So You Want To Be A Management Consultant?

1. So You Want To Be A Management Consultant? The Anderson School at UCLA

2. Our agenda for today’s presentation What a consultant does Overview of the management consulting industry The client engagement Interviewing with a consulting firm

3. First, some ground rules for today • This is NOT a Towers Perrin recruiting presentation • We may provide examples from our experiences at Towers, but this is meant as an introduction to the industry in general • Please ask questions throughout the day • We’re helping only if we’re answering the questions you want answered • There are NO stupid questions • It’s better to ask the “silly” questions now, rather than at a firm’s reception

4. What a consultant does Overview of the management consulting industry The client engagement Interviewing with a consulting firm

5. What is a management consultant? • Management consultants are business advisors to companies and other organizations • Client contacts typically are senior- and executive-level managers • Services may be provided in several areas, including: • Functional areas • Strategy • Information technology • Human resources • Operations • Logistics • Specific industries • Financial services • Oil and gas • Chemicals • Health care • High technology

6. This is what you hear a management consultant does . . . EXTERNAL ANALYTIC FOCUS INTERNAL • Competitive assessment • Customer satisfaction measurement • Benchmarking • Corporate/business unit strategy • Product positioning • Marketing/distribution strategy • Value chain analysis • Customer retention • Mass customization • Portfolio analysis • Shareholder value analysis • Business process improvement/reengineering • Cycle time reduction • Total quality management • Activity-based costing • Organization design • Change management All types of analyses must be performed in light of the client’s strategies

7. . . . but what does it mean to you? You will: • Be staffed on a project (as opposed to originating work) • Gather project data • Research the client, industry, and market • Conduct client interviews, secondary research • Work with/lead/facilitate client project teams • Analyze data • Tap into company resources and tools • Perform quantitative analysis (“crunch” numbers business-school style) • Perform qualitative analysis (e.g., use disparate data to develop findings) Continued . . .

8. . . . but what does it mean to you? You will: • Develop recommendations for discussion by project team members • Produce reports/presentations in conjunction with project team members • Participate in firm/internal development projects • Marketing/new business • Intellectual capital • Recruiting

9. So why would anyone in their right mind want to be a consultant? • Learn about lots of different industries • Work with bright, dynamic, hard-working people (like those you know in school) • Gain exposure to client senior management • Make a virtually “no-lose” career choice • Believe in the work you do: consultants make business and the world a better place • Travel • Find a highly legitimate way to make a transition from one industry to another • Develop a strong contact network to help you throughout your career • Enjoy the thrill and fast pace, especially as project and report deadlines near • Avoid having to figure out what you want to do when you grow up Source: Adapted from Wet Feet Press (www.wetfeet.com).

10. Why should you choose not to go into consulting? • You don’t have complete control over your schedule • Travel can wear you out • You don’t like the unstructured, ambiguous nature of the work • There is too much variety; you would prefer to develop depth with one organization • You don’t really believe that consultants add much value; you question the profession • The hours can be extreme and unpredictable • Your recommendations might not be implemented; final decisions are out of your hands • You prefer to work for or with small companies • You prefer being on the line and having profit-and-loss accountability • Your clients can fear and perhaps dislike you Source: Adapted from Wet Feet Press.

11. What reasons should not matter? • The money is too good to pass up; you’ve got student loans to pay • Travel is “glamorous” • Fancy restaurants, cell phones, and expense accounts • You want to impress your friends • “I can do it for a year, then move on to something else” • TheWall Street Journal says everyone’s doing it

12. What positions/careers/opportunities can result from your experience as a consultant? • A career in consulting • Consultant • Managing Consultant • Principal (Partner) • Practice Leader • Office/Geographic Manager • Skills for a different or enhanced career • Preparation for middle and upper management in industry • Preparation for entrepreneurial ventures • You name it Consulting allows you flexibility and opportunities for continuous learning, which can prepare you for a wide variety of careers

13. What personal attributes are required for success in consulting? • Intellectual and analytical ability • Ability to understand and work well with people • Ability to communicate, persuade, and motivate • Sense of humor • Intellectual and emotional maturity • Tolerance for ambiguity • Personal drive and initiative • Integrity • Physical and mental stamina Source: Adopted from Management Consulting: A Guide to the Profession.

