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A Father of Contemporary Consulting

This article appeared in the December 28, 2003, issue of The New York Times Magazine -- reviewing the career highlights of interesting people who died during 2003. Marvin Bower was one of them. He's pictured at the far left in the photo below ... along with senior partners at McKinsey in 1944.

McKinsey partners in 1944 ... with Marvin Bower at the far left

Marvin Bower b. 1903: The Purist

December 28, 2003

Over the years, the consulting profession has sometimes elicited a snicker, or at least a skepticism about what these high-priced advisers really do. Provide a plan, submit a bill and jet off before the managers on the ground have to face the consequences -- that has always been the suspicion. The Enron disaster, which was scripted by Jeffrey Skilling, a former McKinsey & Company partner, seemed to confirm the worst that had ever been said about the modern consultant's smooth detachment, not to mention his arrogance. So it is important to recall that, in Marvin Bower, the profession has its roots in the very Old World notions of integrity, ethics and unyielding loyalty to the customer.

As the man most responsible for building McKinsey into the premier problem-solving firm for blue-chip orporations, Bower was also the architect of a new profession -- what Bower's contemporaries referred to as management engineering. He did this by adhering to an ironclad set of principles. Chief among these was that consultants should put the interests of their clients above everything else, even if it meant turning down their business. Howard Hughes was so eager to hire the father of consulting that he summoned him to his desert hideaway on three occasions (always after midnight). Each time, after hearing Hughes out, Bower refused to take the job. He didn't think the reclusive billionaire would listen to anything he said -- and to take his money for producing a report that would gather dust in a fancy binder struck him as unprofessional.

A young associate at McKinsey once recommended that a Fortune 500 client create a planning department -- and strongly hinted that he was the man to run it. The idea that one of McKinsey's vaunted professionals would personally profit from his advice violated everything Bower stood for. The young man was the top-producing associate in the firm, but Bower didn't care. He fired the consultant on the spot.

Bower was especially vigilant about guarding McKinsey's independence. To offer untainted advice, he understood, the consultant could not suffer conflicts of interest. In this, he was rowing against the powerful tide of postwar America, in which one profession after another -- accounting, law, consulting and so on -- enthusiastically branched into related fields, even if it meant getting involved in conflicting and competing businesses. By the time Arthur Andersen collapsed in 2002, the dangers of this approach could no longer be ignored. Bower had figured it out in 1935, when he wrote to James O. McKinsey, the firm's namesake, that a firm could do either auditing or consulting well, but not both. ''Any crossover between the two will result in mediocrity at best or questionable conflict at worst.''

Bower's ethics were nurtured at Harvard Law School and then burnished at the prestigious law firm Jones Day Reavis & Pogue in Cleveland, where he started his career in 1930, the thick of the Great Depression. As he watched many of the firm's law clients struggle, Bower realized that American C.E.O.'s needed some decent advice. Moreover, Bower had been impressed by McKinsey, an auditor whose practice was starting to broaden into general corporate strategizing. And so Bower left the law to become a partner with McKinsey and, in effect, to start a practice in a profession that did not yet exist.

Immediately, Bower tried to convince McKinsey that no self-respecting firm could audit the books of a business to which it was also consulting. Whereas the consultant naturally took a rooting interest in his client, the auditor could allow no prejudice. McKinsey disagreed. In fact, he merged McKinsey with another firm that specialized in accounting. After McKinsey died, prematurely, in 1937, Bower engineered a separation of the firm into two parts, accounting and consulting. This anticipated by more than half a century the division of labor that Congress would partly insist on in the Sarbanes-Oxley Act of 2002.

Few of Bower's peers agreed with him. As the complexity of business grew, corporations increasingly called on their auditors to give assistance outside the realm of accounting. By the postwar era, audit firms like Arthur Andersen were starting consulting wings. But Bower ignored the trends and kept his firm focused on its primary mission. When McKinsey ventured into executive search, he persuaded the firm to get out. Then, when some of the partners wanted to form a joint venture with an investment bank, Bower helped talk them out of it. ''He got very upset at some of the things McKinsey was talking about,'' says Jack Sweeney, editor of Consulting Magazine. Bower's influence was also felt in McKinsey's refusal to go public, though a sale would have netted the partners millions.

Today, in an age when values often seem malleable, it is fair to wonder at the source of such Calvinist rectitude. You may as well wonder why Bower, a conservative Midwesterner, insisted that his consultants dress for work always in hats and long socks. Elizabeth Haas Edersheim, who is writing a biography of Bower, cites the role model of his father, a diligent expert in the field of land transfers, and also of his strait-laced mentor at Jones Day.

Today, McKinsey partners bristle at the suggestion that their ties to Enron, once a prized client, mean the firm strayed from Bower's principles. It may be more accurate to say that the entire business world has strayed. The news that Arthur Andersen accepted $27 million for consulting and related work from Enron while resuming to also be its ''independent'' auditor vindicated Bower's worst fears from the 1930's. And of course, Andersen was not alone; America's professions have become crassly commercial. Bower was in failing health by the time of the Enron revelations, but he was painfully aware of its McKinsey connection. Moreover, he was deeply saddened to see law firms behaving as crassly as commercial businesses, or to see accounting firms sponsoring golf tournaments. The battle for independence was never won; Bower fought it all his life.

Roger Lowenstein is a contributing writer for the [New York Times Magazine] and the author of the coming ''Origins of the Crash.''