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Management Consulting (Generalist)

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Management Consulting firms help their clients solve problems. More specifically, they work with a company to help them improve their performance or refine their business strategies. Furthermore, Management Consulting is sometimes described as “Strategy Consulting” or “Business Management Consulting”. 

 

Management Consulting is a broad term and encompasses many types of consulting careers. However, on this page we will focus on “Generalist” Consultants aka ones that don’t specialize in a specific industry.

 

Keep on reading below to understand Management Consulting within minutes.

What is Management Consulting?

The goal of a Management Consultant is to provide strategy-based advisory services for clients in exchange for a fee.

 

Some examples of ways a Management Consultant helps their clients are:

  • Provide advice on areas of expertise the client might lack. For example, a client wants to buy another company, it’s helpful to get guidance from someone that has done this many times before.
  • Act as an outside opinion for internal management. For example, if a client needs to make an important decision, it is helpful to get an educated, outside opinion to ensure the decision is a good one.
  • Allow the client to focus on running their business while a team of Management Consultants work on the side project. As a result, consultants can help their clients be more efficient and successful.

Who are Management Consulting Firm’s clients?

Before understanding the value a management consultant provides, it is helpful to understand the type of clients that use these services.

It varies depending on the specific consulting firm, however, clients usually fall into one of the following categories:

  • Businesses (Fortune 1,000 Companies like Microsoft, PepsiCo, etc.)
  • Financial Companies (Private Equity Firms like KKR, Carlyle Group, etc.)
  • Non-profits (Bill & Melinda Gates Foundation)
  • Governments (U.S. Department of Energy)
Out of the above client types, businesses tend to be the most common.
 

Real-Life Analogy:

Below is a simple analogy to help understand why a client might hire a management consultant rather than just solving a problem themself:

  1. Let’s say Robin wants to build a house on a piece of property he owns. 
  2. He could certainly design the house himself, but the obvious downsides are: a) it will take a lot of his time to figure this problem out, b) he is not an expert, and therefore c) he risks doing a poor job.
  3. For the sake of his time and confidence that the house is built well, Robin is best-off hiring an architect.  
The architect is like a consultant because they’re experts in this field and have been through this process many times. They can get the job done more quickly and efficiently than Robin can on his own.
 

Management Consulting Examples:

In general, strategy projects involve defining the strategy for an organization. This means:

  • Researching and advising on the direction of the organization (expand to new markets, change geographical location, switch to different products)
  • Decide on resource allocation for the company (should we invest in specific technology? A particular product?, etc.)

A Healthcare Company hires a team of consultants (for a 12 week period) to help strategize a five-year plan. Additionally, they agree on a Fixed Fee structure, which states that the consulting team will be paid $750,000 total over the course of the project. The procedure goes as follows:

  • They must create a data-driven analysis of initiatives the client can make to generate more revenue/sales for their business (aka the “deliverable”)
  • This means, the consulting team comes up with a list of ways their client can make more money, and use data to support their claims.
  • Then, the consultants use their knowledge of the industry and business principles to brainstorm a long list of potential initiatives.
  • For each initiative, they determine: a) how large the potential revenue growth opportunity can be, b) how long it will take to carry out this initiative and c)how much it will cost to deploy this initiative.
  • Once the necessary scenarios are mapped out for the client, they can make the best long term decision for their firm.
  • Company A buys Company B. As a result, there will be many post-acquisition problems to solve.
  • A Management Consultant can be hired by Company A to figure out how the two companies should come together, and what the organization and processes would be like.
  • Some problems to solve include:
    • How should we create the new organization and define the roles and responsibilities of the employees?
    • What are some ways that Company A can integrate Company B’s resources and processes with their own?
    • Where can costs be cut (for example: excess employees, staff, machinery, offices, etc)?
  • This type of project involves more conceptual problem solving and client interactions, but less data analysis.

What does an actual day for a Management Consultant look like?

Usually from Monday to Thursday, consultants are working on a project and are placed at the client’s office/headquarters. As a result, they often fly out early Monday and fly back late on Thursday. However, Fridays are generally more relaxed and involve working from the local office. 

Some daily tasks:

  1. Answer emails and requests, as well as sending out any requests that you have. A “request” means project-related material(s) that another team (usually within the consulting firm) provides you or needs from you.
  2. Go over with the boss/manager the “to-dos” for the day (more on this below). Examples might include:
    • Gathering data for your client’s project
    • Preparing for a meeting
    • Creating/reviewing PowerPoint slides 
    • Working on a model, that’ll help clients find answers they need (such as a cost and revenue breakdown of a specific initiative).
  3. Attend meetings throughout the day with the client or your team to review project materials. 
  4. Depending on the intensity of the project, your workday can end anywhere between 6pm and Midnight.

