History of Consultancy

The power of management consultancy is ever pervasive. Elements of this ancient practice of giving advice can be traced even in epic periods. From a crude form of guidance given in the political or business ventures, it evolved as an art, as we perceive it today, within hundred years of the recent past.

The turn of the 20th century witnessed the formation of Management consultancies. The practice was begun to deal with certain rudimentary issues that were of prime importance to the then bosses of the business such as employee output, machine efficiency and factory productivity.

Among the early management consultants known as ‘Industrial Engineers’, Taylor & Gilbreths were popular. These quality gurus were concerned with Time and Motion Study in the evolving industrial sector of the 20th century. The results were often spectacular in terms of increase in productivity. Their ideas helped to develop some big U.S. industry such as steel, ship & armaments in the year preceding the First World War

When General Motors for example, set up its R&D centre in the early 1920s it hired Arthur Little and his staff as consultants to help them.

During the 1920s American practice of knowledge sharing, situation study and advisory service became influential outside the USA as well. Management consultancy became an established practice in West Germany and UK very soon. Thus the term made its entry to the management dictionary.

A noticeable earlier practitioner was Urwick. After the First World War, he went on to work for the Rowndry Company, moved on to become a director of the International Management Institute in Geneva and then returned to set up his consultancy.

It was the management consultants who waged, fought and won the Second World War. On both sides of Atlantic they accelerated the productivity of armament companies in US and UK.

Management Consultancies proved their mettle in government affairs too, not so late after the World Wars. In UK, Cabinet Minister Sir Stafford Crisp brought in Mr.Nud Hay of Hay Consultants from USA. He was appointed Govt Chief Advisor on Job size and Content in Britain to advice on policy matters of industries like aircraft and munitions, the output of which were well below in demand.

The war in effect expanded the functional sphere of the consultants it showed up the need for improvements in fields like education, industries, etc. The move was initiated by the British Institute of Management (BIM) which properly dictated the growing status of management consultants.

Management consultancies arrived the seal of approval soon. The PE International enhanced the status of the management consultants by investigating a much publicized issue- the productivity of Musgribe Cotton Mills in Bolton. A six month study in the first half of 1947 led to an increase in output per person of 39%.

The sixties saw the unheralded growth of management consultants and felt a growing complacency among them. With the expansion of European economy most consultants like most businessmen of the time were insufficiently aware of some of the profound changes that were emerging in business, in particular the birth of new technologies.

The seventies caused shock waves in consultancy industry. The two oil price hikes in 1973 and 1978, the emergence of Japan as an industrial competitor and the increasing importance of logical competence left most consultancies unprepared. And indeed they entered most industries unprepared. It was also a watershed decade for management consultants since accountancy firms all over Europe entered consultancy service. Hence it was also a period of rationalization and reformation for Management Consultancies.

By 1980’s the consultancy profession took a new promising turn. It refreshed itself with better educated, organization and was better equipped to deal with the growth of the coming decade and the demands of a more technically oriented and more internationally minded client base.
The world’s most leading firms underwent massive restructuring with the help of consultants during the eighties. Also consultancies in the UK and USA took a much higher profile in the period and spawned a number of Management Gurus such as Tom Peters and Robert Waterman

The early nineties and first decade of 21st century witnessed miraculous change through the implementation of Information Technology in business. The internet broke all barriers of communications. Website and web portals became more expressive than any other tools, Management Information System, Web based tools, emergence of dependable search engines, digitalization, implementation of Geographic  Information  System, GPRS, Satellite and remote technology, micro processed and embedded systems turned the total face of expression of the field. The globe got reduced to a village.

The technology reduced the globe to the size of a village but World Trade Organization and globalization changed the earth as a common market. It changed and contributed much in business and production lexicon.

Abaft team always move along with the pulsates of present and planning for the future.