Options for Post Consulting Careers

Question:

First, let me tell you that LOMS has been of great help.

It was interesting and very concise.

Thanks to it, I was able to get an offer from BCG and Oliver Wyman.

I really enjoyed meeting the consultants, but ultimately feel BCG is a better fit.

In any case, I have a question for you regarding Consulting vs. industry. I have been told that one year in consulting = 2 - 3 in industry.

How accurate is that in practice? If I leave a consulting firm, what's next?

I hear many people go into positions in strategy. But is there something else?

I imagine someone interested in product/marketing management is better off going into industry. Any thoughts?

My Reply:

First off, congratulations on your BCG and Oliver Wyman offers. I am glad my guidance has been helpful to you in this next step in your career.

Let me start by answering your question about career options after consulting.

The short answer is that you can pretty much do anything... literally.

So yes, I do think that 1 year in consulting is worth 2-3 years in industry... but more important than the years' ratio is the quality of those years.

In consulting, you work on very high-level strategic issues, board-of-director-level issues.

There are many, many, many people in industry who work 30 years and never work on a board-level issue. In my three years at McKinsey, I worked on close to a dozen such issues.

Board issues are very different than functional issues, which is the more common experience you see in industry.

If someone works in industry for three years in marketing, they have three years of experience in marketing.  The experience in consulting is more akin to CEO-in-training-type experiences.

You are simply able to "connect the dots" between disparate functional issues that those in industry are simply unable to see.

For example, if a customer complains that customer service is lousy: Why is it lousy? Is it because the company hired the wrong CSRs (customer service representatives)? In which case, it's a human resources issue.

Or did the company hire the right people, but how they are being deployed is causing the complaints. In this case, it is an issue with a client services’ incorrect decision.

Or are clients unhappy because your products stink?  Is that a design problem? A manufacturing problem? Or a problem involving sales and marketing over-selling and over-promising in their messages, causing the client to have unrealistic expectations?

Or are retail partners selling the product in such a way that is somehow incomplete? Thereby causing the end consumer a negative customer experience.

Given something as simple as a recurring customer service complaint, what is the actual problem?

A VP of client services with 20 years could not tell you the underlying cause of the problem.

They would tell you how many more people are needed to staff up to handle the complaints, but they are generally not cross-functionally and big-picture-oriented enough to "see" how the pieces of the puzzle (the different functions in the company) interconnect.

The VP of human resources could not either. They could tell you how to hire better CSRs or implement a re-training program, but doing a cross-functional root cause analysis is not in their usual job description either.

Generally speaking, in many companies (perhaps Fortune 500 companies with strategic planning departments excluded) there is often one person who has this cross-functional and big-picture perspective -- the person running the business.

Yet, in just 18 months of work in consulting, you quickly develop this skill, which is in extremely short supply in industry.

This allows you to tackle any role with this particular perspective in your tool bag.

Here are some examples of jobs and roles my friends took after 2 - 3 years at McKinsey.  Keep in mind my colleague group started at McKinsey after undergraduate, so you'll see some go to grad school.  The career choices for Associates after three years is similar in terms of industry (minus the grad school).

* Harvard or Stanford MBA

* Yale Law

* Started an internet company (two sold theirs for $80M+)

* Work for an LBO firm

* Help run a non-profit

* Work for a mid-size movie studio

* Become chief of staff for a CEO

* Work in product management

* Become a chief information officer of a startup

* Work for a client and run a division of the client's company managing 300 employees

*Work in strategy or business development for a big company

* Become an independent film writer and producer

* Go get a PhD in Psychology

* Run their parent's family-owned small business

* Work for one of the major fashion designers in NYC

Here are where some of my friends from BCG, Bain, Mercer, etc... ended up working.

* Ran a part of gap.com

* A partner at a venture capital firm

* Partner at a private equity firm

* VP of marketing for Ghiradelli Chocolates (after working in brand management at Clorox)

* Ran a product management group at Paypal

* Worked in finance at Pepsi, HBS, Brand manager at Oral-B

* In charge of global marketing launches for Gillette

The mix of industry and roles is constrained not by your skills, but by your preferences. You will notice the roles are really all over the place -- very much reflective of personal interests that any kind of restriction based on qualifications.

The only field I can think of where consulting is a major negative is a highly creative field. One of my friends at McKinsey tried to break into Hollywood -- working for one of the big Hollywood agents.

He found that McKinsey on the resume was a liability.

