This blog has been growing my leaps and bounds. I’ve really appreciated meeting readers and helping people in their quest to break into the consulting industry.

For new readers, consider subscribing to my RSS. It’s the most convenient way to receive blog updates – and expect a slew of content in the next few days

Here are my 5 favorite posts since starting Management Consulted

• Management Consulting versus Investment Banking – a time-honored question for undergraduate and MBA students across the world. I break it down into the 5 primary dimensions upon which these careers differ
• Day in the life of a management consultant – the day described here is one of the easier ones you’ll face, but provides a good view of client relations, team dynamics, and a typical day’s ebb and flow
• Life as a Consultant: An interview with a consultant from Booz Allen- one of my favorite interviews thus far, past ones have included McKinsey, ATK Shanghai, and Nortel. Booz guy does a great job discussing issues ranging from public sector consulting to the Booz recruiting process to career paths within the firm
• Overview of the management consulting recruiting process – ground zero for prospective consultants, this article gives a comprehensive view of each component in the typical recruiting cycle. While the perspective skews towards those currently in school, there are valuable insights regardless of your current position
• The Consulting Bible – no round-up of resources is complete without a plug for my in-depth interview guide. It’s not free, but there’s a 60-day return policy, plus free updates for life. My 2nd update will be coming in a few weeks!

Here’s a very useful case study primer, courtesy of Bill Blackwell and the Jesse Jones School of Management Consulting Club at Rice University. Pay particular attention to the case frameworks – there are a few very good ones

An interview with Social Geekette

I recently did an interview with Serena Wu on Social Geekette. We cover topics such as why I started Management Consulted, my experiences at McKinsey, and my views on blogging and the internet. Check it out here.

Questions for readers on a new project

After helping more than a hundred people with resumes and interview prep to break into consulting, the biggest issue I’ve noticed is that many people don’t have access to useful recruiting channels

It’s easy for Ivy Leaguers, for most MBA students, and for those already in consulting. But there’s a huge audience – experienced hires from different industries, those that go to non-target schools – that don’t have access to key resources like information sessions, campus recruiters, and the attention of consultants at their target firms.

The tentative title of this project is “How Anyone Can Break Into Management Consulting, Regardless Of Your School Or Current Job.”

It will be a comprehensive directory of consulting firms and emails/phone numbers for recruiters AND consultants at each firm. I plan to include tactics that people can use to get their resumes noticed and land interviews – such as actual call scripts and email templates. The focus is on boutique firms – because the big guys are much tougher to break into through non-traditional methods.

Having said that, I’d love to get reader feedback on 2 questions:

1. If you want to be a business consultant, what are your biggest concerns in breaking into the industry?
2. Have you entered consulting through non-traditional means, and if so, can you share your story? I’d love to feature some successful case studies

Thanks a million! I’d prefer if you contacted me directly with answers, particularly for the case studies. To incent responses, I’ll provide this book for free to anyone whose concerns, insights, and stories are incorporated (along with a free copy of The Consulting Bible, 2nd ed).

The Life of a Consultant series continues. The guest today is Marquis – former McKinsey consultant, Stanford GSB graduate, and author of the popular consulting blog Marquis’ Weblog. Previous interviews covered consultants from Booz Allen, AT Kearney, and Nortel.

Some background: I’ve been reading Marquis’ blog for several years. He is a prolific and insightful poster who truly cares about his readers. Head over to his blog to read tons of great articles about consulting, business school, and general career advice.

Now on to the interview! I’ve bolded a few things that are particularly helpful for prospective applicants

Please note, the personal views and opinions expressed are strictly those of the interviewee and do not reflect the views of the interviewee’s employers or affiliated entities.

1. For the benefit of readers, can you give us a summary of your background?

I’m originally from a small town in Virginia and, through some miracle, I ended up at Princeton University, where I earned an A.B. in Computer Science. After college, I worked as a Software Engineer for a couple of companies (a internet consulting firm in NYC and a software and systems engineering firm in the DC area), focused primarily on Java development. While at the second company, I earned my first graduate degree, an M.S. in Management of Information Technology from the University of Virginia, as the first step toward stepping from behind a computer to learning about management. After five years as a Software Engineer, I attended the Stanford Graduate School of Business and completed a joint-degree program, earning an MBA and an M.A. in Education. Following business school, I spent a couple of years as a consultant at McKinsey & Company, where I worked on projects in a range of industries/functions. In late 2008, I left McKinsey and started an exciting new gig in Chicago, where I’ve been for two months now.

