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EspañolBAIN & COMPANY
(Redirected from Bain (consulting))
'Bain & Company' is a management consulting firm, headquartered in Boston, MA, recognized as one of the leading firms in the consulting industry. It has been named by ''Consulting Magazine'' as the Best Firm to Work For in 2003, 2004, 2005 and 2006. Its slogan is "Helping make companies more valuable."
Bain & Company was established in 1973, by a group of seven former partners from the Boston Consulting Group headed by Bill Bain.
Under Bill Bain’s direction, the new Boston-based firm implemented a number of unconventional practices, by traditional consulting standards, in its early years. Notably, Bain would only work with one client per industry to avoid potential conflicts of interest[1]. Partners did not carry business cards and clients were referred to only in code names, further demonstrating its reputation for enforcing client confidentiality. And the company preferred to win work by boardroom referrals rather than marketing itself, sometimes landing clients by offering several weeks of work at no cost until proving the results of their services[2].
What differentiated Bain & Company from its competitors was its focus on generating profitable results for clients through the implementation of its recommendations. The firm specialized in bringing rigorous fact-based analysis directly to CEOs, and its consultants preferred to work on increasing a company’s market rather than simply handing clients a list of recommendations[3]. To win business, Bill Bain liked to show clients the increase in stock price of Bain clients relative to the Dow Jones industrial average[4]. Bain's Web site boasts that their clients "outperform the market 4 to 1."
The firm’s founding was followed by a period of explosive growth in the late 1970s and early1980s. With revenues increasing at a rate of 40 to 50 percent a year, the firm opened offices in London, Munich, San Francisco and Tokyo and firmly established a global presence in the consulting field.
Another innovative consulting approach that Bain pioneered was aligning its incentives with its clients’ results and occasionally taking equity in lieu of fees. An estimated 10% of revenue is from equity or success fees. This model proved successful for both Bain and its clients. For example, the firm took an ownership stake in fruit processor Del Monte while working to revamp the company’s strategy. "Coming into a leveraged buyout situation is never easy," says Del Monte CEO Richard Wolford. "Knowing Bain and their desire to deliver results, they probably would have provided ongoing support regardless. But the fact they own a stake doesn't hurt."
The first consultancy of its kind to establish a private equity practice, Bain & Company is well-known among the money set, offering services like due diligence, IPO preparation, portfolio profit improvement and revenue enhancement, geared toward leveraged buyout and venture capital firms. It is important to note, however, Bain & Company, the consultancy, shouldn’t be confused with Bain Capital, the private equity firm founded in 1984 by four former Bain consultants including former Massachusetts governor Mitt Romney. The two companies are completely separate entities and have no insight into each other’s client base.
After a successful start, the company found itself facing a growing list of challenges in the late 1980s. In the midst of sluggish business conditions and overstaffing, Bain also faced the dilemma of having to turn away business due to its one-client-per-industry restriction. Competition increased as other firms copied Bain’s implementation-focused strategy.
However daunting these external challenges were, it was internal infighting that threatened to tear the firm apart. Bain was incorporated in 1985 and over the course of two years, the Employee Stock Ownership Plan (ESOP) was established, after which senior executives borrowed against their equity for cash, leaving the firm with a heavy load of debt[1].
As business slowed, the debt load began to squeeze the firm. In 1988, Bain laid off 10 percent of its workforce, and as profits turned negative the firm was faced with another round of layoffs in the fall of 1990. And the original founders (led by Bill Bain) began making efforts towards a buyout, increasing the likelihood of a financial crisis.
Facing both financial duress and the founders' buyout, former Bain & Company partner Mitt Romney was asked to rejoin the firm as interim CEO. Bringing along two lieutenants from Bain Capital, Romney began traveling to all the Bain offices to rally employees.
The Boston Globe points out that “Over several weeks, Romney managed negotiations with the banks and among the partners,” and that “The moment came when negotiations produced a package in which [Bill] Bain and the founding partners would give up control of the firm, turning back $30 million they had taken from the ESOP and $100 million in notes they held against the firm.”
Romney’s plan involved "a complicated restructuring of the the firm’s stock-ownership plan, real-estate deals, bank loans, and money still owed to partners"[6]. To avoid the financial crisis that a buyout would have triggered, the group of founding partners agreed to return about $100M cash and forgive outstanding debt.[7].
Although in the role for just one year before returning to Bain Capital, Romney’s work had three profound impacts on the firm. First, ownership was officially shifted from the owners to the firm’s 70 general partners. Second, transparency in the firm’s finances increased dramatically (e.g., partners were able to know each other’s salaries[8].) And finally, Bill Bain relinquished ownership in the firm that carried his name.
Within a year, Bain bounced back to profitability without major partner defections[9], and the groundwork was laid for a period of steady growth. In 1993 the head position was split into two roles – a Managing Director and a “non-executive” chairman of the board. Orit Gadiesh, named Bain’s first chairman in 1993, was fundamental in maintaining Bain’s culture. After spending two years in military intelligence for the Israeli army and earning a degree in psychology from Hebrew University, Gadiesh enrolled in the Harvard Business School and graduated as a Baker Scholar. As a junior partner during the turnaround she had been instrumental in keeping senior partners from leaving the firm, and as chairman she became the first female to lead one of the major consulting firms. With her "purple hair and clunky jewelry," Gadiesh was known throughout the firm for her passionate leadership and "True North" philosophy, which the firm still embraces. For the past several years, she has landed among Forbes' list of the "100 Most Powerful Women in Business" and is on the board of several organizations, including the World Economic Forum[10].
