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So I'm curious, why hasn't one of the big 4 acquired one of the MBBs?

likefunny
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Better question: why would B4 be a strategically logical owner? What value is created? Sure, we could do better on fixed costs but that’s tiny part of our cost structure. Regularly using strategy to pull through implementation is margin dilutive (which eventually hurts comp/talent acquisition), requires a major behavior change, and undermines a key pillar of our value prop (around impartiality). How do you mitigate the very real risks of major talent attrition and client attrition (forced by independence)?

likehelpful

Don’t remember the exact number, but I seem to remember the Booz and Monitor acquisitions happening at 1-2x revenue. If you believe our margins are a tad richer and intangibles more valuable, it’s not hard to imagine that translating to $10-15B for lil ol’ us. That’s 25-35% of big D’s whole-firm revenue. I doubt any partnership has that much dry powder laying around which means levering up, a capital call, or an equity heavy deal. Either way, you’d have to convince a bunch of accounting partners to pony up. Simply seems too rich.

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P1, he’s joking. But Deloitte is much harder to get into than Harvard.

likefunnyupliftingsmarthelpful

What does it matter. Amazon will own us all soon enough.

likefunnysmartupliftinghelpful

They’ve tried plenty but MBB is one partner one vote and needs 2/3 or 3/4 majority for this. Partners don’t want to since they typically make enough $ and don’t want to work for B4

likehelpful

I think you mean big3. Deloitte is more selective than those firms.

likefunny

Isn’t ACN in the process of acquiring Bain this year?

likefunny

Because MBB are not for sale. PWC were only able to buy Booz as Booz was much smaller and struggling. And it was a disaster of an acquisition anyway.

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This reminds me of a joke:

Q: How do you acquire a small consulting firm?
A: Buy a big consulting firm and wait

likefunny

Both. And woosh.

likefunny

M1: what does that mean? That D would never buy MBB? Or that they’re better in all aspects than other 3? Both incorrect statements

likeuplifting

Comp is (mostly) better at MBB.

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Funny guy 🤦🏾‍♂️

likefunny

This turned into a case study quickly

likefunnysmart

McK Implementation and B4 do very very different things. MI is a small coaching practice, B4 is a large body shop/process practice.

likesmart

Op: no for the average partner MBB much better. For the few really top dogs, B4 is better but few of the MBB partners would be given those roles. Hence better to stay independent and not be Part of massive business that’s not really global. MBB is one global partnership with global P&L. B4 are country P&Ls

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Look how it worked out for us 🤷🏻‍♀️

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Bain is worth a lot since they have great margins. Of course they’re going to put huge premium on their business to sell. Why wouldn’t they? They’re making up for lost future comp by asking for more now. Smart thing to do

likefunny

So much business would be lost due to conflicting with audit clients

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According to the rumor mill Bain has been up for sale a few times. Most recently in 2015. We had an internal for drill as there was talk of Accenture acquiring them. The problem is that they think they are worth way more than they are.

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@BCG1 if the brand and margin dilution is problematic then why does McKinsey implementation exist? Honest question there.

I've been wondering for years how McKinsey will retain their culture and brand with McKinsey solutions and implementation businesses.

BCG seems to try and create new businesses (digital ventures, gamma, plantinion) which may help? I'm not sure on that.

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