The Firm: The Story of McKinsey and Its Secret Influence on American Business (7 page)

Second, the McKinsey consultant had to inspire confidence with his appearance. Bower’s writings are full of physical descriptions of people he hired in part because of how they looked. “I found that [Harrison Roddick] had an attractive appearance and personality,” he wrote in one instance;
¹²
“Walter Vieh . . . was a fine looking and likable man in his late forties”
¹³
in another. As recently as the 1990s, said one former McKinsey consultant, the notion that one was “clubbable”—the type to be asked to join a high-end social club—remained an explicit characteristic of McKinsey hires.

Bower’s obsession with appearances was of the time. When George MacDonald Fraser began writing his multititled chronicle of the cad Harry Plaget Flashman in 1969, he described his antihero in the precise terms one might think Bower looked for in recruits: “His eyes [were] blue and prominent and unwinking—they looked out on the world with that serenity which marks the nobleman whose uttermost ancestor was born a nobleman, too. It is the look that your
parvenu
would give half his fortune for, that unrufflable gaze of the spoiled child of fortune who knows with unshakeable certainty that he is right and that the world is exactly ordered for his satisfaction and pleasure.”
¹⁴

And the McKinsey consultant was usually tall too. One (not-so-tall) rival consultant suggests that McKinsey has long hired taller-than-average people for the sole reason that history has shown people pay more attention to them. And he’s right: In a recent excavation of the mausoleum of Chinese emperor Qin, the average height of an infantryman was five feet nine, the average height of an honor guard was six feet two, and an infantry general was six feet four.

Bower enforced an unyielding dress code: dark suits, hats, and garters. Long socks were required because Bower abhorred the sight of
“raw flesh.” Maurice Cunniffe, who worked at the firm from 1963 to 1969, could remember the protocol as if it were yesterday. “Definitely long socks,” he said. “And a feather on your hat only if it was barely peeking over your hat band.”
¹⁵

“You would wear garters and you would wear a hat,” recalled McKinsey consultant Jack Vance. “You didn’t wear bow ties and Lord knows you didn’t have a mustache.” Or argyle socks. In one heralded piece of McKinsey lore, Bower is said to have attended a client meeting in 1966 with a young associate who had the audacity to reveal a flash of argyle under his pants cuff during the meeting. Upon returning to the office, Bower whipped off one of his signature blue memos on appropriate sock wear, and he even held a Saturday clinic on the right way to dress.
¹⁶
As recently as the 1990s, consultants were strongly encouraged never to leave their offices without their suit jackets on, although they were allowed to work in shirtsleeves. It wasn’t until 1995 that the firm conceded business casual days to its hardworking minions. Competitors and clients still make fun of McKinsey consultants and their cuff links.

Bower once explained the rationale for his sartorial standards. “If your job is to help a client have the courage to follow the trail indicated by the facts, you need to do everything you can to minimize the distractions and deviations the client is likely to take,” he told his biographer Elizabeth Edersheim. “If you have revolutionary ideas, they are much more likely to be listened to if you do not have revolutionary dress. . . . If you were an airline passenger, and the pilot came aboard the plane and he wore shorts and a flaming scarf, would you have the same confidence as you did when he came on with his four stripes on the shoulder? Basically, the dress code all has to do with what you want to do, when you want to build confidence and an identity.”
¹⁷
Whatever the argument, Bower was cooking the individuality of his consultants out of them as soon as possible. In 1962 McKinsey staffers gently mocked their workplace by publishing
The Consultants’ Coloring
Book
, in which every color suggested was black or gray. Longtime partner Warren Cannon compared the dress code to that of “moderately well-to-do morticians.”

(Bower wasn’t entirely blind to shifts in fashion. Three years after John F. Kennedy shocked the nation in 1961 by forgoing a hat at his inauguration, Bower turned up at the office without one. Bower’s consultants consulted with one another: Had the decree been lifted? “I’d wait six weeks,” one consultant told another. “It may be a trap.”
¹⁸
It wasn’t: The hat requirement had gone by the wayside.)

