It can be said that consulting — hiring a consultant or seeking the advice of an outside expert — is thousands of years old.
For example, Alexander the Great conquered the known civilized world beginning in 323 B.C. He often sought advice for his endeavors from a consultant. That man was none other than one of the greatest philosophers of all time, Aristotle. He was Alexander’s teacher as he grew to manhood. Alexander met or wrote to Aristotle frequently in his years to ask about a host of serious issues involving vanquishing his enemies and ruling over what he had taken.
But if we’re looking to the beginnings of what we would recognize as modern consulting, we can look to the late 19th Century. This is when something called “work rationalization” emerged in contemporary business. Work rationalization refers to steps or strategies a company uses to improve its operation. This most often involved a need for expertise in getting people organized, developing efficient processes, and acquiring improved machinery.
Business owners found it efficient to bring in an outside consultant to get this kind of stuff done.
There’s an excellent case to be made that Arthur D. Little and Roger Griffin in Cambridge created the first management consulting firm. The Little & Griffin company launched in 1886. Arthur Little was a chemical engineer who played a significant role in developing the chemical engineering department at MIT, the Massachusetts Institute of Technology. His tremendous technical expertise was much in demand by an array of businesses. Little & Griffin are credited with inventing “scientific management” techniques.
While Little & Griffin helped clients with scientific and engineering problems, the first consultancy firm to work in business management may be Booz Allen Hamilton. It launched in 1914. The first firm to offer pure management strategy consulting in the modern sense can be McKinsey & Company, founded in 1926.
The year 1929 proved to be pivotal for the consulting industry. That was when the great stock market crash kicked off the Great Depression. It triggered a considerable demand for advice on finance, banking, management, and business efficiency in economically lean times. This created a boom for many different types of consultants and shaped the future of the profession.