Guide To Management Consulting, 2015 Edition

The HUB’s Guide To
Management
Consulting
2015 Edition
This guidebook will give you an edge in your consulting career, so don’t share it with your friends.
Tom Spencer and The HUB © 2015 1
Sponsors:
Contents
1. Introduction ....................................................................................................4
2. Consulting Basics ...........................................................................................5
What is Consulting? .......................................................................................5
Types of Consulting.......................................................................................6
What Do Consultants Do Each Day? ........................................................7
Required Consulting Skills ............................................................................8
Is Consulting For You? .............................................................................. 10
Consulting or Banking................................................................................ 11
Consulting Jargon........................................................................................ 14
3. Consulting Industry Overview ................................................................. 19
Brief History of the Consulting Industry ................................................ 19
State of the Market 2014/2015 ................................................................. 20
4. Consulting Careers ...................................................................................... 21
Generalist versus Specialist ........................................................................ 21
Consulting Roles ......................................................................................... 21
“Up or Out” Policy ..................................................................................... 22
Surviving in a Procyclical Industry ........................................................... 23
Travel Policies .............................................................................................. 23
Formal Training ........................................................................................... 23
Mentorship ................................................................................................... 24
Exit Options ................................................................................................ 24
5. Consulting Projects ..................................................................................... 25
The Client Can Help ................................................................................... 25
Working Towards an Objective ................................................................ 25
The Consulting Value Proposition ........................................................... 26
1. Introduction
This guidebook is designed for aspiring consultants and provides an
introduction to management consulting and the management consulting
industry.
Consulting is an appealing career choice for many graduates.
Consultants have the potential to travel with work, network with
Fortune 500 executives, earn six figure salaries, develop high-level
transferable business skills, and benefit from lucrative exit opportunities.
What’s not to like?
Well, for all its benefits, the life of a consultant is no bed of roses.
Consultants can be placed under a lot of pressure, required to work
extremely long hours, spend endless nights in lonely hotel rooms, and
face the continual threat of redundancy either due to an economic
downturn or the firm’s ‘up or out’ policy.
Before you embark on a career in management consulting, it is worth
taking some time to understand the consulting industry and whether the
requirements of job are likely to be a good fit with your personality and
goals for the future.
This guidebook provides you with an overview of the management
consulting industry, and what you can expect from a management
consulting career.
2. Consulting Basics
What is Consulting?
“Consulting” is a fairly general term, and doesn’t really give you a clear
idea of what consultants actually do.
The Oxford dictionary indicates that “to consult” means to “seek
information or advice from someone (especially an expert)”. In other
words, consultants are people who provide expert advice.
In this guidebook we focus on consultants who provide advice to
organisations (corporate, non-profit and government). They are
typically employed by management, and hence they tend to be called
“management consultants”.
In general terms, management consulting involves providing advice to
organisations with the aim of helping to improve organisational
performance or solve specific organisational problems.
Consultants can perform a wide range of tasks including framing a
business problem, synthesising large amounts of data, undertaking
research, interviewing employees, developing recommendations, and
presenting findings to senior management.
Consultants can work in a wide range of industries including
automotive, CPG (consumer packaged goods), chemicals, defence,
electronics, financial services, healthcare, infrastructure, logistics, media,
mining, oil & gas, pharmaceuticals, private equity, retail, social sector,
technology, telecommunications and tourism.
Consultants can also provide many different services including growth
strategy, pricing, marketing, supply chain optimisation, software
development, human resources management and economic forecasting.
Large full service firms like Deloitte, PwC and KPMG typically provide
a wide range of consulting services across a broad range of industries.
While smaller consulting firms often specialise in providing advice in a
particular service area or to a specific industry.
Types of Consulting
There are many different types of consulting. As an aspiring consultant,
you should understand your options so that you can make an informed
decision about which kind of consulting is right for you.
Below we outline five (5) of the main types of consulting that might
interest you.
1. Strategy: Think BCG, McKinsey and Bain (although it is worth
noting that these firms are doing less and less “pure” strategy work
and more operations, implementation and restructuring). Strategy
consulting is the kind of consulting that you probably think of when
people say “management consulting”. Strategy consultants work with
the CEO and senior management to address strategic problems
including declining profitability, growth strategy, market entry,
product development, or responding to a competitive threat.
2. Operations: While strategy consultants give recommendations about
what a client “should” do, operations consultants help clients
improve their existing operations. Operations consultants might work
on projects relating to supply chain management including
streamlining procurement or improving manufacturing efficiency.
3. Information Technology: In an increasingly competitive digital world
organisations are increasingly looking for digital solutions. IT
consultants work with the CTO and senior management to develop
software solutions to improve efficiency and organisational
performance.
4. Human Resources: For many firms wages are their biggest expense
and people are their biggest asset. HR consultants help organisations
attract, select, train, compensate and assess employees.
5. Economic: Economic consultants normally work with government
and law firms to provide economic forecasts and expert evidence
based on statistical analysis and econometric models.
What Do Consultants Do Each Day?