Conformity was enforced too in the way the offices looked and how the memos were written. All offices were made to look the same—and they still do, to this day. And the reports that the company produces for such extravagant fees all adhere to a precise formula—blue covers, the same typeface, sparse use of text, and a common language. Most McKinsey reports begin with a page titled “Today’s Discussion.” It’s a brief of what the consultants hope to get across to the client, presented in outline form, and it shows not just how McKinsey presents but how its consultants are taught to think: in logical, well-structured, and easy-to-follow steps. A McKinsey consultant, according to the Bower way, was never supposed to put his personal stamp on anything.

So Bower substituted himself for the firm; he was its embodiment, and thus every detail deserved and received his attention. He took memo writing to an extreme, delivering his thoughts at excessive length on any subject that crossed his mind. It became a McKinsey tradition: To this day, firm leaders will write fifteen-page memos to the entire staff on a whim, discussing their view on the role of a consultant or how to succeed at McKinsey. Bower once concluded that too many ellipses and dashes had found their way into company reports. He issued a memo banning their use.
¹⁹

Bower wrote the firm’s first Basic Training Guide in 1937. It included
everything from expense protocols to directions on how to write a proper letter to a client. That same year, McKinsey, Wellington inaugurated its reading program for associates, complete with required book reports. Every McKinsey consultant was forced to read what can only have been a page-turner, the two-volume
Air Conditioning
, as well as more compelling titles such as
The Human Problems of an Industrial Civilization, Modern Economic Society
, and
Automotive Giants of America
.

The firm demanded that every consultant read at least fifteen books in the coming year, and submit book reports to partner Harrison Roddick in New York. If that seemed like a lot of reading for already busy consultants, the guide suggested that each man employ what could only be described as a sort of rudimentary speed-reading technique. “It has been well proven that one should practice reading as rapidly as possible, first for short and then for longer periods,” the consultants were told. “It will be found that gradually the general reading pace will be quickened. It is best not to read word for word, but to take in at a glance phrases and sentences.” And a threat: “The names of men who do not send in reviews will be brought to the attention of the partners.”

Bower’s exhaustiveness in producing the guide was typical of the man. Did a consultant need a sample engagement letter? There were two samples included for his perusal. Did he need guidance on how to respond to a potential inquiry regarding the relationship between McKinsey, Wellington & Company and Scovell, Wellington & Company? There were several pages on the matter. There were copies of speeches by James McKinsey, rules for when the use of a Pullman car was allowed on a train trip to see a client (when it was more than 100 miles), and five pages on the creation of time sheets for internal use as well as submission to clients. McKinsey later dispensed with giving clients much more than a single sheet of paper that included its fee, but in 1937 the firm was as enamored as all of American industry with
the meticulous gathering and analysis of data. They were management
engineers
, after all.

Another example of an early philosophy that has since been jettisoned: The guide included an engagement letter that touted the “considerable experience” that all men working for McKinsey had before joining the firm. Later, McKinsey flip-flopped precisely on that point, having come to consider such experience an obstacle to broad-gauged problem solving, but in 1937 it was one of the firm’s most cherished assets.

As with almost everything he wrote about McKinsey to McKinsey people, Bower insisted on an almost ridiculous level of secrecy about the Basic Training Guide, despite the fact that it contained hardly anything of a competitive or proprietary nature. “The Manual should be treated in the strictest confidence,” he wrote. “It is recommended that it not be taken away from the office or from your hotel room when away on long engagements. This will avoid its loss.” Why did it matter? Because unlike other professions—law, medicine—consulting was obviously built on pretense, where dress, manners, and language were meant to present some notion of capability that wasn’t there to see on a diploma.

One reason for his caution might have been that at the end of the guide, Bower let loose with a bit of unbridled ambition that he usually took great pains to keep out of public view. “It is not unreasonable to compare the outlook for the [firm] today with that of the Ford Motor Company at the beginning of the Century,” he wrote. “The [firm] has relatively as satisfactory conditions under which to operate as Ford did in the early days of the automobile industry, and our progress during the next thirty years depends entirely upon the extent to which we develop these possibilities.” Ambitious, perhaps, but also dead-on.

