Simply put, management consultancies like McKinsey, Bain, Boston Consulting Group, Bain & Company, Accenture, Oliver Wyman, Booz Allen Hamilton, Deloitte, and PricewaterhouseCoopers (Strategy&) assist their clients in problem-solving. Management consultants work in every industry and function (for example, manufacturing or media) (pricing to organizational behavior). Their work almost always falls into three major categories, which are:
We’ll look at who management consultants’ clients are and what problems they help with.
Who are their clients?
Leading corporations such as Fortune 1000 companies like Coca-Cola and Microsoft), investors (such as Private Equity firms like KKR), governments (such as the US Dept. of Energy), and nonprofit organizations are frequently the clients (e.g., Bill and Melinda Gates Foundation).
While each consulting firm will have a distinct clientele (and maybe a different industry concentration) leading businesses represent the majority of the clients for many consulting firms.
What are the client’s challenges?
Given that leading businesses are the primary customers of consulting firms, you might immediately ask: why do leading businesses, who likely can likely hire the world’s best talent, need to hire expensive consultants to help them with their problems? While there are edge cases, there are three core reasons that drive the bulk of the consulting business. Here are three core reasons companies hire firms like McKinsey, BCG, and Bain.
Given that leading businesses are the main clients of consulting firms, it is assumed that they have the most qualified employees. However, there are three main factors that justify the hiring of management consulting companies.
The nature of their work almost always boils down to three different areas:
#1: Functional expertise
The top consulting firms have developed critical expertise in key areas (e.g., pricing, marketing, organizational behavior, post-merger integration, etc.). Thus, when businesses face mission-critical challenges or problems that necessitate that expertise, partnering with a consulting firm can be an efficient way to resolve the issue.
For example, consider a large consumer electronics manufacturer that has decided to merge with a competitor of comparable size. While both companies have made small acquisitions in the past, neither has attempted a merger of this magnitude. As a result, neither will have the muscle memory nor the in-house expertise to confidently execute.
Although the firms are capable of doing it themselves, given the high stakes, they want to execute confidently, so leveraging expertise from a consulting firm makes sense.
#2: Objective opinion
Consulting firms are frequently hired to provide an objective, third-party opinion on a major decision that a company is making (e.g., it could be a new, large multi-year investment, a potential acquisition, a strategy shift, outsourcing, etc.).
Even if they have a solid understanding of the business and probably have more background than any other participant, additional difficulties nearly always crop up. There may be biases or “blind spots” among the company owners. By bringing in an outside perspective, they will be better able to tackle and resolve these issues.
A “deadlock” situation is another illustration. For instance, it’s possible that the board of directors or divisions within the executive team disagree over the best course of action, necessitating the need for a tie-breaking, unbiased view. Another frequent possibility is that the consulting company can offer an unbiased perspective on best practices in the sector, essentially using their larger scope of how other businesses have approached comparable difficulties.
#3: On-demand brains
The final common scenario is that the company may have an urgent problem. Because all of their existing teams and people are committed to ongoing projects, the company requires an injection of smart people and “brains” to address the issue at hand.
Some companies are even designed to operate in this manner. When looking to make an acquisition, private equity firms, for example, frequently rely on management consulting firms to assist with specific aspects of due diligence. Sure, private equity firms could create and staff their own internal consulting firms, but many will prefer to hire teams “on-demand” rather than changing the structure and talent pool of their own organization.
- Bachelor’s degree from a prestigious university
- Well-developed core consulting skills in research, analysis, presentation, and attention to detail
- Ability to grasp new concepts and effectively produce results
- Exceptional problem-solving abilities – an analytical, innovative, and creative mindset
- Excellent written and verbal communication skills
- Ability to be self-directed and contribute independently to the team
- MBA from a top institution
- 2+ years of consulting experience
- Advanced working knowledge of the Microsoft Suite, specifically Excel and PowerPoint
- Strong industry expertise in a domain of alignment (financial services, consumer products, human capital, shared services, etc.)
- The ability to lead teams with a strong work ethic, intellectual curiosity, and outstanding client service.
- Proven industry expertise in a domain of alignment (financial services, consumer products, human capital, shared services, etc.)
- The ability to lead teams with a strong work ethic, intellectual curiosity, and exceptional client service.
- Well-developed industry expertise in a domain of alignment (financial services, consumer products, human capital, shared services, etc.)
- Ability to lead teams with a sound work ethic, intellectual curiosity, and exceptional client service
Personality and Interpersonal Skills
- The ability to structure and manage intense workloads
- A valuable team player committed to contributing to the team’s desired outcome
- A high level of emotional intelligence to effectively deal with increasingly diverse clients and teams
- Confidence and maturity to work with senior executives
Types of Management Consultants
Management consultants specialize in a variety of tasks such as core strategy development, operational optimization, risk advisory services, technology deployment, and human capital advisory.
- Strategy consultants advise clients on a variety of business matters, such as corporate strategy, business transformation, and digital and innovation capabilities.
- Operations Consultant
- Operations consultants advise clients on business process optimization to improve operational business capabilities.
Information Technology Consultant
- IT consultants design and implement technological solutions for their clients.
- Human capital consultants
- They offer clients change management solutions and assist with any organizational changes that may affect employees.
Financial Advisory Consultant
Regarding mergers and acquisitions, business restructuring, and economic guidance for general business health, financial advising experts provide assistance to clients.
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