Who Wants to Be a Consultant?
the darling of job-hunting students and strategy-seeking clients,
management consulting deals with upheaval of its own.
it was: the button.
most buttons in this modern era, it existed to be punched. Ted
Boles, AB'01, had already heard from his People Matters representative
that it was in the pipeline. When it arrived on September 21,
2001-three-dimensional and almost tactile, embedded at the end
of an e-mail, subject heading "The Flexible Leave Program"-he
let it sit in his Lotus Notes in-box for half a week before resolving
to depress it. With one small-motor motion, accompanied by the
soft but audible click that denotes an e-action taken, Boles froze
his six-week-old consulting career for exactly one year.
on an "insider career network" discuss recent
layoffs, with farewells from ex-consultants who sport usernames
was entirely voluntary. I did it to save my career," says
Boles, an analyst for Accenture who has spent the past nine months'
deep freeze working as the public relations and marketing manager
of the University's Career and Placement Services (CAPS). The
case was one of simple supply and demand: like most consulting
firms when the recession hit in April 2001, Accenture's supply
of consultants soon exceeded the demand for their services. Many
employees were given the option of a FlexLeave sabbatical in return
for 20 percent of their salaries, all their benefits, and the
guarantee of a position at the same salary and career level in
a year's time. If too few employees opted to take the offer, head-count
reductions would follow. (Accenture, the world's largest management-consulting
firm, spun off from parent accounting firm Arthur Andersen several
years ago and is now a separate entity not to be confused with
Andersen's internal consulting arm. So Accenture's actions are
entirely recession-not Enron-related.)
is no fool. He'd just rolled off Accenture's three-week Client
Engagement Readiness School in St. Charles, Illinois-"basically
a converted college campus with a corporate feel," he says,
where Accenture trains new hires from around the globe and where
he learned, among other things, that the easiest heads to reduce
are those that haven't even made it onto the totem pole. Nevertheless,
he reflects, "Given where I was, it was frustrating. I was
eager to start."
September Boles and Danielle Kranacher, AB'01, who joined Accenture
in June 2001 and like Boles is on FlexLeave from the Resources
Group in Accenture's Chicago office, have watched long distance
as their cohorts from St. Charles spread out across the country
on client engagements. They've received frustrated e-mails about
long hours and difficult clients and exhilarated e-mails about
how cool it is to actually be a consultant. They attended the
holiday party and quarterly outings held by their Chicago Resources
Group Community, dubbed Earth Wind and Fire in honor of the natural-resources
businesses it advises, and kept up on the group's doings via the
newsletter Elementals. They autosubmit charge codes every
two weeks so Accenture can keep track of its nonbillables, and
once a month their assigned mentors check in to see how they're
doing and if they still want to come back to work. Despite their
short tenures on staff, they continue to use the company's lingo,
"Octelling" each other (referring to the brand of Accenture's
voice-mail system) and "dropping Lotus Notes" to one
another (particularly when a cryptic corporate communication arrives).
It's a strange limbo. Yet it hasn't dulled their desire to get
anxious to start my career," Boles says during a conversation
in the sweaty third-floor CAPS offices of Ida Noyes one unseasonably
warm April day. In the waiting room down the hall third-year students
in wool suits and ties, stockings and heels, clutch leather portfolios
and dab their foreheads with damp hankies as they wait to be called
for Metcalf Fellowship interviews: next year's class of alumni
hoping to land prestigious summer internships and an upper hand
in the job search ahead. "If there's ever a point in my life
to be a consultant," continues Boles, "it's now. My
body can take working 80 hours a week."
not kidding. The consulting industry has a reputation for two
things among students: what most call "the lifestyle"-long,
grueling hours and travel schedules that keep you on the road
four days a week, four weeks a month; and "the exposure"-to
a broad cross section of industries, to senior-level clients,
to CEO- and enterprise-level quandaries, to the brightest colleagues
one could hope for.
the increasingly smaller number who make it through the intensive
interview process with job offers, the pros of the exposure seem
to outweigh the cons of the lifestyle. For those 10-12 percent
who, before the recession, left after two or three years to get
an M.B.A. or take a position in one of the industries to which
they were exposed, the lifestyle doesn't top the list of things
missed. For those who stay in consulting and climb the ladder
to director or partner, such as Mary Tolan, MBA'92, a partner
at Accenture and a 20-year veteran of the firm, the thought of
doing anything else is pretty much inconceivable. "I'm an
addict of challenge," she says. "I think I'd fall asleep
if I had to stop consulting."
for the past 20 years there hasn't been much time for consultants
to sleep. During the 1980s and 1990s management consulting was
one of the fastest growing sectors in the world's advanced economies.