Under Gadiesh and MD Tom Tierney, Bain simultaneously loosened its restrictions around the one-client-per-industry policy, by ensuring clients that the firm's strict internal Professional Standards prohibited the circulation of client data internally, and expanded its presence worldwide throughout the 1990s. The firm grew by 25 percent per year, expanded its number of offices from 12 to 26, and increased partnership from about 70 to nearly 200[11].
The 2000s began with Bain guiding its clients through the “New Economy” of e-commerce. The collapse of the dotcom, coupled with a general slowdown in the economy as had been faced in the early 1990s. The slowdown was painful on all of the major consulting players; however, Bain’s previous experiences with contraction left the firm zealous in avoiding layoffs. The firm weathered the economic downturn and emerged from it in a position of strength by investing in its leadership ranks with internal promotions and key external hires. Subsequently, the economic recovery has been followed by another period of sustained growth. In 2007, the firm expanded its number of worldwide offices to 36, with the opening of offices in Kiev, Moscow, Helsinki and Frankfurt in Europe, and worldwide consulting staff increased to approximately 2,700.
The new millennium also brought changes to Bain’s traditional “generalist” approach to solving clients’ business issues. The firm developed areas of specialization with its deep industry “Practice Areas” in order to better serve the varying needs of its increasingly diverse multinational and local client base. Through targeted industry hires, Bain added industry experts to each of these new Practice Areas, significantly raising its profile in fields such as Financial Services, Healthcare, IT and Media and Entertainment industries.
Steve Ellis is Bain’s Worldwide Managing Director. He is responsible for overseeing the firm’s 36 offices and over 3,700 employees. He joined the firm in 1993 from a Silicon Valley strategy consulting firm he co-founded in 1989. He was formerly the Managing Director of Bain’s San Francisco and Palo Alto offices and a leader in the firm’s Global Technology, Media & Telecommunications and Private Equity Practices. He has held several governance positions on the North American Operating Committee and Nominating Committee.
Bain's major competitors include the Boston Consulting Group and McKinsey & Company. The firm also occasionally competes with specialist boutiques such as Monitor Group and Oliver Wyman, or diversified consulting firms such as Booz Allen Hamilton and AT Kearney.
The main entry points for Bain & Company are at the Associate Consultant, Consultant and Industry Hire levels. Bain partner Bill Neuenfeldt, in a Financial Times interview identifies the desired qualities in potential hires as “intelligence, integrity, passion and the ambition to make a difference.” In addition to these basic requirements, the Associate Consultant (AC) is typically a recent college graduate and is expected to have an enthusiasm for problem-solving and an analytical skill-set. No specific major is required, though a demonstrated interest in economics and business can be valuable. The AC role lasts for two years, after which outstanding ACs are invited to stay for a third year and become a Senior Associate Consultant (SAC). This third year can be spent at a Bain office abroad ("transfer"), or working for a client ("externship").
Demand is high for the AC position. Bain also offers an internship ("Associate Consultant Intern") for undergraduates in between their junior and senior years.
The Consultant role is a more senior role; most consultants join Bain with an MBA, either directly from school or from industry. In some cases, Consultants are former Bain ACs who went to business school and are returning to Bain. Unlike the AC role, the Consultant role is a longer-term career path, feeding the firm's management ranks, with Consultants eventually moving to roles of Manager and Partner. The consultant role also offers great flexibility in terms of six-month transfers and other opportunities. Also like the AC role, demand is quite high and Bain typically draws the bulk of its consultants from top-tier schools.
Bain employees receive approximately 105 hours of training annually, starting all of its associate consultants off with two weeks of orientation in their local offices, followed by a 10-day global training event in Cape Cod. Other global training sessions, conducted by some of Bain’s best managers and partners, is held every 12 to 18 months at places like Cancun, Barcelona and Phuket.
Bain’s culture differentiates it from other consulting firms and its powerful brand is recognized around the globe as a great place to work. Much of this recognition is the result of employee 'Best Places to Work' surveys, which are generally sponsored by local, top-tier newspapers or magazines. Recent awards include:
★ Press Trust of India Limited – “Best Places to Work for MBA Grads” (2007);
★ Fortune – One of the top “100 Best Companies to Work For” (2007);
★ The Great Place to Work Institute – “The Best Workplace in France” (2007);
★ Financial Times – “Best UK Workplace ‘Laureate’” (2007);
★ BusinessWeek – One of the top “50 Best Places to Launch a Career” (2006);
★ Consulting Magazine - #1 “10 Best Firms to Work For” (2006);
★ Financial Times – “#1 “Top 10 Places to Work in the UK” (2006);
★ Financial Times – One of the top 10 “100 Best Workplaces in Europe (Bain Belgium)” (2006)
Additionally, Bain also translated its innovative approach to client cases to its corporate environment as well. The Bain recruitment and hiring process extends beyond traditional face-to-face interaction into the virtual world of podcasts and Second Life, a leap which the company views as an accent to traditional methods rather than a replacement.
