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Questions about consulting answeredIf you are considering management consulting as a career you likely have questions about consulting. In this article, we attempt to answer some of the common questions about consulting. We will keep it very brief as you can get in-depth answers for many of the questions below, and well beyond, in our numerous articles, podcasts, programs, and books.
Consultants are hired as advisors to corporations. They tackle a wide variety of business problems and provide expert opinions, analysis, and solutions for their clients. These problems can be as straightforward as market research and as complex as corporate strategy.
As a consultant, you will make a good living. In the short-term, you will get exposure to various businesses and industries. In the long term, it allows you to be solving the most pressing problems for companies. Clients do not hire consultants to solve simple problems. Why would they pay consultants’ ridiculous fees? They usually hire consultants to solve the most difficult problems that they themselves cannot solve.
Consultants from top firms like McKinsey, BCG, Bain, Deloitte have very good compensation, far exceeding the BLS averages. As an example, according to the job website payscale.com, management consulting associates with McKinsey & Co. earn an average of $102,000 per year, within a range of $72,000 to $174,000.
There are different types of consulting, including strategy consulting, operations consulting, implementation consulting, IT consulting, etc. Each type of consulting will have a long list of skills required to do the job. However, if we look at general skills all consultants need they will include the following:
Major consulting firms like McKinsey, BCG, Bain, Deloitte, etc. require consulting job applicants to have a minimum of a bachelor’s degree. The preferred majors include accounting, engineering, business, finance, marketing, management, or a similar area. The consulting job applicant is expected to demonstrate an interest in business and solving difficult problems. Coursework should include such subjects as accounting, management, leadership, statistics, ethics, strategy and communication.
One of the reasons companies hire consultants is because they want specialized skills that might not exist in house (inside the company). And because of consulting firms, companies can bring in that skill set when needed.
Management consulting is a smart choice for a first job as it allows young professionals to explore various industries and different types of work. It also generally involves opportunities to travel and a learning curve is generally steeper than in many other first jobs after university.
Some people consider MBB (McKinsey, BCG, and Bain) the most prestigious. The second tier to MBB include firms like Accenture and the big 4 accounting firm’s consulting arms: PwC and Strategy&, Deloitte, E&Y and KPMG. Out of those firms, Deloitte Consulting is probably the most prestigious. According to many consultants who worked at Deloitte and at MBB, they preferred their Deloitte experience as more rewarding.
In consulting firms titles differ but generally along the following lines:
MBB is an abbreviation that stands for McKinsey & Company, Boston Consulting Group (BCG), and Bain & Company. These 3 firms are often considered the top 3 firms in the management consulting industry.
Big 4 consulting refers to the Big Four consulting firms, Deloitte, PriceWaterhouseCoopers (PwC), Ernst & Young (E&Y), and KPMG.
Consultants often travel 4 days a week. They typically fly out on Monday morning, fly back home on Thursday night and work from their local office or from home on Friday. The schedule always changes based on the project consultant is staffed on.
Teamwork is very important in consulting and something firms are testing for during interviews. Most consultants are working as part of project teams, delivering value to a specific client. A team can consist of 2 business analysts, 1 associate, 1 manager, 1 junior partner, and one senior partner, as an example. In this type of team set up senior partner and junior partner will usually primarily focus on managing the relationship with a client and leading the team and more junior team members will primarily focus on conducting analysis, putting together slides and financial models, conducting focus interviews.
Yes, consulting work and lifestyle can be very stressful. Long hours, constant travel, deadlines, burning midnight oil, are all realities of consulting. However, it is not more stressful than many other similar jobs like, for example, banking.
It’s quite rare for unqualified consulting job applicants to be hired for a top consulting job (e.g. joining McKinsey, BCG, Bain, Deloitte, etc.). The consulting job applicants pool is very large and the case interview process is very rigorous. So if you find yourself in one of these prestigious firms, you almost certainly have the required foundation to do well.
This differs across consulting firms. However, generally, according to Vault.com survey, both single and married consultants average 56.6 hour work weeks. However, about a quarter of single consultants routinely work between 60 and 70 hours per week. And about six percent of the responding consultants reported they average between 70 and 80 hours a week. The results are from a survey of more than 4,500 consultants.
It takes many years to acquire the skill-set of a consulting partner. At each level in consulting, you will be acquiring and strengthening different skills. As a business analyst and associate, for example, your skills will be primarily focused on business analysis.
A typical day of a management consultant includes a lot of high pressure activities such as working on putting together slides and analysis before the deadline, getting input from superiors and updating the work before client’s presentation, preparing for client’s presentation, presenting to clients, traveling to client’s location (locally, to another city or even to another country), working on proposals for prospective clients, working on internal initiatives such as training, recruitment and thought leadership. Consultants often have to keep their sleep short and sacrifice weekends and evenings to manage heavy workloads.
Consulting projects differ dramatically depending on the firm and the client, and the type of consulting project (e.g. strategy, operations, implementation, IT etc). However, a typical project lasts about 3-4 weeks.
