In the usual model, a consulting firm parachutes a team into a client company. There, consultants analyze tons of data, then share their recommendations with senior. The team leaves and the relationship ends.
Why this model? Because, although hiring outsiders to tell you how to run your business may seem like a luxury, if not a slap at your executives, it’s often more economical to outsource the production of advice. Counseling leaders on how to run their firms is what consultants do, drawing on the experience of others.
Consulting also depends on the regulatory environment. If you run a hospital or car company, for instance, antitrust law limits what you can share with other firms in your industry. Consultants adhere to the law but may know about “best practices” worth paying for, especially if there’s no other legal way to get that knowledge.
Bill Bain flipped that model.
Instead of airlifting a team in and out of a company, Bain & Co. sets up a long-term relationship with only one firm per industry. Working on retainer, instead of a fee, it sells exclusive advice.
Bain’s model works because CEOs like having a house guru, and the long-term relationship gives Bain a stake in whether its advice actually helps the company.
— Adapted from The World’s Newest Profession, Christopher D. McKenna, Cambridge University Press.