Consulting is one of the most popular career choices for MBA graduates. The growth in demand for management consultants has seen a rapid increase in revenue from $5 billion in total worldwide revenues in 1980 to $60 billion in 19996 and $114 billion in 2000. New players continually enter the market. A way to assess different companies and what they do is to think of consulting as a continuum. Companies operating predominantly at the insight end can be described as strategy-led firms; the others are often referred to as full service firms. These companies may have started out as accounting firms, generalist consulting firms or technology based firms, but they have developed a range of skills and services that they now offer to clients. This does not mean that strategy led firms do not have business experience, or that full service firms lack insight. Secondly what consulting style do they use in the main? Is the emphasis on facilitative team working or is the approach based on deductive logic and building reasoned argument? Full service firms tend to use a facilitative style with clients, often in their strategy work as well. Strategy led firms will work predominantly with a hypothesis, backing these up with targeted research and quantitative modelling. Preparing for an interview The consulting interview – round one
What is consulting?
A 'consultant' is the universal term for any professional who provides assistance to others, usually for a financial reward. This covers a multiplicity of roles operating in almost any industry. In simple terms 'management consulting' involves the identification, diagnosis and resolution of business issues. Companies will hire consultants to get an objective view of the way forward. Teams of consultants work on projects, usually called 'engagements'. These can last anywhere from a week to several years. A consulting company will normally get paid a fee for the project, fixed against a set of deliverables. An officer or partner of the firm will have overall responsibility for the client relationship, and the success and profitability of this and any subsequent projects.
Types of consultancy
There are several different types of consultancy, and many different consultancy providers. Marketing and branding consultancy are becoming increasingly popular and the HR function in larger organisations will often incorporate an internal consultancy role. Smaller independent consultancies are springing up all the time. The mainstream recruiters however are the management consultancies who hire post-graduate students on an annual basis, so the rest of this article is devoted to this form of consultancy. Those who wish to pursue a more individual approach to consulting are welcome explore other options.
The industry is continuing to change
Consulting in the 21st century has evolved for a number of reasons" Companies hiring consultants nowadays have more developed skills in-house" Clients are more sophisticated buyers of consulting projects and hence more challenging." Consulting organisations have invested in growing relationships with their clients in recent years" The supply side of this industry is evolving from a coterie of highly paid strategic advisors to a broad-based group of advisors who evaluate strategy, information systems and operations.
Who does what?
There are literally hundreds of consulting organisations worldwide ranging from the small independent companies employing less than 50 people to much larger global organisations who employ thousands of consultants. Most firms focus on the private sector, but increasingly the larger firms have developed considerable public sector practices involving government department work.
So how do you decide which of the consulting firms is right for you?
Industry focus: Some firms specialise in particular industries. Virtually all the major consultancies have business in financial services and telecommunications as these have traditionally been sectors with plenty of money, whilst consulting revenues in retail may be more difficult to develop. Some of the consultancies have larger practices in traditional industries such as utilities, transportation and manufacturing. Others have more business in newer sectors such as healthcare, bio-technology, media and entertainment.
Service lines: Traditionally the market has been segmented by service line: strategy, operations, HR and information technology. Within each of these service lines there are a number of different issues, products and services. Some firms would do a mix of work; others would focus on pure strategy. A firm that did mainly strategy would have been office based, producing a set of recommendations in the form of a report. Firms doing mainly operational projects would have been based on client sites, tending to work with the client on implementation issues for a period of time, across the business. The consultancies used the term strategy or implementation to differentiate themselves.
Nowadays, the boundaries between the consultancies are less clear cut for several reasons
Choosing what type of consulting suits you
When researching the companies that appeal to you bear in mind two key factors: First look at the roots of the firm and how they have got to where they are today
Opportunities for MBA students in the consultancy market
The number of companies recruiting for consultancy positions reflects the rapid growth ain demand for intellectual talent. Of course, consulting is an exciting career with high salaries, but there are other things to look at when thinking of a consultancy as a career. These include
Responsibility: Consulting involves both independent work and teamwork. Accountability will rest on the team performance but you will be responsible for a piece of the overall work. As you gain experience you take on more responsibility until you become a team leader or manager. As team leader you will need strong interpersonal skills since managing smart independent people effectively brings its own challenges. In industry you may start in middle management in a large firm, while consulting can involve interaction with very senior managers in client firms.