2. You run a popular career-advice blog over at Marquis’ Weblog. What inspired you to start this site?

I started the site back in Oct. 2003 as a tool to help other B-school aspirants by sharing stories of my own B-school process. I didn’t know any MBAs while I was applying, which made the application process a huge mystery for me. I figured that, if there were other aspirants who didn’t know anyone in the MBA world, they could rely on me as the person that they “know”. Over time, I learned that telling my story was giving a lot of people hope because, “if someone as silly as [me] can get into and through a top B-school, then just about anybody can” (that is a direct quote from a reader I met a few years ago). After graduation, the site continued to morph into its current form where I help readers even more by answering their questions on just about any topic they generate for me, including career, education, and business. It hsan’t been easy to keep my site going for so long, but, as long as it’s helping people, I’ll keep on doing it…well, as long as I’m also having fun doing it, that is :-)

By the way, I wrote up a much longer response to this question in a past entry on my blog, which can be found here.

3. You went to Stanford GSB for business school before working at McKinsey. Can you tell us why you chose Stanford GSB?

Hmmm…why did I choose Stanford GSB?…That’s basically what the first three year’s worth of entries in my blog are about :-) That exact question was posed to me in an entry from last October, so I’ll copy over what I used to respond to that reader:

At a high-level, I was looking for the following things in a business school and Stanford offered all of them:

–

a. Strong general management program –> My goal was to finish B-school with a strong overall understanding of business, so I targeted general management programs when selecting schools. Stanford is among the top general management programs out there, so it immediately make the short-list of schools for me.

b. Small class size –> I wanted a school where each incoming class was small enough for me to really get to know my classmates over my two years. I was trying to find a place that would allow me to be a name and not a number and Stanford’s average class size of 370 made it a great fit in this metric.

c. Strong “transformational” and diverse culture –> Every business school has a strong culture, but not every school’s culture will be a fit for everyone. I was looking for a culture that embraced diversity of thought, background, nationality, and perspective among its students. Even more important to me was finding a school whose culture left its students feeling like they’d reached their full potentials and had been transformed by their MBA experiences. As I researched Stanford and spoke to students, I learned that the GSB scored off the charts in both of these areas, cementing its position as my #1 choice school.

–

4. What sparked your interest in McKinsey as a career? Can you tell us about your recruiting experience with the firm?

My interest in McKinsey was sparked prior to applying to business school as I researched the management consulting industry. During this research, I found that McK had a reputation for creating CEO’s and other business and organizational leaders, which is what I aspired to become. Also, I learned that it was known for tackling mission critical issues for its clients, which also appealed to me. Finally, I thought that having a stint at McKinsey would do wonders for my own professional brand since my first employer collapsed after the dot-com bubble burst and my second employer was too small for anyone to have ever heard of.

My recruiting experience with the Firm was very straight-forward and positive overall. It started during the first year at Stanford by attending several events and getting to know people, which confirmed my liking for the place. I was dinged for the summer internship after second-round interviews, but several people from McK stayed in touch with me during that summer, which made me put McK back at the top of my list for the full-time recruiting process. Fortunately, I did better the second time around and was able to secure a full-time offer. My experience was so good that I devoted significant attention to recruiting once I joined the Firm in order to have a positive impact on the recruiting of other candidates.

5. During your time at McKinsey, you were based in Atlanta. Did you notice any differences between working in a smaller office like Atlanta versus a larger office like New York?

There wasn’t a difference in terms of the actual nuts and bolts of what I did day-to-day, but I did note a few differences, including:

1. Types of projects available within the office and region — Different offices have core sets of clients, which have different needs from teams, so I found that I’d have different options (topic areas, industry, function, etc) for studies than my friends in other offices…it is possible that there’s a correlation between variety of available work and office size, but I’m not certain about that.

2. Ability to connect with other Associates in the office — I found it much easier to build good friendships with the majority of my fellow Associates because there were fewer of us and we’d hang out quite often. I imagine that it is more difficult to get to know as high a proportion of the Associates in a bigger office like New York.

3. Social options for outside-of-work times — Often, it doesn’t take long to see what there is to see and do what there is to do in a city with a smaller office. Whereas, in a huge city like NYC, there are any number of social outlets and they change all the time, which provides more options during one’s off-time.