In Second Life, the company has created a “virtual recruitment centre complete with networking areas, auditorium and information stands where visitors can watch videos and slide shows and download information.” The ability to interact in a Bain virtual world brought ease and efficiency to the recruitment process while still ensuring that the company was not only hiring the best recruits but also showing these recruits that Bain is consistently one step ahead of the competition. Bain plans to utilize its virtual alternative in the future for other events such as global staff meetings, seminars and workshops.
Recruitment podcasts further cemented Bain’s ability to hire the best of the best by bringing the voices of Bain partners from around the globe to recruits in New Delhi who gained a better understanding of the enthusiasm of the employees, the global breadth of the firm, its technological know-how and its determination to ensure that recruits enter the interview both prepared and enthusiastic to join the Bain team.
The originality does not stop with the hiring process. The innovative environment at Bain encourages and breeds innovation from its employees. The chance to make a difference at the firm is most evident in the recent creation of Bain’s Green Team by two Associate Consultants, just four months after arriving at Bain’s New York office in 2005. Their mission to make the office more environmentally friendly by reducing paper usage, increasing recycling, using recyclable materials in office renovations, and reducing energy use has expanded to a number of Bain offices around the world including London, Chicago, Toronto, Boston and Sydney and is expanding still. The fact that two new hires could make their dream of a more socially conscious a reality on a global scale with the support of Bain and its resources is evidence of the company’s dedication to encouraging growth, change, originality and innovation.
Several Senior Bain & Company Partners have used the firm’s analysis coupled with their personal experience across industries to write a number of books on common issues faced by firms and their executives in today’s business environment. These books exemplify the type of results-based focus that is the basis of the consultancy and include the following publications:
★ ''The Loyalty Effect: the Hidden Force Behind Growth, Profits and Lasting Value'' was written by Bain & Company partner Frederick F. Reichheld and was published in 1996. In it Reichheld reveals the fundamental business philosophies of successful companies that base their business strategies on loyal relationships. With concrete advice that has stood the test of time, he analyzes the true economics that drive long-term business success, and his startling conclusions and examples of loyalty leaders show how even a small improvement in customer retention can sometimes double profits.
★ ''Loyalty Rules: How Today’s Leaders Build Lasting Relationships'' is the 2001 sequel to Reichheld’s international bestseller, The Loyalty Effect. In its pages, Reichheld provides the acid test for leadership in today’s volatile business environment and finds that most leaders deserve failing grades. Reichheld uses vivid stories to illustrate how superior leaders create networks of mutually beneficial, trust-inspiring partnerships between customers, employees, suppliers and investors, demonstrating that the most effective leaders build these relationships upon six bedrock principles of loyalty: Play to win/win, be picky, Keep it simple, Reward the right results, Listen hard and talk straight, and Preach what you practice.
★ ''Profit from the Core: Growth Strategy in an Era of Turbulence'' is a 2001 book by Bain & Company’s Chris Zook and James Allen in which they argue that a timeless strategic principle-building market power in a well defined core business-remains the key source of competitive advantage and the most viable platform for successful expansion. Based on a ten-year study of 2,000 companies conducted by Bain & Company, the book identifies three factors that differentiate growth strategies that succeed from those that fail: 1) reaching full potential in the core business; 2) expanding into businesses adjacent to that core; and 3) preemptively redefining the core business in times of market turbulence. Explaining how leaders can adapt their strategies in response to a rapidly changing business environment, the book concludes with guidelines for becoming sustained value creators—companies capable of successfully refining and redefining their core businesses over the long haul.
★ ''Aligning the Stars: How to Succeed when Professionals Drive Results'' is the 2002 work of Bain & Company’s Thomas Tierney and Jay W. Lorsch in which they examine the professional service industry, a rapidly expanding, trillion dollar field whose primary competitive advantage is found in its professionals and how they are managed. From strategy to organization to culture, it offers customized insights for businesses in which professionals drive bottom-line results and long-term company success. By describing how to attract, retain, motivate, organize, and lead the stars that shape a company's destiny, this book provides valuable lessons for the current and future leaders of every talent-driven business.
★ ''Beyond the Core: Expand Your Market Without Abandoning Your Roots'': In his 2003 sequel to Profit from the Core, Chris Zook answers the question of what happens when your core business hits a wall. In Beyond the Core, Zook outlines an expansion strategy based on putting together combinations of adjacency moves into areas away from, but related to, the core business, such as new product lines or new channels of distribution. Beyond the Core shows how to find and leverage the best avenues for growth—without damaging the heart of the firm.
★ ''Mastering the Merger: Four Critical Decisions that Make or Break the Deal'' was written by David Harding and Sam Rovit in 2004 and examines the fact that today’s corporate deal makers face a conundrum: Though 70% of major acquisitions fail, it’s nearly impossible to build a world class company without doing deals. This book simplifies the process by focusing on just four key imperatives that can dramatically improve M&A success before executives finalize the deal. Based on more than 30 years of in-the-trenches work on thousands of deals across a range of industries—and supplemented by extensive Bain & Co. research—Harding and Rovit reveal that the best M&A performers channel their efforts into (1) targeting deals that advance the core business; (2) determining which deals to close and when to walk away; (3) identifying where to integrate—and where not to; and (4) developing contingency plans for when deals inevitably stray. Helping executives zero in on what matters most in the complex world of M&A, Mastering the Merger offers a blueprint for the decisions and strategies that will beat the odds.