Consultants work on projects of varying lengths, and are often required
to travel to work on site with the client.
The specific tasks that a consultant undertakes will depend on which
firm she works for, the project requirements, as well as her level of
seniority and experience.
Projects typically follow a predictable cycle which involves five stages:
pitching, hypothesis generation, research and analysis, reporting, and
implementation.
1. Pitching
Pitching involves selling the firm and its consultants to prospective
clients, and includes not only sending the final proposal but also
conducting industry research, investigating prospective clients, and
making sales calls. Much of the pitching process at consulting firms is
handled at partner level.
Consultants who are “on the beach” (that is, not staffed on a client
project) may spend time researching prospective clients and supporting
the firm’s marketing and business development efforts.
2. Hypothesis Generation
Prior to commencing any research or analysis, most consulting firms
start by developing a case hypothesis about the specific business
problem that needs to be solved. This may require a few days of
brainstorming involving the consulting project team and members of the
client organisation.
3. Research and Analysis
The consulting team will perform research and analysis to test its case
hypothesis. This may involve gathering information from the client,
conducting market surveys, attending client meetings, interviewing
employees and building quantitative models.
The consulting team will use its research findings to uncover insights
and develop a set of recommendations.
4. Reporting
The consulting team will usually communicate with the client
organisation throughout the project at various intervals: daily, weekly,
monthly. The purpose of ongoing communication is to keep the client
informed about the evolving hypothesis, get buy in about key
assumptions, and make sure the consulting team is on track to meet
client expectations.
The consulting team will often conclude its project by delivering a final
report accompanied by a polished PowerPoint presentation.
5. Implementation
Providing recommendations is often not the end of the story, and clients
often engage consultants to help implement the recommendations
produced by the consulting project. Depending on the nature of the
project, implementation may involve project management, software
development, systems integration and testing, or post-merger
integration.
Required Consulting Skills

The consulting field is extremely broad, and so the domain knowledge
and expertise that a consultant will require will vary widely depending on
the industry focus and services that the consultant actually provides.
That being said, there are some generic skills that every consultant will
require.
As a starting point, every consultant will need to be intelligent and
energetic to cope with client expectations, a relentless travel schedule
and demanding deadlines. Consultants will also need to enjoy learning
since no two consulting assignments are the same. Consulting firms
screen heavily for intelligence and enthusiasm during the application
process. If you are not smart and energetic then breaking into and
succeeding in the consulting industry may be an uphill battle.
Skills Required By Junior and Mid-level Consultants
Assuming a consultant has sufficient aptitude and the right
temperament, there are also a number of generic skills that junior and
mid-level consultants require, which we outline below.
As you read through the list, be honest with yourself. Do you possess
these skills? You don’t need to be perfect on day one, but your time is
valuable and pursuing a career in consulting will be challenging if you are
not well prepared. Which areas do you need to work on?
1. Communication skills – Consultants work in many different
service areas and industry sectors. Where ever a consultant may
find herself, she will need to be able to communicate clearly and
persuasively. Consultants need to be able to collect information
from employees, obtain client buy-in, ensure that the proposed
solution is feasible, and present recommendations to senior
management.
2. People skills – Consultants work in teams and often deal with the
client’s senior management team. As such, consultants need to be
agreeable and pleasant to work with as well as assertive and able to
influence outcomes.
3. Quantitative skills – Consulting firms screen applicants in the
interview for their quantitative skills using market sizing and maths
questions. It is important for consultants to be comfortable
working with numbers and using programs like Excel. Some
people are better at maths than others, but applicants can improve
their maths skills through dedicated practice.
4. Analytical skills – Consultants need the ability to collect and
synthesise large amounts of information, develop a hypothesis
about the client’s problem, analyse the data to uncover insights,
and come up with a set of recommendations. In short, consultants
require strong analytical skills.
5. Organisational skills – Consulting assignments can be fast paced,
multifaceted and chaotic, and consultants are sometimes staffed on
more than one assignment. Consultants without strong
organizational skills are likely to flounder.
6. Initiative – Consultants need to be able to identify issues and take
action without supervision, and to know when to ask for help. A
consultant will sometimes be sent to work independently at the
client site, and should be able to represent her consulting firm and
make a favourable impression with the client.
Skills Required By Partners
With good core skills and a strong performance record a consultant can
get promoted through the ranks. However, once she approaches the
partner level a consultant will also need strong sales and marketing skills.
If a consultant is unable to sell high priced consulting services, then she
is unlikely to enjoy continued success at partner level.
Is Consulting For You?

