Monitor Group, a darling of the Harvard Business Review founded by a group of Harvard professors, is now the topic of intense battling in bankruptcy court as competing creditors and aspiring buyers slug it out over assets and liabilities.
The Cambridge-based international consulting firm has gone belly up, even unable to pay rent on its posh riverfront headquarters, despite being managed by bunch of purported business gurus. The failed firm has been quiet about its fall blaming the economy while denying its controversial pandering to Muammar Khadafy had anything to do with its demise.
While Monitor Group was raking in millions of dollars in fees from the Libyan strongman to write a flattering biography and conducting unregistered lobbying services, the future looked bright. However, the Monitor Group spin artists that handled Libya’s publicity problems after the regime tortured Bulgarian nurses were unable to extract the company from worldwide scandal when their secretive dealings became known.
An analysis of the Monitor Group tumble by Steve Denning for Forbes magazine now suggests that the house of cards was based on a puffed up reputation and unequal competitive advantage brought to the firm by its Harvard cachet and academic mumbo-jumbo. In short, Monitor Group did not provide unique business advice but instead traded on its reputation.
Denning spelled it out: “Hype, spin, impenetrable prose and abstruse mathematics, along with talk of “rigorous analysis”, “tough-minded decisions” and “hard choices” all combined to hide the fact that there was no evidence that sustainable competitive advantage could be created in advance by studying the structure of an industry.”
Art Hutchinson, writing for Spend Matters, has a similar view of Monitor Group’s purported business prowess.
Hutchinson writes: “Monitor was known – among other things – as a purveyor of scenario planning services. Unfortunately much of what passes for scenario thinking is only pseudo-effective executive entertainment.”
After the Libya scandal, the whole thing unraveled.
Although Monitor Group executives were able to avoid prosecution for being unregistered foreign lobbyists by making a tardy filing with the Justice Department they were unable to escape from their customers who dropped the tainted consultants.
Now preliminary maneuvering in bankruptcy court suggests a protracted legal battle over the corpse lies ahead while layoffs at the Cambridge headquarters seem guaranteed.