Boston Consulting Group
Careers at Boston Consulting Group
Mission
Boston Consulting Group’s mission is to go deep to unlock insight and have the courage to act.
History
Bruce Doolin Henderson was an employee at Arthur D. Little (ADL), one of the earliest business consulting firms. Over time he became bothered that ADL did not allow him to explore his thoughts on how companies should make decisions. He made his frustrations known to the CEO of Boston Safe Deposit and Trust, an ADL client, and was invited to launch a consulting division at the bank.
In 1963 Henderson joined Boston Safe Deposit to start the department. He hired several employees, but by the end of the year still had difficulty attracting clients. In response, he began writing “Perspectives”, a series of short essays explaining his view on various business topics. He mailed them to a list of leading executives ten times a year, and they helped to build his brand.
In 1965 Henderson determined that the unit needed to differentiate itself from bigger rivals more effectively. He eventually decided that they would market “business strategy” services. At the time, most consulting firms addressed specific, short-term problems and focused on internal operations. Henderson planned to address long-term strategy as well as the impact of external events.
A key component of this plan would be the development of tools that could increase understanding in these areas. The first one Henderson created was the “experience curve” in 1966. It posited that unit costs decrease as firms gain production experience. Another was the product portfolio matrix, which separated a firm’s offerings into “stars”, “cash cows”, “question marks”, and “dogs”.
Henderson began promoting the tools to clients, and they grew in popularity, leading to new customers. In 1968 he took advantage of this success by spinning the consulting unit off as a subsidiary called Boston Consulting Group (BCG). The firm expanded rapidly, growing to 36 employees by the end of the year, then doubling its headcount in another year’s time.
The next few years saw several milestones. BCG grew further by recruiting from prestigious business schools with the lure of high salaries. It then expanded internationally, opening offices in London, Paris, and Munich during the 1970s. In 1974, it took advantage of the ERISA Act to become an independent company. BCG would go on to become one of the leading strategy consulting firms.
Business model of Boston Consulting Group
Customer Segments
BCG has a mass market business model, with little differentiation between customers. The company targets its offerings at firms of all sizes and industries seeking management consulting services.
Value Proposition
BCG offers four primary value propositions: convenience, customization, performance, and brand/status.
The company creates convenience by offering a three-step program for client enablement. The process involves a) identifying the capabilities necessary to win, b) developing better managers by providing them with a mix of managerial and technical skills, and c) developing next-level business platforms to maximize manager effectiveness. The program can be applied across industries.
The company offers customization through the second step of its enablement program. It develops programs with a curriculum tailored for specific managers and cohorts. For example, its “lean curriculum” has 24 modules, which are used in different combinations for different cohorts.
The company has demonstrated strong performance through tangible client results. High-profile examples of these outcomes include the following:
- An industrial engineering conglomerate used BCG’s enablement program to obtain more than $25 million worth of positive results (e.g., savings)
- A rolling stock manufacturer used BCG’s lean transformation program to decrease lead times by 70% and increase productivity by 30%
- A government agency used a new BCG operating model to increase productivity by 15%
- A pest control company used BCG’s pricing and infrastructure improvement program to drive bottom-line improvements of over 250 basis points annually
- A building products company used BCG’s lean manufacturing program to create bottom-line improvements worth over $100 million within two years
The company has established a strong brand as a result of its success. It is one of the world’s top management consulting firms, operating 85 offices in 48 countries. Its clients include over two-thirds of the Fortune 500. Lastly, it has won many honors, including recognition as one of the “World’s Best Outsourcing Advisors” by IAOP (2016), as one of the “Best Firms to Work For” by Consulting magazine (2015), and as one of the top three consulting firms by Vault for three years in a row.
Channels
BCG’s main channel are its partners that acquire new consulting projects. The company promotes its offering through its social media pages and attendance at conferences.
Customer Relationships
BCG’s customer relationship is primarily of a dedicated personal assistance nature. Customers work directly with staff members to implement solutions. That said, there is a self-service component. The company’s website features self-help resources such as articles and research reports.
Key Activities
BCG’s business model entails creating and developing problem-solving solutions for customers.
Key Partners
BCG maintains the following partnership programs:
BrightHouse – The company partners with this firm, billed as the world’s first ideation company, to help clients become more purpose-driven to increase employee engagement and customer loyalty.
BCG Digital Ventures – The company works with business leaders and investment communities to quickly develop and introduce transformational digital platforms, products, and businesses.
Key Resources
BCG’s main resources are its human resources. Beyond its traditional consulting staff, it maintains the following key groups of employees:
BCG Gamma – Consists of world-class business consultants and data scientists who specialize in advanced analytics, utilizing computer science, machine learning, artificial intelligence, and statistics. Team members operate from BCG’s North American, Asian, and European hubs.
Centers of Excellence – Consist of specialist coaches and consultants who utilize proprietary resources and tools and design certification programs for clients. There are seven centers total.
Cost Structure
BCG has a value-driven structure, aiming to provide a premium proposition through significant personal service. Its biggest cost driver is likely cost of services, a variable expense. Other major drivers are in the areas of research/development and customer support/operations, both fixed costs.
Revenue Streams
BCG has one revenue stream, the fees charged to its clients for its selection of services. These fees vary by type of client and project.
