|
As Consulting Firms Come Back to Campus, Students Revisit the Industry
A three-part article looking at consulting careers.
Part I: Overview & Outlook
As anyone who has logged 80-hour weeks as a consulting associate is well aware,
entry-level consultants do a great deal besides making hundreds of PowerPoint
decks. In fact, consultants do just about everything: They identify managerial
and institutional problems, perform in-depth quantitative and qualitative
analyses, recommend and develop solutions, and assist in implementation.
Time-constrained senior managers often rely on consultants to bring unbiased
outside perspectives to problem solving.
Five short years ago, MBAs fresh out of school were commanding hefty salaries
from whatever consulting firms they were interested in. The job offer–to-student
ratio was running in the students' favor, and everyone was giddy with the
possibilities. There appeared to be more jobs available than there were
qualified students to take them.
Unfortunately, the recession of 2001 struck the industry like a hammer. Jobs
began to vanish. Offers started to thin out. Business school graduates began
measuring their parents' basements for drapes.
But today, things are changing again. A consulting rebound seems to be in the
works, although few can tell how big it will be or how fast it is coming.
Back to Schools?
“Consulting firms are coming back to campus, though at a much more deliberate
pace than in the late '90s,” says Tom Rodenhauser, president of Consulting
Information Services and publisher of Inside Consulting. “The industry took its
share of lumps during the recession, and consulting usually lags overall
economic conditions by six months, so it's slower to recover.”
Anecdotal data suggests that management consulting maintained its popularity
among students through the recession and subsequent hiring slowdown. Still, you
don't need to look much further than the placement statistics at the top U.S.
schools to understand the impact that the downturn in consultant recruitment
had, not just on placement but also on salaries.
Plenty of schools indicate that starting salaries fell just as fast as the
overall recruiting numbers. Richard McNulty, director of career development at
Dartmouth's Tuck School of Business, believes consulting has lost its huge
salary lead. “Compensation has equalized to a certain degree,” he says. “It’s no
longer a huge differential to go into consulting.”
McNulty’s perspective is rather unique: Before coming to Tuck, he worked as a
consultant for Corporate Decisions Inc. (later acquired by Mercer Management
Consulting) and recruited for Mercer during the hiring boom of the late '90s. He
recalls "bidding wars" that firms occasionally engaged in to recruit top
students. While the firms are back on campus now, that frenzied pace will likely
remain a memory for at least the near future, he notes. “Students will return to
consulting, but I’m not sure we’ll see 40 percent of the class entering that
industry again for some time,” says McNulty.
Despite the hiring waves, says Rodenhauser, student interest remains mostly at
the strategy level. McKinsey & Company, The Boston Consulting Group, and Bain &
Company remain the most popular choices -- even as those firms are pursuing more
non-MBAs. Other players include A.T. Kearney, Accenture, BearingPoint, Booz
Allen Hamilton, and IBM Global Services, as well as boutique shops that
specialize in a certain area. Although students don’t often get to pick the
industry they focus on when they enter a consulting firm, hot fields include
health care, government/security, and financial services – as well as
entertainment and media, to a lesser extent. The most active practice areas
include business process outsourcing (BPO), offshore sourcing, and
e-procurement/supply chain consulting. At companies like Booz Allen, defense and
security are also hot, given the current emphasis on counterterrorism efforts
around the world.
On the Job
Starting salaries for business school graduates in consulting range from
about $70,000 all the way up to $150,000. Perks like company cars are
increasingly rare, but benefits and bonuses could amount to 20% or more of your
starting salary if you're lucky. Of course, after you’ve put in a few years and
several thousand frequent flyer miles and made it to a senior manager position,
you could end up with something in the higher six figures. Make partner, and you
could take in a cool $500,000 to over $1 million a year at top firms. All of it
depends on hard work, your ability to acquire new business from clients, and
your willingness to stay in hotel rooms as often as necessary.
