McKinsey's Marvin Bower

Vision, Leadership, and the Creation of Management Consulting

Elizabeth Haas Edersheim

• Publisher: Wiley
• Year: 2010
• ISBN:
  9781118040140
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Consultoría

"I had the privilege of working closely with Marvin and McKinsey for many years. This book makes Marvin come to life and perpetuates him as a role model."
-Peter F. Drucker "A wonderful book about a wonderful man. In many ways, Marvin's McKinsey framed the hypotheses in our own search for excellence-for example, passion for values, belief in people as the prime resource, and willingness to let people experiment. As well as I thought I knew Marvin, however, this remarkable book, drawing on the collective memories of those who worked most closely with him, taught me a ton about how extraordinary the man really was and what made him that way. Many have called Drucker the man who invented management; I think history will conclude that both he and Marvin Bower share that pedestal."
-Bob Waterman, coauthor of In Search of Excellence "Marvin Bower became a legend, not just within McKinsey & Company, but within professional services and the business world more broadly. In everything he did and said, he embodied the professional approach and the importance of values. This book sheds remarkable insight on a remarkable man and on the power of constancy of purpose."
-Ian Davis, Worldwide Managing Director, McKinsey & Co. "It is as Marvin would have wanted it-simple, honest, fact-based, wonderful stories with a long-term perspective. An insightful read about the father of management consulting."
-Lois Juliber, retired COO, Colgate-Palmolive "This book provides fascinating insight into the early days of modern management consulting. It is an extremely enlightening look at the origin of one of America's most important professions and one of America's most innovative leaders."
-Thomas H. Lee, founder, Chairman, and President, Thomas H. Lee Partners L.P.

PART I

Translating a Vision into Reality

Ideas are not enough. They do not last. Something practical must be done with them.

—Marvin Bower, 2001¹

CHAPTER 1

Marvin Bower

1903—Harvard University had no business school. The New York Times cost one cent. Women could vote in 2 of the 45 states. The Wright brothers made their first flight. Thomas A. Edison’s light bulb was already 24 years old.

2003—9,000 applicants competed for 900 places at the Harvard Business School. The New York Times cost $1. The majority of registered voters were women in 42 of the 50 states. British Air decommissioned the first supersonic commercial airplane, the Concorde, after 24 years of active use. The light bulb, after 124 years, was fundamentally unchanged.

Born in 1903, Marvin Bower lived in one of the few houses in this country that had electric light. When Marvin died in Florida almost 100 years later, he had become to the world of business and management what Thomas Edison was to technology. Both men were elected to the Business Hall of Fame. When notified of the honor being conferred on him, Bower said, “It must be a mistake. I’m not a businessman. I am a professional.”¹

His profession was one that he virtually invented: top management consulting. As the person who transformed McKinsey & Co. from a nearly defunct accounting and engineering firm into a preeminent adviser to senior executives throughout business and, on occasion, government, his term of service was a remarkable 59 years, from 1933 to formal retirement in 1992 at the age of 89.

What distinguished Marvin Bower was his dedication to values and his personal integrity. As John Byrne noted in an article in Business Week after Marvin’s death in January 2003:

Bower was McKinsey’s high priest, the man who made the partnership the gold standard in its industry.... He strongly believed that, like the best doctors and lawyers, consultants should always put the interests of their clients first, conduct themselves ethically at all times, and always tell clients the truth—rather than what they wanted to hear.²

Bower’s ethical sense and values can be traced directly to his early years. The firstborn child of Carlotta and William Bower, Marvin Bower grew up in a family of modest means in Cleveland, Ohio. While the Bowers were not poor, they valued integrity and respect over money. Two years after Marvin’s birth, his brother, Bill, was born.

The Bower family’s emphasis on learning was a major element of Marvin’s childhood. Required reading included stories and poetry, with William Bower keeping track of the books Marvin and his brother read. Marvin read every Mark Twain story twice; as he completed one, he would initial it.

His father was the ideal role model because his work on complex matters of land title transfers had both intellectual and practical hands-on aspects. It involved both technology and law, and required business acumen and very high ethical standards. William achieved national recognition in his field, just as his son would in later years. William Bower regularly took Marvin and his brother on tours of different kinds of industrial plants in Cleveland so they could experience firsthand what each plant was like. Marvin remembered these plant tours as fun and absolutely special because his father sometimes even took off a day from work to tour a plant with Marvin and Bill.³ It is a fair guess that Marvin’s desire to learn something useful and important from any and every experience was inspired by his father. As they would leave each plant, his father would ask, “What did you learn?”

