century.” But his path to that influence featured several stops and starts. After starting at the University
of Virginia, he eventually took a degree in mechanical engineering at Vanderbilt University. After stints
at Frigidaire and Leland Electric, he enrolled at Harvard Business School, Class of 1941, but left about
90 days short of graduation—war was looming,
Westinghouse had offered him a job. He remained at
Westinghouse for 18 years, rising to corporate vice
president in 1953.
When he left Westinghouse—he later bragged
that he had been fired from every job before founding BCG—he went into consulting at Arthur D. Little, animated in part by curiosity about what seemed
to him anomalies in the businesses he had studied at
his former employers.
Why, for instance, did Leland, the market leader, make a profit selling motors for gasoline pumps
while Westinghouse couldn’t? ADL let him to hone
his analytic and consulting skills, but he eventually
clashed with the leadership there. In 1963, without
a job, he took up an offer from the Boston Safe Deposit and Trust Company to found a consulting division for that hitherto sleepy financial institution.
The intellectual particles that would come to co-
here as “corporate strategy” were in the ether then,
but hadn’t coalesced—indeed as late as 1960 the
word “strategy” was barely in use in management cir-
cles. Meanwhile, Henderson and his half dozen col-
leagues were looking for a focus for their consulting
operation. According to one of BCG’s foundation sto-
ries, Henderson proposed strategy as their specialty.
But no one will know what we’re talking about, a col-
league objected. “That’s the beauty of it,” Henderson
supposedly responded, “We’ll define it.”
And define it they did. Working to analyze clients’
problems, Henderson and his colleagues came up
with concepts such as the experience curve, demon-
strating that what it cost a company to turn out a
product declined predictably the more of that product
it made. If you were market leader, producing more
than anyone else, you should be able to maintain a
cost advantage over competitors virtually forever.
And woe betide Nos. 4 or 5 in the market; they’d nev-
er be able to compete, at least not on price.
With such concepts, what soon became the independent Boston Consulting Group provided what
was in effect the first framework for tying together
the three C’s of modern corporate strategy: an understanding of costs, customers, and competitors,
and how they related. To make possible their analysis, Henderson’s firm and its competitors virtually
invented modern cost accounting, the intellectual
substratum for much of today’s business analytics.
By the late 1970s, McKinsey & Company, the
sleeping giant of consultants, woke up to the clarion
call of strategy under pressure from upstart BCG. In
1973, Bill Bain spun his eponymously named firm
out of Henderson’s operation. To this day, the three
so-called “strategy firms”—BCG, McKinsey, and
Bain & Company—dominate the market for high-end consulting around the world.
Their writ now extends far beyond strategy, and
into every aspect of their clients’ data, in part because of strategy’s very success—no self-respecting
corporation would be without one, which fact would
please Bruce Henderson.
Walter Kiechel III is the former editorial director of Harvard
Business Publishing, and former managing editor at Fortune
magazine. He researched Bruce Henderson for his book
The Lords of Strategy: The Secret Intellectual History of the
New Corporate World, and has also written the previous book
Office Hours: A Guide to the Managerial Life.
Had he been associated
with an object, the fame
of Bruce Henderson
would’ve spread wider.
But Henderson’s province