What is Consulting?

Presentation to aspiring entry level hires

J-P Martins, Consulting Careers Team

9 September 2009 Page 1 Page 1

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Who are we?

J-P Martins Associate Director

7 years’ experience spanning BCG and Bain

Also held strategy and corporate development roles in Mining and Financial Services

BCG, McKinsey, Deloitte, KPMG and EMB client

June O’Connor

Senior Relationship Manager

10+ years’ experience at London Business School

Long standing and deep relationships with all significant consulting recruiters from the school

The Consulting Careers Team

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Who are you?

Novice

•  I have no experience of consultants

Onlooker

• They’ve been involved with my company

Participant

•  I’ve worked on a project with them

Player

•  I’ve worked as a consultant

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No experience High experience

MBA and MiF students

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The start of the ‘1st year’ autumn consulting programme, leading to January recruiting

What …is consulting?

Who …are the consultants?

How …do I get a job in consulting?

9 September

‘Is consulting for me?’

11 September

‘Which firms should I apply to?’

14 October

‘How do I best prepare?’

30 Oct

Case workshops

4 Nov

Solving Complex Business Problems

6 Nov

‘Which Firms and How?’ workshops

20 Nov

‘CVs for consulting’ workshops

4 Dec

‘Cover letters for consulting’ workshops

18 Dec

Case workshops

28 Oct

Problem Solving for Case Interviews

Sessions in red are presentations, others are workshops One-on-one sessions for MBA 2011s available from 29 January

MiFs welcome to all sessions

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Also: comprehensive ‘2nd year’ consulting programme, focused on Autumn recruiting

18 Sep

Case workshops

26 Sep

‘Super Saturday’   CV review

  Cover letter review

  Application strategy

  Pitch

  Case workshops

28 Sep

One-on-One sessions begin (MBA 2010)

16 Oct

Case workshops

4 Nov

One-on-one sessions begin (MiFs)

Bain

BCG Parthenon

Accenture

AT Kearney

McKinsey

Booz Diamond

LEK ZS

OC&C

Roland Berger

CapGemini

FINCO

2020 Everest

Marakon

Recruiting*:

W/C: 21 Sep

FINCO: Finance and Consulting networking event, 15 October * Preliminary list – individual firms to be confirmed

5 Oct Consulting Club ‘Crack a Case’ programme

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Don’t forget FINCO on 15 October!

Finance and Consulting Networking event

Consulting attendees include (preliminary list):

  Alvarez and Marsal

  Cambridge Associates

  Celerant

  Deutsche Post

  Efficio

  Gallup

  Molten

  PRTM

  PWC

  Schlumberger

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Today’s agenda: Two main questions

Introductions

What is management consulting?

Is it for you?

Recap and next steps

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What is a management consultant?

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Any professional who provides advice and assistance to others, usually for financial reward. This covers many roles operating in almost any industry

‘Consultant’

Identifies, diagnoses and solves business problems and issues

‘Management Consultant’

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That’s very general - what distinguishes what management consultants do?

Management consultants:   Identify, diagnose and resolve business issues   Provide resources

–  People –  Access to data and expertise –  Impartiality

  Operate at many levels   Work with others

–  Clients –  Case teams

  Work on projects ('cases' or 'engagements’), lasting from a few weeks to several years

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Provide an objective view of the way forward and/or help the client to achieve something they can’t do alone

Logic

Speed

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How do they do that then? – Workplan, analyse, communicate!

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Business Problem

Problem Framing •  Impact

•  Insight

Problem Structure and Hypotheses

•  Key elements

•  Early hypotheses

Issue Prioritisation •  Speed

•  80:20

Next iteration? New priorities?

Output Communication •  Buy-in •  Implementability

Synthesis and Recommendations •  Solutions •  Actions

Analysis •  So what - insight •  Justification –

how do you get the data to prove it?

Work Planning •  Efficiency •  Leverage

Strategic Problem Solving Process

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Sorry, what do they actually do?

The case team leader (typically 2-3 years post MBA) will:

  Ensure the problem is correctly defined and scoped

  Understand what the client needs to achieve

  Sound out approaches and potential solutions (hypothesis based)

The team (consultants & clients) will work together to solve the problem:

  Work through the issues in a logical way

  Discuss approaches and solutions as a team

  Conduct desk research, interview and observe clients, ask awkward questions, collect and analyse data, consult experts

  Substantiate conclusions with data, data, data

  Obtain buy-in from team members and client’s senior management

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Example project 1: Merger between two global airlines

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Problem: Asked by CEO of XYZ Air to assist build a business case for merger, to present to Board

Project: Two teams, each led by a manager with 2 or 3 consultants/associates, three month timeframe Identified likely areas of synergy and estimated quantity of each ‘Killer’ analysis was reconstructing the other airline’s operating and maintenance schedule by working backwards from published timetables Also lots of detailed working through organisation charts and expense details with XYZ Air’s senior managers Developed detailed brand and service strategies to minimise top-line erosion Workshopped findings with select senior managers from both airlines

Findings: Validated key assumptions and overall value - £1+bn synergies

Work was presented to Board – they continued to move forward with the project Merger was eventually announced to markets, but rejected by regulators

Results:

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Example project 2: Operational improvement at flight catering centre

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Problem: Asked by GM Catering of XYZ Air to advise on cost reduction and operational improvement at regional flight catering centre

