Management Consulting and the Consulting Industry 101

It seems like everyone these days is in management consulting - 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 management consultants? -McKinsey, Accenture, Monitor…what’s the difference between different management consulting firms? -What do management consultants actually do?

Who are consultants?

Management 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 management 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 management consulting firms?

The consulting industry can be segmented accordingly:

1) Management consulting firms (eg McKinsey, Bain, BCG – MBB) 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 consulting 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: 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) Smartphone 2) Durable laptop, usually a PC

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) PowerPoint 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 (acquisitions/divestitures/partnerships) 4) Org design and the gameplan for hiring and firing of employees 5) And so forth

For more information about management consulting, check out:

Management Consulting – Day in the Life

Management Consulting – Interview Preparation

 

 

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