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Learning From Consulting Mentors

I have spent a long time examining my own career path from associate to principal. Mainly because there was always a fair degree of luck involved. It is not as if I was a break-out superstar and knew I would become a partner. I was good, but there were other better associates who did not become partners.

So, I must have done a few things differently to compensate for this perceived disadvantage I possessed.

I eventually realized that I succeeded not only because I was analytical, could communicate well, develop great storyboards, was great at math etc. Let’s not be mistaken, I needed those skills. Yet, they were not enough if you did not know how to use them. Everyone had those skills when they entered BCG, McKinsey et al and these were not enough to distinguish oneself.

Even today, many outstanding candidates are managed out every month and most are surprised when it happens since almost all have the skills listed above, and in great abundance. I know because we receive several emails a week from distressed management consultants seeking guidance.

I succeeded because a partner took me under his wing and personally mentored me when I was just an associate. In other words, this partner guided my analytical development by showing me how to deploy those critical reasoning skills.

That single act made the greatest difference to my career.

You may think the mentoring did not matter at the time since I was already working as a management consultant. Yet it did. Without the mentoring, I would probably have stayed 1 or 2 years, quite possibly have been promoted but most likely never have made partner. But, I wanted to be a partner, and that was a completely different objective from simply getting an offer or getting promoted to manager.

In other words, you can prepare to just get an offer or you can prepare to rise to partnership level.

I recall two events demonstrating the importance of such mentoring.

Event One

As a young associate leading the business case analyses for a transfer pricing study, I was completely struggling to sketch out the boundaries of my analyses, understand the company’s business model and convert this to an excel model to estimate the impact of the various options we were recommending to the client.

At the time, I did not have any business training and struggled to understand many of the concepts I now take for granted. The client’s business was difficult to understand and transfer pricing is actually very difficult for anyone to understand, irrespective of their background.

I had to determine the prices one division, the releasing division, should charge the next division, the receiving division of the same company, which takes over the semi-finished product as it wove its way through the company towards completion.

Should a division generate a profit? Should a division charge at cost-price? Should a division link their prices to efficiency gains?

It was even harder to do since there was no competition in the market, whose numbers we would typically use to benchmark comparable processes and products.

I received a telephone call from the strategy partner leading the engagement at 8pm on Friday, the first week of the study, asking for feedback on the engagement. It was not going well and I stated as much.

I believe in telling the truth no matter how much pain it would cause.

After realizing I would be in the office the next day, a Saturday, he offered to come in to provide some guidance. I fully expected a 30 minute chat followed by a depressing summer day working by myself and eating vending machine tender.

He came in at 9am EST, brought breakfast consisting of coffee with chocolate croissants, and simply cranked up his laptop and started building the skeleton of the model as if he did this every day. More than that, he took over a whiteboard and taught me how to build the links between different modules of an excel model, using A4 sheets of paper, to depict each module like an income statement, and whiteboard marker to draw connections to depict the relationship between each module – a technique I still use today to teach young consultants.

It was interesting how the learning process became so enjoyable watching a senior partner explain finance, and throw in interesting anecdotes and ideas to explain complex concepts in ridiculously simple ways. Brealey & Myers may know finance, but teaching it is quite different.

Much to my surprise, he stayed through lunch, during which he insisted we order pizza from a hole-in-the-wall which made thin-crust gourmet pizza with only fresh toppings. I was told that the owner, a real Italian mama, will not serve you if she does not like you. Over lunch we talked about how he had learned the technique to visually depict excel models on a white board. He told me the story of a London-based partner who taught him that technique when he was an associate – about 20 years ago.

Since I knew he had dinner plans, I fully expected him to stay until 6pm. Yet, just before the skeleton for the balance sheet module was to be constructed, he calmly whipped out his phone and cancelled his dinner. It seemed like the most natural thing to him.

He did not even make me feel guilty about it. His commitment was unusual and not every consulting partner would do this. In fact, most would not. But he did. And that is what counts. I learned the correct values of helping younger consultants and the importance of critical reasoning. The latter must be important if a partner is spending his Saturday teaching me how to analyze a company’s issues and determine if an analysis was needed. I mirrored this behavior when I was elected a firm principal.

Event Two

In a role-reversal, and a few eventful years later, I was now the principal leading a team through a challenging engagement to redesign the operating model for a client. We were trying to determine how a US$10B emerging markets company should change its operating model as its growth rates dramatically slowed down. Many parts of the business set up to enable that growth, such as a large M&A team and forays into non-core activities, were now redundant.

About 5 weeks into the study, an engagement manager on the team came up to me on a Tuesday morning, I remember this clearly, even the clothing he wore when he entered the room, and explained that the labor cost numbers had been incorrectly calculated and the documents sent to the EVP Operations, for board circulation, were flawed.

Since the labor costs were incorrect, the fixed and a large part of the variable costs had been underestimated and both the cash flow and return-on-invested-capital projections were far too rosy. In other words, the proposed initiatives did not meet the hurdle-rate for the client.

You can only imagine the embarrassment and, possibly, anger if the board of directors debate a major investment over a long-weekend only to be told the numbers were flawed, their recommendations were no longer valid and they would need to meet again to discuss the same issue.

It was a striking mistake for a very important client on a critical engagement. Several senior partners were displeased with the mistake and the impact this would have with a client who was already slightly skeptical about the value we could bring – the client openly questioned our domain knowledge. I particularly recall my mentor, a senior partner, was probably for the first time upset with me that I would let this happen on a study.

The first thing I did was to inform the senior partner leading the study and literally race across the city to inform the client in person. I have learned it is important to pay clients due respect at all times, especially when a mistake is made.

I then hunkered down with the team for the next 2 days to double-check all the numbers and update the board pack. Never once did I fault the team or create an atmosphere of gloom, although there would be a time and place to do a review, it was not now, and there is never a time and place to hinder morale while you need to meet a deadline.

When the senior partner and client separately asked me who was responsible, all I said was I am accountable so it was my fault. My team never forgot that. I did have a long discussion with the manager about fixing the problem, but I was clear that it was mainly my fault for not allocating sufficient time to check the results.

The team’s loyalty to me increased after the incident and word quickly spread around the office, creating even more loyalty. I took all the blame because it was my fault for not checking the numbers carefully, even when I could have easily shifted it to the manager.

Make no mistake, we had several sessions thereafter to discuss the analyses gaps and mistakes. As younger consultants, the team needed to demonstrate proficiency in this area. That said, that is not the main lesson from this story.

I learned to take responsibility for my actions because many years earlier a partner did the same thing when I made a mistake on the revenue analyses I was leading, which the partner forgot to check.

Values are passed from partner to potential partner. Those who live those values become partners. Don’t get me wrong. You need to be very good at generating insights from data. That, however, will only weed you out from the rest. To propel yourself to the next level, and ultimately partnership, you need to layer on much more skills.

We want to expose our clients to those analytical and values based teaching-moments.

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Image from Trey Ratcliff under cc.

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