It’s not the first time I got this question, but, now that I’m done (at least for now) – what do I really think of management consulting?
- Great first job: I believe this is one of the best first jobs that you can get coming out of college or business school. It challenges you to think about issues which most people don’t get a chance to until they’re at the middle/senior manager level (e.g., the clients you work with). It also gives great practice in handling tough situations (e.g., hostile clients/customers, rapid deadlines, changing requirements, etc.) and forces you to learn how to work with many different types of people and thinking styles. It also introduces a mental discipline around finding and structuring solutions to tough problems, no matter the political situation or the perceived difficulties. Beyond the “boot camp” aspect, its also tends to pay a pretty decent salary and offer a very young and “work hard, play hard” culture which large companies tend to be unable to replicate.
- Opens many doors: Consulting doesn’t end up fulfilling the 4 criteria for job satisfaction for everyone. But, not to fear – the skills I alluded to in the first point make new consultants very attractive to employers (some job openings primarily target consultants, like some private equity and corporate strategy roles) given the broad set of experiences and ability to perform in difficult situations. Furthermore, the abundance of MBAs and the networks of the more senior members of the firm provide consultants with a great network to use to help position themselves in new jobs. It’s a benefit that should not be discounted.
- Very cyclical: There is no business which isn’t, to some extent, vulnerable to the business cycle, but as a fairly expensive client-services business with long lead-times in both hiring and getting new clients, management consulting is especially vulnerable. I can tell you that during a recession, things can get pretty tough. Clients are rarely willing to pay full price and demand much higher levels of quality. This, in turn, makes everyone’s lives harder and makes the firm reluctant to pay bonuses, hire additional workers, provide perks, or give promotions. This has no effect in the short-term, because there are no other job opportunities available in a recession, but when the economy begins to recover, it pushes more people to look elsewhere for jobs. The result of this is that during the ensuing recoveries/booms, firms can’t seem to do enough to hold on to their people. Compensation/bonuses go up and more promotions are granted as the firm becomes both forced to and more willing to do more to keep its people and hire new employees to handle the increased quantity of client work it wants to service – which itself becomes the over-capacity which leads to problems when a recession hits (and the cycle repeats). Now, this cycle is not unique to consulting, but it’s important to keep this in mind when considering consulting as a career because the very nature of the consulting business (long hiring/project lead times, expensive client-service) strongly amplifies the bad aspects of the consulting experience in recession and the good aspects during booms.
- Changing model making it harder for junior people: Like the previous bullet point, this is not unique to consulting, but it is a growing trend which I have observed. In the “Dark Ages” of business when the internet was not around and electronic data/contact lists were not so readily available, successful consultants did not require deep industry or operational area expertise to be effective – they could quickly come up to speed by finding the right data/experts and conducting the select set of analyses needed. But, as more data and “industry experts” became more readily available via the internet (and the market understanding there was demand for such things), clients began to demand more and more industry/operation-specific expertise from their consultants. This has forced the more senior members of a consulting firm to become industry/operational area experts. While this is a natural progression of the consulting model, an under-appreciated result of this is that junior members of the team now start new projects with a significant knowledge disadvantage from the senior members of the team. The result of which is that junior members may get less of an opportunity to work deeply with “the higher ups” and with the client (who expect junior consultants to be as well-versed as the senior members of the team). While strong teams and cultures find ways to mitigate these problems (with team norms, strong mentorship, and/or by allowing junior members to specialize, etc.), the change in the consulting model (and their adverse impacts) will likely continue. This is definitely something to think about if considering consulting.