Lifestyle: You have to work hard, the hours are long and you are expected to be available to travel at a client’s request. The amount of travel will depend on the firm that employs you and it is worthwhile finding out as much as you can from employees who already work there. Firms have realised the importance of lifestyle and try to balance their demands with personal needs. This is particularly true of the smaller firms.
Career paths: In consulting, it is not uncommon for promotion to be ‘up or out’, and your progress is monitored at all times. The chart shows the length of time that business school students normally stay with a firm. If you do not make the right progress, the firms still treat you well and moving out is not considered to be failure. The churn factor for business school graduates is around 20 percent per year. This may seem shocking, but firms use new recruits to constantly bring fresh ideas into the firm. Many people also choose to move on after getting some consulting experience on their CVs.
Brand value: Working for a strategy firm certainly adds to the market value of your CV content, especially if you have not worked for a consulting firm before your business school degree. Working in consulting allows you to gain exposure to many different industries while working in an intellectually challenging and stimulating environment. For those who choose to leave after some years, the experience gained is of high value in the job market. It is therefore important to choose your consulting firm with care, looking at its culture, lifestyle and the type of career development on offer. The top strategy firms provide excellent experience and can help with transition to a business development or strategy role in industry. If your interest is in a broader line management position, a stint in one of the full service consultancies may be more helpful to your long term job prospects.
Getting selected for an interview
The first hurdle to joining a consulting firm is getting an interview. The more targeted your approach is, the better your chances of success.
Networking: Networking is one of the most important things you can do. It provides an opportunity for you to find out about the working culture in different consultancies and how your experience and aptitudes relate to their requirements. There are several ways to go about this. The majority of consultancies make formal presentations on campus and bring along alumni for you school. After the formal presentation you have an opportunity to network with these alumni at informal receptions. This also enable you to make initial contact and arrange to set up an information session, whether ten minutes on the phone, or a meeting to find out more about the firm and the job. Additional opportunities for networking involve reaching out to your school alumni. Alumni are the most valuable and accessible source of information available to help you decide which forms to apply to and whether or not consulting is the career for you.
CVs and cover letters: When writing your CV and cover letter, tailor it to the type of consulting work that the firm predominantly carries out. Remember, the strategy firms place more value on logical thinking, quantitative skills and analytical / modelling capabilities. The full service firms place more importance on team working, interpersonal skills and business experience. Nonetheless, here are some broad areas to think about when preparing your application:
So how do you prepare for the second hurdle, the interview itself? This process begins long before even applying. Here are some suggestions for things to do well before the interview:
Practise your case study answers.
The first round of the consulting interview is usually divided into two stages: The ‘fit’ interview and the case study interview.
The ‘fit’ interview: This looks at you values and the firm’s values. It is a bit like the old adage: ‘So do I want to spend time on a plane with this person?’ You will be asked about your interests and achievements as well as why you are specifically interested in the firm. Never interview without having done some recognisable research on the firm. Remember that the ‘fit’ interview also allows you to ask questions about the style and culture of the firm.
The case study interview: The second stage is usually the case study interview, which requires rigorous preparation. In this interview you are being asked to demonstrate your strategic and logical thinking skills. In general, there are three types of case study questions:
1. General – ‘What do you see as the main effects of global warming on the world economy?’ There are no specific answers but the interviewer is looking at how you structure your answer, as well as your reasoning abilities to consider the effects on many different economies.
2. Quantitative – ‘How many cars do you think there are in India?’ Again, there is no specific answer expected. The exercise is much more about how you would go about up a simple structure t answer the question. This involves some ‘guesstimating’ in terms of: assumptions about the size of populations of India, income levels and affordability of cars, etc.
3. Specific – This may be a question poised by a recruiter who has built up specific knowledge about a particular industry, and therefore will know the answers to the question. You are generally expected to answer using a model, one of the many that you might have learnt during your studies. For example, you may be asked to look at why a client has lost market share. In such cases, if you are not provided with information, then you are expected to ask the interviewer questions such as: what is their market position, competition, their unique market offering, pricing structure, etc. This type of interview is most common for strategy consultancy and you are basically being asked to demonstrate your consultancy skills on your feet.
The consultancy interview – round two
Be prepared for more case interviews and follow-up discussions with senior members of the firm. The later rounds are designed to assess your potential to help grow the firm, so a discussion with a partner will follow a different path. Success here is about making an impact, having a point of view and being passionate about the firm in question. Finally it’s about being yourself and deciding whether or not you fell happy to work there.
Saturday, August 4, 2007
Careers in consulting: Your guide to finding a job in strategy and business consulting
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