Management consulting is a highly paid and prestigious profession, but it
is not for everyone.
Many people go into consulting with a plan to gain a few years of
experience and then apply for B-school or pivot into industry or
entrepreneurship. This is a legitimate strategy, but it can also be a cop
out with many people leaving their career direction too much to chance.
The sooner you figure out what you are passionate about, the better.
One of the reasons that many applicants are attracted to the consulting
industry is that consultants travel with work. Travelling sounds like fun,
but travelling for work can be a double edged sword. Constant travel,
lonely hotel rooms, and an inability to plan time with family and friends
can be disruptive and exhausting. Different consulting firms have
different travel policies, and if travel is an important factor for your
decision then look into this before applying.
Consulting is not for everyone, and one reason is that consultants work
hard to provide valuable recommendations but tend not to see the fruits
of their labour. Consultants often leave a client prior to implementation.
For people who enjoy seeing projects through to completion, this can be
unsatisfying. Clients also tend to take the credit for positive outcomes
and blame consultants if things go wrong. As New York based
consultant Alan Weiss would say, “If you want to be loved, get a dog.”
Consulting or Banking
If you are a high achieving undergraduate or MBA student, then you are
likely to be considering various highly paid and prestigious career
options. This section provides you with a high level comparison of
management consulting and investment banking.
1. Nature of the job
Management consultants assist organisations by providing advice to
address specific problems and improve organisational performance. For
more information about the role of a consultant, read the sections
entitled “What Do Consultants Do Each Day?” and “The Consulting
Value Proposition”.
Investment banks help companies raise money for various purposes
including investment, acquisitions, and provision of working capital.
They do this by selling stocks and bonds to public investors. Within an
investment bank, the work is split into many roles including investment
banking, sales and trading, equity research, risk management, operations,
and technology.
People in the “investment banking” or “corporate finance” division
typically help large organisations undertake merges and acquisitions.
This is a front office role and normally the most prestigious and highest
paid role at an investment bank.
People in the “sales and trading” division buy and sell financial products.
Sales people communicate with investors to sell financial products.
Traders buy and sell securities with the bank’s money with the aim of
making money for the bank.
People in “equity research” review listed companies and provide
buy/sell recommendations. Investment banks employ “sell-side
analysts” while investment funds employ “buy-side analysts”. The
research division will provide reports to the sales and trading division to
inform trading activity and provide ideas to help sell financial products.
The research division may also provide research to clients in the hope
that they will execute trades through the bank’s sales and trading
division.
Risk management is a middle/front office role which assesses the
market or credit risk assumed by the bank or its clients in a particular
transaction. Prior to the 2008 financial crisis the views of the risk
management division in most banks were overlooked in favour of the
short term profit opportunities pursued by the investment banking
division (this may or may not still be the case).
Investment banks also employ people in a range of back office roles
including operations and technology.
2. Salary
For fresh graduates, the base salary for investment banking is typically
similar to the base salary for management consulting. However, in good
years bankers typically get an end of year bonus in the range of 50% to
100% of base salary. Consultants may also receive an end of year bonus,
but it will be much smaller, around 10% of base salary.
Salaries will vary by country and over time. Below are some average
base salary and bonus figures for new analysts drawn from Glassdoor
for 2014/2015.
Country Role Base Salary Bonus Total Comp
America Goldman US$69,912 US$31,117 US$101,029
Sachs IBD
Analyst (USA)
McKinsey US$81,260 US$9,324 US$90,584
Business
Analyst (USA)
Australia Goldman A$90,147 A$16,472 A$106,619
Sachs IBD
Analyst
(Australia)
McKinsey A$91,250 A$13,000 A$104,250
Business
Analyst
(Australia)
UK Goldman £46,882 £7,631 £54,513
Sachs IBD
Analyst (UK)
McKinsey £41,955 £45 £42,000
Business
Analyst (UK)
Figure 1: Salary data obtained from Glassdoor.com, Glassdoor.co.uk, and Glassdoor.com.au. These numbers are
averages based on anonymously submitted aggregate data, use them as a rough guide only.
In general, adjusting for experience level, bankers will earn more than
consultants. While there are many factors to consider when charting
your career direction, if money is a deciding factor for you, then banking
may be the way to go.
3. Lifestyle
Hours: Banking work hours can average 10 to 18 hours per day, while
consulting work hours average around 12 hours per day. Work hours in
both industries will vary depending on various factors including client
demands, the eccentricities of your boss, and where you find yourself in
the deal/project lifecycle.
Travel: Bankers sometimes do roadshows to drum up support from
investors, but will typically spend 90% of their time in the office. In
stark contrast, it is normal for consultants to travel up to 80% of the
time.
Work culture: Consulting firms typically have a professional and collegial
atmosphere where an intense client focus is combined with networking
and professional development opportunities.
In comparison, investment banks are competitive and hierarchical. It is
not uncommon for bosses to yell at staff for mistakes, and colleagues are
less likely to lend a helping hand since everyone is competing for the
same bonus pool.
4. Exit Opportunities
Consulting offers many exit opportunities including industry, academia,
government and entrepreneurship. Top consulting firms make a point of
keeping current employees in touch with alumni, so there are likely to be
many firm sponsored networking events.
Investment banking is an excellent starting point for future careers in the
finance industry including private equity and hedge funds, although less
helpful if you want to pursue non-finance related exit opportunities.
Consulting Jargon
Organisations hire management consultants to provide advice in relation
to their most challenging business problems. Senior management are
busy people, and so consultants need to communicate as clearly as
possible. The need for clarity, however, has not prevented consultants
from developing an industry jargon all of their own, which can
sometimes be quite incomprehensible to industry outsiders.
Below we outline some of the jargon that you are likely to come across
in the consulting industry.
10,000 foot view: A high-level overview of the situation.