The daily “to-dos” usually represent the general game plan of the project, such as:

  • Create a hypothesis of the answer you are trying to provide your client
  • Gather the data needed to answer the question
  • Might also include expert opinions/work, whether that is through calls with industry experts, or internal people who have done a lot of work on the topic.
  • Analyze to understand the answer
  • Put that analysis on paper
  • Walk through it all with the client

How Do Management Consulting Firms Get Paid For Their Services?

When a consulting firm and a client agree to work together it is called an “engagement”. Within these engagements, there are three main ways they receive a fee:

  1. Fixed Fee – Before working on a project together, the consulting team and the client agree on a flat fee, which usually includes an upfront down payment. Additionally, they will agree on specific “deliverables” or tasks that the consulting firm should complete within the given time frame.
  2. Milestone Based – The client and consulting team map out a list of milestones and how much the consultants will be paid for accomplishing each goal.
  3. Time plus material – The consulting team and client agree on a price per “billable hour”. Essentially, this means when a member of the consulting team does relevant work, they bill the client for the hour of work at a predetermined rate.

The specific payment price depends on:

  • The firm – more “premium” firms tend to charge a bit more for their “premium services”.
  • Size of the consulting team – bigger teams (with more consultants), require more of the consulting firm’s resources and thus cost more.
  • Length of the case – If a project will take more time, it will cost more to provide this service.

Typical Consulting Hierarchy:

While this can vary from company to company, a typical path at a consulting firm looks as follows:
career hierarchy management consulting
 

How is Management Consulting different from other forms of Consulting?

A Management Consultant’s responsibilities revolve around giving advice on business-strategy. While some bigger management consulting firms do more than this, traditionally this has been the case. Below are some other forms of consulting:

  • Implementation Consultant – Help clients with more operational/hands-on problems. For example, fixing the logistics of a production process or implementing a new software product.
  • Industry-Focused Consultant – Bring industry-specific knowledge to help solve their client’s problems. For example, there are Healthcare Consulting firms whose consultants are experts in the healthcare industry. 

Some tools a Management Consultant uses:

  • Customer Relationship Management (CRM) – Such as Salesforce, helps manage customer activity and information. 
  • Surveys Tools – Like Qualtrics. Might be used for Employee Engagement Surveys which measure the extent to which employees feel engaged and valued.
  • Market Research Tools – For research on consumer needs and/or broader industry.
  • Data Analysis Tools – Such as Excel and Tableau. 
  • PowerPoint/Slide Building – For presentations. 

What types of skills, mentality, etc. are necessary to be successful in Management Consulting?

  • Ability to interpret information from multiple sources.
  • Organized and efficient – will often need to complete a project within a time frame, so it’s important to be able to work efficiently.
  • Communication skills – will be working with a team of consultants and need to communicate well with them and your clients as projects progress.
  • Team Player – you will be part of a specific team that assists a specific client for a specific time frame. Being able to collaborate effectively is essential.

Some challenges of being a Management Consultant?

Below are some challenges of being a Management Consultant:

  • Most Consultants travel a lot. Monday-Thursday they often work on a project located away from where they live (usually at their client’s office). This lifestyle can be tiring but also exciting for individuals who enjoy traveling.
  • If you work on an intense project, you can find yourself working very long hours (15+ hour days at times).
  • There can be a lot of pressure to get things done on a strict deadline. 
  • Working with clients inherently means having to deal with good and bad clients. For example, a client might be a poor communicator, which would be difficult to work with efficiently.

What are some benefits of being a Management Consultant?

Below are some advantages of being a Management Consultant:

  • Good compensation – Paid well for their premium services. 
  • Get exposure to companies and help them solve their business problems.
  • Quick promotions – consultants often get their first promotion 1-2 years after entry-level.
  • Build a strong network of people – from working with many clients (often major corporations) and colleagues.
  • Always learning and experiencing something new – Work on projects for different companies and get exposure to unique problems.
  • Expenses are usually covered – Depends on the specific consulting firm but this often includes meals, hotels, travel, etc. (at least Monday – Thursday when traveling). 

Typical Management Consulting Salary?

Inspired by wall street oasis, below is the salary projection of a typical Management Consultant (varies from firm to firm):

  • Analyst- 65k-100k. Spend 2-3 years at this level.
  • Associate/Consultant – 170k-200k. Spend 1-3 years at this level.
  • Project Leader – 200k-300k. Spend 1-3 years at this level.
  • Principal/Manager – 250k-400k. Spend 2-3 years at this level.
  • Partner – 500k+. 

Should I go into Management Consulting?

Management Consulting is one of the most prestigious careers for recent graduates. Often the biggest concern about consulting is the constant travel. However, if you do not mind traveling, then management consulting is a great way to gain exposure to many areas of the business and strategy world, and you will have fantastic exit opportunities. Additionally, if you want to create a strong network and work with some smart people and/or companies, consulting provides you the opportunity to do so.

Some common career paths for consultants include: switch to another consulting company, business and strategy roles at non-consulting companies, and startups. 

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