Or Private Equity guys that buy middling companies and make them excel.
Yes. Reminds me of all those SS ER guys. The return in their PA says it all.
They charge A LOT for common sense. I don’t see their value. Check their poor track record on Wiki.
As was said, much of consulting (not only strategy stuff from BCG but also stuff like financial restructuring from Big4s) is just about the board/management having a back up in case everything goes to shit, so consultants are just there to validate a plan.
Correct me if I’m wrong, but nobody goes to a consulting firm and say “hey, I don’t know what to do. Please send these polished kids you have there to give me ideas”. It’s more like “hey, we want to do this. So take your check and write how you think it is realistic”.
A lot of unversity grads want to be a management consultants as soon as they graduate, but very few of them have any knowledge and experience to offer, honestly, what can they consult in if they have no prior experience to speak from?
^ +100
Please…Nana do you really think Consulting firm clients are paying for the expertise of recent university grads.
Consulting clients are paying for the broad perspective and expertise of the firm, their points of view, methodologies, industry/functional background, benchmarking resources, etc. Recent college Grads after (3) years with one of these firms wll have outstanding and marketable exposure (and experience).
What recent grads do brings is they are bright and malleable and have demonstrated in school and internships a track record of amiition and success…the raw material needed to sustain these consulting firms.
The approach and governance in executing these engagements (in the better firrms) is top down driven. These people sell their services to a tought audience they generally know what they are doing.
Although consulting firms have a lot of new graduates, I doubt that it is common for firms to sign off on client services without the involvement of a more senior person. In industries like this, where presentation is very important, I’m sure there is a lot of due diligence, writing and drafting, and presentation work that can be done by new people, in addition to general research. Maybe someone who has worked for one of these places can comment.
On the other point - most companies probably have obvious areas that can be improved. However, management is always used to the way things are and politically invested in the existing company structure. Because of this, it could be useful to bring in consultants to support the controversial decision to make changes in the company. Consultants can also lend support for risky decisions made by management, so if things turns out poorly, they can say McKinsey agreed with me, but we are just unlucky.
In my experience, consultants are brought in when:
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There’s a well defined job that the management wants to be able to dismiss the consultant, once its over. Thus, the consultant is more like a temp worker than a true consultant.
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There is an internal idea that needs external validadation in order to push the idea through middle management as “recommended by people who want to make our business better.” Usually the idea is set, or decided on early, and the consultant provides political cover for upper management.
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The management wants to do a process where having some perspective on how the process has worked in other companies and settings can be valuable. Thus, the broad outline of the changes is known, but what is valuable is managing the way those changes get expressed in a particular corporate culture. The consultant adds value for being able to solve expected or unexpected problems quicker than the home management could, because they’ve recommended all the same stuff to other organizations and watched it unfold.
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Management is secretly hoping that “best practices” will include some of their competitors secrets which they can steal or leverage.
Do you think that there are CFAs who do management consulting for financial firms?
I’m sure there are at least some… but realistically, people who work for McKinsey and similar places already have top tier undergrad, MBA, or other credentials like that. They do not need to waste time on stuff like CFA.
^ There are some CFA’s in McKinsey’s corporate finance practice, but not many. Competitive strategy and industrial structure are still at the heart of what McKinsey does.
More thinking for myself or others here who have already wasted time on that stuff. If someone on here who went back to a top MBA and then talked to a management consulting firm what do you think they would think of the CFA? Do you think they’d be considered higher billing and given more compensation? Just curious.
Probably not. I did not mean to say that CFA is always a waste of time. It is probably just not important for management consultants, particularly those who already have strong professional backgrounds.
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All else equal, a new McK associate out hired of business school gets an additional $0.00 if they have their CFA. You get hired because of your qualifications. Qualifications are table stakes, and if you get an offer, then they give you a salary that is pretty standardized across the board. You don’t get “extra” just for passing some exam, just like I didn’t get a higher offer from McK than any of my peers for having spent 6+ years in investment banking, equity research and private equity which are worth a whole hell of a lot more to potential McK clients than the CFA anyway.
A professor of mine (harvard MBA) worked for mcKinsey work a couple years and he told us these consulting companies sometimes hire people with obscure qualifications to impress their clients. He has met olympic medalist (who may also have a minor in business or econ or whatever) in the firm for that specific reason.
Clearly i am not saying that’s all they hire, but it’s an interesting mix of people.
i think nana would make a great partner at McKinsey…she knows everything about everything and gives good advice.
whats the pay like at these joints?
If these people eventually venture into investment management, I would like to see CFA after their name. If their top tier credentials were obtained through merit, I wouldn’t think it would be too big of strain on their time to pass three exams that cover basic finance. I like the idea of having an objective measure of a minimal level of fitness. If they are “famous” and their knowledge, aptitude and experience are without question, I would give them a pass, but they would get a big pat on the back if during an October interview they said I’ll knock it out in 20 months if you hire me.
Thanks 