MC note: these themes echo my global firms vs boutiques post

6. What do you think are the most important lessons you took away from McKinsey?

It’s difficult to give a short answer to this question because I learned a lot in my years at McK. A few lessons that come to mind are:

1. The Consulting Toolkit — Structured problem solving, analytics, frameworks to think about business issues, methods to effective present/lay-out arguments/analyses, etc

2. Ways to leverage both EQ (emotional quotient) and IQ (intellectual quotient) — I’ve heard it said that EQ gets you through life and IQ gets you through school. I’ve always been an killer EQ guy, but McK taught me how to effectively leverage IQ to be even more effective

3. Importance of developing a network of supporters within an organization/office/etc.

4. Ability to get spun up on a particular company, industry, function, or topic very quickly and develop a perspective on it

5. Understanding of the impact of professional presence and tools to develop that presence

6. Importance of maintaining a strong work-life balance (I was terrible at it, so I learned from the downside of it…more on this below)

7. I know this question is huge for readers, and you seem as well-placed to answer it as anyone: what would you say are the biggest differences amongst the Big 3 (McKinsey, Bain, BCG)?

This is a great question, but one that I’m cautious about answering because I’ve never worked for Bain or BCG. From what I’ve heard, all three companies tackle the same types of questions for their clients and bring tremendous intellectual power to every client situation. The two biggest differences I always hear about are the methodology/approach used by each firm and their corporate cultures. I’m sure many of your readers have heard about “The McKinsey Way”, the McK approach to problem solving and delivering client value…a few books have been written about it, so there’s a lot of information about it out in the market. I’ve heard that Bain and BCG have their own methodologies that, while different, provide a similar guideline upon which to rely when doing client work. I imagine that there are nuanced differences between the three though. And, as for the culture issue, I’d suggest that your readers attend a few info sessions for each firm and talk to some of the company representatives. That process should leave them with a good idea of each company’s culture.

8. What motivated your transition from consulting to finance?

Actually, I didn’t really make a full-on transition into finance, which I’m very happy about considering the state of the finance industry right now. Rather, my new company is a strategic advisory and capital investment firm and my current work is still strategy-based, just with a different focus and in a different arena. But, I’ve been diving into company financial statements (to learn about those companies) more than I have since taking my Corporate Finance course at Stanford GSB. As I looked at my options, I was trying to optimize on several factors, including my interest in the work, what I’d learn in the role, and how it would fit into my overall “story” in the long-term, and this gig fit the bill perfectly. Plus, it didn’t hurt that it is based in Chicago where I had a lot of friends, so I wouldn’t have had to build a social network from scratch like I did in Atlanta.

9. Any last words of advice to prospective consultants?

As you can imagine, many of my reader requests are for advice about consulting, so I’ve thought and written about this a LOT. You know that consulting people like to use structure whenever possible, right? So, I’ll break this into two parts: getting the job and then nailing the job.

Winning an offer in consulting is no easy feat, so prospective applicants need to be on point from the beginning. Here are a few lessons that I learned along the way in my own process:

1. Start preparing for case interviews as early as possible (case prep guides, practice cases, mental math exercises, etc)
2. Do as much due diligence on the different firms as possible (leverage company websites, recruiting sessions, industry publications, etc)
3. Develop your “Why Company X is a fit for me” and “Why I am a fit for Company X” stories early on and continue to sharpen them as you find out more about the firms during the due diligence process
4. Take stock of your professional, educational, and life experiences and figure out how to concisely describe them in depth (this will be helpful in the fit interviews)
5. Remember that you have a lot to offer wherever you end up, so, if you don’t get a consulting offer, the world will not end, your life will not be over, and it doesn’t mean that you’re not a high-quality candidate

Once a person gets their consulting offer, they should immediately shift their mindset to preparing to do well at the job. To address this point, I’ll leverage some content I wrote for an entry a while back because the readers here might find it useful. With that in mind, my top-10 list of tips for soon-to-be consultants are:

1. Be confident, but humble
2. Get really good at Excel modeling (or any other core skill to the job) as early as possible
3. Always present the best “you” as possible
4. Be prepared to be pushed
5. Don’t be afraid to seek help when needed
6. Build a support network within your office as early as possible
7. Show enthusiasm and interest
8. Always execute on deliverables
9. Don’t be afraid to be active/vocal in team settings
10. Sign up for frequent flier, hotel loyalty, and rewards credit cards as early as possible (if you’re going to be living out of a suitcase, you might as well benefit from it, right?)

And, one last piece of advice…be prepared for the strain that the job can put on real-life relationships with significant others, family, friends, colleagues, etc. I underestimated this point going in and was totally unpreprepared for the difficult process of balancing the job with the personal relationships I valued. I still wonder how things might have turned out differently if I’d been more prepared for this issue from the beginning.

10. How should readers get in touch with you?

Readers can contact me at the email address that I set up for my blog. I often have a long backlog of messages, but I always send a response, even if it takes me a month or more to do so.

