey Quarterly or the McKinsey Global Institute it could conceivably publish more since there are no quota’s on the articles that can be produced and the standards are different. This is the advantage McKinsey has and why it no longer needs to publish as heavily in HBR.
McKinsey has invested in its own platform, integrated its site, bolstered the McKinsey Global Institute and McKinsey Quarterly whereby all partners and consultants are encouraged to produce content and there is of course no limit on the number of articles that can be published. McKinsey has diluted HBR’s prestige for McKinsey’s benefit. That is a clever strategy since it means McKinsey can unleash hundreds of consultants, managers and principals who would likely never appear in HBR with their current pieces.
Just as the internet gave rise to Netflix, McKinsey is using alternative channels to bypass HBR.
The interesting thing is the firm’s embarked on their diverging media strategies at roughly the same time.
In the 1980’s and 1990’s BCG was killing McKinsey in HBR. It was a serious matter of concern for the firm. Around this time Bill Matassoni took over the role of guiding McKinsey’s brand. His view was that “thugs” duked it out to get the attention of the HBR editors and it was indeed a zero-sum game – since HBR had a fixed number of pages and an unlimited number of wannabe authors. He did a couple of things to wean McKinsey off its dependence on HBR.
First, he encouraged the firm to use other platforms like the WSJ to produce provocative yet factual op-eds that weaved together a narrative for CEOs. In some ways, this was McKinsey’s early test to see if a platform beyond HBR could have the same impact. It did. Partners within McKinsey started professionally challenging the opinions of their peers through more and more pieces, which fed the content cycle.
Second, Matassoni was part of the team, which set up the McKinsey Global Institute (MGI) to merge macroeconomics with rigorous on-the-ground consulting analyses. At a time when the world was shifting, emerging markets were opening up and US firms expanding internationally, MGI helped CEO’s understand the risk, opportunity and impact of economic issues. This really changed the conversation. McKinsey was no longer trying to speak about strategy better than BCG; they simply changed the language and nullified BCG’s strengths in microeconomics.
It was a structural change and BCG has yet to catch-up here.
Third, Matassoni focused McKinsey on bolstering and improving the McKinsey Quarterly by increasing resources and expanding the scope. It basically stopped being a quarterly and became this glittering luxury showroom for curated and handcrafted ideas from the firm. Crucially, since McKinsey hired professional editors, even average pieces from average McKinsey consultants could be polished for publication. The cap on the number of articles was no more and a thousand articles bloomed, while McKinsey controlled the channel to deliver them.
McKinsey had Netflixed its competitors. It owns the last mile of the delivery channel directly into readers’ homes and minds.
BCG’s response was actually to hire Matassoni, which implied they were simply trying to reach parity with McKinsey versus changing the conversation. BCG, however, wisely started building out its own platform in BCG Perspectives. It should do more but it is a start.
Bain has always had the weakest culture of producing internal research and ideas, and distributing it. And that has led to Bain’s enormous reliance on HBR, at their great risk. To mitigate this risk, Bain needs to not just invest in research but also radically overhaul the delivery mechanism to get its ideas out. If HBR does not allow Bain to get out a tent-pole article, Bain’s entire model for building out methodologies fails.
Bain has outsourced the delivery of its messaging and brand power in the market to HBR.
Bain will argue that despite the logic of the above argument, they would like to appear prominently in HBR while simultaneously building out their own delivery channel. While that dual strategy appears eminently logical at face value, it ignores one important fact.
Even if Bain were to publish 6 HBR articles a year, which is theoretically possible in its very best year, and even if a Bain article was somehow awarded the prestigious title of HBR article of the year every single year for a decade, McKinsey always wins.
This is simply because the award is called the HBR McKinsey Award for Best Article and that gets first mention in a tweet, with the author’s employer rarely, if ever, mentioned.
Michael Boricki
Hello Davison,
Thanks. That is something we are looking at. We made some changes to the site and some of the areas are not working correctly.
Michael
Davison
Hello Michael,
To help clarify Alex’s point, for some reason every strategy firm in the rankings list links to defunct or non-existent Google+ posts. I believe these are the “dead links” that Alex was referring to earlier.
Davison
Michael Boricki
Hi Alex,
Thanks for the comments. We are no longer updating the rankings but we are collecting the information and processing it. When you say dead link I do not believe any of the links are down.
Michael
Alex
Hi Michael,
Great article, as usual. This website has given me some great insights on the consulting industry, and I really appreciate you taking the time to analyze the firms.
Quick Question: Are you still updating the consulting rankings? If not, could you fix the link so it isn’t a dead link.?
Alex
Mahmoud Khaled
Thank you for your comment, Michael. I really appreciate it. You are absolutely right too.
