Firmsconsulting Consulting Value Index
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FIRMSCONSULTING McKinsey claims they are a leadership factory. Can they prove it? FIRMSCONSULTING We set out to prove McKinsey’s marketing claim and devised three analyses, with the Consulting Value IndexTM being the main test • The three analyses test Dominic Barton’s, and McKinsey’s, claim: – Which firm had the most alumni serving as CEO in the Fortune 1,000? – Which firm was most efficient at producing CEO alumni? – Which firm’s CEO alumni created the most value? (main test) • We took the Fortune 1,000 and filtered out the companies run by consulting and audit alumni in the USA. • We clustered all the companies run by one firm’s alumni into one share portfolio to calculate if investing in that portfolio generated greater value than investing in the S&P 500. We created portfolios for: – McKinsey & Co. – BCG – Bain & Co. – PwC Audit – E&Y Audit – Deloitte Audit – KPMG Audit – Arthur Anderson Audit Source: https://www.firmsconsulting.com/consulting-rankings/consulting-value-index/ To see the footnotes and methodology please visit the Consulting Value IndexTM on the link above FIRMSCONSULTING McKinsey & Company does have more alumni running Fortune 1,000 listed companies in the USA… Alumni CEOs of the Fortune 1,000 30 26 25 23 21 20 16 15 12 11 10 9 10 5 4 Number of CEOs 5 2 1 0 BCG Monitor Hamilton E&Y Audit PwC Audit Bain & Co. Booz Allen KPMG Audit Deloitte S&O Oliver Wyman Deloitte Audit McKinsey & Co. Arthur Anderson Consulting & Audit Firms Source: https://www.firmsconsulting.com/consulting-rankings/consulting-value-index/ To see the footnotes and methodology please visit the Consulting Value IndexTM on the link above FIRMSCONSULTING … although Bain consultants have a 33% higher probability of becoming a Fortune 1,000 CEO versus McKinsey consultants… Alumni CEOs of the Fortune 1,000 / 1,000 employees 2.5 2.04 1.96 2 1.53 1.5 1.33 1.33 0.93 1 0.71 0.45 0.5 0.27 0.23 0.11 0.08 0 Number of CEOs / 1,000 employees BAH BCG Monitor AD Little E&Y Audit PwC Audit Bain & Co. Kurt Salmon Olivery Wyman McKinsey & Co. Alvarez & Marsal Alvarez Consulting & Audit Firms Arthur Anderson Source: https://www.firmsconsulting.com/consulting-rankings/consulting-value-index/ To see the footnotes and methodology please visit the Consulting Value IndexTM on the link above FIRMSCONSULTING …while a portfolio of Fortune 1,000 companies led by PwC Audit alumni created greatest value and easily surpassed the S&P 500 Consulting / Audit Portfolio Value Against the S&P 500 Read the commentary below to $2,121 discover why Bain’s own $2,052 shareholder analyses, at http:// $2,000 $1,774 www.bain.com/about/client- results/index.aspx, is incorrect $1,528 $1,500 $1,333 S&P 500 Value= $1,395 $1,052 $932 $1,000 $907 $500 Value for a $1,000 investment Value $0 BCG E&Y Audit PwC Audit Bain & Co. KPMG Audit Deloitte Audit McKinsey & Co. Arthur Anderson Consulting & Audit Firms Source: https://www.firmsconsulting.com/consulting-rankings/consulting-value-index/ To see the footnotes and methodology please visit the Consulting Value IndexTM on the link above For the period Jan 2008 to October 2014 FIRMSCONSULTING The CEO alumni of the audit firms create the most value and, with the exception of KPMG, are the only firms beating the S&P 500 Consulting / Audit Portfolio Value Against the S&P 500 PwC Audit $2,400 E&Y Audit $2,000 Deloitte Audit Arthur Anderson $1,600 S&P 500 $1,200 BCG $800 McKinsey & Co. $400 Bain & Co. Value for a $1,000 investment Value $0 KPMG Audit 7-2-2009 4-2-2010 7-2-2012 1-2-2011 1-2-2008 4-2-2013 1-2-2014 10-2-2008 10-2-2011 10-2-2014 Consulting & Audit Firms Source: https://www.firmsconsulting.com/consulting-rankings/consulting-value-index/ To see the footnotes and methodology please visit the Consulting Value IndexTM on the link above FIRMSCONSULTING McKinsey CEO alumni have consistently trailed the S&P 500 since mid 2009 McKinsey CEO Alumni Portfolio Value Against the S&P 500 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 Value for a $1,000 investment Value Value of$1,000 $1,000 investment investment in hypotheticalin McKinsey portfolioportfolio $200 Value of $1,000 investment in S&P500 $0 07-02-09 04-02-10 01-02-11 10-02-11 07-02-12 01-02-08 10-02-08 04-02-13 01-02-14 10-02-14 2008 – 2014 Time Period Source: https://www.firmsconsulting.com/consulting-rankings/consulting-value-index/ To see the footnotes and methodology please visit the Consulting Value IndexTM on the link above FIRMSCONSULTING BCG CEO alumni closely track the S&P 500 and you will not earn more than the market by investing in the BCG portfolio BCG CEO