With the slowdown in general economic growth, and intensifying international competition, companies flocked to BCG and other consulting firms for help. Confident of demand from multinational clients, the firm expanded to Europe. The investment paid off as the still small firm developed a sizable share of European business, and began planning offices on other continents.
However, BCG’s rapid growth led to disagreements in the firm on how to proceed. Bill Bain and two other consultants left to form Bain & Company, which emphasized implementation more than strategy. The departures ended up strengthening BCG by clarifying its focus on strategic thinking. Henderson also doubled down on the firm’s collaborative culture. The departure led the fledgling firm to formalize its ownership structure. Rather than give himself the lion’s share of the stock, Henderson issued all but 5% to his fellow partners.
Meanwhile, capital allocation was a pressing concern for many clients, with interest rates rising worldwide. Headquarters needed a smarter way to connect scarce resources with the strongest opportunities. BCG was a pioneer in setting up complex computer models based on extensive data collection. With user-friendly allocation models such as the growth share matrix, clients could invest with greater confidence.