Management consulting continued... The invention of a purely management and strategy consulting company came in 1926 with the launch of McKinsey & Company, a firm originally founded to give local companies financial and accounting advice. McKinsey is credited with the idea of using consultants, or "management engineers," for the first time.

Martin Bower, who was hired in the late 1930s and was CEO of McKinsey from 1950 – 1967, developed it into the first Management Consulting firm. He modeled his consultants after the same ‘professional’ standards as leading law firms and insisted on professional business language where jobs were "engagements" and the firm had a "practice." Bower shifted the recruiting focus away from experienced experts towards MBA graduates from top schools, who could learn to be good problem solvers. This practice, which is still used today by management consulting firms, inspired the growth of Business Schools and MBA courses.

The Great Depression created huge demand for consulting services as companies started to navigate their way out of the economic slump. The number of management consulting firms quickly grew from an estimated 100 firms in 1930 to 400 firms by 1940. 

More next week...