14. What a consultant does Overview of the management consulting industry The client engagement Interviewing with a consulting firm

15. Over 60% of this revenue is generated by the top 50 firms Projected at 13% per year through 2000 Growth varies by consulting service line ‘92-96: IT 16%, Operations Mgmt. 14%, HR 10%, Strategy 18% ‘97: IT 29%, Operations Mgmt. 16%, HR 15%, Strategy 11% The management consulting industry continues to grow . . . Total Worldwide and U.S.Management Consulting Revenues $89.0 Size $73.0 $45.0 $40.0 $34.0 Revenue(in billions) Growth Source: Adapted from Consultants News.

16. . . . is still one of the mostpopular choice for Anderson graduates . . . Percentage of Anderson Graduating Class Entering Consulting Source: 1993-1999 MBA Program Placement Reports

17. . . . and is an increasingly lucrative choice as well Starting Salaries (mean and range) of Anderson Graduates Entering Consulting In Thousands Source: 1993-1999 MBA Program Placement Reports

18. Many major consulting firms trace their roots to other firms Arthur D.Little1886 One major parent Parented by two firms or more Acquisition 1910 1920 1930 1940 1950 1960 1970 1980 Booz- Allen 1914 McKinsey1926 TowersPerrin1934 Cresap1946 BostonConsultingGroup 1963 Strategic Planning Associates 1972 Bain1973 Braxton1976 Towers Perrin General Management Services 1983 LEK 1983 Monitor 1983 Alliance 1986 Quantum 1989 Source: Adapted from Bain & Company, Inc.

19. The major management consulting firms often are grouped into categories on the basis of their origin, but this can be misleading CPA HUMAN RESOURCES/BENEFITS INFORMATION TECHNOLOGY GENERALIST/ STRATEGY • Ernst & Young • Andersen Consulting • KPMG Peat Marwick • Price Waterhouse Coopers • Deloitte & Touche • Arthur Andersen • Grant Thornton • Mercer Consulting Group • Towers Perrin • Watson Wyatt Worldwide • Hewitt Associates LLC • Sedgwick Noble Lowndes • Milliman & Robertson • Buck Consultants • Alexander Consulting Group • A. Foster Higgins & Co. • Godwins International • The Segal Co. • IBM • CSC • American Management Systems • EDS • Metrius • Diamond Technology Partners • McKinsey & Co. • Gemini Consulting • Booz-Allen & Hamilton • The Boston Consulting Group • A. T. Kearney • Bain & Company • Monitor Company • Marakon Associates E-COMMERCE • Agency.com • Razorfish • USWeb/CKS • Viant • Zefer Source: Consultants News, July/August 1995.

20. Firm Worldwide U.S. Andersen Consulting $7,129 $3,578 PricewaterhouseCoopers $6,000 $2,700 Ernst & Young $3,870 $2,400 Deloitte Consulting $3,240 $1,480 CSC $3,000 $1,900 KPMG $3,000 $1,516 McKinsey & Co. $2,500 $1,023 Cap Gemini Group $2,261 $272 Mercer Consulting Group $1,543 $926 Arthur Andersen $1,368 $691 The ten largest consulting firms generate over one-third of the industry’s revenues 1998 Management Consulting Revenues* *Revenues in millions. Source: Consultants News, June 1999.

21. What a consultant does Overview of the management consulting industry The client engagement Interviewing with a consulting firm

22. Identifying the lead Selling the job Scoping the job Staffing the engagement Performing the work Identifying next steps Steps in a consulting engagement

23. Steps in a consulting engagement: identifying the lead Identifying the lead Selling the job Scoping the job Staffing the engagement Performing the work Identifying next steps • Marketing • Image/advertising • General promotion • “Events” • New business development (sales) • Market analysis • Internal referrals (LOBs) • Client referrals • Previous/repeat client work • Previous career contacts (industry and former consultants) • Personal or family contacts

24. Steps in a consulting engagement: selling the job Identifying the lead Selling the job Scoping the job Staffing the engagement Performing the work Identifying next steps • Identifying the issues • Selling = listening • “What keeps you awake at night?” • Probing for possible root causes • Proposing solutions • Alternatives/scenarios • Methodologies/approaches to determining desired results • Reaching agreement on how to proceed • Discussion/agreement • Letter of intent • Formal RFP (request for proposal) or direct proposal • Budget estimate (if appropriate)

