"Consultant" has become a very broad term, and there is a lot of confusion about what it actually means. So, in this article, we're going to demystify what life and work are actually like in consulting. Let's begin with a brief overview of what consultants do:
Consultants work with client companies to solve specific business challenges. Consulting projects are often done in teams and can focus on a variety of areas, including strategy and technology implementations. Some consultants are independent experts, but many work for consultancies like McKinsey.
We know, that's only scratching the surface. In order to better understand the day-to-day life of consultants, you'll first need to understand the difference between the companies consultants are employed by (consultancies), and the companies that they work for (clients).
Then, we'll dig into the main reasons that clients hire consultants, and what consultants are really doing in their daily lives. There are also realistic examples below, which illustrate the type of work you can expect to find in the world of consulting. Let's get to it!
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Who do consultants work for?
For most people, the question "who do you work for?" is a simple one. For consultants, it's a little more complicated. Typically, management consultants are employees of McKinsey, Deloitte, and other consulting firms.
However, the day-to-day work that consultants do, is for client companies. As a consultant, your specific clients can vary widely. For major consulting firms, their clients tend to include:
- Large companies (e.g. Nike)
- Investors (e.g. KKR)
- Governments (e.g. US department of Energy)
- Non-profits (e.g. Bill and Melinda Gates Foundation)
There are a few reasons a company or institution like these would want to hire a consulting firm. Let's dig into those below.
Why do companies hire consultants?
High-level, companies have 3 reasons to hire consultants.
1. For specialized expertise
A company may hire consultants to provide a skill-set, that they don't have internally.
Say you're an executive at BMW (hypothetically), and you're given an opportunity to acquire a Chinese automaker. This deal has huge potential to increase BMW's market share, and will give a strong foothold in the growing Chinese market.
Here's the challenge: international acquisitions are complicated, and BMW's core skill-set, is producing and marketing cars. You don't have the expertise within your team to successfully complete the acquisition.
So, rather than facing the despair of a missed opportunity, you hire a team of consultants from Bain, who specialize in mergers and acquisitions in the auto industry.
2. To fill resource gaps
The second reason a company may hire consultants, is similar. In this case, a company may have the expertise to create a solution, but could be lacking the man-power to finish the work within a required timeframe.
For example, consultants might be brought in on a short-term basis, to help Wells Fargo (US Bank) create a new internal software programme in 6 months instead of 12 months.
3. For an outside opinion
A company may also hire consultants, in order to bring-in an objective 3rd-party opinion. This can be useful for leadership, when making an important decision for the firm's strategy or operations.
Every company, whether it's obvious or not, has an underlying culture that affects the way the people within make decisions. This can be a positive thing that unifies employees and executives. However, it can also create blind-spots.
For example, there may be inefficient processes that are still used, because "that's the way we've always done it". There could even be blind spots in thinking, where opportunities and problems are not even noticed. In this type of situation, bringing in an outside opinion can provide valuable perspective on the business, and empower leadership to make better decisions.
Now, let's take a look at what work and life is like for consultants in the real world.
What's the day-to-day of a consultant like?
To help you get a better understanding of what the daily work of a consultant looks like, we've broken down 9 things that are common for strategy consulting projects. If you'd like to get an idea of the different types of jobs available at MBB firms, check-out our article on McKinsey Careers.
For each item below, we've listed the following:
- Consultant level - to show if the work applies to partners, managers, junior consultants, etc. This will help you see where on the consulting career path you'll be involved in this activity.
- Overview - This is exactly what it sounds like, we'll provide a high-level description of that consulting experience.
- Example - To make it more applicable, we'll also provide an example of what you might encounter in the real world.
Let's get to it!
1. Engage clients for new work (selling)
Consultant Level: Partners and principles
Overview: Before a consulting project can happen, there has to be a client. For consulting partners and principles, a big part of their job is building relationships with clients (or prospective clients) and selling new work. This can be initiated by the consultancy, or can be a response to an RFP (Request For Proposal) from the client.