Are you a current consultant or someone who recruited successfully? Interested in being interviewed? Please get in touch to be featured in the Life as a Consultant series.

This post kicks off my “Life as a Consultant” series – where through interviews, we take an inside look at the stories of current and past consultants.

Some background before we launch into the interview:
A reader was kind enough to reach out to me when I posted about starting this series of interviews. His background in boutique consulting and now at Booz Allen provides a valuable perspective on topics ranging from public sector consulting to firm culture to career advice.

Now on to the interview! I’ve bolded a few things that are particularly helpful for prospective applicants

1. Tell us about your background

I graduated from a large public university in 2006 and spent a year and a half at a boutique consulting firm before coming to Booz Allen. My undergraduate background is in economics, and I had a pretty good undergraduate GPA. I’m currently a Senior Consultant for Booz Allen’s Organization & Strategy team.

2. Booz Allen is one of the industry’s most respected firms. What was the recruiting process like for Booz? Any tips you can share with readers?

The recruiting process for me was extremely easy and not typical. I was “referred in” to the firm on a Monday, had a phone interview that Tuesday, was brought in for an in-person interview that Friday and had an offer the next Tuesday.

There are three main routes to working for Booz Allen – being referred by a current employee, going through the University recruiting process, or being snatched from another consulting firm. In the year-and-a-half I’ve been at Booz Allen, I’ve never heard of anyone who applied on the website and was hired. I’m sure it happens, but the overwhelming majority of our staff come through the aforementioned pipelines.

My telephone interview consisted of several behavioral questions and an explanation of my background. The in-person interview day was broken into five thirty-minute segments where I sat with various Senior Associates for discussions on where I would be a good fit, with several cases and logic puzzles mixed in.

My suggestion for navigating the hiring process is to Be Patient, But Follow Up. Because the company has grown so much over the past few years, the recruiting process is still a little broken. If you have a well-respected internal rainmaker to shepherd you through the process, it will help you tremendously. I also strongly recommend applying for an internship while you are an undergrad, but they are pretty tough to get.

3. What perceptions did you have about the job before you started? Have these changed or been confirmed?

When I applied to Booz, it was still a “top tier” management consulting firm. Since then, the reputation has taken a hit from the separation and those of us who had an opportunity to work at more “prestigious” firms have been somewhat disappointed. Besides that, everything that people have said about the firm is true – everyone is smart and qualified. They may not have all gone to Princeton, but they are driven and fun to work with.

I did not expect the culture to be so buttoned-down, but I like it. Monday through Thursday dress is business formal – suits and ties. Fridays are technically business casual, but that generally means that guys just take off their ties.

4. Many readers are interested in government and public-sector consulting. What has been your experience working in these areas?

Public-sector consulting is very similar to doing commercial projects, but it gives you some nice perks. First, it allows you to do work that you can easily explain to people outside of the consulting world. While it might be challenging to explain the fine points of change management at a large corporate client, you can tell your parents that you are “fixing the IRS” and they will understand what that means.

Second, I’ve been surprised at how easy it is to get your clients to accept your recommendations in public-sector work. If you are really interested in public policy, this is a great place to be. Economic regulation, health care, and national security work is popular within the firm and if you show an interest it is pretty easy to find work.

Finally, you don’t experience some of the project lowballing that corporate clients hit you with. Government clients are more interested in making sure that the work is done right than if it is done quickly (partially, I think, because it isn’t their money). You never have to share hotel rooms, almost always get your own rental car, and use a General Services Administration per diem for most of your travel so the client can’t ask you to go cheap on food.

There are some negatives: It is really easy to get stuck in staff augmentation-style work, particularly at pre-MBA levels. Because junior consultants are less expensive and much easier to bring in than hiring a Fed, clients frequently use them to fill a hole in their staff. Doing this kind of work isn’t sexy, but it does give you unbelievable access to senior government executives that you can use later on to build business.

5. You mentioned the recent separation of Booz Allen into a strategy-focused Booz & Co, and a government-focused Booz Allen Hamilton (acquired by Carlyle). Can you share an inside perspective on what happened, and how this has impacted your job?

There are a number of reasons why the two practices separated, but the paramount ones are corporate culture and business model:

- The commercial business primarily hired graduates of top MBA programs, whereas the government side was much more open to ex-military personnel, non-MBA masters’ degree holders, and recent college graduates.

- The commercial side utilized Up or Out, while the government practice did not, resulting in a significant age disparity between government and commercial partners.