Project: One team, led by a manager with 2 consultants/associates, three month timeframe (one of 8 or 9 such teams running simultaneously in the same client) Hand-picked 15 client team members to perform the project analysis and act as change champions First day was met by a walkout of all staff leading to no food on planes for a 6 hour period Identified likely areas of opportunity and quantified each   Included sifting through all discarded meals from one day’s flights to identify what

passengers really want to eat, rather than what they say they want   Benchmarked potential savings against wholesale outsourcing

Findings: Over £1m annual saving possible from reduced flight delays, re-scoped food menus and efficiencies in ingredient procurement

All recommendations accepted and implemented – XYZ went on to further reduce scope of economy class hot meals as it realised these really were not valued by public

Results:

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Example project 3: Energy coal supply and demand study

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Problem: Asked by Group CEO Energy of Global Mining Co to produce bottom up forecast of energy coal prices for next 15 years based on comprehensive supply and demand study

Project: Sino-Australian team: 2 managers with 4 consultants/associates, with 1 senior manager and two engineers from the client, 3-month timeframe (based in China for 2 months) Completed survey of 300 Chinese mines using local market researchers, and exhaustive electricity demand projections based on GDP growth and demand elasticities Modelled all new planned power stations over next 15 years and likely impact on demand Thoroughly researched Chinese road, rail and sea transport infrastructure Built global supply and demand model using company information

Findings: Ground-breaking (then!) view on explosion of Chinese natural resource demand Confirmed availability of low cost coal production to meet this demand, despite likely short term transport bottlenecks, and unviability of some of Global’s assets in the long term Reviewed Global Mining’s cost position and made advised strategy for each mine

Strategy not adopted – Global Mining instead reacted to short term price rises, raising long-term price forecasts, and overinvested in acquisitions which destroyed value

Results:

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Today’s agenda

Introductions

What is management consulting?

Is it for you?

Recap and next steps

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The appeal of consulting is different for different people – here’s a starter list…

A fantastic opportunity to accelerate or transform your career

Extremely selective hiring – it’s like winning a prize

Immense capability of your colleagues – smart, charming, driven people

Great employers – training, benefits, offices, personal development

Remuneration’s good – particularly if you stick around a few years

  Base UK salaries for MBAs £60-70k range for MBAs (+ sign-on)

Professional service – serving clients

Opportunities to travel

Variety: of problems to be solved; of industries/organisations

Intellectual challenges

Interpersonal challenges

Influence (power?)

Ability to create completely new intellectual capital

Value creation

Opportunities to develop, coach and train others (clients, juniors)

Looks good on your CV

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…but it’s not going to suit everyone (1 of 2)

You may not be good enough?

  Hiring is very selective

  Fewer than 10% of applicants from LBS get into the top firms

You have to be highly driven and work hard

  60+ hour weeks remain normal, and 80+ hour weeks are not unknown

Travel commitments can be onerous

  Consultants need to work with their clients. This may mean extensive periods of travelling, living away from home 4 days a week

Things change

  Constantly. Project allocations, travel arrangements, meeting times, holiday plans, development targets…

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…but it’s not going to suit everyone (2 of 2)

You’re not the smartest fish in the pond any more

  Your colleagues are bright and enthusiastic – many did better at school than you

  Your bosses really do know what they are talking about now, and sometimes you’re the one who doesn’t

‘Up or out’

  Your performance will be constantly evaluated

  Every six months or so, you will be appraised by a career development committee

  You may be promoted at any of these appraisals

  If not promoted at regular intervals (usually around 2 years) you will be asked to leave

  Annual turnover at these firms is often around 25%

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How does a consulting career work?

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Associate Consultant1

• Business Analyst2

• Associate3

• Consultant4

Consultant1,3

• Associate2,4

Case Team Leader1

• Engagement Manager2

• Project Leader3 • Senior

Associate4

Manager1 • Associate

Principal2 • Principal3,4

Partner1,3 • Partner/

Director2 • Vice

President4

1 Bain, 2 McKinsey, 3 BCG, 4 Booz Note: Timings very approximate

Typical MBA entry level

2 years post MBA

4-5 years 6-9 years

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Current market is down a bit, but expected to bounce back

Growth in Consulting Hires (%pa)

Source: ADD/MCA survey, 75 firms, 2008

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Today’s agenda

Introductions

What is management consulting?

Is it for you?

Recap and next steps

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Recap

Management consulting is a broad field, concerned with solving clients’ business problems at all levels

Value, rigour, speed and independence are key

Consultants work in teams, and apply a rigorous problem solving process

Consulting has many attractions, but will not suit everyone

Only you can tell if it’s for you – take today as a starting point and research the sector, and firms…

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Coming soon – Consulting Club kick-off tonight & ‘Who Are The Consultants’ on Friday

What …is consulting?

Who …are the consultants?

How …do I get a job in consulting?

9 September

‘Is consulting for me?’

11 September

‘Which firms should I apply to?’

14 October

‘How do I best prepare?’

30 Oct

Case workshops

4 Nov

Solving Complex Business Problems

6 Nov

‘Which Firms and How?’ workshops

20 Nov

‘CVs for consulting’ workshops

4 Dec

‘Cover letters for consulting’ workshops

18 Dec

Case workshops

28 Oct

Problem Solving for Case Interviews

Sessions in red are presentations, others are workshops One-on-one sessions for MBA 2011s available from 29 January

MiFs welcome to all sessions

9 Sep Consulting

Club Kick-off meeting

7:00