If you went to work for a fashion designer on the design side, I think consulting would be a liability... a degree from the FIT - Fashion Institute of Technology (I think is the name) would be more credible.

Though I know several people who went to work for high-end designers on the business side, and the experience was very much valued.

Personally, I went down the startup route.  I started one of the first social networking companies in the world -- about five years before Facebook got started.  60,000 users in the first 60 days, no revenue model in sight, end of story.

I later became what is now known as chief of staff to the CEO of another startup company, stepped in as interim chief information officer, helped the company go public writing parts of the SEC filing documents, and took on a permanent role as VP of product management.

Ran a $20M division of another publicly-traded company while my wife went to Harvard to get her MBA, decided to focus on having kids. Ditched the career in software.

Started my current company, which over a few years of fumbling my way around in ecommerce, morphed into the consulting company that is it now.

Published four business books. Serve as an expert source for various media organizations - Fox, MSNBC, TIME magazine, the Wall Street JournalInc magazine, EntrepreneurForbes, etc...

Basically, I answer business questions for reporters in much the same fashion I answer your questions for you.

So, that has been my career path. Lots of startups, technology, product management, product marketing and consulting (for small and mid-size companies).

One thing that is worth pointing out is that in the two companies where I worked as an executive, I was very consistently seen by many in the company as the likely future CEO of the company.

This was the case in large part because I could see how all the pieces of the company fit together, and others with deep functional experience did not have this breadth of perspective.

Though this did cause some resentment with some, due to my age only being in my mid 20's at the time.

So, the value add of the consulting experience was that I could run my department or division effectively while being able to see how it fit into the whole... and I was one of the few, if not only, people in the company capable of troubleshooting a cross-functional issue. Nobody else had the breadth of experience to do it.

My career trajectory as an employee in industry was equally as fast as my trajectory at McKinsey -- and I believe the latter enabled the former.

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40 comments… add one
  • Howie Oct 8, 2013, 10:23 pm

    Hi Victor,

    I have an engineering background and worked for almost 5 years in technical roles.

    I have a choice of moving from a ranked-60ish B-school to a top-10 B-school (different start date). Down side is, to move to the top rank B-school, I have to wait 2 months, retake my GMAT (as I heard it will be important for my post-MBA employment) and take a huge loan whereas at the moment I don’t have to pay anything. I am very worried that I will be pennyless with a huge education loan when I graduate.

    I am almost 1/4-way through my current B-School and I am thinking of trying out a career in management consulting when I graduate. Will you choose to stay or move if you were me ?

    Apologies if I sound like I’m ranting a bit, but it’s been keeping me awake at night and would like to know your opinion on this. Thanks in advance

    Howie

  • TA Mar 26, 2013, 12:01 pm

    Dear Victor,

    I am undergraduate chemical engineer senior in a Tier 1 engineering institute in India. I have a job offer from campus in hand, but I wish to make a career in business consulting.

    Should I try applying for boutique consulting firms? What are the future prospects for the same. Does experience at such a firm hold significant value? Can it open up doors for the big consulting firms or say opportunities at good consulting firms in the US.

    Regards,
    TA

    • Victor Cheng May 29, 2013, 2:40 pm

      Boutique consulting firm experiences called to a good business school acceptance, which in turn can lead to a top consulting firm. It is extremely rare to jump from a boutique firm to a top firm directly.

      If your goal is to work for a top US firm in the US and you are to currently in the US, the best path is to aim for a US MBA at as a good a school as you can get into, and then transition from there.

      Victor

  • Alexander Lu Mar 8, 2013, 10:45 am

    Hi Victor,

    My name is Alex. I only came across CI recently. Dont mean to flatter,, but can I say that your site is the best consulting prep site I know so far and your book is amazing!

    Im currently working for a boutique strategy house in London that only deals with buyouts and capital markets. After 1.5 years I realise I am more interested in following deals and buyouts than the doing actual consulting and strategy work…

    Since I dont come from a MBB background, would you suggest I follow the typical MBA -> buyside route or should I work my way into a MBBs?

    My personaly view is that getting a solid brand on CV is THE KEY for PEs and IBs and it’s really hard to make a move without a proper brand. Boutique consulting firms generally dont have much exit options…

    Im just wondering what is your view on this?

    Many thanks

    Alex

    • Victor Cheng Mar 8, 2013, 1:07 pm

      Alex,

      Thank for your very kind words.