Example: You manage a portfolio of projects focused on grocery retailers in the Northwest US. Armed with new research showing a trend towards home delivery, you meet with an existing client (e.g. Walmart). During the conversation, you present the data, and discuss the potential of helping them develop a new strategy for a customised home grocery delivery service.
2. Define outcomes
Consultant Level: Partners and principles
Overview: Once you have a client, and they're onboard with a specific piece of work, then it's time to create clarity. This is often documented in an SOW (Statement of Work), which acts as a detailed summary of the project to be delivered. At this stage, budgets, payment plans, and contracts would also come into play. Most consultants are not lawyers, so the legal departments of the consultancy and client would help complete the technicalities of this process.
Example: You work with the appropriate decision-makers at Walmart, and agree to an initial 3-month analysis. You agree to form a team of 6 consultants, who are experts in grocery retail and logistics, and who will work on the Walmart project. The defined outcomes of this project, include an analysis of customer demographics, and recommendations on whether Walmart should begin testing a home delivery service. The details are defined in an SOW, and the contract is signed.
3. Send teams
Consultant Level: Principles and managers
Overview: Now that the project is sold, and a contract is signed, it's time for the work to begin. In order to deliver the agreed upon services, the consulting firm would internally recruit a team of consultants, with experience and skills aligned with the project.
Example: For the Walmart project, the SOW calls for a manager, two senior consultants, one junior consultant, and two business analysts. The principle for the project would use their internal network and staffing tools, in order to assemble a team of consultants for each role. This would likely include review of internal resumes, and informal interviews. The manager of the team would typically be experienced in grocery retail. But the junior members of the team might not be, and will learn the industry specific details they need during the project.
4. Manage project plans
Consultant Level: Managers
Overview: Once the team is assembled, the manager will be responsible for leading the project plan. This includes monitoring milestones, providing updates to the client, and providing support when the team encounters roadblocks or issues. There's also a relationship element to this, and it's important for the consulting manager to continuously communicate and set expectations with the client.
Example: The consulting manager holds a weekly status meeting with a small group of decision makers from Walmart. The principle for the project may also join that meeting. In this meeting, the consulting manager provides updates on the project milestones, and highlights anything that is behind (or ahead) of schedule. The manager gathers feedback from the client and makes adjustments to the analysis or project plan if necessary.
5. Gather input and data
Consultant Level: Senior consultants, junior consultants, and business analysts
Overview: This step could involve a wide variety of tasks. Generally speaking, the consultants will be gathering input and data from the client, and maybe also external sources (like market data). Before the consultants can provide recommendations, or develop new strategies, they need to gather information.
Example: At Walmart, the objective is to evaluate the potential of a future home delivery grocery service. The consultants already know that there is a market trend towards home delivery groceries. However, that doesn't necessarily mean it will work for Walmart. In order to make informed recommendations, they will gather information on Walmart's customer demographics, and existing business operations, to understand if they are aligned with the home delivery trend.
6. Prepare analysis
Consultant Level: Senior consultants, junior consultants, and business analysts
Overview: After gathering information, the consultants can get deeper into their analysis. They may use statistics to identify trends in the client's data. They may apply a framework to focus their research. The best approach for analysis will vary depending on the industry and the specific project.
Example: After gaining access to Walmart's customer data, the consultants discover some interesting insights. First, the market trend towards home delivery services, are most significant for customers from ages 25-45. After some experimenting, the consultants discover that Walmart-owned stores in Portland and Seattle, have the highest percentage of customers in this age range. They develop a model that shows that the biggest opportunities for home delivery, exist in major cities.
7. Communicate results
Consultant Level: Full consulting team (excluding partners)
Overview: After forming an initial set of recommendations, the consultants would present their findings to the consulting manager for input. The full team will work together to refine the analysis, and will produce a PowerPoint deck explaining their recommendations, and supporting analysis. The principle will likely provide input in the later stages of preparation. Finally, the team will present their initial recommendations to client stakeholders.