80/20 rule: A rule of thumb which holds that 80% of a business
problem can be solved by focusing on 20% of the issues.
Add some colour: Make it more interesting/appealing/persuasive.
Adding value: Making a contribution.
AOB: Stands for “any other business” and might be used in a meeting
agenda to block out time for miscellaneous discussion.
At the end of the day: A consultant may use this phrase before
summarising the main thrust of her argument.
B2B: Stands for “business to business” and indicates that a business is
aiming to sell to other businesses rather than to end consumers.
B2C: Stands for “business to consumer” and indicates that a business is
aiming to sell directly to consumers rather than to other businesses.
Bandwidth: Capacity to take on additional work commitments. For
example, “I don’t have any bandwidth this week”.
Big 3: McKinsey, Bain and BCG.
Big 4: Deloitte, EY, KPMG, PwC.
Boil the ocean: Go overboard; undertake an excessive amount of
analysis; fail to follow the 80/20 rule.
Buckets: Categories.
Buy in: Agreement; support. For example, “we need to get buy in from
the client before finalising the report”.
CAGR: Compound annual growth rate.
Charge code: A unique code provided for a project which can be used
to record work-related expenses.
Circle back: Follow up with someone at a later point in time.
Close the loop: Completing an item on the agenda or topic of
discussion with everyone being in agreement.
Core client: A client that has a long-standing relationship with the firm.
Deck: PowerPoint slides.
Deep dive: To conduct an extensive examination of a particular issue.
Deliverable: Work product that a consultant needs to provide to her
manager or the client as part of a client engagement.
Development opportunity: A professional shortcoming or area for
improvement that requires attention.
Due diligence: Comprehensive examination of all relevant issues, such
as a review of the client’s business or industry.
Elevator pitch: A short persuasive summary of a proposal, which leaves
the listener wanting to know more.
Fact pack: A pack of information that provides the essential facts for a
project/industry/company.
Granular: Focusing on the finer details, as in “this analysis needs to be
more granular.”
Hard stop: A stated time after which the person will no longer be
available to continue the meeting/discussion. For example, “I have a
hard stop at 3 o’clock”.
Key: Critical; essential; required; important; central. For example, “the
key issues are X, Y, Z.”
Let me play this back: Words used before providing a summary of the
discussion from the listener’s perspective. This is a helpful technique
which can allow a consultant to clarify her understanding of the key
issues and at the same time sound intelligent by saying something even if
the summary adds no additional insights.
Leverage: Make use of.
Low hanging fruit: Targets that are easily achievable, issues that can be
quickly resolved, opportunities that can be readily exploited, or problems
that are simple to solve. By picking the low hanging fruit first,
consultants can demonstrate quick results, which can boost client
confidence in the project and help build initial momentum.
Lots of moving parts: Complex.
Managing upwards: Providing feedback to more senior employees.
MBB: McKinsey, Bain and BCG.
MECE: Pronounced “me see”, and stands for “mutually exclusive,
collectively exhaustive”. It is a principle developed at McKinsey for
grouping information into distinct categories which, taken together, deal
with all available options.
On the beach: In between assignments. Time spent on the beach may
be spent in training or used for new business development.
On the same page: See things from the same perspective.
Opportunity cost: What you give up in order to pursue an opportunity;
the value of the next best alternative.
Out of the box thinking: Lateral thinking; coming up with new ideas
which don’t follow neatly from the data.
Ping: Contact someone, as in “I will ping you later via email.”
PIOUTA: Pulled it out of thin air.
Pipeline: Current and upcoming client engagements.
Production: A department of the consulting firm (often outsourced)
that assists in producing material needed for presentations and meetings.
Pushback: Resistance or disagreement, as in “we received some
pushback from the client.”
Right size: Downsize.
Sandwich feedback technique: A structure for providing feedback
that resembles a sandwich – one positive comment, followed by a piece
of constructive feedback, and ending with a positive comment.
Scope: Agreed set of deliverables for a client engagement.
Scope creep: When the client adds, or tries to add, additional
deliverables which were not agreed in the initial project brief.
Sniff test: A common sense check of a particular idea, proposal or
analysis.
SWAG: Some wild-ass guess.
Take the lead: Take responsibility for something, as in: “Why don’t you
take the lead on this project.”
Takeaways: The key points that should remembered at the end of a
discussion or meeting.
Touch base: To meet at a certain time to talk about the project.
Up or out: Many top consulting firms employ an “up or out” policy.
Employees are expected to advance up to the next level of responsibility
or they will be counselled out of the firm.
Work stream: The tasks that make up a project.
3. Consulting Industry Overview
Brief History of the Consulting Industry
Executives often rely on the advice of management consultants. Was it
always this way? Where did it all begin?
The management consulting industry, as we know it, originated in
America.
The very first management consulting firm was Arthur D. Little,
founded all the way back in 1886 by a professor at MIT whose name
was (funnily enough) Arthur D. Little.
Almost 30 years later, Booz Allen Hamilton was founded in 1914. Booz
was the first management consultancy to serve both industry and
government clients.
Founded in 1926, McKinsey & Company was the world’s first pure
management and strategy consulting company. McKinsey is arguably the
world’s most prestigious consulting firm. The culture of the firm was
heavily influenced by a man named Marvin Bower, who served as
managing director from 1950 to 1967. Bower believed that management
consultancies should adhere to the same high professional standards as
lawyers and doctors. To this day, the core guiding principle at McKinsey
is professionalism.
Boston Consulting Group, arguably the world’s second most prestigious
consulting firm, was founded in 1963 by Bruce Henderson. It all began
when Henderson left Arthur D. Little to accept a challenge from the
CEO of the Boston Safe Deposit and Trust Company to start a
consulting arm for the bank.
Ten years later, in 1973, Bill Bain and others left the Boston Consulting
Group to form Bain & Company, which is also one of the world’s
leading consulting firms.
According to the UK Management Consultancies Association, the
consulting industry in the UK began to grow quickly in the 1950s,
fuelled by the arrival of the US consulting firms, a wave of new
management techniques, and increased demand from clients for
specialised consulting skills.
State of the Market 2014/2015

