Management Consulting Discussion

A friend of mine got her PhD. in chemistry and joined one of the big 3 consulting firms after graduation, and she didn't have any business training. She did well there, and probably would have gone very far had she decided the stress, 80-90-hour weeks, and weeks away from home was worth it. She was there for probably 5 years.

She didn't use a single bit of her chemistry training, and was basically an Excel and PPT jockey. She's now at a more regular job that does involve chemistry and is a lot happier.

The company recruits a lot of science and engineering types for business consultants.

--Andre

Originally Posted by Milpool

Click to expand...

What kinds of "red flags" do you look for that would signal it is time to tell the client that you can't help them?

Look right from the beginning, when they ask you for a proposal.

If they cannot supply a scope of work, then be prepared for difficult times as then the client will try and worm their way out of paying for certain items or expect you to do out of scope work for the fixed price.

I recently sent off a proposal that was requested by a client and they didn't supply a scope. I put together a notional scope of work on the provision that it may be modified by us where necessary (this was for a geotechnical engineering pre feasibility study for two open pits and one underground mine), keeping in line with our time and expense charging. So essentially it becomes a non fixed-cost job.

Also look at the size of the company and where they are from. If a small, junior exploration company with no history comes to us and asks for a proposal for $2 million worth of work then we will most likely demand a certain up front payment if they accept the proposal, or if they don't pay at the end we will withold the work from them. We had a recent experience with an Indian company where they asked us to submit proposals, and then tried to haggle on price. Sorry fellas, thats our rates and they are fixed and we dont price match with other consultancies. They dithered a bit and then asked for further proposals and then started to do the same. We ended up dropping it and politely telling them to look for anothe consultancy.

Originally Posted by ibleedwhite

Click to expand...

AF - can you speak more towards Healthcare consulting?

Currently I work for a hospital corporation in mergers, acquisitions and start-ups of outpatient clinics. How can I work towards jumping in the consulting role at a consulting firm?

If you don't have an MBA or other advanced degree, you might want to get that first. Studying on case interviews also helps. Most important is being able to present and genuinely have deep experience in solving problems, presenting the methodology you used, and presenting results in terms of client impact. Always good to be published and also have speaking engagements if possible.

Originally Posted by Milpool

Click to expand...

What kinds of "red flags" do you look for that would signal it is time to tell the client that you can't help them?

The biggest is lack of buy-in by the key stakeholders. Also, you want to have some impact and ideally one you can measure even if there is a qualitative element. Also, you really don't want to be hired to validate existing mgmt ideas but rather dispassionately evaluate the options.

Hard to explain in a reply but there are techniques and body language you can look for.

Originally Posted by gnatty8

Click to expand...

What would you say the main value proposition of management consulting is for the firms that hire them? Can that value be monetized? Can lessons learned generate sustainable increases in EBITDA growth, and can lessons learned in one division be leveraged into other areas and transformed into increased EVA there as well? Discuss.

I want to come back to this. In many consulting projects the client is happy if you improve their KPIs (key performance indicators). Things like customers acquired, lower cost per acquisition, lower funding costs, lower credit defaults, etc.

Originally Posted by Artisan Fan

Click to expand...

In non-strategy consulting rates run from $75 per month but generally run $150 - $200 per month for "consultant" level (ie. non-partner) fees. Typically you have a project manager (at McK called an "Engagement Manager") who manages the team on a daily basis with direction given by a partner and sometimes a senior partner ("Director" in McKinsey speak).
What do these rates mean? $200k per month per team?

Originally Posted by Artisan Fan

Click to expand...

In non-strategy consulting rates run from $75 per month but generally run $150 - $200 per month for "consultant" level (ie. non-partner) fees. Typically you have a project manager (at McK called an "Engagement Manager") who manages the team on a daily basis with direction given by a partner and sometimes a senior partner ("Director" in McKinsey speak).

Originally Posted by Artisan Fan

Click to expand...

In a strategy house...Bain/BCG/McKinsey: Consultants $150-200K plus bonus Engagement Manager $250-300K+ plus bonus
Seriously? EM makes that much more than the consultants? Also, that is it? $200k for a consulting life? Working how many hours a week?

Originally Posted by cross22

Click to expand...

What do these rates mean? $200k per month per team?

Seriously? EM makes that much more than the consultants?

Also, that is it? $200k for a consulting life? Working how many hours a week?

Those are annual salaries. Yes, EM and Partner can be nice jumps up. Hours vary but figure 60-70 on average but a lot of living expenses paid when on the road.

It's a road warrior life but if the work is interesting it is not that bad. Lifestyle is one of the big things the Big 3 work on but there is a sacrifice. The learning can be unequaled.

Originally Posted by Artisan Fan

Click to expand...

Those are annual salaries. Yes, EM and Partner can be nice jumps up. Hours vary but figure 60-70 on average but a lot of living expenses paid when on the road.

It's a road warrior life but if the work is interesting it is not that bad. Lifestyle is one of the big things the Big 3 work on but there is a sacrifice. The learning can be unequaled.

Ok sounds like the EM is not just a certified project manager and has some expertise that is valuable to the outcome of the project.

What are we talking about in term of bonuses?

I don't think it's appropriate to discuss mgmt consulting without mentioning this: http://www.gettingdrunkinfirstclass.com/

Any good books on consulting, particularly if they are not specific to management consulting, but rather more generalized?

is the consulting industry hurting right now? based on my observation of harvard grad students this year it seems like the bar for associate hiring is insanely high, to the point i have to assume it's because business is weak.

how much do the people at the top of these companies really make? (not counting insider trading lolz.) i'm guessing it's more than the 7 digits advertised

also have you ever seen people lateral in at the associate or higher level and what kind of backgrounds did they have other than heavy science?

Originally Posted by Milpool

Click to expand...

Any good books on consulting, particularly if they are not specific to management consulting, but rather more generalized?

Yes, do an author search for Ethan Raisel.

Originally Posted by cross22

Click to expand...

Ok sounds like the EM is not just a certified project manager and has some expertise that is valuable to the outcome of the project.

What are we talking about in term of bonuses?

20% and on up depending on level. Not as big as i-banking bonuses but there can be some significant comp.

Originally Posted by scientific

Click to expand...

is the consulting industry hurting right now? based on my observation of harvard grad students this year it seems like the bar for associate hiring is insanely high, to the point i have to assume it's because business is weak. how much do the people at the top of these companies really make? (not counting insider trading lolz.) i'm guessing it's more than the 7 digits advertised also have you ever seen people lateral in at the associate or higher level and what kind of backgrounds did they have other than heavy science?
Consulting is doing fine but business did taper off in the recession. It is coming back as companies spend more on growth initiatives. You can make $1 million+ per annum at partner level. Eight figure comp is rare I believe. "Experienced hires" include people with deeper than MBA experience in industry. McKinsey and BCG (not sure about Bain) like to hire specialists for skills in demand. If no MBA they have mini-MBA programs they put you through first before client work and they get really top professors so its a good program and means something on the resume. Backgrounds of experienced hires are generally things like advanced math/statistics, risk management, law and MD degrees. Healthcare is a booming area as is healthcare economics. "APDs" are people with advanced professional degrees and some value them more than MBAs as they feel they offer up a a different perspective in solving complex problems.

Thanks for fielding all of the questions AF.