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Musings on the Makeup of Consulting Analysts

Heidi wrote a very thoughtful post that profiles my blog. Her blog is currently oriented towards the research of the management consulting profession. Her investigation appears to be in part motivated by an investment banking friend that indicated, "… you should be a management consultant. You’re a good question askerer and it suits your personality". She is trying to learn more about how to get an internship with one of the top firms. In my opinion, the Vault is a go-to source for information on careers in consulting.

Heidi’s post made me realize that I have posted very little on analyst positions within consulting firms. Analyst positions are non-partner track positions within a firm. Often analysts are hired into a consulting firm with the expectation that after a couple of years with a firm that the analyst may return to get an MBA degree (after which, the analyst may choose to return to a consulting firm at an associate-level position [which is an entry-level, partner track position]).

To set some additional context, the most popular paths to becoming a management consultant fall into three categories:

  1. Get an MBA at a top school and get a decent shot at becoming an associate with a firm (this is the path I took into the field)
  2. Get a PhD and get a shot at becoming a consultant with a consulting firm that has a track record of hiring PhDs
  3. Get an undergraduate degree (e.g., business, economics, liberal arts, engineering) and get a shot at an analyst position with a consulting firm

Although analysts vary widely, the consulting analysts I have worked with strike me on a number of dimensions:

  1. Good to excellent at marketing research, combing the Internet, and finding sources of information – many of the analysts I have seen are better than the average associate, manager, principal, or partner within the firm in terms of obtaining factual business information to support a project, whether via press releases, research reports, company filings and financials, company knowledge base, questionaire, or even client secretary.
  2. Good to excellent vertical industry knowledge – it is not unusual for analysts to know more about industry trends, stats, happenings, etc. within a vertical (e.g., healthcare or mobile wireless) than 1st- or 2nd-year associates who may be more focused on project concerns and problem solving.
  3. Diligent, organized, and curious – based on a combination of having to both comb through tons of information and support numerous consultants working particular workstreams of a consulting engagement, analysts have to be diligent and organized. Curiousity is something else I’ve noticed in many analysts. Many are hungry to learn and to seek knowledge.

Analyst positions are great ways to enter the consulting area. Although I haven’t performed a detailed numerical analysis, I would suggest looking at larger firms (e.g., Booz Allen, Accenture) for these types of positions. It is my feeling that smaller firms tend to have much fewer of these positions available proportionate to demand (which makes it hard to land a position from a pure probability pespective).

Update (1/25/07): Amaresh has another great point below, which I replicate here "One more point I will add is that most of the good analysts have atleast one very solid core skill (i.e. doing very good research,financial analysis, statistics etc.), which they have developed during their undergraduate project or course work."

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The Workshop Method As Part of Strategy Consulting

Client workshops are elements that I have often seen as part of consulting engagements, but I have found little written information about them (unlike the topic of client interviews, which I discussed here). I have often set up workshops for engagements related to business or marketing strategy, but workshops are not limited to these scenarios.

Suppose a client is looking to enter a new business, and they want to determine a strategy for entering the business (in terms of business structure, channel structure, pricing methods, division of operational responsibilities, etc.). A consultant may structure a workshop where key elements are discussed in a management or executive setting with a client:

  • case studies of competitors
  • case studies of comparable companies in related sectors
  • consultant research and points of view on client issue area
  • client point of view and prior experiences
  • industry trends, unsolved problems, and/or sexy solutions

By engaging in a workshop, the consultant helps to level set with the client and to ensure that many points of view are brought in (especially to encourage "blue sky" thinking). Note that the workshop is also very focused on setting up a fact-based foundation. In this structure, any opinions can be framed within a structured environment. Such a structure helps consultants from giving and clients from receiving shallow advice.

Note that other frameworks can be weaved into the workshop structure. For example, suppose the consultant has specific methodologies for assessing whether a product development process can be improved and that this methodology covers four distinct areas. The workshop can be carefully designed to weave around those four areas.

The workshop needs to have specific goals in order to be effective. In some cases, the workshop may be a first step to get the client thinking about where they think priorities should be for their business. In other cases, the desired outcome of the workshop may be for the consultant to help the client with two to three focus areas that become evident during the workshop. Other outcomes might include performing financial analysis of different business scenarios/ideas generated during the workshop. The possibilities for workshops within consulting engagements are endless. But one of my favorite ways for thinking about workshops is as a way to stretch people's minds while facilitating a fresh start in attacking business problems within a fact-based framework.

Update (1/17/07): Phil's comment (#1 below on role playing) is very noteworthy to mention, especially since he is a very experienced consultant part of the inner circle of consulting (principal and partner+ levels within many consulting firms).

Update (1/23/07): Gautam Ghosh contributes to the workshop dialogue here. Thanks!

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On The Contributions of Management

One of my wife’s professorial colleagues in the business school, Dr. Steven Postrel, has a post over at Organizations and Markets (hat tip: Virginia Postrel), which starts off by posing the question, "What contribution does management make toward producing output?". One item that drew my attention (snipped a little out of context) is:

In other words, management’s effect on capabilities is best understood as avoiding incidents of inconsistent behavior.

Consistency analysis can be an important tool to use in management consulting. I refer to a different flavor of it in an earlier post as one fail-safe method (method of last resort) for approaching management problems when one cannot rely on external benchmarking information or clear business theory. I will say, however, that seeking consistency at a tactical management level presumes that consistency is the right strategy in the first place (which may be considered a leadership or portfolio concern)!