- The government practice grew out of the commercial practice, but has been significantly more profitable. In FY 07, roughly 70% of the firm-wide profit came from government business, which accounted for only 30% of the partnership.

- Because of the work that the government practice does within the intelligence community, the commercial practice was precluded from providing similar consulting services to foreign governments. With the separation, Booz & Co is free to build that business without restriction.

- From my perspective, I can add another dimension to the cultural divide – the top focus for the government side is ensuring that our clients get the best possible service, whereas my colleagues in the commercial business tended to be much more focused on doing the most interesting, cutting-edge work.

The capital infusion hasn’t effected my work at all. Carlyle has been very hands-off with the firm for good reason: a consulting firm has to rely on its people as the “product.” If the people aren’t happy, they leave, and Carlyle’s investment is in danger.

6. One topic that I often address is the differences in culture between firms. Can you tell us about Booz Allen’s culture?

The culture is the reason why people stay at Booz Allen. I’ve rarely been in a situation where I felt the firm was abusing consultants or had a backwards policy. The firm is tremendously respectful of your personal life, and while there are frequent occasions where you need to put in lots of hours to meet a deliverable, your work does not go unnoticed. Most consultants don’t travel and work between 40-50 hours a week. If you do travel, 50-60+ hours is normal. If you work on the flight or travel during core business hours, you are allowed to bill time while traveling. You aren’t issued a blackberry (most people have their own, anyway), but you are not generally expected to respond to email after 5 pm (though most people do, anyway).

Booz Allen consistently gets high marks for training, and it’s very easy to find interesting courses that the firm offers for free. While the firm does not currently sponsor your MBA, there is some chatter about increased educational allowances over the next few years.

The firm is somewhat parsimonious with vacation time, but they make up for it with incredible flexwork arrangements. Depending on your project, you may be able to work from home a few days a week. If you live in DC there is a free, WiFi equipped shuttle from the metro to the main campus in McLean running every twenty minutes. The offices are simple, but well equipped.

It has surprised me that some consultants at other firms don’t get exposure to their clients. I have always been in direct contact with my client, and much of our work is done in tandem with them. Because Booz Allen does strategy and implementation work, a lot of the time you will sell a client on a particular course of action, then hold their hand while they implement your recommendations.

Contact with senior leadership is frequent, although you tend to build the most meaningful relationships with your Senior Associate. With that said, contact with leadership and the type of projects that you are staffed to are most highly dependent on the team you work on. Some teams are relatively small and give you a lot of flexibility. Larger teams, however, can be disjointed and may make it difficult to network.

Incidentally, it might be useful to explain Booz Allen job titles: most entry-level hires come in as Researchers (and are informally referred to as Level A’s) or Consultants (Level 1′s). People with a few years of experience or MBAs are generally hired as Senior Consultants (Level 2′s) or Associates (Level 3′s). The firm is managed by Senior Associates (Level 4′s), Principals (Level 5′s) and Partners (Officers).

Finally, it is worth mentioning salary and benefits. For entry-level employees, salaries are generally competitive with most other consulting firms. Having a security clearance, excellent internship experience or other credentials will bump up your offer. I’ve seen people complaining about low salaries at Booz Allen as opposed to, say, Deloitte or BearingPoint, but there isn’t much in the way of facts substantiate this whining. I have friends from college at Accenture, PwC, E&Y and Deloitte and we all make roughly the same salary.

Similarly, Senior Associates and above are fairly well-compensated, and Booz Allen partners are paid much more than their colleagues throughout the industry. With that said, Associates (Level 3′s) frequently grumble about being underpaid in comparison to similar positions at competitor firms. To some degree, this is true – they are paid less than what they could make at another firm. With that said, there is a reason for this. Booz Allen doesn’t use Up or Out because the firm is totally comfortable letting someone hang out at the Associate level for ten years, provided they do good work. Not everyone wants to make partner, and it shouldn’t be easy to do so unless you are serious about building business, managing a large team of people and working pretty heavy hours, which Senior Associates and above are tasked with.

There are a few performance-based cash awards you can win, but no bonuses below the Senior Associate level. If this bothers you, take solace in the fact that your friends who are getting bonuses lose about 40% of it in taxes.

Benefits are fantastic. The firm provides a contribution of 10% of your base salary into a profit sharing account every year and the health insurance is strong.

Team dinners, activities and other freebies abound as well, all you have to do is pay attention.