★ ''The Ultimate Question: For Driving Good Profits and True Growth'' was published in 2006 and was written by Fred Reichheld in order to examine why companies fail to achieve the ambitious growth targets their CEOs set for them, boosting short term earnings but alienating customers in the process. Reichheld’s most recent publication shows how to reverse this equation, turning customers into promoters who generate good profits and true, sustainable growth. This strategy is based around the simple question “Would you recommend us to a friend?” and forces the company to track performance through the customer’s eyes using something called the Net Promoter Score, the single most reliable indicator of the company’s ability to grow. The Ultimate Question shows how companies can measure this score, help managers improve it and create communities of passionate advocates that stimulate innovation.
★ ''Unstoppable: Finding Hidden Assets to Renew the Core and Restore Profitable Growth'' (2007) shows managers how to face an uncertain future by looking deep within their organizations and finding undervalued, unrecognized or underutilized assets that can serve as new platforms for sustainable growth. Drawing on more than 30 interviews with CEOs from companies such as De Beers, American Express, and Samsung, it shows readers how to recognize when the core needs reinvention and how to deploy the "hidden assets" that can be the basis for tomorrow's growth. Building on the author's previous books, ''Profit from the Core'' and ''Beyond the Core'', this book shows how any company in crisis can transform itself to become truly unstoppable.
For more information please see: www.harvardbusinessonline.hbsp.harvard.edu
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Los Angeles
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★ Bill Bain - founder of Bain and Company
★ Joshua Bekenstein - MD, Bain Capital
★ Greg Brenneman - former CEO of Burger King
★ Jane Brock-Wilson – MD, Berkshire Partners
★ Kenneth Chenault - CEO of American Express
★ Scott Cook - founder of Intuit
★ Gary Crittenden - CFO of Citigroup, Inc.
★ Pete Dawkins - CEO of Primerica Financial Services
★ David Dominick – MD, Golden Gate Capital
★ John Donahoe - president of eBay Marketplaces, Trustee of Dartmouth College
★ Andrew Feinberg, CEO and President, NetCracker
★ Anne Glover - co-founder of Amadeus Capital Partners
★ Murray Hennesy – CEO, Avis Europe
★ Jonathan Kraft - president of the New England Patriots
★ Eric Kriss - co-founder of Bain Capital
★ Federico Mioli - President, Ducati
★ Scott Olivet – CEO, Oakley
★ Larry Orr – MP, Trinity Ventures
★ Vivek Paul - Partner in Texas Pacific Group
★ Nick Prettejohn - Chief Executive, Prudential Assurance UK and Europe
★ Kevin Rollins - former CEO of Dell, Inc.
★ Sam Rovit - CEO of Swift & Company
★ Mark Sarvary – Executive Vice President and President of Campbell North America
★ Dr. Dietmar Scheiter - CEO, TA Triumph-Adler AG
★ Jill Smith - CEO and President, Digital Globe
★ David Soskin - CEO, Cheapflights Limited
★ Peter Tornquist, Senior Managing Director, CVC Capital Partners
★ Mark Vadon – founder and CEO, Blue Nile
★ Meg Whitman - CEO of eBay
★ Robin Buchanan - Dean of London Business School
★ Mitt Romney - Governor of Massachusetts (2003-2007), co-founder of Bain Capital, 2008 presidential candidate
★ Roger Brown - president of the Berklee College of Music
★ Michael Kolowich - internet content pioneer (founder of ZDNet, AT&T New Media) and documentary filmmaker
★ Michael Murphy - former Olympic diver
★ Kim Ogden, COO of AGAPE
★ Jonathan Reckford - CEO, Habitat for Humanity
★ Fred Reichheld - business writer
★ Tom Tierney – Chairman and Co-Founder of the Bridgespan Group
★ Janet Voute – CEO, World Heart Federation
★ Suzy Welch - former editor of the ''Harvard Business Review''
★ Chris Zook - author of "Profit from the Core," "Beyond the Core," and "Unstoppable"
1. Naficy, Mariam. "The Fast Track", 1997.
2. Bain & Company: Information [1]"Answers.com", retrieved May 21, 2007
3. Sweeney, Jack. "Raising Bain." [2]Consulting Magazine, retrieved May 21, 2007.
4. Bain & Company: Information [3]Answers.com, retrieved May 21, 2007
5. Naficy, Mariam. "The Fast Track", 1997.
6. Rees, Matthew. "Mister Powerpoint Goes to Washington".[4]American.com, retrieved May 21, 2007.
7. Sweeney, Jack. "Raising Bain." [5]Consulting Magazine, retrieved May 21, 2007.
8. Rees, Matthew. "Mister Powerpoint Goes to Washington".[6]American.com, retrieved May 21, 2007.
9. Rees, Matthew. "Mister Powerpoint Goes to Washington".[7]American.com, retrieved May 21, 2007.
10. Sweeney, Jack. "Raising Bain." [8]Consulting Magazine, retrieved May 21, 2007.
11. Sweeney, Jack. "Raising Bain." [9]Consulting Magazine, retrieved May 21, 2007.
★ Official website
★ The Bridgespan Group
'Bain & Company' is a management consulting firm, headquartered in Boston, MA, recognized as one of the leading firms in the consulting industry. It has been named by ''Consulting Magazine'' as the Best Firm to Work For in 2003, 2004, 2005 and 2006. Its slogan is "Helping make companies more valuable."
| Contents |
| History |
| 1970s |
| 1980s |
| 1990s to present |
| Competitors |
| Recruiting |
| Publications |
| Offices |
| Notable current and former employees |
| Business |
| Politics and public service |
| Other |
| Notes |
| External links |
History
1970s
Bain & Company was established in 1973, by a group of seven former partners from the Boston Consulting Group headed by Bill Bain.