Such expressions, though, were rare for Bower, who preferred to steer pretty much any conversation back to the topic of professionalism. Doug Ayer, a consultant at the firm from 1962 to 1968, recalled
telling Bower of his plans for an upcoming ski trip. “He said he regarded skiing as unprofessional,” said Ayer. “I laughed. He didn’t. He said, ‘You’re running the risk of breaking your leg, and having that get in the way of client work.’ I told him I was going anyway, but that I appreciated his opinion.”
²⁰

As World War II raged in the early 1940s, McKinsey improbably hit its stride. Conflict and corporate confusion proved good for business, as the firm helped American industry convert to war production. It advised ketchup-maker Heinz on making gliders and American Automotive on making tanks. While this wasn’t necessarily the kind of work Bower envisioned for his platonic McKinsey, business was nevertheless booming: By 1945, the firm had eighty-nine clients in New York (up from thirty-five five years earlier), twenty-five in Boston (up from nine), and four in San Francisco.

Revenues climbed from $284,000 in fiscal 1940 to $420,000 in 1942. In 1943, when payments to the McKinsey estate ended, the underlying vitality of the business was revealed: a profit of a quarter-million dollars and a net margin in excess of 40 percent. The firm posted losses in the last two years of the war, but the business was growing. The year after the war, the consulting staff numbered sixty-eight, up from twenty-five in 1942. Numbers like that promised a bright future for consulting.

At every pass, the firm expanded its vision of what consulting could be. Bower made speeches all over the country to professional organizations and composed treatises with paint-peeling titles like
Unleashing the Department Store
and
The Management Viewpoint in Credit Extension
. The point was to give the firm the patina of intellectualism, to sell big concepts to big clients.

In 1937 the Boston office hired Paul Cherington, a former marketing professor at Harvard Business School and author of
Consumer Wants and How to Satisfy Them
. The book was one of the first expressions of the product cycle—the idea that, like humans, products had different life stages (birth, growth, maturity, and decline) and that opportunities and problems changed in each stage. After the 1935 Wagner Act, which mandated collective bargaining with unions, McKinsey created its own specialty in the field. It hired Harold Bergen, former labor-relations manager at Procter & Gamble, and began advising clients on how to deal with their growing masses of employees and the rise of labor unions.

Bergen brought with him a client list that upgraded McKinsey’s roster in one fell swoop: Cluett-Peabody, H.J. Heinz, Johns Manville, Lukens Steel, United Parcel Service, Upjohn Company, Sylvania Electric, and Sunbeam Electric.
²¹
McKinsey was never so foolish as to get labeled anti-union, but to its clients—corporate executives—it was clear which side of this growing struggle the consultants were on.

James McKinsey’s animating idea was that the firm would operate like an exclusive private club admitting only the most prestigious clients. By 1940, it actually started to look that way: In addition to Bergen’s list, the membership included American Airlines, U.S. Steel—and Marshall Field. Despite the serious damage Mac’s brutal layoffs had inflicted on the firm’s image in Chicago, the retailer remained a client.

The firm specialized in turning problems into profits. With banks holding lots of foreclosed property and corporate assets from the Depression, McKinsey pitched its general surveys as essential tools. When the economy
began to recover, McKinsey deftly began to pitch more aggressive methods for making businesses grow, all the way down to unraveling the workflow processes for companies like Four Roses Whiskey. “[It was] the most miserable thing I ever did,” recalled Warren Cannon. “[It] involved my traveling with whiskey salesmen to find out how they really sold the stuff which was, by the way, a lot of drinking.”
²²

The key, though, was to persuade people that McKinsey’s ability to solve problems was just as inspired as the solutions themselves. When the Progressive Era ushered in a cultural acceptance of scientific methods, there was McKinsey, offering scientific evaluation of customer problems. Cutting back because of the Depression? McKinsey offered to help you downsize. When the challenge shifted to managing huge organizations, McKinsey offered advice on the newest thinking in organizational structure.