The Kennedy Information Resource Group estimates that total management-consulting
revenues worldwide are $62 billion a year, compared to about $3
billion in 1980. Roughly 80 percent of today's management-consulting
firms were established after 1980, according to The Expansion
of Management Knowledge (Stanford, 2001). Observers explain
the explosion as part of a larger shift in advanced economies
away from manufacturing toward business services. But it's also
because clients' demand for management-consulting services has
increased, mainly in response to the perplexities of a globalized,
is real, and it's fast," says Mark McGrath, MBA'69, a director
in McKinsey Consulting's Chicago office. "It comes from competitors,
consumers, and suppliers. Uncertainty is the name of the game,
and ambiguity is always present." He speaks in the practiced
tones of someone who's been around the block enough times to be
a tour guide. "It's a lot harder now than when I started.
We have a much more global economy. Transaction costs are much
different. The life expectancy of a Fortune 500 has dwindled.
Small competitors can be much more aggressive with the use of
also been a shift, he says, in the perception of hiring management
consultants. "Seeking help is viewed as a good course of
action," says McGrath. "Thirty years ago in company
after company management had a machismo about tackling problems.
Now seeking targeted help is much more acceptable. When you can
tackle a problem with heavy-up resources, the quality of the outcome
will be proportionate to the effort you spend. For a company to
devote five or six of their most talented people to a problem
typically just isn't feasible." But hire a consulting firm
noted for employing the best and brightest M.B.A.s from elite
programs like the GSB who devote themselves full time to the problem,
and, says McGrath, they'll break its back in no time. The perception
shift has also been helped along by the many consultants-turned-corporate-managers
who hire the firms.
most striking change in recent years, says Joni Bessler, MBA'83,
a partner at Booz Allen & Hamilton in San Francisco, is that
"the integration of strategy and technology is now fundamental.
They are not separate and distinct, period. We've been fortunate
because that has played into our strengths. I can't think of a
single piece of work that I've bid on that doesn't intertwine
this reality, management consultants like Bessler, McGrath, and
Tolan take pains to differentiate themselves from the large number
of information-technology consulting firms, such as the formerly
robust and now emaciated Sapient and the defunct MarchFirst, whose
fast-selling, high-priced, and some would say unwieldy and unfathomable
Web-based systems contributed substantially to the growth of the
consulting industry during the 1990s. It's a telling sign, McGrath
notes, that traditional strategist McKinsey has gotten into the
business of helping clients figure out what to do with the systems
they paid other consulting firms so much to build.
was a surreal time. I don't think we'll ever see it again,"
says Harsh Jawharkar, a part-time GSB student and freelance consultant
who was laid off from Sapient in February. "It was very casual.
Everyone was pampered. There were video games and Nerf toys everywhere,
and our office fridges were stocked with beer. We had lunch catered
once a week." The firm could afford the luxuries, he explains,
because "big corporations were scared to death. They didn't
know what the Internet does, and they'd pay millions for our help.
The pricing pressure was unbelievable." He tells of a client
in Oklahoma City who could only pay $1 million for a project.
"That was peanuts to us. The partner on the engagement said,
'Let's take it, and then halfway through tell them we can't finish
without more resources.'"
like this are exactly what make McGrath, Tolan, and Bessler cringe,
in part because they are quickly gobbled up by a small army of
journalists who devote themselves to questioning whether, at the
heart of it all, consulting really works. In the late 1990s books
about consulting horror stories proliferated: Con Tricks: The
Shadowy World of Management Consultancy and How to Make It Work
for You (1998), Dangerous Company: The Consulting Powerhouses
and the Businesses They Save and Ruin (1997), and The Witch
Doctors: Making Sense of the Management Gurus, the last written
by Economist editors John Micklethwait and Adrian Wooldridge.
those titles make clear, much has changed in the perception of
consulting since Hal Higdon, X'59, wrote The Business Healers
in 1969. Even then, Higdon noted what was called the Fortune
syndrome. "[A]bout once every five years Fortune publishes
a debunking article on management consultants that completely
punctures their egos," he wrote, leading to a general industrywide
lip zipping and a dearth in press interviews with consultants.
Higdon seems to still have it right: a quick search of Fortune's
online archives dredges up "Why Consultants Generally Suck,"
from May 2000.
professions incite such extreme views as the consulting field.