Under Bill Bain’s direction, the new Boston-based firm implemented a number of unconventional practices, by traditional consulting standards, in its early years. Notably, Bain would only work with one client per industry to avoid potential conflicts of interest[1]. Partners did not carry business cards and clients were referred to only in code names, further demonstrating its reputation for enforcing client confidentiality. And the company preferred to win work by boardroom referrals rather than marketing itself, sometimes landing clients by offering several weeks of work at no cost until proving the results of their services[2].
What differentiated Bain & Company from its competitors was its focus on generating profitable results for clients through the implementation of its recommendations. The firm specialized in bringing rigorous fact-based analysis directly to CEOs, and its consultants preferred to work on increasing a company’s market rather than simply handing clients a list of recommendations[3]. To win business, Bill Bain liked to show clients the increase in stock price of Bain clients relative to the Dow Jones industrial average[4]. Bain's Web site boasts that their clients "outperform the market 4 to 1."
The firm’s founding was followed by a period of explosive growth in the late 1970s and early1980s. With revenues increasing at a rate of 40 to 50 percent a year, the firm opened offices in London, Munich, San Francisco and Tokyo and firmly established a global presence in the consulting field.
Another innovative consulting approach that Bain pioneered was aligning its incentives with its clients’ results and occasionally taking equity in lieu of fees. An estimated 10% of revenue is from equity or success fees. This model proved successful for both Bain and its clients. For example, the firm took an ownership stake in fruit processor Del Monte while working to revamp the company’s strategy. "Coming into a leveraged buyout situation is never easy," says Del Monte CEO Richard Wolford. "Knowing Bain and their desire to deliver results, they probably would have provided ongoing support regardless. But the fact they own a stake doesn't hurt."
The first consultancy of its kind to establish a private equity practice, Bain & Company is well-known among the money set, offering services like due diligence, IPO preparation, portfolio profit improvement and revenue enhancement, geared toward leveraged buyout and venture capital firms. It is important to note, however, Bain & Company, the consultancy, shouldn’t be confused with Bain Capital, the private equity firm founded in 1984 by four former Bain consultants including former Massachusetts governor Mitt Romney. The two companies are completely separate entities and have no insight into each other’s client base.
1980s
After a successful start, the company found itself facing a growing list of challenges in the late 1980s. In the midst of sluggish business conditions and overstaffing, Bain also faced the dilemma of having to turn away business due to its one-client-per-industry restriction. Competition increased as other firms copied Bain’s implementation-focused strategy.
However daunting these external challenges were, it was internal infighting that threatened to tear the firm apart. Bain was incorporated in 1985 and over the course of two years, the Employee Stock Ownership Plan (ESOP) was established, after which senior executives borrowed against their equity for cash, leaving the firm with a heavy load of debt[1].
As business slowed, the debt load began to squeeze the firm. In 1988, Bain laid off 10 percent of its workforce, and as profits turned negative the firm was faced with another round of layoffs in the fall of 1990. And the original founders (led by Bill Bain) began making efforts towards a buyout, increasing the likelihood of a financial crisis.
1990s to present
Facing both financial duress and the founders' buyout, former Bain & Company partner Mitt Romney was asked to rejoin the firm as interim CEO. Bringing along two lieutenants from Bain Capital, Romney began traveling to all the Bain offices to rally employees.
The Boston Globe points out that “Over several weeks, Romney managed negotiations with the banks and among the partners,” and that “The moment came when negotiations produced a package in which [Bill] Bain and the founding partners would give up control of the firm, turning back $30 million they had taken from the ESOP and $100 million in notes they held against the firm.”
Romney’s plan involved "a complicated restructuring of the the firm’s stock-ownership plan, real-estate deals, bank loans, and money still owed to partners"[6]. To avoid the financial crisis that a buyout would have triggered, the group of founding partners agreed to return about $100M cash and forgive outstanding debt.[7].
Although in the role for just one year before returning to Bain Capital, Romney’s work had three profound impacts on the firm. First, ownership was officially shifted from the owners to the firm’s 70 general partners. Second, transparency in the firm’s finances increased dramatically (e.g., partners were able to know each other’s salaries[8].) And finally, Bill Bain relinquished ownership in the firm that carried his name.
Within a year, Bain bounced back to profitability without major partner defections[9], and the groundwork was laid for a period of steady growth. In 1993 the head position was split into two roles – a Managing Director and a “non-executive” chairman of the board. Orit Gadiesh, named Bain’s first chairman in 1993, was fundamental in maintaining Bain’s culture. After spending two years in military intelligence for the Israeli army and earning a degree in psychology from Hebrew University, Gadiesh enrolled in the Harvard Business School and graduated as a Baker Scholar. As a junior partner during the turnaround she had been instrumental in keeping senior partners from leaving the firm, and as chairman she became the first female to lead one of the major consulting firms. With her "purple hair and clunky jewelry," Gadiesh was known throughout the firm for her passionate leadership and "True North" philosophy, which the firm still embraces. For the past several years, she has landed among Forbes' list of the "100 Most Powerful Women in Business" and is on the board of several organizations, including the World Economic Forum[10].
