What is management consulting?
Management consulting is a profession where consultants provide advice and guidance to businesses, governments and other organisations to help them improve their performance, efficiency and overall effectiveness. Management consultants are typically hired to provide insights and solutions to complex business problems that organisations may face.
Consultants may work with clients on a range of issues including strategy, operations, finance, marketing, human resources and technology. They use a variety of analytical tools and methodologies to identify areas of improvement and develop recommendations for their clients.
The ultimate goal of management consulting is to help organisations achieve their objectives, increase profitability and improve their overall performance. Consultants may work with clients for a specific project or on an ongoing basis and they may work independently or as part of a consulting firm.
How do management consulting projects work?
Management consulting projects typically follow a structured approach that involves several stages. The first stage is to identify the business problem that needs to be addressed. This could be anything from improving operational efficiency to entering a new market. Once the business problem is identified, the consulting team needs to define it further. This involves understanding the impact of the problem on the business and what information they need to gather to solve it.
The next stage is to structure the problem by breaking it down into key elements. This involves creating a framework or a hypothesis of what the underlying causes of the problem could be. The team will then prioritise the issues to determine which ones are the most important to solve first. This helps them focus their efforts and work more efficiently. They will also develop an analysis plan to determine where and how to spend their time and create an issues analysis to identify any gaps in their understanding of the problem.
With the problem structure and the issues prioritised, the consulting team can begin conducting analyses. This involves gathering data and evidence to prove or disprove their hypotheses. The team will use a variety of methods such as interviews, surveys and data analysis to gather the necessary information. Once the analyses are complete, the consulting team will synthesise their findings. They will analyse the data to identify patterns and insights and determine what implications their findings have for the business. Based on their findings, the consulting team will develop recommendations for the business. This involves thinking through potential solutions to the problem and determining what actions the business needs to take. Finally, the consulting team will think about how to embed and sustain the solution, considering how the business can continue to improve and iterate on their solution in the future.
How is management consulting different from investment banking?
Both management consulting and investment banking provide advisory services to businesses who are often considering long term strategic goals. Investment bankers, on the one hand, do this through M&A deals, while management consultants look more internally at a company’s processes to determine inefficiencies and streamline operations. Consulting thus can involve a more long-term, interrogative analysis of a company’s core industry and business model. As projects often stretch over several months while consultants identify clients’ operational issues and design and implement solutions to these, becoming heavily immersed in the day-to-day activities of their clients.
Investment banks, on the other hand, have less of an intense focus on identifying and rectifying their clients’ inefficiencies. Instead looking more generally at growth opportunities by advising companies on how particular deals can facilitate their goals for expansion. Evidently, both industries help companies access growth opportunities and achieve strategic goals. However, management consulting looks more at improving inefficiencies, meaning it often involves implementing a more diverse array of solutions. While investment banking focuses on expansion and using M&A deals exclusively to achieve this, such as through entering new markets or product lines.
What does a role in management consulting entail and what are recruiters looking for?
A key element of management consulting regardless of seniority is market research, with consultants having to conduct comprehensive analysis of market trends, competitors, and business models. As they look to holistically advise clients on their potential issues and provide recommendations for solutions. This in-depth work whereby consultants get heavily involved in a business’ day-to-day operations also means they spend large amounts of time finding and interacting with client’s stakeholders like suppliers and customers. Which makes collaboration and teamwork skills core elements of consulting roles. Such engagement with a diverse range of perspectives therefore also makes empathy a key consulting skill. As consultants constantly need to work with new people and understand their viewpoints in order to properly address their clients’ needs.
Further to collaboration and empathy, some other soft skills highly valued by recruiters include:
- Active listening (to ensure proper comprehension of other’s ideas)
- Creative thinking
- Public speaking skills
- Interpersonal skills
What entry level opportunities are there in management consulting?
As a finance career pathway management consulting is therefore particularly relevant for those interested in rigorously analysing companies’ operations and industry trends. Graduate opportunities in management consulting are available at the big 4 professional services firms (PwC, KPMG, EY, and Deloitte), alongside at the big 3 consulting firms (Boston, Bain, and McKinsey).
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