The role of management consultants is shrouded in mystery. Many questions arise, including – what is a business consultant? And also – what is a consultation? We’ll break it down, but first, you should know that while doctors and other professionals may offer consultations, consultants are staffed on engagements. What is a consulting firm? And if you’re interested in consulting – what is a consulting job? What do consultants do and why are they traveling all the time? Why do they get paid so much?
Well, we know a thing or two (or 500) about the consulting industry. If you have questions, you came to the right place. In this article, we’ll be going over both the basics and the deeper nuances of the consulting industry.
First…What is a Consultant?
Ultimately, consultants provide solutions to business & organizational problems. They provide an objective and external perspective using data, frameworks, and industry insight. Consultants inform clients on what the data says is the best strategic decision. Oftentimes, the recommendations are different from what the client would rather hear. These clients include businesses, institutions, and organizations.
Many wonder why a client would need to hire another party to solve its problems rather than having its own employees analyze and fix the issue at hand. What is a business consultation and why should a client pay somebody else to fix their problems? The easiest way to explain why consultants offer such valuable advice is through an analogy.
Think about the many times in your life that you’ve reached out to friends or mentors for advice regarding a challenge you were facing. Though you may have the best understanding of the problem at hand, just as a client would, the outside advice from experienced people you trust can help you make better decisions.
The same is true for clients – sometimes they are in the weeds of day-to-day operations that it’s difficult to truly take a step back with an unbiased perspective to properly fix their own issues. Consequently, consultants who have solved many similar problems for previous clients can step in, perform robust analysis, recognize patterns, and offer valuable advice.
What Do Consultants Do?
Now that you have an understanding of what a consultant is, let’s dive more into what they do from the start to the end of a project.
1. Consulting Firm Pitches and Gets Hired for a Project
To start on a project, consulting firms first must get hired. The most senior partners and consultants are tasked with the job of maintaining relationships with the management teams of their clients. For the biggest firms like McKinsey, BCG, and Bain, this means being friendly with the CEOs, CFOs, and COOs of Fortune 500 companies.
When a company has an issue they need consulting help with, multiple consulting firms pitch for the project. Each firm highlights their strengths to win business, but usually, the senior consultant’s relationship with the client will be a key deciding factor. So when you ask, “What is a consulting firm?”, in one way it is no more than business experts leveraging business relationships. Once the project is sold, there are different levels of analysts to dig into the problem and develop a set of recommendations.
2. Consulting Firm Forms Team for Project
The next step is for the consulting firm to form the right team for the project. Depending on your job title at the firm, your role on projects will be different. The more senior you are, the more say you have in the type of project you are on. This is due to a variety of reasons, including experience with similar projects, a strong reputation built over time, or relationships built with the partners heading the project. When you are a consultant who has just started at the lowest level, you will state your preferences but likely be assigned to the project that makes the most sense for the firm.
The type of project you are on will greatly impact the work you do, and thus, the skills and experiences you gain as a consultant. For instance, there is a big difference between working on a profitability project versus a new market entry product. The former may deal more with financial data and modeling, while the latter may deal with more focus groups and research. Of course, there will also likely be many overlaps between the two projects, regardless of their different objectives.
3. Consultants Work on Deliverables
Once the firm assigns teams, it’s time to roll up your sleeves and work towards giving your client valuable advice. Projects can be anywhere from a few weeks to multiple years, but most strategy projects usually last for 3-6 months. During this time, consultants work on the following:
Understanding the Objective
– Unsurprisingly, this is the first step of a consulting project. Consultants spend time with management understanding the details of what the client is looking for and aligning on the strategies and resources needed to get clients the advice they need. Consultants will usually start with a hypothesis on potential solutions and think about the right data they need to test their theories.
– Consultants spend a lot of time gathering the right data to support their hypotheses. This can include going through a company’s internal financial figures, hosting focus groups with third parties, poring over industry research reports, interviewing company employees, and more.
– With data in hand, consultants then focus on arriving to the insight they are getting paid to uncover. Consultants organize data in Excel and extract key pieces of information into charts and graphs. These visualizations often help uncover potential solutions to the case, which could result in the case going in several unexpected directions.
Meetings with Clients
– Throughout a project, there are many, many meetings between the consultants and the client. These meetings are not always with the C-suite executives, but point people that the client appoints to coordinate with the consulting team (usually VPs, Directors, etc.). What most non-consultants don’t know is that by the time the final deliverable is presented, there should be no major surprises to the client. Consultants provide constant updates every few days or weeks to the point person, who provides ongoing feedback and guidance and updates his/her seniors.
Creating the Deliverables
– PowerPoint and Excel are a consultant’s best friends. Consultants spend many hours making sure every detail is perfect and build presentations that are clean and easy to understand, yet insightful with clear next steps and recommendations.
4. Presenting the Deliverable
Usually, the most senior consultants deliver the final presentation. Presenting the deliverables is an interactive experience. Consultants go through their presentation page by page with everyone sitting around a table. Very rarely do consultants ever need to stand and present their presentation with a projector. As the group discusses each page, the clients ask tough questions, so it’s important that everything is backed by logic and data.
5. Follow-Up Work
The last potential part of a project is follow-up work. Once the final deliverable have been presented, the client often needs more guidance on what to do next. This could mean just a few more PowerPoint slides, or this could mean the start of another project. Consultants are motivated to do an excellent job in every project because they can be the foundational reason for being hired for future projects.
What’s important to note is that this follow-up work rarely ever involves actual implementation, unless the consulting firm offers those services. Most consulting firms only offer advice and recommendations on what is best to do based on the data and analysis. Clients have the challenging task of executing this advice and making their desired changes into a reality.
What Are the Different Levels in a Consulting Firm?
The role at a consulting firm really makes a difference in what exactly a consultant is. Though there are overlapping similarities, the position you hold results in different responsibilities. Go through each to see where the best starting point is for you. See if you can envision yourself staying at a consulting firm for the long haul.
Analysts / Associates
Analysts / associates are at the bottom of the totem pole and are hired directly from undergraduate programs. They usually work for 2-3 years and perform a lot of the “grunt work”. This is mainly slide building and lower-level data analysis. However, analysts / associates are seen as crucial members of the team and it’s normal for them to own one or multiple significant work streams in a project. There are several opportunities to interact with clients but on a minimal basis.
Consultants are usually hired from MBA programs but can come enter in with other advanced degrees or commensurate industry experience. They work on PowerPoint slide building and analysis. They also often lead work streams and are in charge of checking an analyst / associate’s work. Consultants interact with clients regularly to keep the project moving.
Project Leaders / Principals / Managers
These folks focus on managing the entire case team and on keeping clients happy. This is the busiest role inside of a firm – you are managing a case team, the client, and the Partners.
Partners sit at the top of the consulting food chain. They “lead” multiple projects, and maintain/build relationships with clients. The most important responsibility of a Partner, however, is to sell. Interestingly, this is one of the few skills not taught in consulting work.
As you may have gathered by now, a consultant is many things, and every project looks different. Ultimately, however, consultants are expert problem solvers. They help clients with their hardest problems and provide them the objective advice they need through data and analysis. We hope this article helped uncover some of the mystery surrounding the consulting industry!