Under Gadiesh and MD Tom Tierney, Bain simultaneously loosened its restrictions around the one-client-per-industry policy, by ensuring clients that the firm's strict internal Professional Standards prohibited the circulation of client data internally, and expanded its presence worldwide throughout the 1990s. The firm grew by 25 percent per year, expanded its number of offices from 12 to 26, and increased partnership from about 70 to nearly 200[11].
The 2000s began with Bain guiding its clients through the “New Economy” of e-commerce. The collapse of the dotcom, coupled with a general slowdown in the economy as had been faced in the early 1990s. The slowdown was painful on all of the major consulting players; however, Bain’s previous experiences with contraction left the firm zealous in avoiding layoffs. The firm weathered the economic downturn and emerged from it in a position of strength by investing in its leadership ranks with internal promotions and key external hires. Subsequently, the economic recovery has been followed by another period of sustained growth. In 2007, the firm expanded its number of worldwide offices to 36, with the opening of offices in Kiev, Moscow, Helsinki and Frankfurt in Europe, and worldwide consulting staff increased to approximately 2,700.
The new millennium also brought changes to Bain’s traditional “generalist” approach to solving clients’ business issues. The firm developed areas of specialization with its deep industry “Practice Areas” in order to better serve the varying needs of its increasingly diverse multinational and local client base. Through targeted industry hires, Bain added industry experts to each of these new Practice Areas, significantly raising its profile in fields such as Financial Services, Healthcare, IT and Media and Entertainment industries.
Steve Ellis is Bain’s Worldwide Managing Director. He is responsible for overseeing the firm’s 36 offices and over 3,700 employees. He joined the firm in 1993 from a Silicon Valley strategy consulting firm he co-founded in 1989. He was formerly the Managing Director of Bain’s San Francisco and Palo Alto offices and a leader in the firm’s Global Technology, Media & Telecommunications and Private Equity Practices. He has held several governance positions on the North American Operating Committee and Nominating Committee.
Competitors
Bain's major competitors include the Boston Consulting Group and McKinsey & Company. The firm also occasionally competes with specialist boutiques such as Monitor Group and Oliver Wyman, or diversified consulting firms such as Booz Allen Hamilton and AT Kearney.
Recruiting
The main entry points for Bain & Company are at the Associate Consultant, Consultant and Industry Hire levels. Bain partner Bill Neuenfeldt, in a Financial Times interview identifies the desired qualities in potential hires as “intelligence, integrity, passion and the ambition to make a difference.” In addition to these basic requirements, the Associate Consultant (AC) is typically a recent college graduate and is expected to have an enthusiasm for problem-solving and an analytical skill-set. No specific major is required, though a demonstrated interest in economics and business can be valuable. The AC role lasts for two years, after which outstanding ACs are invited to stay for a third year and become a Senior Associate Consultant (SAC). This third year can be spent at a Bain office abroad ("transfer"), or working for a client ("externship").
Demand is high for the AC position. Bain also offers an internship ("Associate Consultant Intern") for undergraduates in between their junior and senior years.
The Consultant role is a more senior role; most consultants join Bain with an MBA, either directly from school or from industry. In some cases, Consultants are former Bain ACs who went to business school and are returning to Bain. Unlike the AC role, the Consultant role is a longer-term career path, feeding the firm's management ranks, with Consultants eventually moving to roles of Manager and Partner. The consultant role also offers great flexibility in terms of six-month transfers and other opportunities. Also like the AC role, demand is quite high and Bain typically draws the bulk of its consultants from top-tier schools.
Bain employees receive approximately 105 hours of training annually, starting all of its associate consultants off with two weeks of orientation in their local offices, followed by a 10-day global training event in Cape Cod. Other global training sessions, conducted by some of Bain’s best managers and partners, is held every 12 to 18 months at places like Cancun, Barcelona and Phuket.
Bain’s culture differentiates it from other consulting firms and its powerful brand is recognized around the globe as a great place to work. Much of this recognition is the result of employee 'Best Places to Work' surveys, which are generally sponsored by local, top-tier newspapers or magazines. Recent awards include:
★ Press Trust of India Limited – “Best Places to Work for MBA Grads” (2007);
★ Fortune – One of the top “100 Best Companies to Work For” (2007);
★ The Great Place to Work Institute – “The Best Workplace in France” (2007);
★ Financial Times – “Best UK Workplace ‘Laureate’” (2007);
★ BusinessWeek – One of the top “50 Best Places to Launch a Career” (2006);
★ Consulting Magazine - #1 “10 Best Firms to Work For” (2006);
★ Financial Times – “#1 “Top 10 Places to Work in the UK” (2006);
★ Financial Times – One of the top 10 “100 Best Workplaces in Europe (Bain Belgium)” (2006)
Additionally, Bain also translated its innovative approach to client cases to its corporate environment as well. The Bain recruitment and hiring process extends beyond traditional face-to-face interaction into the virtual world of podcasts and Second Life, a leap which the company views as an accent to traditional methods rather than a replacement.
In Second Life, the company has created a “virtual recruitment centre complete with networking areas, auditorium and information stands where visitors can watch videos and slide shows and download information.” The ability to interact in a Bain virtual world brought ease and efficiency to the recruitment process while still ensuring that the company was not only hiring the best recruits but also showing these recruits that Bain is consistently one step ahead of the competition. Bain plans to utilize its virtual alternative in the future for other events such as global staff meetings, seminars and workshops.