Consultants are presumed to be shallow and immoral because of
their high prices and association with "cost cutting"
(read: head-count reductions). At the same time they are respected
for their problem-solving skills, adaptability, and broad understanding
of business. The effectiveness of their work is scoffed at, and
yet the industry's growth demonstrates that they must be doing
their part, students seem unswayed by the naysayers and consider
a consulting position to be the liberal-arts degree of the business
world. "It's a chance to flex every muscle in my M.B.A. portfolio,"
says Jeff Koebler, a part-time M.B.A. student at the GSB's downtown
Gleacher Center campus who hopes to leave the textile industry
for a strategy-consulting position when he graduates next year.
"A friend of mine at McKinsey puts it this way: consulting
is like a finishing school after your M.B.A."
best finishing schools, as one might guess, are highly competitive.
Ask M.B.A.s in the heat of a consulting job search where they'd
like to work, and you can almost chant along with the names: McKinsey,
Booz Allen & Hamilton, Boston Consulting Group, Bain &
Company. These elite strategy consulting firms have traditionally
eschewed tinkering with a client's day-to-day operations and focused
instead on the big picture and the long-term. They are also the
oldest firms; McKinsey was founded in 1910 by James O. McKinsey,
a U of C business professor, while Edwin G. Booz, a Northwestern
graduate, founded Booz Allen & Hamilton in 1914.
elites recruit heavily at Chicago, where consulting is the No.
1 career choice for M.B.A.s, ahead of investment banking. Roughly
30 percent of 470 new hires from the GSB Class of 2001 took consulting
jobs, with McKinsey as the GSB's top employer, at 32 new hires
and 19 interns. Boston Consulting Group was No. 5, and in the
top 15 were Deloitte Consulting and Accenture, members of the
Big Five, that is, the consulting companies that grew up as parts
of the nation's biggest accounting firms.
years ago, of course, the Big Five were the Big Eight accounting
firms, but the complicated glomming of mergers and acquisitions-as
evidenced by the firms' compound names-has winnowed them down
to Accenture, Deloitte, PriceWaterhouseCoopers, KPMG Consulting,
and Cap Gemini Ernst & Young. These consulting firms built
multibillion dollar businesses by streamlining clunky processes
and creating enterprisewide information-technology systems for
many of the world's biggest firms. But Accenture's Mary Tolan
notes that the "Big Insert-Number-Here" nickname is
inaccurate, given that the consulting arms have grown up and diversified
and may no longer even be associated with the big accounting firms
that spawned them.
consider a consulting position to be the liberal-arts degree
of the business world, a post--M.B.A. finishing school,
a chance to flex every muscle in their U of C portfolios.
Big Five, for lack of a better name, have had almost as much cachet
among Chicago M.B.A.s and certainly as much among undergraduates
as the elite strategy firms. Like most college career centers,
CAPS has only just begun to track student employment interests
and job offers, but as director Liz Michaels, AB'88, says, "By
no means a majority but certainly not an insignificant number
of our undergraduates interview in consulting, and not an insignificant
percentage of our alums work at consulting firms," demonstrating
that consulting is a leading career choice for College grads.
The National Association of Colleges and Employers (NACE) is able
to be more specific: in 2001 consulting firms ranked first among
employers hiring new college graduates.
interesting is that many undergraduates who have gone into consulting
say they had no idea what consulting was when they walked into
their career centers in early fall and saw flyers announcing all
the firms coming to recruit. "The buzz on campus was that
these companies hire a lot of students for their liberal-arts
backgrounds, for how you think and learn versus your specific
skills," recalls Ted Boles, a biology concentrator. "But
I knew very little about it. To an outsider, the word is so bizarre-what
does a consultant do? And even now I know that answer is
always changing and being redefined."
like many of his peers, attended each firm's informational reception
and submitted résumés even as he was signing up
for interviewing workshops and figuring out what a exactly consultant
does, much less what a McKinsey versus an Accenture consultant
does. (These specifics he learned by prowling the consulting hub
at Vault. com, "the insider career networkTM." Vault
provides statistics on individual firms, "why work for us"
paid pitches, job-hunting tips, and very active chat boards on
specific companies and general trends. Recent threads range from
which girl the consultant on ABC's reality show The Bachelor
would choose to KPMG's April round of layoffs, with farewell after
bitter farewell from ex-consultants who sport usernames like consultmaniac
interviews with four companies-McKinsey, Accenture, Cap Gemini,
and Watson Wyatt, including five rounds of interviews with Accenture-Boles
had a job offer and two weeks to decide whether to sign on the
bottom line. He took one week. "It was all over very quickly,"
he says, "and I spent the summer wondering what it would
be like, how long I would stay"-two or three years and then
on to business school is standard for entry-level consultants.
