History of Business Consulting
Small businesses consultants provide guidance to help small businesses improve their business. Often looking at their processes and procedures the consultants analyze what they see and find ways to help the companies meet their different goals. So, when exactly did consultants gain such a big role in the business industry?
The first documented consultant was Arthur D. Little. Arthur founded his management consulting firm in 1886. In 1909 he incorporated it and it became Arthur D. Little, Inc. Arthur focused mainly on technical research in his firm.
During that same time frame Frederick Winslow Taylor started a consulting firm. Taylor opened his independent firm in 1893. Taylor invented scientific management, which mainly was the first method of organizing work. Also known as Taylorism this method of management focused on economic efficiency and labor productivity. Taylor's method was used worldwide until W. Edwards Deming created a method called the Total Quality Management (TQM), which is still used today. Interesting side note, Deming resided in Powell, Wyoming (which is where T and T Consulting Solutions is located).
The Glass-Stegall Banking Act in 1933 sparked demand for knowledge in the finance, management and organization. This act alone boosted the consulting industry. One of the methods that came out during this time frame was created by Sakichi Toyoda, the founder of Toyota. Toyoda developed the 5 Whys technique in the 1930s, but it didn't become popular until the 1970's. Toyota, along with many other companies still use this technique today.
In the 1950's consultants started to expand their businesses in the United States. Companies that hired consulting firms kept it quiet until the mid 1960's. The stigma during that time was if you hired a business consultant you were going through hard times.
Growth happened again in the 1980's and the stigma of a consultant was long gone. In the 1980's consultants became a partner in helping legitimize strategies for the businesses. This allowed the industry to grow and focus on strategy and organization. In 1986 Bill Smith created the six sigma process while working for the Motorola company. Six Sigma focuses on the number of defects per million whether it is in a product, process or a service. Six Sigma is still used to this day
In the 1990's (time dial up internet was invented) the industries shift went from strategy and organization to strategy and technology advice. The internet had opened up a whole new opportunity for consultants.
Currently more freelance consulting firms are opening up and allowing for a more affordable consulting experience, which is putting pressure on the larger consulting firms.