Recruitment podcasts further cemented Bain’s ability to hire the best of the best by bringing the voices of Bain partners from around the globe to recruits in New Delhi who gained a better understanding of the enthusiasm of the employees, the global breadth of the firm, its technological know-how and its determination to ensure that recruits enter the interview both prepared and enthusiastic to join the Bain team.
The originality does not stop with the hiring process. The innovative environment at Bain encourages and breeds innovation from its employees. The chance to make a difference at the firm is most evident in the recent creation of Bain’s Green Team by two Associate Consultants, just four months after arriving at Bain’s New York office in 2005. Their mission to make the office more environmentally friendly by reducing paper usage, increasing recycling, using recyclable materials in office renovations, and reducing energy use has expanded to a number of Bain offices around the world including London, Chicago, Toronto, Boston and Sydney and is expanding still. The fact that two new hires could make their dream of a more socially conscious a reality on a global scale with the support of Bain and its resources is evidence of the company’s dedication to encouraging growth, change, originality and innovation.
Publications
Several Senior Bain & Company Partners have used the firm’s analysis coupled with their personal experience across industries to write a number of books on common issues faced by firms and their executives in today’s business environment. These books exemplify the type of results-based focus that is the basis of the consultancy and include the following publications:
★ ''The Loyalty Effect: the Hidden Force Behind Growth, Profits and Lasting Value'' was written by Bain & Company partner Frederick F. Reichheld and was published in 1996. In it Reichheld reveals the fundamental business philosophies of successful companies that base their business strategies on loyal relationships. With concrete advice that has stood the test of time, he analyzes the true economics that drive long-term business success, and his startling conclusions and examples of loyalty leaders show how even a small improvement in customer retention can sometimes double profits.
★ ''Loyalty Rules: How Today’s Leaders Build Lasting Relationships'' is the 2001 sequel to Reichheld’s international bestseller, The Loyalty Effect. In its pages, Reichheld provides the acid test for leadership in today’s volatile business environment and finds that most leaders deserve failing grades. Reichheld uses vivid stories to illustrate how superior leaders create networks of mutually beneficial, trust-inspiring partnerships between customers, employees, suppliers and investors, demonstrating that the most effective leaders build these relationships upon six bedrock principles of loyalty: Play to win/win, be picky, Keep it simple, Reward the right results, Listen hard and talk straight, and Preach what you practice.
★ ''Profit from the Core: Growth Strategy in an Era of Turbulence'' is a 2001 book by Bain & Company’s Chris Zook and James Allen in which they argue that a timeless strategic principle-building market power in a well defined core business-remains the key source of competitive advantage and the most viable platform for successful expansion. Based on a ten-year study of 2,000 companies conducted by Bain & Company, the book identifies three factors that differentiate growth strategies that succeed from those that fail: 1) reaching full potential in the core business; 2) expanding into businesses adjacent to that core; and 3) preemptively redefining the core business in times of market turbulence. Explaining how leaders can adapt their strategies in response to a rapidly changing business environment, the book concludes with guidelines for becoming sustained value creators—companies capable of successfully refining and redefining their core businesses over the long haul.
★ ''Aligning the Stars: How to Succeed when Professionals Drive Results'' is the 2002 work of Bain & Company’s Thomas Tierney and Jay W. Lorsch in which they examine the professional service industry, a rapidly expanding, trillion dollar field whose primary competitive advantage is found in its professionals and how they are managed. From strategy to organization to culture, it offers customized insights for businesses in which professionals drive bottom-line results and long-term company success. By describing how to attract, retain, motivate, organize, and lead the stars that shape a company's destiny, this book provides valuable lessons for the current and future leaders of every talent-driven business.
★ ''Beyond the Core: Expand Your Market Without Abandoning Your Roots'': In his 2003 sequel to Profit from the Core, Chris Zook answers the question of what happens when your core business hits a wall. In Beyond the Core, Zook outlines an expansion strategy based on putting together combinations of adjacency moves into areas away from, but related to, the core business, such as new product lines or new channels of distribution. Beyond the Core shows how to find and leverage the best avenues for growth—without damaging the heart of the firm.
★ ''Mastering the Merger: Four Critical Decisions that Make or Break the Deal'' was written by David Harding and Sam Rovit in 2004 and examines the fact that today’s corporate deal makers face a conundrum: Though 70% of major acquisitions fail, it’s nearly impossible to build a world class company without doing deals. This book simplifies the process by focusing on just four key imperatives that can dramatically improve M&A success before executives finalize the deal. Based on more than 30 years of in-the-trenches work on thousands of deals across a range of industries—and supplemented by extensive Bain & Co. research—Harding and Rovit reveal that the best M&A performers channel their efforts into (1) targeting deals that advance the core business; (2) determining which deals to close and when to walk away; (3) identifying where to integrate—and where not to; and (4) developing contingency plans for when deals inevitably stray. Helping executives zero in on what matters most in the complex world of M&A, Mastering the Merger offers a blueprint for the decisions and strategies that will beat the odds.
