What is consulting? Management Consulting and the Consulting Industry, 101

It seems like everyone these days is a consultant – strategy consultants, business consultants, technology consultants, IT consultants, marketing consultants, the list goes on and on.

It’s a catch-all title for someone who gets paid to give their advice on particular subjects to companies

In this post, I’ll attempt to answer 3 big questions:

-Who are consultants?
-McKinsey, Accenture, Monitor…what’s the difference between different consulting firms?
-What do consultants actually do?

Who are consultants?

Business consultants as people are generally:

1) Knowledgeable about the topic at hand
2) Well-connected within the industry
3) Have a reputation and/or brand (based on experience, publications, etc)
4) Effective communicators

Companies often face questions that they are incapable of answering or too busy to properly address. This is where consultants come in, armed with the above 4 traits, to help address precisely those questions.

Further reading: Why companies hire management consultants

McKinsey, Accenture, Monitor…what’s the difference between different consulting firms?

The consulting industry can be segmented accordingly:

1) Management consulting firms (eg McKinsey, Bain)
2) One-stop-shop and technology-focused consulting firms (eg Accenture, Deloitte)
3) Niche/boutique consulting firms (eg Mercer HR, Kurt Salmon)
4) Independent consultants (self explanatory)

My categorization isn’t perfect – for instance, boutique consulting shops provide management advice; one-stop-shops often focus on IT/technology and less on strategy.

In addition – many corporations these days have in-house consultings groups (often populated by ex-McKinsey-Bain-BCG-types).

And much of what the venture capital industry does when working with portfolio companies is similar to what Monitor would do for their Fortune 500 clients.

Further reading: Interviews with a McKinsey and Bain consultant

Finally, what do consultants do?

The answer is that it depends. If you’re an analyst/associate (the focus of Management Consulted), your job is to do the grunt work necessary to answer client questions.

You will work with the following pieces of software:

1) Microsoft Powerpoint
2) Microsoft Excel
3) Email…lots and lots of email

You will be provided the following pieces of hardware:

1) Blackberry
2) Durable laptop

Your day will typically include the following (with a more detailed post on this later):

1) Client meetings
2) Team (internal) meetings
3) Data gathering and analysis
4) Slide creation
5) Conference calls

With all the above, your job is to come up with the most comprehensive, data-driven insights and answers that your clients don’t already know. These will form the basis for recommendations that your team will provide, and from which your clients will (ideally) make changes to their business to result in one or more of the following:

1) Increased revenue
2) Reduced costs
3) Clear strategic direction
4) Gameplan for hiring and firing of employees
5) And so forth

Further reading: 11 tips for new consultants

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• 6 reasons why companies spend $2 million to hire management consultants

Tagged as: accenture, Bain, BCG, consulting, deloitte, Fortune 500, management consulting, mckinsey, mercer, monitor, strategy consulting, understanding consulting, what is consulting