      In my experience tier 1 PE and IB firms are fairly brand conscious, especially PE firms. If those are your goals, a tier 1 MBA would help a lot.

      The exit options for boutique consulting firms are typically – working in industry, working for other boutique firms, lateral moves to boutique firms in other fields (e.g., smaller IB firms, asset management, etc…)

      Of the people I’ve know who have “upgraded” their employer prestige level, all of them did a tier 1 MBA first. The signal value of the tier 1 MBA can significantly overcome the bias the tier 1 firms have against tier 2 firms listed on resumes.

      Victor

  • Vishwas Arora Nov 2, 2012, 3:08 pm

    Hi Cheng

    I have been following your posts and find them really helpful.

    Well, about me – I am Vishwas Arora and I am presently working as an Executive Assistant to COO of an Indian steel major. I hold a bachelor’s degree in metallurgical engineering from IIT Bombay (2008).

    Last four years at Essar Steel, I have been working with the senior management team on providing and implementing solutions for managing huge capital projects, procurement practices, productivity enhancements and cost reduction.

    My long term plan are to acquire strategic CXO position in a Fortune 500 operations / manufacturing organization and to achieve my goals, I am considering doing an MBA next year.

    In order to reach my long term goals, post MBA, I am considering Consulting as a bridge between my past accomplishments and future plans. In my opinion, a career in Consulting will provide me the enriching experience dealing with all facets of an organization.

    Sorry for the long verbose, but I actually needed some guidance as to how will the career of a professional like me progress in a global management consulting firm like McK after an MBA from a top B-School.

    Will I be considered for a Generalist BA profile or an Associate or may be for a Subject Area Expert? How will the progression be like when I would want to widen my portfolio in consulting from an Operations function to Strategy function? Am I going in the right direction?

    This will also be a part of my research for presenting a convincing case to the admissions committee of the Business School.

    I would be highly obliged if you could please throw some light on the above mentioned points.

    Thanks in advance.

    Regards
    Vishwas Arora

    • Victor Cheng Nov 5, 2012, 2:15 pm

      Vishwas,

      If you get a MBA and then apply to McK, you would be considered for the Associate role. You could in theory apply for a specialist role if one existed in your field of expertise (steel). However, given your longer term goals, I would try for the general Associate role as your work will be broader and you’ll see a wider range of industries and business issues than in a specialist role.

      Good luck!
      -Victor

  • Victor Cheng Jun 19, 2012, 4:01 pm

    For a transition like that into PE, you need more credibility on your resume. I would suggest getting a top 10 mba as a stepping stone. If you can excel where you’re at, that may be enough to get into a good mba program. I would then suggest mba -> private equity, or mba-> top consulting firm -> networking to PE

  • Sharon Jun 19, 2012, 3:47 pm

    Hi Victor,

    Thanks for your reply, I am considering stay in consulting industry for 2 to 3 years, after that i would like to go to private equity or corporate finance. I just wonder, should i seek working opportunities in a larger consulting firm ? Or i should stay for a longer time in this boutique firm ?

    Thanks,
    Sharon

  • Victor Cheng Jun 19, 2012, 3:29 pm

    Sharon – Rather than ask what COULD you do next career-wise, I would suggest asking yourself what do you WANT to do next?

    My ex-McKinsey colleagues are university professors, film producers, CEOs, private equity partners, entrepreneurs, non-profit leaders… it’s a pretty wide range.

    Victor

  • Sharon Jun 19, 2012, 2:16 pm

    Hi,

    I would like to know if i have worked for a large financial company as an analyst for 2 years, and now i am working for a boutique consulting firm (size likes Spectrum value partner etc) for almost 3months, i would like to know what can i do next ?

    Thanks,
    Sharon

  • Victor Cheng Jun 12, 2012, 3:53 pm

    Jeremy

    Unfortunately I do not have any human capital type frameworks.

    Victor

  • Jeremy Jun 1, 2012, 12:28 am

    Victor,

    I first want to thank you personally for helping me get through two rounds of interviews at two prestigious consulting firms among the Big 4. Your coaching and tips have proved to be invaluable for someone with a humble background and eduction – I only have a bachelor of arts degree from a liberal arts college and 2 years work experience.

    I am approaching the case interview for Human Capital positions – specifically geared towards people, change, and org transformation. Do you have any sample case interviews or tutorials addressing these specific areas? I found your M&A tutorial helpful, but not particularly geared towards human capital. Any tips and help you can provide would be much appreciated!

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