The Great Recession led many clients to reduce their budget for
consulting services, but demand for consultants is again on the rise.
Here is an overview of the state of the consulting industry in major
markets:
 USA: According to IBIS World, the consulting market in America
is worth around $153 billion with an annual growth rate from 2009
to 2014 of approximately 5%.
 Canada: According to IBIS World, the consulting market in
Canada is worth around $8 billion with an annual growth rate from
2008 to 2013 of approximately 0.6%.
 UK: According to IBIS World, the UK consulting market is worth
around £44 billion with an expected annual growth rate from 2010
to 2015 of approximately 2.6%.
 Australia: According to IBIS World, the consulting market in
Australia is worth around $8 billion with an expected annual
growth rate from 2010 to 2015 of approximately 2%.
According to Bloomberg Businessweek, high growth areas in the U.S.
market for 2012-2013 included marketing and sales (26%), operational
improvement (11%), and technology (10%). High-growth industry
sectors included health care (18%), energy (12%), and pharmaceuticals
(10%).
4. Consulting Careers
Generalist versus Specialist
The traditional consulting career model employed by top consulting
firms like McKinsey was to develop generalist consultants who could
apply general business principles and frameworks across different
industries, sectors and functional areas.
Clients increasingly value industry experience and specialised knowledge,
and so firms are evolving the traditional consulting career model to
accommodate these changing client demands.
Consulting firms often expect generalist consultants to specialize within
two or three years of joining the firm. As a junior consultant you need
to be pro-active in managing your career since you can quickly become
pigeonholed. For example, if your first few projects relate to “big data”
you could become the firm’s in-house expert and then work primarily on
projects relating to big data.
Consulting Roles
A consultant who enjoys a successful career progression within the
consulting industry will be promoted up through the ranks and hold
various different roles along the way. Job titles will vary by firm.
An entry level consultant may be called a business analyst or junior
associate. New recruits who hold an advanced degree (e.g. MBA, PhD,
JD/LLB or MD) may start as an associate, senior associate or senior
consultant. Many top consulting firms require analysts to pursue an
MBA before being promoted to associate.
Consultants who perform well at associate level are likely to be
promoted to manager, and will be responsible for managing projects and
the day to day client relationship.
Managers who perform will be promoted to senior manager and then
ultimately to partner level. Partners are responsible for building the
business, forming new client relationships, and developing the firm’s
brand and intellectual property.
“Up or Out” Policy

