– written by Chitra Venkatesh (IIM Lucknow class of 2016) and edited by Karthik Palaniappan.
Management consultants are typically experts in multiple business domains such as operations, strategy, finance and marketing. They provide professional help to organisations to function better. Consulting jobs at top firms like McKinsey are highly sought after by students in Business schools across the globe. The following article intends to unveil and to explore the bewitching world of management consulting and its nuances.
Why is Consulting a highly desired career path?
A fantastic pay-check:
Incontrovertibly, consulting scores high both on glamour and on pay-check. Average salaries paid to fresh MBA graduates in consulting firms range between Rs. 20-30 Lakhs per annum (Rs. 2,000,000 – Rs. 3,000,000) in India. Graduates of the best business schools in the US get paid over $ 120k per annum just in base pay. Top firms pay over $ 200k that includes a variable component not exceeding 30%.
Outdoing the best in all aspects:
In their quest to solve their clients’ problems, consultants are always on their toes, keeping themselves informed of the latest developments in their areas of concentration so much so that they prove themselves better than the industry experts. It is this ‘kick’ of outdoing the best that makes consulting a sought after career for bright students.
A superb network:
In addition to these, this profession provides exceptional exit options. Other advantages include flexibility (since one doesn’t work on the same domain) and an opportunity to build a strong network. The strong alumni network that consulting firms harbour speaks for itself. The nature of the job requires consultants to work with top-notch industrialists, government officials, and researchers to name a few.
The typical consulting career path:
Fresh graduates from Business schools join these firms at the associate level and typically work on several assignments a year. A partner of the firm manages each such assignment, with the assistance of associates from a multitude of domains. Usually, these assignments range in size from humongous ones (like a project to develop a strategy for the turnaround of a huge conglomerate) to molecular ones (like cycle time savings in operations).
Once into this profession, successful associates are promoted as partners in (as early as) seven years under exceptional cases. However, this requires not just the ability to solve a clients’ case brilliantly but also a capacity to generate repeat cash flows from the same client. Graduates should be open to an immensely unpredictable environment and create new business opportunities. The path to partnership is not an easy one and at each level, the attrition levels are very high.
How to crack it?
Firms, including the big three management consulting firms, (MBB or McKinsey/Boston and Bain), look for strong academics and unquestionable analytical skills to ensure that their hires have an inquisitive mind with an eye for detail. This should be complemented with healthy extra-curricular activities and leadership roles at university and work place. These firms are staunch believers of charisma and prefer graduates who can leave their clients in sheer admiration. Recruitment is based on several rounds of case-based interviews.
The best places to work:
The consulting role offered to fresh MBA graduates is that of a “generalist” (not specialist). These roles are offered by big firms like the MBB, Deloitte, and A.T Kearney to name a few. However, it would be naïve to say that all big firms work across all domains. Firms usually have a few focus areas and some of them can be earmarked for a single domain (example – Mercer for HR consulting).
|Strategy||Strategy formulation at the apex level (fortune 500 cos.), policy framework for government projects||Mckinsey, BCG|
|Financial||M&A, corporate finance, working capital management||PwC, EY|
|HR||Talent acquisition, human capital, M&A (HR specific)||Mercer, Aon Hewitt|
|Operations||Process improvement, benchmarking, six sigma consulting, cost reduction||Deloitte, Mckinsey|
|IT||Supporting IT transitions, constitute suitable IT strategies for the firm and implementing them||Accenture, Cognizant|
Niche consulting firms – pros and cons:
Since the sector is maturing, niches are beginning to mushroom. Niches such as energy, retail and healthcare are gaining momentum. Besides the big fish, these niches aren’t the only ones. Several smaller firms are proliferating that focus on existing sectors such as supply chain, IT and finance. These, popularly known as boutique firms, are very often products of ex-consultants of the MBBs. They offer specialised services (usually in just one sector) such as six sigma implementation and charge their clients lower fees. Owing to their strong expertise in their respective domains, small & mid-sized industries and even large organisations, prefer them over others when the problem statement is focussed. These firms also offer lucrative consulting roles to fresh MBA grads. However, they may look for specialists (i.e., students with in-depth know-how in the preferred domain) unlike the big firms and may demand steeper learning curves. Another disadvantage is the limited choice of exit options since the domain know-how is narrow. An evidence to this would be the limited preference to the HR consulting firm “Positive moves” in IIMs during placement season.