Consultanting skills (business management, business acumen, communication, persuasion, analytical, critical thinking, strategy, operations, implementation etc.) allows consultants to help solve challenging problems for clients that hire them.
Management consultant compensation in the US will vary by position, level of experience and the firm. Lower levels (business analyst and equivalent) usually earn about $83,000 from MBB (McKinsey, Bain and BCG). And their performance bonuses are about $12,000-$18,000. A signing bonus of $5,000 may also be applicable.
While top firms require at least a bachelor’s degree, there is no degree required to become an independent consultant. Provided you can deliver more value to clients than what you are charging for your services, clients will generally want to hire you. At the end of the day delivering results is what matters to most clients, especially to small business clients, not a degree or formal qualifications. Delivering results within agreed upon timelines while remaining professional and pleasant to work with is what usually leads to clients coming back over and over again.
The market rate is the average price a typical client will pay for your type of consulting service, given your level of expertise and experience. “The market rate” is the average price and range of pricing a typical customer will pay for your type of consulting service. If the average freelance business consultant charges and receives $100 per hour, then the market rate is likely between approximately $50 to $150 per hour.
Major consulting firms require job applicants to have at least a bachelor’s degree as a minimum requirement. And most firms prefer to hire those who earned their master’s degree. Particularly, the MBA. However, almost anyone can become an independent consultant if they are willing to develop the skills required so they can deliver meaningful results for their clients. We have a program that teaches how to become an independent consultant with zero upfront investment: Replacing Income with Online Freelance Consulting.
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We hope you found the above answers to questions about consulting helpful. Overall, consulting is a wonderful career choice and you should consider it seriously.
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Recommended books:
When people think about the business strategy we often think about the field of strategy consulting/management consulting and firms like McKinsey, BCG, et al. If you are interested in learning how to conduct a management consulting engagement, you will likely enjoy this book. Succeeding as a Management Consultant is a book set in the Brazilian interior. This book follows an engagement team as they assist Goldy, a large Brazilian gold miner, in diagnosing and fixing deep and persistent organizational issues. This book follows an engagement team over an 8-week assignment and explains how they successfully navigate a challenging client environment, develop hypotheses, build the analyses ,and provide the final recommendations. It is written so the reader may understand, follow ,and replicate the process. It is the only book laying out a consulting assignment step-by-step. (Published by FIRMSconsulting.) One of the best business books if you are interested in management consulting and strategy. This book will be very useful as well if you are a small business consultant. If you were searching for answers to questions about consulting, this book is a gold mine, according to many readers.
Bill Matassoni’s (Ex-McKinsey and Ex-BCG Senior Partner) Marketing Saves The World is a truly unique book. Never before has a McKinsey partner published his memoir publicly. This book is a rare opportunity – a true exclusive – to see what shapes the thought process of a partner and learn about marketing and strategy. The memoir essentially lays out McKinsey’s competitive advantage and explains how it can be neutralized. (Published by FIRMSconsulting.) One of the best business books if you are interested in marketing, strategy, how McKinsey and BCG operate, and overall in management consulting. This book will be very helpful if you are a small business consultant. Another gold mine, according to many readers, if you have questions about consulting.
Turquoise Eyes started off the groundbreaking new genre developed by FIRMSconsulting that combines compelling narrative while teaching problem solving and critical thinking skills. Set after a bank begins implementing a new retail banking strategy, we follow Teresa García Ramírez de Arroyo, a director general in the Mexican government, who has received some disturbing news. A whistleblower has emailed Teresa with troubling news about a mistake in the loan default calculations and reserve ratios. The numbers do not add up. The book loosely uses the logic and financial analyses in A Typical McKinsey Engagement, >270 videos.
Bill Matassoni speaks highly of Kenichi Ohmae in his memoir Marketing Saves The World. He is one of a few people Bill calls “brilliant.” The Mind of The Strategistremains one of a few strategy books we recommend to understand how to think critically. Now you can read Bill’s memoir, a book about Bill’s mentor (Marvin Bower), and a book by one of Bill’s close colleagues at McKinsey (Kenichi Ohmae). Definitely, one of the best business books, especially if you are interested in management consulting and strategy. Another fantastic book if you have questions about consulting.
One of the best business books of all time. The Innovator’s Dilemma – “By the nineties, most books on management were just rhetoric, but this book is the real deal. A well-researched classic,” says Bill Matassoni. Named one of 100 Leadership & Success Books to Read in a Lifetime by Amazon Editors. In his book, Clayton Christensen showcases how even the most outstanding organizations can do everything right and still lose market leadership.
There is no better book than McKinsey’s Marvin Bower to explain the philosophy of strategy and the way in which management consultants develop a strategy. What we do is very different from the way a researcher of strategy would develop a strategy. I highly recommend this book and have read it several times. Bill Matassoni (see Marketing Saves The World) was a mentee of Marvin so reading both books will allow you to see things from both sides. Marvin Bower is considered to be the father of management consulting. So if you have questions about consulting this book is a must.
Get a list of the best strategy books and other business books we recommend to help you answer your questions about consulting and strentghen/build your consulting skills …
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Cheers, Kris
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