It is common for top consulting firms to subject consultants to a
rigorous “up or out” policy. What this means is that consultants are
required to advance to the next level of responsibility within a certain
period of time or leave the firm.
Consultants normally receive regular performance feedback and so have
frequent opportunities to gauge whether they are making satisfactory
progress. If a consultant is falling short, they will normally have
opportunities to talk to their manager about areas for improvement and
benchmarks to measure progress. If the consultant is unable to make the
necessary headway within an agreed timeframe, they will normally be
asked to resign. This extended resignation process is referred to as
“counselling out”.
Consulting firms appear to employ the “up or out” policy for three
reasons. Firstly, consulting firms typically embrace a meritocratic culture,
and so the “up or out” policy is a way of making sure that the best
consultants advance within the firm. Secondly, most consulting firms
adopt a business model based on a pyramid organisational structure with
a small number of partners at the top and a relatively large number of
business analysts at the bottom. The only way to hire a constant flow of
talented business analysts is to ensure that existing consultants are
advancing upwards or leaving the firm. Thirdly, top consulting firms
value their alumni network and use it to drum up new business. The up
or out policy ensures that this network continues to grow.
Surviving in a Procyclical Industry
Management consulting is a service industry that earns its keep by
serving large organisations – corporate, non-profit and government.
During economic downturns these prospective clients typically have less
money, or more uncertain cash flows, and so are less likely to spend
money on consulting services. As a result, consultants are vulnerable to
layoffs during economic downturns.
Consultants and consulting firms can go some way towards reducing the
effect of economic downturns by offering a range of services including
some which are countercyclical, that is, services which are more in
demand during downturns such as restructuring and turnaround support
services.
Travel Policies
Different consulting firms have different travel policies. For example,
McKinsey consultants often spend Monday to Thursday at the client site
with Fridays in the office. Bain and BCG often spend a lot of time with
the client at the beginning and end of the project but less time in
between.
Formal Training
Consultants are the primary asset of a consulting firm, and top
consulting firms invest a considerable amount on formal training and
development programs.
Consultants may spend as much as eight weeks per year attending
formal training sessions and conferences. Since university courses are
often overly theoretical and academic, the focus on training and
development can serve as an invaluable bridge into the corporate world.
This can lay a solid foundation for a career in the consulting industry, as
well as open up attractive exit opportunities.
Mentorship
Consulting firms will typically assign new recruits with a formal mentor.
A mentor is responsible for overseeing professional development and
can be an invaluable source of career guidance, an advocate to help you
get staffed on projects and a person to champion your promotion within
the firm.
In addition to having a formal mentor, you should also develop
relationships with consultants throughout the firm, in particular with
those who share a common area of interest and with whom you have
good rapport.
Exit Options
One of the benefits of starting your career in management consulting is
that it provides many favourable exit opportunities. Some of the
possible exit opportunities that a consultant may consider are outlined
below.
Another Consulting Firm: Just because you leave your firm doesn’t
mean you have to leave the consulting industry. A consultant may decide
to move to another consulting firm which offers a better office location,
better pay, the promise of accelerated promotion, or more interesting
projects.
Internal Consulting: Some companies have an internal consulting unit
designed to provide support within the organisation on issues such as
strategy, business development, marketing, and project management.
The benefits of this kind of arrangement for the consultant include less
travel and a steady stream of work. The downsides may include lower
pay, less variety of work, and perhaps less dynamic colleagues.
Large Corporates: Former consultants can land themselves strategy,
marketing, operations, business development or management roles in
large corporations like Amazon, Apple, Coca-Cola or Procter &
Gamble. The benefits of working at a large corporate include better job
security, less travel, and shorter work hours. The downsides may include
lower pay and more limited options for career progression.
B-school: Probably the most common next step for junior consultants
who have a few years of work experience is to attend business school.
Some consulting firms will even offer to pay the tuition fees on the
condition that the consultant returns to the firm for a number of years.
5. Consulting Projects
The Client Can Help
The client is not your friend, they are a paying client. Even if a strong
working relationship exists, consultants need to maintain a professional
distance with members of the client organisation. Idle gossip or one too
many drinks can create a bad impression and make the client unhappy,
which could mean no referrals and no repeat business.
While the client is not your friend, they can often help. Members of the
client organisation often have a lot of industry experience, and so
cultivating strong working relationships can often save you a lot of time
and effort.
Working Towards an Objective

