August 5, 2025 – The Economist
There are few more frequent visitors to the executive suites of America’s biggest companies than the strategy whisperers at McKinsey, BCG and Bain. It helps that the corner office is often occupied by one of their alumni. Among the chief executives of America’s 500 most valuable companies, 36 spent time at one of the three elite consultancies, according to Altrata, a data provider, up from 25 in 2018. Household names from Alphabet and Coca-Cola to Citigroup and Visa are run by former consultants. But are they any good at the top job?
To study the question, we used a list compiled by Altrata of alumni of the strategy trio who have run a company in the S&P 500. We built an index of these firms weighted by market value, and a benchmark that re-weights the S&P 500 to ensure the same mix of industries as for the firms run by ex-consultants.
Since January 2010 companies run by former consultants have generated a cumulative return for shareholders of 677%, including dividends, compared with 584% from our benchmark index (see chart). There have been some notable flops: the tenures of John Donahoe (a former Bainie) at Nike and Laxman Narasimhan (an ex-McKinseyite) at Starbucks were disastrous. But on the whole, the gap in stockmarket performance is meaningful enough to suggest that consulting may have been helpful training for the top job, particularly amid the turmoil of the past few years.
Consulting firms have long claimed to be “CEO factories”. Clever graduates are rotated through projects lasting a few weeks to a few months, exposing them to a wide range of business problems, from entering new markets to cutting costs. Most leave after a couple of years of punishing work, with the consultancies often helping them line up their next role.
McKinsey, the biggest of the trio, performed particularly well in our analysis. Not only has it nurtured the largest number of S&P 500 bosses, accounting for 24 of the current lot. Its alumni also did best in the top job, both in absolute terms and relative to their industry mix. That may be a welcome source of comfort for the firm, which has bled market share to its biggest rival, BCG.
This is, of course, not a comprehensive analysis. For a start, figuring out the precise imprint of a chief executive is tricky; other things can drive stock prices. There are all the makings of a promising project for an enterprising, spreadsheet-wielding consultant.
Read the original published article here.