25. Steps in a consulting engagement: scoping the job Identifying the lead Selling the job Scoping the job Staffing the engagement Performing the work Identifying next steps • Defining the scope • Identifying the approach and resources required • Tools/analyses to be used • Gap analysis • Roles and responsibilities • Client and consulting resources available • People for teams • Experts • Internal and external data/information • Developing the project plan • Identifying the deliverables • Defining the budget

26. Steps in a consulting engagement: staffing the engagement Identifying the lead Selling the job Scoping the job Staffing the engagement Performing the work Identifying next steps • People involved • Principal • Managing Consultant • Consultant • Associate • Other LOBs/experts • Roles of each/rationale for involvement • Experience • Expertise • Billing rate • Availability, geographic, and development considerations

27. Steps in a consulting engagement: performing the work Identifying the lead Selling the job Scoping the job Staffing the engagement Performing the work Identifying next steps • Working with client teams • Gathering data • Client interviews • Primary/secondary research • Surveys • Analyzing data • Creating the work product • Documentation • Working papers • Interim findings • Analytics • Recommendations • Presentations • Written product • Oral presentation

28. A real-life example: an aerospace/electronics firm Identifying the lead Selling the job Scoping the job Staffing the engagement Performing the work Identifying next steps Phase I Phase II Phase III Go/No-Go Decision Go/No-Go Decision

29. The project design specifies the consultants’ and client’s responsibilities I II III PHASE: Perform detailed analysis and develop recommendations Implement recommendations Establish the improvement business case Go/No-Go Decision Go/No-Go Decision DELIVERABLES: • Requirements definition • Issue and problem determination • Root cause analysis • Improvement opportunity identification • Process and roles and responsibilities documentation • Detailed issue, problem, and opportunity analyses • Improvement alternative evaluation • Recommendation • Implementation plans • Defined processes, structures, roles, responsibilities, and technologies • Trained staff • Pilot testing • Operational capability CLIENT COMMITMENT: • One phase at a time • Go/no-go decision points • Go/no-go decision criteria

30. Steps in a consulting engagement: identifying next steps Identifying the lead Selling the job Scoping the job Staffing the engagement Performing the work Identifying next steps • Immediate actions or analyses (for client) • Possible follow-on business (internal)

31. Issues in a consulting engagement:managing the client and changing priorities • Managing the client • Schedules/agendas • Access to client information • Education/coaching of team leaders • Unwilling client participants • Internal politics/agendas • Weak leadership/managers • Changing priorities • Vague/shifting/evolving scope of work • Budget limits/changes • Mid-project “discoveries” /new or different issue definition • Change in client project management • Loss of interest/new priorities • Corporate changes affecting the project (leadership/structural/ownership)

32. Issues in the consulting engagement: communication • Client Executives • “No surprises” • Client Workforce • Worry/uncertainty Project Team Consultants ClientTeamMembers Partners(often offsite) External Influences Press/Analysts Customers/Suppliers

33. What a consultant does Overview of the management consulting industry The client engagement Interviewing with a consulting firm

34. Laying the foundation for your success in the interview process • Assess yourself • Interests • Skills • Personality traits • Values • Formulate your career goals, narrow your focus • Find criteria to compare various career options • Don’t become frustrated; this step is difficult and time consuming

35. Preparing for the consulting interview • Visit the firm’s web site • Read the firm’s brochure cover to cover • Identify the particular industry/functional focuses of the firm • Become familiar with the firm’s organization structure/key terminology • Compare the firm’s core businesses with your interests • Use library resources for additional information • Lexis/Nexis, Hoover’s, Gladis, Internet, WetFeet, etc. • Attend the firm’s on-campus presentations/workshops • Search your school’s alumni database for company contacts • Talk to people at the firm and previous summer interns about specific questions you have • Practice case interviews

36. Other issues to consider in evaluating firms • Size of firm and clients • Marketing of the firm (i.e., image) • Degree of specialization (firm’s and yours) • Culture • Lifestyle issues • Travel • Overall environment/”feel” • Entry levels and promotion cycles • Typically staff consultants, project managers, and partners • Training and development philosophy • Defined core program • On-the-job training • Mentoring/development advisor • Profit model • How does the firm make money, and how does this affect you? • “Billability” targets

37. Questions and Answers What questions have we not yet answered?

38. Thanks for your time — and good luck at Anderson!