When engaging a consulting firm, clients often have a goal in mind. As a
junior consultant working on a project, or attending a client meeting,
you need to make sure that you understand the objective, how success
will be measured, the timeframe for delivery, and the next steps that you
need to take.
Take notes in meetings, and if you are not sure about something, it is
better to ask clarifying questions at the time rather than spin your wheels
for hours trying to figure out what might be required.
The Consulting Value Proposition
Why do organisations hire consultants? If you are a junior consultant,
knowing why your work is valuable is likely to make your job more
meaningful. If you are a partner, knowing why your work is valuable is
likely to help you sell consulting projects and make money for the firm.
Below we outline five (5) of the main reasons why organisations engage
consulting firms.
1. Expert Knowledge
Consultants can provide management with the expertise needed to
address specific business problems. For example, a company that needs
to update its computer systems might seek advice from IT consultants.
The benefit of bringing in specialist consultants is that they are likely to
have experience solving similar problems and an understanding of
industry best practice. Large consulting firms can draw on a breadth of
experience and offer clients a broad range of expertise applicable to a
wide range of business problems.
Areas of expertise that consultants can provide include:
1. Industry specific knowledge;
2. Strategy, which includes assessing industry structure, defining
strategic priorities, increasing profitability (cutting costs and
finding new revenue streams), creating growth (new product
development, new market entry, mergers and acquisitions),
marketing, distribution, and outsourcing;
3. Marketing;
4. Supply chain optimization;
5. Distribution;
6. Organisational change;
7. Information technology;
8. Tax structuring;
9. Risk management;
10. Human resources;
11. Turnaround and restructuring; and
12. Implementation.
Expertise can form a crucial part of a consulting firm’s value proposition
and can be something worth fighting over. An example from 2014
occurred when McKinsey poached two partners from AlixPartners, one
of the world's best-known restructuring firms. Restructuring is a niche
service which requires specialised knowledge and industry experience. In
an apparent attempt to stop McKinsey poaching key talent, AlixPartners
sued its former employees (Eric Thompson, managing director of
AlixPartners’ Hong Kong office, and Ivo Naumann, head of its
Shanghai branch) on claims that they misappropriated trade secrets
before they left the firm’s Asian operations.
Expert knowledge can be very valuable.
2. Independent Advice
Consultants can assist management by providing independent third party
recommendations. Consultants can provide more objective
recommendations since they do not have a vested interest in the
outcome. For example, consultants would be able to recommend cost
saving measures which full-time employees may be unlikely to suggest if
cost savings are likely to include layoffs.
3. Catalyst for Change

