6 - The Gilded Age of Consulting: A Snapshot of Consultants Circa 1960

Summary

By 1960, the three leading management consulting firms in the United States – Booz Allen & Hamilton, Cresap, McCormick and Paget, and McKinsey & Company – had reached the height of their power. Not necessarily the largest consultancies, these three firms oversaw the most prestigious assignments and referred to themselves, like the American automobile oligopoly, as the “big three” of management consulting firms. As the journalists at Forbes magazine explained in a feature article on Booz Allen & Hamilton:

The firms that Booz Allen likes to compete with are the other members of the club that includes McKinsey; Cresap, McCormick and a few others. All of these are sufficiently comfortable with one another's approach, work and pricing that they will often recommend that a prospective client also price a job with the others.

Like the “big three” automotive manufacturers, this elite “club” of consulting firms exercised significant economic influence and power. As management consulting firms, like the large law, accounting, and engineering firms, became a crucial element of the institutional infrastructure that undergirded the American economy, the leading management consulting firms commanded greater respect and authority. Thus, when these leading firms expanded overseas in the early 1960s, consultants not only transferred American managerial models but also the American institutional system that had routinized the use of management consultants within large organizations.

In retrospect, the big three consulting firms reached the height of their influence in the United States during the early 1960s.