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For My iPhone Diary

The sneezers are singing the praises of the iPhone today:

  • Om Malik (communication and telecom blog) here on the end of an era (or mark of a new era) and here on form factor and packaging
  • Mark Evans (Canadian telecom blogger) here
  • Paul Kedrosky (finance, VC, and tech blogger) here on capital market reactions of Apple, Nokia, Motorola, Palm, and RIM/Blackberry to iPhone showing
  • Matt Marshall (at VentureBeat) here
  • Esme Vos (Muniwireless blog specializing in municipal wireless coverage) says here that we need more muni WiFi just for the iPhone
  • Kottke (uber independent blogger) here

Some of the competitors are shrugging or more lukewarm:

  • Microsoft’s pre-emptive pooh-pooh
  • Nokia VP’s statements that the iPhone confirms convergence but that 2G device slant (versus 3G device) was a surprise

Other notes:

  • Cingular has 58.7 million subscribers (see here)
  • "iPhone will be available in the U.S. beginning in June 2007 in a 4GB model for $499 and an 8GB model for $599, and will work in combination with Apple’s iTunes running on either a PC or Mac." (Cingular news release)
  • Note that I am not clear whether the prices above are retail or inclusive/net of typical handset subsidies that are borne by carrier as part of subscriber acquisition costs. There have been reports that a 2-year contract is required, but it is still not clear whether the prices mentioned are net of subsidy.
  • Apple wants to sell 10 million in 2008 (here). (Note: That’s a lot of subscribers and/or channel pumping given my first bullet point above in this section and given an exclusive carrier relationship)
  • Random history on iPod pricing (post includes graphs)

It will be interesting to see what the mavens of the world uncover about the iPhone specs. It looks like a cool device presentation-wise for sure. I am curious how the battery life will be though. I am used to running my iPod down on power, but I don’t like running my cell phone down on power.

Updates (1/11/07):

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A Couple of Blog Links

I wanted to point out a couple recent posts and blogs that relate to topics that I’ve touched on before:

  • Poweryogi’s post on interviewing experiences with consulting firms. I sympathize with his experiences – interviewing in B-school is not a fun process in many ways. I had an earlier post that described how interviewing can in many ways be like the "Pepsi Sip Test".
  • A blog on Intranet blogging, by corporate intranet blogger at Intel, Ricardo Carreon. Beth Kanter, thanks for forwarding the info! I had back in 2005 worked with companies regarding intranet blogging as well as created a whitepaper on intranet blogging here (note PDF file).
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Update On Management Consulting Blogs

Close to two years ago (in February 2005) I wrote an original post that noted a dearth of blogs by traditional management consulting firms. Six months after that post, I wrote an update where I happened to run across a few more blogs by individual consultants.

Since that time, I’ve run into many more blogs that are associated with management consulting, such as Guerrilla Consulting, David Maister‘s blog, and the Management Consultants’ Blog.

I also ran into a few more blogs that I closely associate with big name, traditional consulting firms (either because the blog carries the company banner or is written by an executive at the firm). Note that even though the blogs likely reflect the perspectives of the individuals and not the perspectives of the company, I still have some loose mental association between the individual and the firm. In any case, the other traditional consulting firm blogs I’ve run into over the past two years are:

In the past, some folks had indicated that a dearth of management consulting blogs may have been due to concerns about unwanted disclosure of confidential information. I’ve not heard of any cases to date, not to mention any disclosures that would indicate that blog media increases chances of disclosure over other media. (That said, there are clearly cases where the blogosphere amplifies the transmission of information which could be argued increases general risks associated with corporate blogs or those loosely associated with companies).

As an additional note, I find it interesting that the four traditional consulting firms that I mention above all have a strong technology competency associated with their brand. For example, Accenture not only has a strategic management consulting practice but also has a strong systems integration practice.

Update (1/4/07): Per comments below (Thanks, Amaresh!), Diamond has a blog by its information and analytics practice. From the looks of it, it is a unique blog that sheds some light on more rigorous consulting practices that top consultants strive to implement for their clients.

Update (1/9/07): Booz Allen Hamiton podcasts here.

Update (3/8/07): Accenture has started a corporate blog here.

Update (3/12/07): Although apparently not officially attached to the "Firm", McKinsey alum Paola Bonomo commented here (thanks, Paola) and points us to a wiki of McKinseyite and McKinsey alum blogs.

Update (10/13/07): Consultant Ninja has a blog over here. Thanks for the links! Sorry I was not able to comment on your blog as it does not accept users without Google logins.

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Goal Setting and the New Year

I’ve never been one to have new year’s resolutions stick very well. I think in prior years, I have had goals about exercising more, eating more healthy, spending more wisely, etc. The general sayings are that goals should be specific and that  one should regularly monitor and measure progress towards goals. No arguments from me there.

Still I’ve managed to make progress over the years and keep things in balance. Making progress and actively thinking about what I would regret if I did not do something – these are two things that have worked for me.

On "making progress", I remember working in one startup and working very hard. But after a year had passed, we had wondered whether we were pressing too hard and running the business model in the right direction. Of course, we had had some tremendous wins and beat the odds that year, but we had to step back and think about whether we were making significant enough progress. In the end, we decided to change directions, and people generally felt better and resolved about new direction.

To illustrate the second point on regret, on a personal front, I had a decided a little more than a year ago to "trade down" on my near-term career potential. The guiding principle steering that decision was that I was thinking about how much I was going to regret other things going on in my personal life if I decided to forgo those things for a "richer" professional life. Careers can always take new turns. They can restart at any point. But some things in one’s personal life only come once. Actively thinking about regret made me make the right choices. As another story, although I’ve never asked my father, I like to think that one of the reasons he stopped smoking many years ago was because he thought about regret scenarios. It wasn’t a twelve-step program that got him to make significant self-improvement. It was one wake-up call.

I don’t pretend to know what works for other people in terms of new year’s resolutions and setting personal goals, but feel free to share your stories. As 2005 closes out, I wish everyone a safe holidays and best wishes for the new year. Best!

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