"By August, when I started training, I felt reassured that
it was all real and happening and I'd done the right thing."
to the dreamlike feel of landing a consulting position is the
compensation: NACE reports that the average starting salary for
an entry-level consultant was $47,893 in 2001, down slightly to
$43,070 this year, reflecting the recession. And although Chicago
M.B.A.s know before they enter GSB programs that large numbers
of their predecessors have gone into consulting-and been paid
very nicely to do so, with a 2001 median salary of $110,000 and
a median signing bonus of $25,000-it's not unusual to hear an
M.B.A. tell a story much like Boles's. "When I began this
process, I had no idea what consulting was," says Dean Rosenblum,
MBA'02. "I had no idea why anyone would agree to pay me 100-some-odd-thousand
dollars to consult a CEO of a Fortune 500 firm." A chef by
trade, this summer Rosenblum will become a consultant at the Chicago
office of a top-tier strategy-consulting firm that prefers to
keep a low media profile.
he says, consulting was among the "low-hanging fruit."
Along with investment-banking firms, consulting companies were
the most plentiful recruiters on campus during his first year,
and the more he learned what a consultant does-being in a group
of "resources dedicated to a specific problem, where on this
hand is the question the client wants answered and on the other
hand is the larger question, and it's up to us to figure out the
eight or so things we need to know, split up, and then come back
together and reassemble this incredibly rigorous analysis we've
conducted into a cohesive strategy for our client"-the more
he wanted to do it.
spent fall and winter of his first year practicing "case
interviews." (M.B.A. recruiting takes place in the first
year, when students compete for summer internships with firms
that, they hope, will extend full-time offers a year later.) A
standard method used by recruiters of both M.B.A.s and undergraduates,
case interviews are essentially story problems designed to test
an applicant's ability to think systematically on his or her feet,
ask the right questions, and demonstrate problem-solving skills.
For example: "An aircraft manufacturer is thinking of building
a plant to produce a 600-seat airplane. Development costs will
total about $10 billion. Should they make this investment or not?"
Compare this to a case posed to Andy Hong, AB'01, a McKinsey business
analyst: "Estimate how many windows there are in Chicago."
did about 75 two-hour practice runs with second-year M.B.A.s who
volunteer to help their classmates prepare. In the first and second
weeks of February he interviewed with three top strategy firms,
with whom he had 13 half-hour case interviews and three "fit
conversations" in which he explained why his experience and
skills might match a specific employer's style and culture. He
received an internship offer from his top choice halfway through
the second week and immediately cancelled five other interviews.
He accepted the internship two weeks later and by August was among
the five of nine interns who were offered full-time positions
were the glory days. As Ted Boles says, "everything changed
on a dime." Although the recession hit last spring, recruiters
such as Rosenblum's employer figured business would pick up soon
enough. But when the World Trade Towers fell, whatever consumer
confidence was weathering the recession was badly shaken.
the traditional fall recruiting season in early October consulting
jobs for undergraduates had all but evaporated and weren't exactly
plentiful for M.B.A.s. The industry dropped to No. 11 on NACE's
list of this year's top employers of college graduates. Hiring
projections for consulting firms plummeted 89.7 percent, according
to NACE's April 2002 employer survey. It's part of a general 36.4
percent decrease in hiring for college graduates that reflects
the drop in demand for all professional-service industries. The
drought has made headlines across the country, with lots of "I
don't know what am I going to do" reports from jobless students
about to collect their diplomas and enter the "real"
no secret to anyone that consulting firms aren't hiring and in
fact are laying off," says Michaels at CAPS. "So what
are our students doing instead? They're looking for other stuff.
A lot are planning to go to graduate school. They're looking at
nonprofits, at programs like Teach for America. Some of the small
boutique consulting firms [with niche businesses] are coming to
campus, and they've been able to compete for students they might
not have in the past. And students are going into other business
the GSB, Associate Dean of Career Services Glenn Sykes reports
175 fewer consulting job offers than at this time last year, when
there were 263. "The growth in M.B.A.s' interest in consulting
went along with the growth in consulting," he says. "M.B.A.s
pursue growth. When growth shifts, their interests shift. Our
top hiring firms this year are companies that actually make things.