Consultants can assist management by supporting organisational change.
There are four reasons why consultants may be well placed to do this:
1. Impetus for action: Consultants can provide research to support a
particular plan of action, which can provide the stamp of approval
that management needs to legitimize its plan and overcome
internal opposition. A consulting report can also provide an
impetus for action by clarifying the reasons that a proposed course
of action makes sense.
2. Convenient scapegoats: Related to the first reason, consultants can
provide political cover to help management pursue a potentially
risky or unpopular course of action. If employees are unhappy
with layoffs, management can blame the consulting report. If
shareholders are unhappy with performance, management can
blame the consulting report. “Nobody ever got fired for hiring
McKinsey.”
3. Open communication: Consultants can facilitate open
communication within a firm and enable good ideas to reach
management. Since consultants do not have a fixed position
within the organisational structure it is likely to be easier for them
to collect information from employees at all levels.
4. Employee engagement: Consultants often engage with staff at all
levels within an organisation and, as a result, employees may feel
more involved in the change process making them less likely to
balk at proposed changes.
4. Implementation
Consultants can assist management by implementing recommendations.
A firm may find this appealing because implementation may be a
dedicated project unrelated to the firm’s ongoing operations. Hiring
outside consultants can help a firm overcome internal bureaucracy and
inertia favouring the status quo. A firm may also lack the expertise or
manpower needed to implement recommendations effectively.
5. Cost Effective Solution

For some types of projects (e.g. software development) consultants may
represent a cost-effective solution. A firm may lack the competencies
needed to complete the project in a timely or cost effective manner and
it may not be feasible to hire and train full time staff.
Even if engaging outside consultants appears more expensive in
financial terms compared with employing full time staff, it may still
make financial sense to hire consultants since (a) they can be dispensed
with more easily after the project is complete, and (b) consultants may
be able to complete the project more quickly and effectively.

Guide To Management Consulting, 2015 Edition

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Guide To Management Consulting, 2015 Edition

Uploaded by

Copyright:

Available Formats

The HUB’s Guide To

What Do Consultants Do Each Day?

Required Consulting Skills

Is Consulting For You?

State of the Market 2014/2015

“Up or Out” Policy

Working Towards an Objective

3. Catalyst for Change

5. Cost Effective Solution

You might also like