Another attractive aspect of the industry is that firms offer business school
students a variety of opportunities. One month you might be staffed on a
pharmaceuticals project; the next month might see you delving into the
intricacies of aircraft engine economics. However, don't expect an impressive
title on your business card; you will likely be an "associate" as you begin your
career. “When students are hired, everyone is considered a ‘consultant,’” says
Megan McLean, head of U.S. recruiting operations for The Monitor Group. “We have
informal, internal functional titles to reflect the role you play on a case
team, but the external role we have is basically a consultant.”
Gerry Bollman, director of university recruiting at Booz Allen Hamilton, says it
is completely up to associates to ensure their own intellectual and professional
growth in the firm. “Consulting is as close to an apprenticeship business as
there is,” says Bollman. “The most important kind of learning and development
that is going to make you successful is working closely with senior people who
have been on your team, who have been around. That’s how you’re going to learn
the business.”
Part II: Getting In and Moving Up
Whether your plan is to be a lifelong management consultant or jump to the
client side after a few years and a few dozen additions to your contact list, it
pays to learn everything you can about the field before making the leap.
First, get involved with a student-run management consulting club. Just about
every business school has one, and it can be a valuable networking source as
well as a “safe” place to practice interviewing skills. “The consulting club
here is pretty active, and the students help one another prepare for interviews
and careers,” says Kelly Walsh, assistant director of the Stanford GSB career
office. Randy Allen, a part-time faculty member at Cornell’s Johnson School who
teaches two consulting-related courses, agrees and notes that clubs can also be
instrumental in attracting recruiters to the school. “Our club works to bring
consulting firms on campus to provide information sessions,” says Allen, who is
one of the club’s three faculty sponsors.
The Graduate Consulting Group (GCG) at the McCombs School is similarly active.
The group focuses on management and technology consultancies, offering
networking opportunities with industry sponsors like Deloitte, BCG, Accenture
and Cap Gemini Ernst & Young. As preparation for hitting the job trail, GCG
members take part in rigorous case interview workshops. They put on an annual
MBA Consulting Case Challenge. And many club members work on consulting
practicums under the auspices of top-tier consulting firms.
Participation in practicums and outside projects is common for MBAs who want to
go into consulting. When it comes to taking classes in B-school, students have
to recognize that there usually isn’t a preset course of study for embarking on
a successful consulting career. For example, while schools like Johnson and
McCombs offer dedicated courses in the field, most schools don’t have a
particular track that is solely focused on consulting.
“We don’t have a set curriculum for management
consulting,” says Stanford’s Walsh. Matthew
Merrick, director of career development at
Harvard Business School, notes that firms that
recruit there don’t look for a set course
background, either. “We’re a general
management school, and teach all the
disciplines. Firms are looking for analytical
ability and the ability to dissect issues.
They want people who are strong and effective
communicators in writing and in person, and
also for people who work and play well on
teams.”
|
This brings up a third point that would-be consultants should keep in mind: select the right firm. Most people agree that students choose firms for many of the same reasons they choose a certain business school: reputation and perception. “The driving factor should be what a firm will do for the student’s career,” says Rodenhauser.
Just as admissions counselors advise people not to go to B-school as a
fall-back career option, it doesn’t make sense to go into consulting because
it’s the path of least resistance. “A recruiter doesn’t want to be hiring a
bunch of students who are just going into consulting by default,” says McNulty.
“You want students who are genuinely interested in it and are going to build
their career in the field for at least a couple of years.”
Career Development
As a new consultant, your career is more or less entirely up to you. Firms vary in their career advancement policies -- while most are meritocracies where a consultant sets her own pace, others expect people to move ahead on a more structured schedule. Megan McLean, head of U.S. recruiting operations for The Monitor Group, says that her firm leans toward the more flexible option. “We don’t really have the career tracking other firms have,” she notes. “It is a much smoother track without an ‘up or out’ formal step process.”