★ ''The Ultimate Question: For Driving Good Profits and True Growth'' was published in 2006 and was written by Fred Reichheld in order to examine why companies fail to achieve the ambitious growth targets their CEOs set for them, boosting short term earnings but alienating customers in the process. Reichheld’s most recent publication shows how to reverse this equation, turning customers into promoters who generate good profits and true, sustainable growth. This strategy is based around the simple question “Would you recommend us to a friend?” and forces the company to track performance through the customer’s eyes using something called the Net Promoter Score, the single most reliable indicator of the company’s ability to grow. The Ultimate Question shows how companies can measure this score, help managers improve it and create communities of passionate advocates that stimulate innovation.
★ ''Unstoppable: Finding Hidden Assets to Renew the Core and Restore Profitable Growth'' (2007) shows managers how to face an uncertain future by looking deep within their organizations and finding undervalued, unrecognized or underutilized assets that can serve as new platforms for sustainable growth. Drawing on more than 30 interviews with CEOs from companies such as De Beers, American Express, and Samsung, it shows readers how to recognize when the core needs reinvention and how to deploy the "hidden assets" that can be the basis for tomorrow's growth. Building on the author's previous books, ''Profit from the Core'' and ''Beyond the Core'', this book shows how any company in crisis can transform itself to become truly unstoppable.
For more information please see: www.harvardbusinessonline.hbsp.harvard.edu
Offices
Amsterdam
Atlanta
Beijing
Boston
Brussels
Chicago
Dallas
Dubai
Düsseldorf
Frankfurt
Helsinki
Hong Kong
Johannesburg
London
Los Angeles
Madrid
Melbourne
Mexico City
Milan
Munich
New Delhi
New York City
Palo Alto
Paris
Rome
San Francisco
São Paulo
Seoul
Shanghai
Singapore
Stockholm
Sydney
Tokyo
Toronto
Zurich
Kyiv
Moscow
Notable current and former employees
Business
★ Bill Bain - founder of Bain and Company
★ Joshua Bekenstein - MD, Bain Capital
★ Greg Brenneman - former CEO of Burger King
★ Jane Brock-Wilson – MD, Berkshire Partners
★ Kenneth Chenault - CEO of American Express
★ Scott Cook - founder of Intuit
★ Gary Crittenden - CFO of Citigroup, Inc.
★ Pete Dawkins - CEO of Primerica Financial Services
★ David Dominick – MD, Golden Gate Capital
★ John Donahoe - president of eBay Marketplaces, Trustee of Dartmouth College
★ Andrew Feinberg, CEO and President, NetCracker
★ Anne Glover - co-founder of Amadeus Capital Partners
★ Murray Hennesy – CEO, Avis Europe
★ Jonathan Kraft - president of the New England Patriots
★ Eric Kriss - co-founder of Bain Capital
★ Federico Mioli - President, Ducati
★ Scott Olivet – CEO, Oakley
★ Larry Orr – MP, Trinity Ventures
★ Vivek Paul - Partner in Texas Pacific Group
★ Nick Prettejohn - Chief Executive, Prudential Assurance UK and Europe
★ Kevin Rollins - former CEO of Dell, Inc.
★ Sam Rovit - CEO of Swift & Company
★ Mark Sarvary – Executive Vice President and President of Campbell North America
★ Dr. Dietmar Scheiter - CEO, TA Triumph-Adler AG
★ Jill Smith - CEO and President, Digital Globe
★ David Soskin - CEO, Cheapflights Limited
★ Peter Tornquist, Senior Managing Director, CVC Capital Partners
★ Mark Vadon – founder and CEO, Blue Nile
★ Meg Whitman - CEO of eBay
Politics and public service
★ Robin Buchanan - Dean of London Business School
★ Mitt Romney - Governor of Massachusetts (2003-2007), co-founder of Bain Capital, 2008 presidential candidate
Other
★ Roger Brown - president of the Berklee College of Music
★ Michael Kolowich - internet content pioneer (founder of ZDNet, AT&T New Media) and documentary filmmaker
★ Michael Murphy - former Olympic diver
★ Kim Ogden, COO of AGAPE
★ Jonathan Reckford - CEO, Habitat for Humanity
★ Fred Reichheld - business writer
★ Tom Tierney – Chairman and Co-Founder of the Bridgespan Group
★ Janet Voute – CEO, World Heart Federation
★ Suzy Welch - former editor of the ''Harvard Business Review''
★ Chris Zook - author of "Profit from the Core," "Beyond the Core," and "Unstoppable"
Notes
1. Naficy, Mariam. "The Fast Track", 1997.
2. Bain & Company: Information [1]"Answers.com", retrieved May 21, 2007
3. Sweeney, Jack. "Raising Bain." [2]Consulting Magazine, retrieved May 21, 2007.
4. Bain & Company: Information [3]Answers.com, retrieved May 21, 2007
5. Naficy, Mariam. "The Fast Track", 1997.
6. Rees, Matthew. "Mister Powerpoint Goes to Washington".[4]American.com, retrieved May 21, 2007.
7. Sweeney, Jack. "Raising Bain." [5]Consulting Magazine, retrieved May 21, 2007.
8. Rees, Matthew. "Mister Powerpoint Goes to Washington".[6]American.com, retrieved May 21, 2007.
9. Rees, Matthew. "Mister Powerpoint Goes to Washington".[7]American.com, retrieved May 21, 2007.
10. Sweeney, Jack. "Raising Bain." [8]Consulting Magazine, retrieved May 21, 2007.
11. Sweeney, Jack. "Raising Bain." [9]Consulting Magazine, retrieved May 21, 2007.
External links
★ Official website
★ The Bridgespan Group
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