Alumni Portfolio Value Against the S&P 500 $1,600 $1,400 $1,200 $1,000 $800 $600 Value for a $1,000 investment Value Value $1,000of $1,000 investment investment in hypotheticalin BCG portfolio portfolio $400 Value of $1,000 investment in S&P500 $200 8-4-09 3-7-11 1-2-08 5-20-10 10-4-12 5-12-14 7-25-13 10-16-08 12-19-11 2008 – 2014 Time Period Source: https://www.firmsconsulting.com/consulting-rankings/consulting-value-index/ To see the footnotes and methodology please visit the Consulting Value IndexTM on the link above FIRMSCONSULTING The poor performance of Bain alumni CEOs is surprising since it is the only firm trumpeting shareholder value creation on its website Bain CEO Alumni Portfolio Value Against the S&P 500 $1,600 $1,400 $1,200 $1,000 $800 $600 Value for a $1,000 investment Value $400 Value of$1,000 $1,000 investment investment in hypotheticalin Bain portfolio portfolio $200 Value of $1,000 investment in S&P500 $0 01-02-08 10-02-08 07-02-09 04-02-10 01-02-11 10-02-11 07-02-12 04-02-13 01-02-14 10-02-14 2008 – 2014 Time Period Source: https://www.firmsconsulting.com/consulting-rankings/consulting-value-index/ To see the footnotes and methodology please visit the Consulting Value IndexTM on the link above FIRMSCONSULTING PwC Audit’s stunning #1 position slays the myth that audit alumni cannot successfully create value in complex businesses PwC Audit CEO Alumni Portfolio Value Against the S&P 500 $2,400 $2,000 $1,600 $1,200 $800 Value for a $1,000 investment Value Value of$1,000 $1,000 investment investment in hypotheticalin PwC Audit portfolio portfolio $400 Value of $1,000 investment in S&P500 $0 01-02-08 10-02-08 07-02-09 04-02-10 01-02-11 10-02-11 07-02-12 04-02-13 01-02-14 10-02-14 2008 – 2014 Time Period Source: https://www.firmsconsulting.com/consulting-rankings/consulting-value-index/ To see the footnotes and methodology please visit the Consulting Value IndexTM on the link above FIRMSCONSULTING E&Y Audit’s #2 position reinforces the strength of audit practices in producing CEOs who produce shareholder value E&Y Audit CEO Alumni Portfolio Value Against the S&P 500 $2,400 $2,000 $1,600 $1,200 $800 Value for a $1,000 investment Value Value of$1,000 $1,000 investment investment in hypotheticalin E&Y Audit portfolioportfolio $400 Value of $1,000 investment in S&P500 $0 01-02-08 10-02-08 07-02-09 04-02-10 01-02-11 10-02-11 07-02-12 04-02-13 01-02-14 10-02-14 2008 – 2014 Time Period Source: https://www.firmsconsulting.com/consulting-rankings/consulting-value-index/ To see the footnotes and methodology please visit the Consulting Value IndexTM on the link above FIRMSCONSULTING The Deloitte Audit alumni performance is largely driven by a female led energy concern, Duke Energy Deloitte Audit CEO Alumni Portfolio Value Against the S&P 500 $2,000 $1,600 $1,200 $800 Value $1,000of $1,000 investment investment in hypotheticalin Deloitte Audit portfolio portfolio Value for a $1,000 investment Value $400 Value of $1,000 investment in S&P500 $0 01-02-08 10-02-08 07-02-09 04-02-10 01-02-11 10-02-11 07-02-12 04-02-13 01-02-14 10-02-14 2008 – 2014 Time Period Source: https://www.firmsconsulting.com/consulting-rankings/consulting-value-index/ To see the footnotes and methodology please visit the Consulting Value IndexTM on the link above FIRMSCONSULTING The KPMG audit alumni portfolio was the only portfolio to break the trend of audit firms outperforming strategy firms KPMG Audit CEO Alumni Portfolio Value Against the S&P 500 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 Value $1,000of $1,000 investment investment in hypotheticalin KPMG Audit portfolio portfolio Value for a $1,000 investment Value Value of $1,000 investment in S&P500 $200 $0 07-02-09 04-02-10 01-02-11 10-02-11 07-02-12 01-02-08 04-02-13 01-02-14 10-02-08 10-02-14 2008 – 2014 Time Period Source: https://www.firmsconsulting.com/consulting-rankings/consulting-value-index/ To see the footnotes and methodology please visit the Consulting Value IndexTM on the link above FIRMSCONSULTING Arthur Anderson alumni “only” come in at #4 which is a strong performance for a now shuttered firm Arthur Anderson CEO Alumni Portfolio Value Against the S&P 500 $2,000 $1,600 $1,200 $800 Value of$1,000 $1,000 investment investment in hypotheticalin Arthur Anderson portfolio Audit portfolio Value for a $1,000 investment Value $400 Value of $1,000 investment in S&P500 $0 01-02-08 07-02-09 04-02-10 01-02-11 07-02-12 04-02-13 01-02-14 10-02-08 10-02-11 10-02-14 2008 – 2014 Time Period Source: https://www.firmsconsulting.com/consulting-rankings/consulting-value-index/ To see the footnotes and methodology please visit the Consulting Value IndexTM on the link above.