What's the Difference? McKinsey, BCG, Bain (MBB)
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.
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 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.
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 reputation for consistently delivering efficiency improvements and being exceptionally diligent. Whilst BCG count the CEO’s of behemoths Pepsi and General Electric amongst their alumni, John Legend, the Grammy award winning musician also spent time working for the consultancy firm.
The smallest of the MBB consultancies, Bain, has fought hard since its struggles in the 1980’s for its place at the top of the consulting pyramid. In order to compete with McKinsey and BCG it has focused mainly on strategy projects and not shied away from difficult challenges. Bain very proudly display a graph on their website showing that Bain clients have outperformed the top 500 companies in the US by a multiple of 4. This stems from Bain’s birth when Bill Bain tied the companies fees to client performance, if the client did well then so did Bain. Whilst this fee structure doesn’t exist to the same extent it is still included in a much smaller way.
This combination of risk appetite, strategy and emphasis on client results has made Bain favourable in the private equity world. This may also be influenced by Bain Capital, the investment firm spun off by Mitt Romney in the 1980’s. Other than 2012 US Republican nominee Mitt Romney, Bain & Company’s alumni includes the former CEO of Dell computers, Kevin Rollins and the CEO of eBay, John Donahoe.
Who should you work for?
Receiving an offer from any of the MBB consulting firms is an incredible achievement but it is also common for exceptional candidates to get offers from more than one of these firms. So, if you had the choice of one of these firms, which one should you choose?
The differences between the three MBB firms are subtle and the graduate application processes are equally tough, they all use similar online testing methods and all conduct case interviews. We have already discussed the differences in the work but as a graduate we understand you want to know what the salary is (that student debt won’t pay itself off), and where you will enjoy the most. We have sifted through Glassdoor to find genuine insight into life at each of the MBB firms.
Bain has been ranked highly as a company to work for many years, earning a place on the top US employers list every year since it started in 2009 and being voted the best company to work for in the US a record four times (2012, 2014, 2017 and 2019). The scores of McKinsey and BCG are also very respectable, and in 2019 BCG ranked 5th with McKinsey coming in 19th on top employers list. So whilst Bain & Company do stand out, you are unlikely to be disappointed taking a job at BCG or McKinsey.
Pros and cons
Taking a look at the keyword counts amongst the Glassdoor reviews we can see what is good and bad about each of the firms.
As you can see there are few differences between the three companies. McKinsey and BCG are almost identical except for a slightly confusing work-life balance inclusion in the pros for BCG. They both feature smart people and mention steep learning curves which is indicative of the high calibre graduates they are hiring every year.
Bain however does have a couple of differences with professional development being highlighted alongside a steep learning curve, this is indicative of the continual training that Bain like to promote within their workforce. For both BCG and McKinsey there are frequent mention counts for “great place” and “work environment” whereas “great culture” is the third highest ‘pro’ for Bain & Company supporting their continually high ranking in the top employers list.
All three firms suffer the same cons that are typical of consulting; long hours, work-life balance and extensive travelling. If you are pursuing a career in consulting it is fair to say that your employer has high expectations. It is also worth noting that these are not cons unique to the world of consulting and many graduate roles will expect a lot of you, especially professional services firms as project scopes creep but clients understandably do not want to pay any more in fees.
After years of studying and with your student debt increasing, salary is unashamedly important when deciding which job offers to take. Whilst all three MBB firms pay well, if money is your main motivation then do not expect to earn as much in consulting as you could in a graduate investment banking role.
McKinsey & Company are the lowest paying of the three firms in both the UK and falls behind BCG in the US, this is widely known, and McKinsey do indirectly compensate for this as their reputation does seemingly bring better exit opportunities for its alumni. BCG and Bain pay their new graduates the same in the UK, but they differ in the US with Bain paying a marginally higher base salary but BCG more than making up for the shortfall with the highest average bonus of all the firms.
In summary, they are all places where you will be surrounded by other high achievers, learn a lot and earn good money. The differences are subtle but if prestige and follow-on career opportunities are the most important then McKinsey maybe the best choice for you, if you value culture and would enjoy working on more ‘drastic’ strategy projects then Bain could be a good option. If you are torn, and want prestige, structure (but not too much) and enjoy squeezing out the fine margins then perhaps you should go down the middle and choose BCG.
Finally, if you decide that you want to work in a specific industry or focus on a particular function (such as IT) then maybe widen your net further. There are many great consultancies that specialise in these areas specifically.