How Has the Management Consulting Career Evolved?
Management consulting is a $250 billion industry – and growing, according to Inc. magazine. The job outlook for the next decade predicts a faster-than-average 12 percent growth, with almost 100,000 new jobs coming online in the next decade.
And climbing up the corporate ladder can pay off for consultants. According to a survey by recruitment firm 325 Consulting, the average pay of junior partners at top-tier firms was $730,000 in 2016.
Consultants are paid well because good consultants are hard to find. A consultant has to be:
- A good listener – If you are to grasp all the nuances of a given project, you must be a good listener and ask a lot of questions.
- A creative thinker – You should be able to generate novel ideas and express them clearly.
- A people person – You should not only like working with others, but be able to put yourself in their shoes, so to speak.
- Client focused – Clients are your bread and butter, which means you are equal parts consultant, salesperson, and customer service rep.
- A team player – Consultants don’t work in silos; in most cases, you will be part of a consulting team.
- Curious – As a problem solver, you should possess a natural curiosity.
- Organized – You find yourself in the role of project manager, which necessitates superior organization skills.
- Professional – It goes without saying, but we’ll say it anyway: You must present yourself in a professional manner and remember that client confidentiality is of the utmost importance.
In deciding on a career in consulting, there are lots of paths to choose from. Two questions are the most basic – do you want to be an independent consultant, or work in-house at an existing business? And you want to be a generalist, or focus on a specific area or industry?
Independent (external) management consultants
When the word “consultant” is used in the business world, it often refers to a person who is not a full-time employee but rather an outsider hired for a specific project or time period. This is typically the case for management consultants as well. Consultants usually are hired on a contractual basis. In fact, they are particularly valued as “outsiders,” able to offer an unbiased perspective on any given situation.
Unless you are hired as a full-time employee of a management consulting firm, you most likely will be working as an independent contractor. You should know the positive and negative aspects of this as you determine your career path.
|Variety – You’ll have the chance to work on a wider range of projects than if you chose a management track within a company.||No benefits – You will have to provide your own medical and other benefits, such as retirement accounts.|
|Networking – You’ll build a vast network of business connections that could prove invaluable throughout your career.||Job security – Once your contract ends (actually before it ends), you’ll have to look for your next project.|
|More flexibility – As a consultant, you’re not stuck in a 9-to-5 desk job (of course, you may be working long hours, but you can set them).||Lots of travel – You may rack up a lot of frequent flier miles, but extensive travel can be exhausting and get old relatively fast.|
|Salary – Because the company does not have to pay your benefits, you’re likely to be well compensated.||Pressure – Because your clients are paying you handsomely, more is expected of you.|
|Independence – While your clients are ultimately the “boss,” you can determine with which clients you choose to work.||Isolation – Due to considerable travel and the fact that you’re not in a traditional office setting, you may experience loneliness.|
Internal management consultants
Many organizations have an ongoing need for third-party expertise. And the cost of internal strategy advisors for a typical project is four to six times lower than that one of the Big-3 strategy consultancy firms (McKinsey & Company, Bain & Company or The Boston Consulting Group).
As a result, many organizations often opt to form their own in-house consulting teams. An internal consulting department will be set up, and often “borrow” staff from various business units to work on a given project. A project may incorporate staff from departments such as corporate development, human resources, finance, project management and IT, for example.
Aside from cost, another advantage of internal consultants is that they have a better grasp of the organization, as well as any office politics that may exist. In addition, internal consultants have established relationships with key players, which can help projects run more smoothly.
Generalist vs. specialist
As a management consultant, you can choose to be either a generalist or a specialist. The book Management Consulting: A Guide to the Profession discusses the ongoing debate over which is preferred in the industry. Those who favor generalists consider them “real” management consultants. Others, however, contend that “generalists lack the in-depth knowledge required fully to understand and resolve problems.”
Ideally, the book suggests, “the specialist has to be able to look at the problem from the generalist point of view.” In most consulting firms, the book notes, there is some division of work between those who are generalists and those who are specialists. Generalists typically handle supervisory and managerial functions, tackling issues such as corporate policy and strategy, leadership, organizational structure, and mergers. According to the book, most consulting for small businesses is conducted by generalists.
In today’s marketplace, however, there is a trend toward specialization in all fields, including management consulting. Businesses are seeking consultants with experience in specific sectors, such as transportation or health. They also seek consultants who have experience with particular disciplines, such as mergers and acquisitions. Plus, many businesses require an advanced degree in addition to an area of specialization.
Advisory expertise covers areas such as change management, financial performance, marketing, business restructuring, and human resources, with an emphasis on managing risks and costs. In the past, consultants focused mainly on strategy, but in today’s market, consultants are expected to provide a greater depth of services.
For the most part, management consulting has followed a very traditional business model. However, recent technological advances have challenged that model, bringing innovation to a field that previously shied away from it.
As an example, consulting giant McKinsey formed a new consulting arm, offering software and technology-based tools for data analytics and data-driven decision-making, independent of individual consultants.
Asset-based consulting is another example of how technology has disrupted traditional consulting. With asset-based consulting, ideas, processes, frameworks, analytics, and other intellectual property are packaged and marketed more like a product than a service. Consulting companies often use this approach in conjunction with static processes and business models. KPMG’s cloud-based software approach to finance and accounting is a perfect example. This allowed KPMG to offer financial advisory at a fraction of the cost, bring in more clients, and gain a competitive edge.
Management consulting trends
According to the 2017 Management Consulting in the US: Market Research Report, the management consulting industry is expected to grow over the next five years. The expanding healthcare sector also is expected to create new business opportunities for management consultants.
In Consulting magazine’s executive survey, 97 percent of executives said they experienced real revenue growth in 2017. For 2018, a whopping 98 percent of executives are forecasting growth. Of those, 94 percent predict that growth will be greater than 6 percent.
If you are just starting out in business, you should consider an internship in management consulting. This can help you decide which career path suits you best. You also can decide whether you want to be a generalist or specialist, an independent consultant or part of an in-house team.
To learn more about management consulting, contact a professional organization. The Institute of Management Consultants is one of dozens of management consulting organizations around the globe. Such organizations offer their members a variety of benefits, from certifications, to training, to networking opportunities.
If you are looking to advance your career in consulting and analytics, consider the Wake Forest online Master of Science in Business Analytics (MSBA). The MSBA enables working professionals to develop deep, quantitative capabilities and technical expertise to create business and social value, with marketable skills required by today’s top employers.