While ostensibly a conservative midwestern family, the Bowers did not emulate the patriarchal structure typical of the time. More democratic in his approach, William Bower sought the opinion of all family members when it came to important decisions. Marvin clearly remembered being included in the discussion when his family was considering a move to the other side of Cleveland. In fact, the discussion itself overshadowed Marvin’s memories of the actual move. As Marvin recalled, “[It was] remarkable [that my father] continued to involve his sons in family decisions. Of course, my input did not necessarily influence the family decision—I can’t even remember what I said—but I did speak up on that and other occasions when I was invited to participate.”⁴ Such events would have been Marvin’s first introduction to a non-hierarchical management structure.

Marvin demonstrated his independent way of thinking early on. In high school he met Helen McLaughlin, the woman who would become his wife. He recalled that his father did not approve of his going steady with Helen: “Dad and I had a real struggle until he learned that I would not give in about going steady.”⁵ His memories of that time also included an influential English teacher, editing a school newspaper, and holding down a wide variety of summer jobs.

Laura Edwards was Marvin Bower’s English teacher in high school. Even at the age of 99, Marvin continued to retain strong memories of her and the effect she had on him and Helen:

Laura Edwards made learning fun. We came to like her, and soon she asked that we all get on a first-name basis.... No other teacher did that. In a funny way, simply doing that made us feel closer to Laura. . . . She lectured us all in a pleasant manner about getting good grades so we could get into colleges, as we all intended to do. I think we all took it to heart. She was an outstanding teacher and influenced Helen to go into teaching. Helen and I visited her when we returned to Cleveland after moving away, and wrote to her over many years.⁶

Marvin adopted this practice of dealing with people on a first-name basis and made it an integral part of his relationships with others, colleagues and clients alike. He was known to everybody simply as Marvin, and if someone called him Mr. Bower he would correct him or her.

His ability to communicate clearly and effectively was evident in his high school years, when he launched a school newspaper entitled Home Brew.⁷ The school administration did not like the title (this was during Prohibition), but the first-rate quality of the reporting convinced them to allow the name chosen by Marvin, providing him with an early lesson in how powerful good communication skills could be.

Each summer Marvin would work at jobs obtained with his father’s help. He worked as a surveyor’s helper, an ice deliverer, a factory worker, and a Boy Scout camp counselor during World War I when there was a shortage of help. As Marvin recalled, “It was a good experience. I had some real responsibility and I had excellent teachers, so I learned a great deal [despite being only 15 years old]. I collected a tidy sum of money and Father taught me how to save.”⁸ In years to come, Marvin Bower would prove to be frugal not only with his own money but with the money of clients as well.

An industrious young man, he was also adventurous. One summer, he and a friend, John Hamilton, set out to take a bike trip to Buffalo and back.⁹ They thought it would be good training for football. They rapidly found the trip boring—more hills and mosquitoes than expected. After about three days of boredom, they grabbed onto a slow-moving truck. The truck driver did not know they had hitched on and began going faster and faster. Marvin and John let go and smashed into the pavement, fortunately without injuring themselves. A few days later, they reached Erie, Pennsylvania and turned around. The next summer the tenacious Marvin and John again set out for Buffalo, this time using William Bower’s outboard motor on a rowboat they had built. A storm set in over Lake Erie, the motor died, and Marvin and John were washed up on an island. They managed to swim to the mainland, call home, and alert the Coast Guard. That ended the boating adventure for the two high school students. The following year, still set on visiting Buffalo, Marvin came up with a more practical approach: He asked his father if they could go to Buffalo for their summer vacation.

After high school, Marvin Bower attended Brown from 1921 through 1925 at his grandfather’s suggestion. When Marvin reflected on his time at Brown, he mentioned one of the few regrets in his life: “I isolated myself in my fraternity too much. I didn’t take advantage and get to know the full campus of people.”¹⁰ At Brown he met Malcolm Smith, who became a close friend for life, and studied philosophy and economics, the latter being a relatively new academic field at the time.