7. Where do you see yourself in the next 5 years?

I’m planning on getting an MBA when the time is right, but for now this is a good place to be. As the firm grows and I continue to be promoted, there are more and more opportunities to jump on cool projects. During the separation from Booz & Co, the two firms agreed on a timeline of when we could re-enter the commercial market (and, similarly, they could pursue government contracts), which is fast approaching. There will be some really great opportunities for junior people to stand up this practice within the firm.

8. Any last words of advice for prospective consultants?

If you have never worked a 90 hour workweek, it is pretty easy to shrug it off as insignificant. The same thing goes for traveling Monday through Thursday for months on end, memorizing the room service menu and living out of a suitcase. It definitely takes a certain type of personality, and you have to make sacrifices in your personal life. It can be fun, challenging, miserable and boring at the same time. Do your research and ask questions!

9. How should readers get in touch with you?

I don’t refer people in to the firm unless I know them, but I would be happy to answer questions via wtbbah(at)gmail(dot)com.

That’s it, folks.

Booz guy has been getting a lot of follow-up questions through email. I thought I’d post some of them here:

Follow-up 1. If I were to start my career at Booz in, say, your Health Group, what doors would that open/close? What kinds of jobs do people step into when they leave your firm?

Our health group is growing in both size and market. If you have an in with them, I would encourage it. They are going places.

Follow-up 2. Are advanced degrees required/encouraged at Booz in order to get promoted?

Advanced degrees are not required, at a certain level. Booz Allen likes to hire two types of people – recent college grads or people who are going to stay in the job for several years. The firm does not like it when people leave to go get an MBA, it is expensive to train someone and build a team around them, only to lose them three years later when they go off and get a higher degree. Obviously, for certain technical work an advanced degree is required, but by the time that I have five years of work experience (which is what most top-tier programs expect) I will be making roughly what I would make coming out of an MBA program, so the additional degree might not be necessary. With that said, Booz Allen likes MBAs and Ph. D’s, and won’t discourage someone with one of those degrees who wants to work here.

Follow-up 3. Who are your firm’s main competitors in the public-sector space?

That’s an interesting question, because it depends on what market we are going after. By the time you graduate, we will be back in Commercial consulting work again, so I don’t know who we will be primarily competing with. For DoD/DHS clients, we compete with Deloitte, Accenture, SAIC, Lockheed Martin, et al; for Executive branch agencies like the Treasury department, the FDIC, and others we might be competing with BCG, McKinsey, Accenture or IBM.

Are you a current consultant or someone who recruited successfully? Interested in being interviewed? Please get in touch to be featured in the Life as a Consultant series.

This is an important question for prospective applicants (in particular, undergrad/MBA students) looking for summer internships and fulltime jobs alike.

The decision was easier for me than for most people. The cons of investment banking – the long hours, the repetitive and unengaging nature of the work, the lack of non-finance exit opportunities – mattered far more to me than a 6-figure salary. I seriously considered sales & trading (in fact, I spent a summer at Credit Suisse First Boston in NY), and was tempted to continue in that line of work post-graduation.

Instead of defining the basic characteristics of each job (there are plenty of resources out there for that, including the Vault and Wetfeet Guides), I will address a laundry list of defining differences between the two professions.

Let me caveat by saying THESE ARE NOT YOUR ONLY OPTIONS. People get carried away into thinking that’s all there is.

#1 SALARY

This is the biggest superficial difference. That’s not to imply that salary doesn’t matter. Banking salaries average 50-100% higher than consulting salaries, with the difference increasingly significant as your seniority increases. Consulting compensates with perks that banking does not offer – from better travel allowances to more generous health and retirement packages.

Consultants always like to say this:

“I know investment bankers make more money. But from a cashflow perspective, it’s exactly the same!”

This simply means that consultants and bankers make comparable base salaries, and at the end of the year, bankers are awarded a bonus which can comprise more than 50% of their total annual compensation. Cashflow or not, the extra money is substantial and a defining driver of why many people do investment banking. This is also a difficult issue for consulting firms with respect to employee retention. In my time at McKinsey, easily half the people who left the firm went into the financial world (from hedge funds to PE), and salary was undoubtedly a major factor in the decision.

My advice is this – if after considering all 5 factors I’ve listed here, you still think the pay difference (for 1st yr analysts, averaging between $30-60K/year) would mean a substantial difference in your personal and professional job satisfaction, choose banking.

Further reading: Consulting salaries from analyst to partner

#2 LIFESTYLE

The key differences here are:

-Hours. Bankers work brutal hours, no surprise. They can average 14-16 hours/day but it can get FAR WORSE.

