What is Management Consulting, and Is It For Me?

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What is Management Consulting, and Is It For Me?

  1. 1. What is Consulting? Presentation to aspiring entry level hires J-P Martins, Consulting Careers Team 9 September 2009 Page 11 Page
  2. 2. Who are we? The Consulting Careers Team J-P Martins Associate 7 years’ experience spanning BCG and Bain Director Also held strategy and corporate development roles in Mining and Financial Services BCG, McKinsey, Deloitte, KPMG and EMB client June Senior 10+ years’ experience at London Business O’Connor Relationship School Manager Long standing and deep relationships with all significant consulting recruiters from the school Page 2
  3. 3. Who are you? MBA and MiF students Novice Onlooker Participant Player •  I have no •  They’ve •  I’ve worked •  I’ve worked experience been on a project as a of involved with them consultant consultants with my company No experience High experience 3
  4. 4. The start of the ‘1st year’ autumn consulting programme, leading to January recruiting How What Who …do I get a …is …are the job in consulting? consultants? consulting? 9 September 11 14 October September ‘Is consulting ‘How do I best for me?’ ‘Which firms prepare?’ should I apply to?’ 28 Oct 30 Oct 4 Nov 6 Nov 20 Nov 4 Dec 18 Dec Problem Case Solving ‘Which ‘CVs for ‘Cover Case Solving for workshops Complex Firms and consulting’ letters for workshops Case Business How?’ workshops consulting’ Interviews Problems workshops workshops Sessions in red are presentations, others are workshops MiFs welcome to all sessions One-on-one sessions for MBA 2011s available from 29 January 4
  5. 5. Also: comprehensive ‘2nd year’ consulting programme, focused on Autumn recruiting 18 Sep 26 Sep 28 Sep 16 Oct 4 Nov Case workshops ‘Super Saturday’ One-on-One Case workshops One-on-one sessions begin sessions begin   CV review (MBA 2010) (MiFs)   Cover letter review   Application strategy 5 Oct Consulting Club   Pitch ‘Crack a Case’   Case workshops programme Recruiting*: W/C: 21 Sep Bain Accenture Booz Diamond OC&C CapGemin 2020 Everest i BCG AT LEK Roland Marakon Kearney Berger FINCO Parthenon ZS McKinsey FINCO: Finance and Consulting networking event, 15 October * Preliminary list – individual firms to be confirmed 5
  6. 6. Don’t forget FINCO on 15 October! Finance and Consulting Networking event Consulting attendees include (preliminary list):   Alvarez and Marsal   Gallup   Cambridge Associates   Molten   Celerant   PRTM   Deutsche Post   PWC   Efficio   Schlumberger 6
  7. 7. Today’s agenda: Two main questions Introductions What is management consulting? Is it for you? Recap and next steps 7
  8. 8. What is a management consultant? Any professional who provides advice and assistance to others, ‘Consultant’ usually for financial reward. This covers many roles operating in almost any industry ‘Management Identifies, diagnoses and solves Consultant’ business problems and issues 8
  9. 9. That’s very general - what distinguishes what management consultants do? Logic Management consultants:   Identify, diagnose and resolve business issues   Provide resources –  People Provide an –  Access to data and expertise objective view of –  Impartiality the way forward and/or help the   Operate at many levels client to achieve   Work with others something they –  Clients can’t do alone –  Case teams   Work on projects ('cases' or 'engagements’), Speed lasting from a few weeks to several years 9
  10. 10. How do they do that then? – Workplan, analyse, communicate! Strategic Problem Solving Process Problem Framing Problem Structure Issue Prioritisation •  Impact and Hypotheses •  Speed Business Problem •  Insight •  Key elements •  80:20 •  Early hypotheses Work Planning •  Efficiency •  Leverage Output Synthesis and Analysis Next Communication Recommendations •  So what - insight iteration? •  Buy-in •  Solutions •  Justification – New •  Implementability •  Actions how do you get priorities? the data to prove it? 10
  11. 11. Sorry, what do they actually do? The case team leader The team (consultants & clients) will work (typically 2-3 years post together to solve the problem: MBA) will:   Work through the issues in a logical way   Ensure the problem is correctly defined and   Discuss approaches and solutions as a team scoped   Conduct desk research, interview and observe clients, ask awkward questions,   Understand what the client needs to achieve collect and analyse data, consult experts   Substantiate conclusions with data, data, data   Sound out approaches and potential solutions   Obtain buy-in from team members and client’s (hypothesis based) senior management 11
  12. 12. Example project 1: Merger between two global airlines Problem: Asked by CEO of XYZ Air to assist build a business case for merger, to present to Board Project: Two teams, each led by a manager with 2 or 3 consultants/associates, three month timeframe Identified likely areas of synergy and estimated quantity of each ‘Killer’ analysis was reconstructing the other airline’s operating and maintenance schedule by working backwards from published timetables Also lots of detailed working through organisation charts and expense details with XYZ Air’s senior managers Developed detailed brand and service strategies to minimise top-line erosion Workshopped findings with select senior managers from both airlines Findings: Validated key assumptions and overall value - £1+bn synergies Results: Work was presented to Board – they continued to move forward with the project Merger was eventually announced to markets, but rejected by regulators 12