Digitalization, MOOCs, big data, cloud computing, social media, gamification and analytics among other technological advances are increasingly revolutionizing virtually everything in our lives. Education and consulting are no exception. Ivy League and Red Brick graduates have been the backbone of the way consulting firms brand and market themselves for so long time as you mentioned. But this model needs to be thoughtfully revisited by many consulting firms as the industry continuously evolves around new challenges, themes and problems, not just strategy-oriented issues, which makes it somehow difficult to predict how the industry will shape up and how the competition will play out in both short and long terms.
Thanks.
Michael Boricki
You are right Mahmoud.
Consulting firms have to be far more creative.
In fact they tend to wholly build their branding and eminence around the Ivy Leagues. Some will say those schools will never lose their lustre, but remember how many people thought that of Oxford and Cambridge in 1940?
Things change rapidly. Consulting firms need to build their eminence around the schools which will anchor their brands in the future.
Michael
Michael Boricki
Hi Jen,
Thanks again for always contributing to the site. We also subscribe to Bain Insights and it is pretty good. Yet, we discount it for several reasons.
When comparing MQ, BCG P and BI, it is crucial to understand the mechanics, motivations and intent behind the article that arrives in your inbox.
The vast majority of Bain articles are written by partners and the majority are written based off a study that had already been done. So Bain is taking an existing study and reworking the findings for general consumption. That is very easy to do but has some enormous limitations.
Research at a consulting firm should be taking the firm in new directions. In other words, as a result of the research, the firm must do new WORK and enter new AREAS. If you look at MQ’s recent work on Africa, it can give you an idea of that. Those pieces where commissioned and done out of the Johannesburg Office at a fairly high cost. They were not simply revamping existing work. I believe Damian Hattingh led that work.
In this case, it was not simply rehashing existing insights from McKinsey’s completed client work, but providing new ideas and themes that led to NEW and DIFFERENT McKinsey work. That is where McKinsey and BCG are far ahead of Bain. Bain tends to repackage known areas.
This is a crucial difference. In medical R&D, something is only called R&D if you move the field forward. with new insights, and the market follows the new insights. The ideas from a firm should always be a little ahead of what the firm is doing and pulling the firm forward.
It is called peer-review if you rehash existing work. There is a reason it has a different name.
MQ’s work on Africa actually made companies and people rethink their investment thesis on Africa. It changed the way companies think about Africa and invest in the continent.
We can say a firm has a strong research platform when the research helps the firm more than the firm’s existing work helps the research.
Finally, there must be an organizational system and culture to do this type of work. Every firm will have one or two offices, practices and partners pushing new ideas into the market. The question is whether or not it is in the culture of the firm and will outlive those few partners who are uniquely doing this. So, while Bain does some interesting work around NPR and Profitability, those exceptions tend to prove the rule.
Hope that helps.
Michael
Mahmoud Khaled
Exquisite as usual, Michael. Actually, you have precisely explained the rarely realized anatomy of the consulting industry’s intellectual capital development and its various uses for marketing purposes. I think that many consulting firms need to quickly adopt new and fundamentally different marketing tools and techniques to attract clients and win projects. Yesterday’s methods and traditional “tricks” will be no longer effective to do today’s work and win tomorrow’s clients as the industry is being incrementally disrupted at a relatively fast pace.
Thanks.
Jen
Excellent piece as usual, Michael.
I subscribe to all 3 – McKinsey Quartely, BCG Perspectives and Bain Insights. Curious why there was no mention of the latter. Are you implying that it’s not on par with the others?
And this was hilarious! “The man has published so many articles and books on the theme of profiting from the core, around the core, adjacent to the core, if you can get a visa to the core, take a cruise around the satellite of a the core, marry into the core, divorce from the core but marry another relative of the core etc., we honestly do not think anyone but him can remember the differences between the articles.”
Profit from the core is still on my list of books to read this year 😉
Aylwin
Hi Michael
I look forward to the interview write up. What I find interesting which was in previous articles in this series was and is BCG and Bain playing catchup. I would expect differentiation to exist at this level of branding. Than, are there other ways for differentiations in consulting.
Aylwin
Michael Boricki
Hi Aylwin,
Good questions. You are right in that there are plenty of internal competitive advantages BCG and Bain would struggle to replicate.
Our forthcoming exclusive interview with Bill Matassoni will answer many of these questions. Bill was the former McKinsey senior partner who set up their branding strategy and also did the same at BCG. So, his views and insights will be especially useful.
Michael
Aylwin
Excellent piece. Would McKinsey have much concern other firms copy their methods, especially outward methods? Doubt would be the case as history repeats itself. There is a raft of internal competitive advantage that the outsiders can’t see. One mentioned in this article on McKinsey partners having to challenge each one’s idea which is fuel for contents. However that is what they do, the how is not so obvious. Is there an approach that shows this?