My roommates in New York (both investment bankers at Goldman Sachs) would sometimes go several weeks before we’d even exchange a word. Which meant not only were they getting in after I went to sleep (around 2am), but going back to the office before I woke up (around 7am).

Your second year as an investment banker gets better – in the 10-14 hours/day range but also with unpredictably tough periods.

Consultants average 12 hours/day, with the typical variations depending on client, team goals, etc

-Travel. Bankers do some for roadshows, due diligence, etc but spend 90% of their time in one office until you’re partner-level (this is investment banking; you can expect more travel in private equity and investment management). Consultants – depending on firm – travel anywhere from 25-75% of their time. At the Big 3 (Bain, Boston Consulting Group, McKinsey), you can expect travel 50-75% of the time. I’ve heard of boutiques

-Relationship with coworkers, managers, and firm. This is less discussed but equally important. Consulting firms have a very collegial atmosphere, where the focus is on getting the work done but also ensuring your professional success. This attitude permeates all interactions. Managers rarely yell, coworkers try to help each other out whenever possible, and companies are organized to provide consultants support with training, expertise, etc. Finally, networking is important at consulting firms, and social events are focused on helping consultants build contacts and relationships throughout the firm.

Investment banks, on the other hand, have a more competitive, hierarchical setup. You can expect more tense relationships with your bosses, you’ll probably be yelled at from time to time for mistakes, and coworkers are much less willing to help each other out (they’ve got enough on their plates, and your success means theres more competition for the biggest bonuses). In addition, you’ll have limited exposure across the company to other groups, departments, etc – less ability to network across the company.

Further reading: Consulting travel; Day in the life of a consultant

#3 SKILL DEVELOPMENT

Call me biased, but I received the best years of business training possible in my time at McKinsey. Thorough and at times intense exposure to textbook business principles and practices. In addition, the project team model leads to mentorship opportunities with managers, partners, and coworkers. Finally, you have constant client interaction which develops “client skills” – from managing client teams to running meetings to learning how to navigate different corporate environments.

That being said, here’s a quick list of what you can expect to learn in both fields:

By “hard skills”, I mostly mean software (ie Microsoft Office Suite), analytics (ie financial valuation). By “soft skills”, I mean the interpersonal, qualitative interactions that you have with coworkers, the broader firm, clients, etc

CONSULTING

Hard skills:
1) Microsoft Powerpoint – you will (and have to) become a master at this, and will eventually have the ability to produce presentations quickly, concisely, and meaningfully
2) Microsoft Excel – less exposure than investment banking. Still, “modeling” is a meaningful component of a consultant’s work, and something every consultant is expected to have significant exposure to. Note -firmsodeling” done in case work may not be directly comparable to the financial modeling more common at investment banks
3) Business knowledge – typically broad exposure across different topics like strategy, operations, organization and several areas where you’ll have expertise. This expertise may be as broad as “operations turnaround” and as specific as “benchmarking for insurance companies”.

Soft skills:
1) Client interaction (explained above)
2) Heavy team interaction
3) Presentation skills – this is a cornerstone of consulting work. After all, findings don’t mean anything if you can’t convince the client to believe in and adopt them
4) Project/workflow planning and execution – this is subtle but important. Much of the time at investment banks, you are given incremental work – eg, add these updated numbers to the model, bind these presentations, insert a graph on chart 11. Consulting is focused on you OWNING a piece of the entire project, setting your own deliverables and timeline, and executing against that framework. This helps you develop the ability to be “standalone” in consulting lingo.

INVESTMENT BANKING

Hard skills:
1) Microsoft Excel – clearly you will become a master at this, and is a mandatory for success. You’ll know the ins-and-outs, every keyboard shortcut known to man (and then some), and so forth
2) Microsoft Powerpoint – much less exposure here depending on the focus of your work (for instance, more in Corporate Finance, less in Mergers & Acquisitions). Very little experience in building a presentation from scratch.
3) Financial valuation – self-explanatory. Differs based on group/focus, but at the very least you’ll understand financial statements inside and out, and have strong knowledge of how companies are financed

Soft skills:
1) Work endurance – this is the upside to those 100+ hour weeks, which is the ability to work incredibly long and incredibly hard. Basically, every job you take post investment banking will feel somewhat like a vacation. It’s a great trait to have
2) Seeing deals get done – investment bankers have, at times, better access to the leading business leaders of the day. As a junior banker, you may not have direct interaction but will be exposed through countless meetings, conference calls, etc to these people and see how deals are done and groundbreaking changes in business emerge day-to-day.