Students are realizing there's more stability in corporate positions."
inside consulting, the view is not great but not that bad. "I
think the economy is changing fundamentally," says McGrath
at McKinsey, calling the downturn "a lot less severe than
others I've seen in the past. The mid-1970s recession was quite
severe, and even compared to those in 1981-82 and 1990, this isn't
the same. Recessions are different now, at least for a firm like
ours that's geographically diverse. That means downturns don't
hit at the same time. Our European, Asian, and Latin American
practices are really strong. We have the rest of the world out
there, and in addition to that, our practice is pretty widely
based. We find now we're focusing on what we can do to make our
clients' organizations more effective or make cash registers ring."
message from Mary Tolan at Accenture is similar but the story
has a slightly different twist. "Accenture is less focused
on classical strategy studies and more on shareholder value creation:
how to double the client's share price, where the break-away strategy
for the firm is. We tend to form very close relationships with
senior-level executives and, taking their ideas, accelerate their
ability to implement them and get results." The firm's shift
away from information-technology systems and toward "value
creation" has been about seven years in the making, and,
she says, it's been a boon during this downturn.
in bad times clients want to improve their businesses," she
explains. "They want ideas that can get them cash flow quickly,
not some big hairy ERP [enterprise-resource planning] program
that's going to cost them a lot of money and not get immediate
results." She talks about solutions that take six or ten
weeks to implement rather than four years and her firm's expansion
into outsourcing-taking on a client's back-office functions so
clients can focus on core businesses.
news from Booz Allen echoes what McGrath and Tolan say. "We're
cautiously optimistic, and our clients are too. But it's a much
different marketplace than it was before," agrees Bessler.
"The work is there, but the clients are putting themselves
through the rigor of whether we consultants add value."
does that mean for job prospects? Not much-at least not for undergraduates,
in the view of Philip D. Gordon, director of the Collegiate Employment
Research Institute at Michigan State University. "In the
past couple of years consulting companies loaded up on new hires
and threw a lot of bodies at problems because clients had the
money to throw at problems," he says. "There's going
to be a restructuring after this recession," he predicts,
"and the demand for undergraduates isn't going to bounce
back." Many corporations, he believes, will tackle the strategy
problems that in the past they handed over to consultants. That
means the hiring demand among consulting firms, he concludes,
will be for "high-skilled people such as M.B.A.s-who will
allow consulting firms to be quicker and able to take on shorter-term
a vast, globalized company be so nimble? Freelance consultant
Jawharkar has his doubts: "Smaller consulting firms are very
quickly becoming more significant now, and not only because of
lower prices but also quality of work." Adds Susan Hendrie-Marais,
MBA'88, who left McKinsey ten years ago because she felt stifled
by the firm's highly structured approach and now freelance consults
for nonprofits, "Any large organization is not going to be
as fast or creative as a small organization could be."
the recession for the slackened demand for consulting services
and the downturn in hiring-but there also seem to be larger forces
at work, and Jawharkar's words are reminiscent of the environment
McGrath said his clients face.
growth and shifts in the consulting field has caught the attention
of, among others, Matthias Kipping of Great Britain's University
of Reading. "The evolution of the consulting industry and
of its preeminent firms," he writes in "Trapped in Their
Wave: The Evolution of Management Consultants," a chapter
in Critical Consulting (Blackwell, 2002), "is closely
linked to the development of management practice and ideology....
This means that consultancies are ultimately dependent on the
evolution of management." If Michigan State's Gordon is right,
the latest evolutionary wave is in our midst. It's plausible,
notes Kipping, that the large firms now dominating the sector
could, as McGrath suggests, "avoid the trap into which most
of the earlier generation consultancies have fallen. Their efforts
to diversify their activities and offer a broad range of services
might suggest they are better able to respond to future shifts
in the locus of managerial and organizational problems."
is among a small but growing number of business and social-science
scholars who have attempted in recent years to quantify the impact
of consulting work and to understand the complexities of the client-consultant
relationship. Perhaps most telling have been studies by Eric Abrahamson
of Columbia University who notes that, increasingly, it's consultants
and management "gurus"-and not academics-who generate
the ideas that catch on in the corporate world. In a 1996 Academy
of Management Review article, Abrahamson urged scholars, "not
only to study the management-fashion-setting process... but also
to intervene in this process in order to render it a more technically
useful, collective learning process...."
those on the outside looking in, consulting has a mystique that
can be almost frightening in its scope. Yet its allure is unmistakable,
if not addictive. "Do I feel like I'm a part of the consulting
world? Yes and no," says Ted Boles in his CAPS office, waiting
out another three months before he returns to Accenture. "I
feel a tie, a relationship with it. I'm hopeful this will happen."
Whether consulting will be the same industry it was when Boles
punched that FlexLeave button is anyone's guess.