Today, we would like to address a question related to the corporate strategy and transformation study to turn around an energy giant. This and other similar advanced strategy training programs are available to FC Insiders. In this article, we will address the question of whether a functional partner should lead a strategy workshop over a sector partner.
Firstly, let us start with the definition of a partner in consulting. There are three types of partners.
One is a functional partner: someone who specializes in particular function work and does not really worry about sectors. A function is things like strategy, operations, implementations, and corporate finance. Functions exist across sectors.
The second type of partner is a sector partner: one who only does work in a sector e.g. Energy sector. He or she only does work in energy.
The third type is a regional partner. A regional partner is someone who specializes in a particular region, e.g. emerging markets. For instance, a partner who does primarily different kinds of consulting engagements in energy in a particular region.
The most common type of partner is a sector partner i.e. someone who does multiple studies in a sector.
When you join top firms as a business analyst or an associate, you initially focus on learning how to solve problems using first principles. The firm would not want you to have a sector specialization. However, once you have proven you can solve problems from first principles, the firm then starts pulling you into sectors.
Let us assume I am an Engagement Manager and I am working with a director and two principals. If they like me, they would put me into their engagements. That director, let us assume he is a pharma director (he serves pharma clients), he works with one pharma client and he is doing a pricing study for him. When he finishes with that pricing study, what is most likely to happen is that because he has insights on pricing in pharma, he is likely to have a reason to speak to the finance and pricing executive of another pharma company. Through that, he is likely to meet other pharma executives because his client may mention his work to other colleagues.
So when he wants to meet another potential client, it is likely going to be through a referral from the existing client. It does not end there; the client may also ask him to help with other issues. So he gets pulled in that direction, bringing other partners to help him solve problems.
In one year, if you have done eight studies in the pharma sector, you develop all this knowledge and deep understanding. So you are most likely to remain in the pharma sector where you can leverage that deep knowledge and understanding. That is why as you become more and more senior in the organization and especially as you become a partner, you automatically focus on a sector, not because you have chosen it but because that is the way your management consulting career has evolved.
Additionally, you start specializing in developing a relationship with a senior client, lets call him Robert. And that senior client, if he trusts you, is going to trust your judgment. You give Robert advice and if he wants to give the firm the IT strategy work, he would expect you, even if you do not know anything about IT, as the partner to bring in the right IT expertise from across the firm.
The answer is yes and no. The answer is yes because you define a consulting partner by three things: the function you cover, the sector you cover and where you are located. You can never say you are a strategy partner only. For example, you are a strategy partner who serves the energy industry in this region. Alternatively, you are an energy partner who focuses on strategy in the energy sector in this region.
Three things define you as a partner: your function, sector and your location. You generally have a functional specialization where you build the sector knowledge. And because you do a bulk of your work in a certain part of the world, you develop a regional specialization. I was an emerging market specialist. If the firm had a project in an emerging market, they would often send me there. That was my area of expertise: understanding issues that affected emerging markets.
So again, you define your capability by three legs: sector, function, and location.
When you make a decision about where to work, you pick your region first. Importantly, your region determines your function, because if you join an office that is weak in say operations, you are probably not going to develop operations skills. If you join a region that is strong in strategy but weak in IT, you probably are not going to develop strong IT skills.
So remember this, you pick your region first but your region largely influences the functional skills you gain. Then your region again is going to influence the sector skills you develop. If you are based in New York, you are highly unlikely to be serving energy (Oil and Gas) extraction clients that drill and mine for oil and gas. It is unlikely because of a regional issue. The region plays a big role here.
The region you pick to join not always but to a large degree determines the function and the sector you end up in. So if you want to be a sector partner specializing in Oil and Gas, pick an office/region where this kind of work is abundant to make it more likely you will have an opportunity to develop such expertise.
So start with the geography: pick the right one and then the function next. Mostly, the sector is going to take care of itself. You often will have a limited choice there. However, you do have a choice in terms of geography. For example, if you want to be a sector partner specializing in financial services work, pick a region that largely serves financial services organizations.
And, if you have already made the decision, it does not matter. Just be the best that you can be where you are right now.
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