Management consulting is one of the more popular career paths chosen by many who graduate from HBS. Nevertheless, a common criticism often associated with the industry is that it has a penchant for creating elaborate reports with unrealistic solutions that generate little to no value for clients.
In 1973, Bain & Company was founded explicitly to address this issue, and the firm continues to live by its mantra of “results, not reports” to this day. Its operating model has evolved over time, but maintains its singular focus on hiring, developing and retaining teams of highly motivated professionals who are as committed to the success of their clients as they to their own. Now widely recognized as one the “Big 3” in the industry, Bain is a clear demonstration of how closely aligning the business and operating models is critical to the creation and maintenance of a successful company.
On the surface, Bain’s business model is not unlike its competitors in the industry. It relies on a partner group to build strong relationships with its clients, selling consulting projects staffed by small teams of highly qualified professionals recruited from leading undergraduate and graduate institutions. What makes its approach unique, however, is the firm’s central belief that meetings and presentations and meaningless unless they result in actionable change that results to a positive outcome for the client. As much time is therefore devoted on each project to implementation as to determining the “right answer.”
To initiate and cement change, Bain also relies on its junior employees to work hand-in-hand with middle-managers at the client. This collaborative approach builds trust and fosters an openness to changing often entrenched ways of getting things done. This is crucial to disseminating senior management directions throughout an organization to ensure adoption and sustainability once the project is complete, while also building client promoters at all levels of the company. While all of this may seem obvious to any casual observer, this approach was fundamentally different to the “report generation” orientation of the industry in 1970s.
To sustain its competitive advantage, Bain has created an operating model that is focused almost entirely on developing by far its most important asset; its employees. These principles extend from the rigor of the hiring and training process, to the emphasis on professional development and to the focused promotion and compensation structure.
During the recruiting and interviewing process, Bain looks for prospective employees who not only have the analytical foundations to crack the problem, but who also demonstrate an ability to work collaboratively in teams. This willingness to share insights and rely on others’ expertise is central to the premise of working collaboratively with clients. Whereas other firms may only pay lip service to fit, Bain places an outsized emphasis on the need to hire humble and empathic individuals who are aligned with the operating principles of the company. Throughout their careers, employees regularly attend intensive training sessions that serve to cement the “Bain approach” to client-facing work.
Given this business’s dependence on high-performing, collaborative teams, it is unsurprising that professional development and mentoring relationships play a central role in the operating model. At its foundation and unlike almost any other large consulting firm, Bain employs a local staffing model in which project teams are composed entirely of professionals from a single office. While this comes at the cost of maximizing employee utilization across the system, it fosters deeper mentor/colleague relationships that improve the professional skills of its employees and enshrines the core aspects of the Bain approach.
The emphasis on training and professional development would not have true clout unless it was supported by compensation and promotion policies that explicitly reward employees who embody the firm’s operating principles. Generating a positive outcome and adding value for the client comprises only 1/3 of the performance evaluation metrics, with fostering collaborative client relationships and proactively facilitating others’ professional development given equal weighting to “cracking the case.”
Over the last four decades, Bain & Company has grown into a powerhouse with over 5,000 employees across more than 50 global offices. It has built lasting client relationships with senior executives in much of the Global 2000, established through a collaborative, thought partnership approach that drives tangible impact. The company’s future success will very likely depend on how well it maintains the core components of its operating model, as it evolves to adapt to new business environments and challenges.