Further reading: 5 big mistakes that will get you fired

The last 2 points in this post are shorter, because I plan to write separate entries on each of them in the future

#4 NETWORKING

Less discussed but important. Consultants move on to a vast array of fields – from industry to academia, government to non-profit. Investment bankers do so less – most continue within the financial world. Your professional network and future career opportunities will be heavily influenced by your colleagues and your firm alumni.

In addition – my perspective is that consulting firms (similar to point #2) facilitate more interactions between alumni and current employees as well as future networking between alumni than investment banks. However, bulge-bracket investment banks have a much larger alumni base, and it certainly isn’t impossible for you to build strong connections provided you are proactive and innovative enough.

Further reading: How to get a consulting job in a tough economy; Networking 101

#5 EXIT OPPORTUNITIES

Corollary to point #4, this is influenced by your firm’s alumni and also the following:

-the different recruiters/headhunters that reach out to you
-the different paths your “hiring class” takes and the knowledge and opportunities you share with each other
-the relationships you’ve built with more senior colleagues and the doors they can open for you

When it comes down to it, the conclusion is similar: if you want maximum career flexibility, consulting provides that in spades. If you want maximum career flexibility WITHIN finance (and corporate financial roles), investment banking provides that.

Interested in sales & trading? Click here for the major differences between consulting and trading.

This is an important issue when recruiting for a business consulting job. In finance, most people think you must work for the biggest – the Goldman-Sachs-or-bust mentality. And while the big management consulting firms (like McKinsey and Bain) get the lions share of media attention, there are many successful and well-respected boutique consulting firms (like Katzenbach Partners, LEK, and Marakon) that I would recommend prospective applicants consider.

So what are the differences between the two? First, I’ll start with the similarities:

1) Consulting travel will usually be a component
2) You’ll work in teams, interacting closely with clients
3) As an analyst/associate/consultant, your focus will be on data gathering, analysis, and presentation. In plain English, this means you’ll receive lots of data from your client, do calculations in Excel, combine that with thorough Internet research and some interviews, and put it into slides to share at meetings

But the differences are very important:

1) While the fundamentals of your work will be the same, the application of that work can vary. Boutique companies like Kurt Salmon typically focus on narrower questions and in fewer industries. At a Big 3 consulting firm (Bain, BCG, McKinsey) you receive exposure to different industries and functions (eg, strategy, operations, organization). In boutiques your exposure is more narrow – at Kurt Salmon, your primary focus would be on retail and consumer goods companies. This is both a pro (you start building expertise) and a con (what if you decide the retail sector is not for you?).

But again, the day-to-day will look very similar. The difference is in the longer-term.

2) As for travel – it depends. Some boutiques do a lot of traveling if they have an industry focus (Kurt Salmon is a well-regarded expert in the retail/consumer goods space, with clients spread throughout the US and internationally). But other boutiques have a more local focus (eg, Slalom Consulting) and thus you may travel very little – most of your work would be with area clients with whom your firm has developed a lasting relationship

3) While you’re guaranteed to work in teams and with clients, both the types of team members, types of clients and nature of interaction could be different. Boutiques have less coverage for clients overall, which could mean you’ll see significantly more client interaction from an early stage, and with more senior members (this is the norm – but I have heard of smaller consulting firms like ATKearney with enormous teams at the client, so it can vary). Your teams will usually be smaller, often with you and maybe one other person as the only real day-to-day presence at your clients. Each of these comes with its own set of pros and cons.

Further reading: Interview with an ATKearney Shanghai consultant

4) Culture can be vastly different

I use the example of a small liberal arts college (Brown) vs a large, public institution (UCLA).

Brown offers greater personalization and support, everyone knows your name, you’re a big fish in a small pond. At UCLA, its harder to standout. The support network is not personalized and easily accessible. While there are more opportunities, it’s up to you to seize them. You’re a small fish in a big pond, but the upside can be higher.

The analogy also applies to large city offices versus satellite/smaller city offices (for example, Bain’s San Francisco office versus their satellite offices in Texas. A great discussion of consulting office selection can be found in my interview with Marquis)

5) Future jobs/exit options. In particular I need to put a disclaimer here, because your situation is largely within your control and the actual situations vary widely. But when we discuss the ACCESS that you have to exit opportunities across industries and job functions, larger firms (like Boston Consulting Group) are the clear winner. Much larger alumni networks, more internally shared recruiting emails and advice, greater brand recognition, the list goes on. Boutiques, given their strong reputation in particular niches, offer plenty of opportunities in the same space – but are distinctly behind in offering opportunities to enter unrelated career paths. These corporate paths usually include (and this is not counting the many who enter graduate school):