“Seeking out good mentors and working your relationships in a learning sense is really your best way to succeed and develop your core skills as a consultant,” says Booz Allen’s Bollman. “In later career stages, it is less about your core consulting skills and more about whether you can build intellectual capital, build relationships, and solve business problems.”
Harvard’s Merrick agrees. “Recruiters ask if this potential consultant – in five, ten, fifteen years – will be able to sell consulting projects and represent the firm at a very, very high level. Clearly, recruiters hope everyone they hire will become senior people in the firm.”
Part III: In Their Own Words
What can you do during business school to facilitate your transition into
consulting? We asked four McCombs alumni to share their insights. Here’s what
they told us.
Nikki Rath
MBA 2000
Senior Associate, Booz Allen Hamilton
Rath advises business school students to put themselves into challenging courses that emphasize project work and case-based thinking to solve real problems, and to take advantage of the range of courses available. “I’ve used so much of my MBA,” she says. “All of the finance and accounting, and some of the IT strategy courses I took, have definitely been applicable to the strategy work I’ve done with Booz Allen. It is critical to have that good broad perspective to help companies solve their problems.”
School is a good training ground for what comes afterward, notes Rath. “Don’t be afraid to take the hard courses from the professors that are really going to drive you to achieve. That’s the kind of environment you’re going to have in the consulting world, so the more experience you have in a safe environment doing that, the more successful you will be.”
Dustin Weeks
MBA 1996
Founder, ForeSight Consulting
Weeks started her Sunnyvale, CA-based investor relations consulting practice in
2001 after working in Europe for a few years in investment banking. When she was
completing her MBA at McCombs, she was sure she wanted to start her own business
but wasn’t sure it would be a consulting business.
“Decide whether or not you want to work for yourself or if you’d rather work for
a big company,” Weeks says. “That decision has to be based in part on how many
contacts you have. If you hang out your own shingle, you better have people who
would say you’ve done a great job for them, and know people and businesses who
can help you with marketing or who are potential clients.”
As a consultant, Weeks values honesty, even when she has to make a potentially
unpopular recommendation. “You do your client a disservice by telling them what
you think they want to hear,” she notes. “They aren’t paying you for that. If
you make a decision you think is the right one and can back it up, it’s better
to explain that to a client instead of basing a relationship on what you think
they want.”
Marianne Seiler
MBA 1979
Senior Manager, Accenture
Seiler started her career in media and entertainment when she graduated from McCombs in 1979. She joined Accenture’s customer relationship management (CRM) practice in 2000. Seiler still remembers the influence of the McCombs faculty: “I got a lot of encouragement from the professors in terms of taking the creative aspects of what I enjoy and really applying it to the business world,” she says, and encourages students to excel in the basics at the very least. “You have to have a strong sense of numbers and not shy away from statistics, finance, or economics.” Seiler even took some math classes just before going to McCombs to sharpen her quantitative skills.
Unlike other jobs, Seiler notes, consulting is always fresh and offers new challenges every few months. “If you’re on 12- to 15-week engagements, you’re always working with new clients, you’re working with a new team, and you’re working with a new environment, so you have to prove yourself on every engagement.”
Frank Duffy
MBA 1998
Manager, Deloitte Consulting
Duffy says his professors were very helpful in getting him ready for his consulting career. Some professors were quite confrontational during class, he notes, which was useful practice for the real world. “There are a lot of difficult people out there - CEOs or other top executives - who are going to be much worse. It’s kind of a risk-free way for you to experience that and see how you’re going to react and be prepared for it.”
Alumni, Duffy notes, are a valuable source of information for anyone considering a consulting career. “Don’t be afraid to reach out to the alumni who are in the field to ask questions. McCombs alumni are pretty open to discussing their experiences and what the different firms are looking for.”
For information on specific programs at the McCombs School, consult our contacts page. For media information, contact the Communications Director by phone at 512-471-3314 or by email at CommunicationsDirector@mccombs.utexas.edu.