  13. 13. Example project 2: Operational improvement at flight catering centre Problem: Asked by GM Catering of XYZ Air to advise on cost reduction and operational improvement at regional flight catering centre Project: One team, led by a manager with 2 consultants/associates, three month timeframe (one of 8 or 9 such teams running simultaneously in the same client) Hand-picked 15 client team members to perform the project analysis and act as change champions First day was met by a walkout of all staff leading to no food on planes for a 6 hour period Identified likely areas of opportunity and quantified each   Included sifting through all discarded meals from one day’s flights to identify what passengers really want to eat, rather than what they say they want   Benchmarked potential savings against wholesale outsourcing Findings: Over £1m annual saving possible from reduced flight delays, re-scoped food menus and efficiencies in ingredient procurement Results: All recommendations accepted and implemented – XYZ went on to further reduce scope of economy class hot meals as it realised these really were not valued by public 13
  14. 14. Example project 3: Energy coal supply and demand study Problem: Asked by Group CEO Energy of Global Mining Co to produce bottom up forecast of energy coal prices for next 15 years based on comprehensive supply and demand study Project: Sino-Australian team: 2 managers with 4 consultants/associates, with 1 senior manager and two engineers from the client, 3-month timeframe (based in China for 2 months) Completed survey of 300 Chinese mines using local market researchers, and exhaustive electricity demand projections based on GDP growth and demand elasticities Modelled all new planned power stations over next 15 years and likely impact on demand Thoroughly researched Chinese road, rail and sea transport infrastructure Built global supply and demand model using company information Findings: Ground-breaking (then!) view on explosion of Chinese natural resource demand Confirmed availability of low cost coal production to meet this demand, despite likely short term transport bottlenecks, and unviability of some of Global’s assets in the long term Reviewed Global Mining’s cost position and made advised strategy for each mine Results: Strategy not adopted – Global Mining instead reacted to short term price rises, raising long-term price forecasts, and overinvested in acquisitions which destroyed value 14
  15. 15. Today’s agenda Introductions What is management consulting? Is it for you? Recap and next steps 15
  16. 16. The appeal of consulting is different for different people – here’s a starter list… A fantastic opportunity to accelerate or Opportunities to travel transform your career Variety: of problems to be solved; of Extremely selective hiring – it’s like industries/organisations winning a prize Intellectual challenges Immense capability of your colleagues – smart, charming, driven people Interpersonal challenges Great employers – training, benefits, Influence (power?) offices, personal development Ability to create completely new intellectual capital Remuneration’s good – particularly if you stick around a few years Value creation   Base UK salaries for MBAs £60-70k Opportunities to develop, coach and range for MBAs (+ sign-on) train others (clients, juniors) Professional service – serving clients Looks good on your CV 16
  17. 17. …but it’s not going to suit everyone (1 of 2) You may not be good enough?   Hiring is very selective   Fewer than 10% of applicants from LBS get into the top firms You have to be highly driven and work hard   60+ hour weeks remain normal, and 80+ hour weeks are not unknown Travel commitments can be onerous   Consultants need to work with their clients. This may mean extensive periods of travelling, living away from home 4 days a week Things change   Constantly. Project allocations, travel arrangements, meeting times, holiday plans, development targets… 17
  18. 18. …but it’s not going to suit everyone (2 of 2) You’re not the smartest fish in the pond any more   Your colleagues are bright and enthusiastic – many did better at school than you   Your bosses really do know what they are talking about now, and sometimes you’re the one who doesn’t ‘Up or out’   Your performance will be constantly evaluated   Every six months or so, you will be appraised by a career development committee   You may be promoted at any of these appraisals   If not promoted at regular intervals (usually around 2 years) you will be asked to leave   Annual turnover at these firms is often around 25% 18
  19. 19. How does a consulting career work? 6-9 years 4-5 years 2 years post MBA Partner1,3 Manager1 •  Partner/ Typical MBA Director2 entry level •  Associate Case Team Principal2 •  Vice Leader1 •  Principal3,4 President4 •  Engagement Consultant1,3 Manager2 •  Associate2,4 •  Project Leader3 •  Senior Associate Associate4 Consultant1 •  Business Analyst2 •  Associate3 •  Consultant4 1 Bain, 2 McKinsey, 3 BCG, 4 Booz Note: Timings very approximate 19
  20. 20. Current market is down a bit, but expected to bounce back Growth in Consulting Hires (%pa) Source: ADD/MCA survey, 75 firms, 2008 20
  21. 21. Today’s agenda Introductions What is management consulting? Is it for you? Recap and next steps 21
  22. 22. Recap Management consulting is a broad field, concerned with solving clients’ business problems at all levels Value, rigour, speed and independence are key Consultants work in teams, and apply a rigorous problem solving process Consulting has many attractions, but will not suit everyone Only you can tell if it’s for you – take today as a starting point and research the sector, and firms… 22
  23. 23. Coming soon – Consulting Club kick-off tonight & ‘Who Are The Consultants’ on Friday How What Who …do I get a …is …are the job in consulting? consultants? consulting? 9 September 11 14 October September ‘Is consulting ‘How do I best for me?’ ‘Which firms prepare?’ should I apply to?’ 9 Sep 28 Oct 30 Oct 4 Nov 6 Nov 20 Nov 4 Dec 18 Dec Consulting Problem Case Solving ‘Which ‘CVs for ‘Cover Case Club Kick-off Solving for workshops Complex Firms and consulting’ letters for workshops meeting Case Business How?’ workshops consulting’ 7:00 Interviews Problems workshops workshops Sessions in red are presentations, others are workshops MiFs welcome to all sessions One-on-one sessions for MBA 2011s available from 29 January 23

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