Two of Marvin’s college professors made a lasting impression on him: One was an economics professor named Patton who used the outstanding text by Marshall to teach principles of economics so they could be remembered. The other was the psychology professor who was very good in dealing with people, and from whom he learned a lot about listening and people.¹¹

Following Brown, on the advice of his father, Marvin went to Harvard Law School, while his friend Malcolm Smith went on to Harvard Business School. Marvin recalled:

It wasn’t hard to get in . . . I had an adequate but undistinguished record scholastically, but one didn’t have to have top grades to get into Harvard Law in those days. The big problem at Harvard Law at that time was staying in, because they flunked people out.¹²

Marvin was able to self-fund his law school education—he had saved earnings from his many summer jobs, and by 1925 he had made enough successful investments in the stock market to pay for his schooling.¹³ Almost everyone made money in the stock market in the 1920s, but it was very unusual for a 22-year-old to have been such a careful investor.

For four summers, starting in 1925, Marvin worked for the Cleveland law firm of Thompson, Hine and Flory (TH&F).¹⁴ During the first summer, his assignment was to collect debts for clients of the firm, principally wholesale hardware companies in Cleveland. First the clients’ salesmen tried to get the retailers to pay up, then the wholesalers wrote letters to the retailers; if this proved unsuccessful, they turned the bad debts over to TH&F. When Marvin went to see the retailers—“dunning” them, it was called—he found he had more punch in person than through a letter: His style was so effective that he could persuade many of the retailers to pay up. TH&F continued to use him in that role for the next three summers.

In 1927, in the summer before Marvin’s last year at law school, he married his longtime sweetheart, Helen.¹⁵ Over 70 years later, Marvin still remembered the details of that day—what it cost to rent an awning for the church, the problems of renting a formal suit, the dress Helen was wearing, and of course his friends who attended. The Cleveland News coverage singled it out as the “Wedding Event of the Week.”¹⁶

Their honeymoon was by car—a “new” (secondhand) car.¹⁷ In typical Marvin fashion, this trip was going to be an adventure, and there was no detailed itinerary. The couple started out late, ending up in Erie the first night. (There were no interstate highways back then, although most of the roads in highly populated areas had some sort of paving.) They had planned to tour Nova Scotia, but instead meandered around, visited many interesting places, and met a variety of people. After two weeks, they arrived in Cambridge, Massachusetts, just in time for Marvin to go back to school.

When he finished law school, Marvin was determined to work for a firm he knew he could be proud of. He targeted Jones, Day, Reavis & Pogue, a highly respected Cleveland law firm. As he told the story, he had not done well enough in law school for Jones, Day to make him an offer, so he decided to go first to the then fledgling Harvard Business School to strengthen his record. His friend Malcolm Smith had found business thoroughly absorbing and was convinced that business was more creative than law.

Once he entered business school in 1928, Marvin confirmed what he had already suspected—that he really enjoyed business. A member of The Harvard Business Review, he was particularly interested in marketing, statistics, finance, and public utility management.

While Marvin was in business school, Helen worked as a teacher (ultimately becoming a principal in Medfield, Massachusetts) to cover their living expenses, with schooling paid for by their stock market earnings. In the summer between his two business school years, Marvin worked for the law firm of Davis Polk in New York, staying in Malcolm Smith’s apartment in Bronxville while Malcolm was away. Marvin’s strategy paid off. After graduating from the business school in 1930, he joined Jones, Day in their corporate law practice.

In 1933, after three years with Jones, Day, Marvin left the firm, plunging headfirst into the business world after he consulted his friend George Dively, a Harvard Business School classmate of Malcolm Smith and a fellow Clevelander, who agreed that such a move was wise. Marvin joined what was then James O. McKinsey’s accounting and engineering firm. Six years later he bought it, and oversaw its transformation into the premier firm in a new profession—management consulting.

Marvin Bower’s foray into the business world would have far-reaching effects on business management throughout the world. He successfully built an eminent institution—and through it a profession—and simultaneously influenced thousands of leaders. His professional life was marked by his commitment to people, his caring about the success of client institutions and promulgation of important ideas, and his absolute integrity. During his almost 100-year lifetime, business went from a second-class profession (for those who even deigned to consider it as a profession) to the engine driving a global economy. Throughout this transition, Marvin was there, anticipating and envisioning the future and recognizing and serving the needs of senior business executives who were faced with huge challenges in a quickly changing world.

As he moved into consulting, Marvin had the opportunity to work with and advise many of the leaders of companies who would lead the charge into less hierarchical structures: Alfred Sloan, chairman of General Motors; Charles Mortimer, chairman of General Foods; Crawford Greenwalt, chairm...