What's the Difference? McKinsey, BCG, Bain (MBB)

Updated: Jan 5, 2021

Intro


MBB is the acronym given to the three biggest consulting firms by revenue. They are widely regarded as being the leaders of the consulting industry, charging the highest fees, paying the highest wages and most importantly possessing the best talent.


Consulting, and in particular strategy consulting, predominantly involves the analysis and development of solutions to a business problem. As they work with multiple clients within a single market, consulting firms are able to bring insight to a business problem that the client may not have available to them. As the leaders in the industry, MBB are regarded as the best problem solvers and strategists and so when researching consulting firms their names (or the acronym MBB) appear most often.


Origins


McKinsey & Company


James O. McKinsey founded the company in 1926, he was a professor of accounting at the University of Chicago and created the company with the desire to bring accounting principles to the management teams of US businesses. Whilst the consultancy began focusing on accounting and budgeting advice it spilled over into organisation and management strategy organically. Management theory was in its infancy at the time and the firm gained a strong reputation for helping both struggling and healthy businesses survive and thrive in the business world.


McKinsey grew steadily until the emergence of its two main competitors 40 years later. Previously unchallenged, McKinsey had prioritised international expansion over industry expertise which opened the door for industry focused consultancies. Despite the new entrants McKinsey has grown from 88 staff in 1951 to over 27,000 today.


Boston Consulting Group


The Boston Consulting Group was founded in 1963 by American, Bruce Henderson. Originally training as a salesman, Bruce later trained as an engineer and then attended Harvard Business School. After almost 20 years working for a large corporate company he joined consultancy firm Arthur D. Little but only stayed for a couple of years as he fell out with the management team. He was then given the opportunity to start his own consultancy by creating a consulting arm for The Boston Company, a large bank.


The consultancy served the clients of the bank in the beginning and continued to grow, branding itself as business strategy consultants. In 1974 the company bought out its owners The Boston Company and formed a new company under the name Boston Consulting Group or BCG for short.


Bain & Company


Slightly ironically, as Bruce Henderson had done, a group of employees left The Boston Company to form a new consultancy in 1973 - Bain & Company. Bill Bain had led a division of the firm that was generating 50% of its revenues and he was assumed to be the successor of Bruce Henderson when he retired. After growing increasingly frustrated, Bill Bain made the decision to leave with most of his senior management team following him out of the door. Within a matter of weeks, Bain & Company were working with several clients of The Boston Company.


Bain & Company experienced many years of struggle in the 1980’s as the company fought to control a public relations crisis for its involvement with Guinness and accusations that it had artificially inflated its stock price. At the same time senior management were growing frustrated with Bill Bain as he withheld information such as total revenue and profits. Mitt Romney, better known for his political career, is widely credited with saving the company from bankruptcy and setting it on its path to the third largest consultancy that it is today.


Difference between McKinsey BCG and Bain (MBB)


Whilst the MBB firms all have client crossover and are largely capable of delivering the same projects, they do have their differences the easiest to see is for revenue, headcount and geographic coverage:



Beyond the top line numbers there are also differences to be found in their approaches, services offered and office cultures.


McKinsey


McKinsey are vocal about their ‘one firm’ philosophy and ‘the McKinsey way’ which enables them to fly consultants from multiple locations to a client and despite never meeting, seamlessly begin working together immediately to solve the problem at hand. McKinsey analysis is recognisable as it follows a set framework of when analysis should delve deeper and how it should be communicated to the client. This rigid framework also has its flaws as it inevitably constrains the creativity of its highly talented employees.


According to McKinsey’s website, they serve more industries than either Bain or BCG but offer the least services. This is because McKinsey maintain a large focus on working with the top leadership teams and like to address the function as a whole rather than its component parts. Whilst BCG promote pricing as an individual service, McKinsey include this under sales & marketing. This emphasis on interacting and working with senior management teams has made ex-McKinsey consultants popular choices for CEO jobs. Notable alumni include Facebook’s Sheryl Sandberg and Google’s Sundar Pichai.


BCG


Methodology is what BCG is most proud of when discussing their differential. They have become known for developing simple, effective frameworks with the BCG matrix proving the most popular. These frameworks are easy for the client to understand and highlight issue clearly. The BCG matrix is a visualisation of where a company sits in its market in comparison to its competitors. As well as good communication with clients, BCG also place more emphasis on collaboration with their clients, going beyond the top level of management and including middle management in the process.


Their desire to work with more levels of the business may be a reason why they advertise less industries served than McKinsey and Bain but the highest number of services. BCG have built a reputatio