Example: The consulting team at Walmart meets with the consulting manager, and presents their hypothesis about home delivery in major cities. They do an internal review, to anticipate questions, and to identify any gaps in their analysis. Then they make changes, and incorporate updates into a PowerPoint deck. Depending on the strength of their relationships, the consulting team may get informal input from client stakeholders, before formally presenting to Walmart.
8. Make adjustments
Consultant Level: Senior consultants, junior consultants, and business analysts
Overview: After communicating the analysis, the client may have specific questions or objections. This step may not always be included, but it's common for consultants to go through a process of refining their data and analysis in response to client feedback. In fact, steps 5-8 may be repeated several times before the final deliverables are complete.
Example: Walmart's regional head of marketing asks if customers with children under 18, is actually a more important measure than age. The consultants have an early hunch, but decide it's best to crunch the numbers before giving a firm answer. They go back to the data, and discover that customers between 25-45, who also recently bought diapers (e.g. customers with babies), would be the ideal market for a home delivery service. They bring their updated findings to the Walmart team for feedback.
9. Submit final recommendations and deliverables
Consultant Level: Full consulting team (may exclude partners)
Overview: Now it's time for the final work to be submitted. The exact materials to be provided should be listed in the SOW. It may include a PowerPoint deck, spreadsheet, model, etc. The final deliverable will be reviewed with the client, who will then sign-off on the completion of the project.
Example: After revising their analysis and getting additional feedback from Walmart stakeholders, the consulting team now has a polished set of recommendations. A final review is done with the full consulting team, and Walmart's decision makers. They are satisfied with the analysis, and excited about the recommendations. After the review, the final documents are delivered, and Walmart gives their final sign-off on the project.
Bonus: the consultant lifestyle
Along with the day-to-day work, consulting comes with a unique lifestyle that you won't find in a typical corporate job. Consultants travel frequently, and a typical schedule is to fly out on Monday morning, fly home on Thursday night, and work from the home office on Friday. The exact schedule varies based on the consulting firm and the client.
A benefit of the travel, is getting to see new places on the company's dime. Plus, you can really bring in the loyalty program points (airlines, hotels, etc.). If you find yourself in a room full of consultants, then frequent flyer status and rewards points is always an easy conversation topic.
Another benefit are the sponsored (paid for by the company) dinners and events, which can be pretty spectacular for some consultancies. If you're in consulting long enough, you'll eat some of the best food you've ever had, for free.
As with anything, it's not all free meals, and travel bliss. Consulting has a reputation for long-hours, and a demanding work environment. Plus, being on the road can make it difficult to manage relationships and activities at home.
To thrive as a consultant, it's important to be adaptable. You'll run into delayed flights, demanding clients, and difficult problems. But, if you respond well to the challenges, consulting can be an exciting career. Not to mention the exceptional exit opportunities and generous pay.
Two Types of consulting projects
Broadly speaking, consulting projects can be categorized into 2 different groups: advisory and implementation projects.
Advisory projects
For most people, when they think about consulting, they're probably thinking about advisory consulting.
In this type of engagement, a consulting firm would be hired to advise their client on firm strategy, give recommendations based on market conditions, provide specialized expertise in specific industries, etc.
Strategy or management consulting at firms like McKinsey, BCG or Bain are focused on this type of work.
Implementation projects
An implementation project can be an add-on to an advisory project. For example, after analyzing customer data, Deloitte may recommend the launch of a customer-facing iPhone app to increase the frequency of customer visits.
If the client company doesn't have an internal team of app developers, they may hire a team of technology consultants from Deloitte's technology branch, to complete the work.
Implementation projects can also arise independent of previous advisory projects. A firm may set their strategy, and then bring in a consultancy to execute it.
In simple terms, an advisory project is where a consultancy informs strategy, and an implementation project is where a consultancy executes strategy.
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