Alternative Opportunities – General management roles:
Strategy consulting is highly sought after. However, only large firms offer “generalist” roles which are conducive for students looking for such exposure. Students prefer “strategy consulting” over others because, upon exiting, it provides a myriad of opportunities in top Multinationals. If the ultimate motive is to formulate strategies and hold leadership positions in Fortune 500 firms, students can also focus on general management roles offered by conglomerates and blue chip companies. In these roles, MBA grads, who join as managers, are on a fast track programme unlike other managers and are given a plethora of assignments/stints to prepare themselves for leadership positions. Dr. Mukund Rajan, after his degree in international relations from Oxford joined the TAS (Tata’s general management programme). In about a decade, he was appointed MD of Tata Teleservices (Maharashtra). Today he is on the Tata group’s five-member executive council that provides strategic support to the chairman Mr. Cyrus Mistry.
Gen-Man roles are less taxing and offer competitive compensation. As per Harvard statistics for class of 2015 (MBA), 14% students were recruited for this profile and the base salary (median) stood at $120,000. Median signing bonus and other guaranteed compensation stood at $25,000 and $ 20,000 respectively.
Which schools to choose from?
The big firms look for an MBA from top schools like Harvard Business School, Wharton, Sloan (MIT), Stanford, Stern (NYU), Columbia, Kellogg (Northwestern) and INSEAD. Moreover, these are now recruiting from other disciplines too. 20% of BCG hires are from law schools, PhD programs and other non-business backgrounds.
In India, the highest number of offers by the big three are made at ISB (Hyderabad and Mohali campuses) and IIMs – A, B, C and L.
Life after consulting:
Graduates taking up consulting jobs report the highest percentage of attrition rate (approx. 30%). Many ex-consultants rediscover their lives post consulting days. Most consultants plan to retire early and join Fortune 500 companies in senior management roles. The high pressure environment, along with excessive competition, leads to burnout. But these jobs are boundlessly lucrative because they leave one with limitless knowledge and expertise. With these to offer, a candidate with consulting experience is absorbed by companies instantly. Furthermore, one is recognised to be fit to take leadership roles at strategic ranks by virtue of exposure gained in varied sectors. From tech-heavy Google to fashion’s harbinger Louis Vuitton, ex-consultants hold leadership positions everywhere. Just to name a few, Vittorio Colao (Group CEO, Vodafone), Jeff Immelt (CEO, GE), Indra Nooyi, (CEO, PepsiCo), James McNerney (Former Chairman, Boeing) are all from the big three.
While most shift from consulting in order to maintain a work-life balance, the ambitious ones might choose to differ by venturing into the financial sector. Those with limited experience in consulting (2-5 years) and a finance background might pursue a career in private equity/hedge funds. Although these jobs offer one greater esteem and pay, they are highly demanding.
While most seek strategic roles in MNCs, some pursue entrepreneurship and some might even join the government. Recently, former McKinsey India chief Adil Zainulbhai was hired by Prime Minister Modi to head the Quality Council of India, which oversees operations of the Indian manufacturing sector and runs accreditation of schools and hospitals among other things. Under his leadership, it is expected that Indian industries will inculcate a quality culture through renewed benchmarks thereby increasing the global presence of Indian manufacturing and service industries.
Lastly, there could be few of those who decide to contribute to the society. After a five-year stint at Mckinsey, Alkesh Wadhwani joined the Bill & Melinda Gates Foundation where he started with the foundation’s AIDS Initiative. On a similar note, it is imperative to mention ex-consultants turning into social entrepreneurs. Ex-BCG consultant Abhishek Thakore’s Blue Ribbon initiative to develop budding social leaders is one such example.
About the author:
Chitra is a graduate of IIM Lucknow (PGDM, batch of 2016). She enjoys traveling and loves eating local delicacies. She earned a PPO to the TAS programme and will be joining them after her vacation.