Consulting is a term for providing business advice on various topics including, corporate strategy, product development, marketing, information technology, and operational improvement. But what most people mean when they talk about consulting is management consulting.
Management consulting firms include top strategy firms such as Bain, BCG, and McKinsey. These firms hire business-savvy problem-solvers to help their clients:
- Define the problems or opportunities their businesses face,
- Collect and analyze data to better understand the problem/opportunity and identify a recommended course of action, and
- Plan the implementation of that solution across the company.
Think of consultants as “doctors” for businesses – brought in to diagnose the root cause of an issue and then prescribe and implement treatments.
My Consulting Offer’s coaches have experience as consultants at Bain, BCG, McKinsey, and various other management consulting firms. We can give you insight into the industry and tell you what consultants do.
In this article, we’ll discuss:
- What is consulting?
- What do consultants do?
- Benefits of a career in consulting
- Downsides to consulting work
- Typical management consulting salaries
- How to become a consultant
Let’s get started!
What Is Consulting?
There are multiple ways to answer the question “What is consulting?” To dig deeper, let’s continue with our analogy of consultants as doctors for businesses.
- Assessment of symptoms: A client knows they’ve got a business problem (such as declining revenue or a new competitor in their market). They turn to a consultant for help getting to the root of the problem, as a sick patient would turn to a doctor.
- Diagnosis: The consultant assesses the client’s business performance, taking into account similar problems they’ve seen at clients in the past, like a doctor would check their patient’s symptoms against known illnesses.
- Prescription: The consultant recommends a course of action to improve revenues or meet a competitive threat, much like a doctor would tell their patient what’s wrong with them and prescribe medicine or recommend a medical procedure.
- Bedside manner: The consultant has the experience to steer a client to the right course of action as a doctor would advise a nervous patient.
- Follow-up care: The consultant provides the client with a step-by-step process to improve their business results, much like a doctor provides a patient with the steps necessary to regain their health.
Why does anyone trust a doctor? Because they are experts in their field and have extensively studied the human body, the injuries and illnesses that can afflict it, medicines, and surgical procedures.
Consultants, similarly, are business experts. They can lead the client through a fact-based analysis of their business problem and the evaluation of alternative courses of action. They can also leverage their firm’s collective knowledge to bring extensive industry and functional expertise to bear to solve the problem.
In addition, consultants can provide expert capabilities on topics that businesses rarely face.
For example, a manufacturing company might only consider a merger or acquisition once every 10 years. Because of this, it doesn’t make sense for them to have M&A experts on staff full-time. But mergers and acquisitions are high-impact business decisions that a client won’t want to get wrong. Consulting firms look at M&A deals all the time, and by hiring consultants, a client can access this specialized expertise when needed.
Exclusive Free Training on passing consulting case interview.
What Do Consultants Do?
Consultants solve complex business problems using their expertise and knowledge in specific industries or functions. This ranges from cutting costs to growing sales or evaluating a new market the client is considering entering.
Let’s explore this question by walking through a sample case from start to finish.
Sample Case: Concert-mania
Concert-mania, Inc. runs several music festivals featuring big-name recording artists each year. Recently, they transitioned to cashless events, with customers paying for tickets, food, drinks, and merchandise with credit cards.
Concert-mania wants to leverage its new digital capabilities to increase revenue and optimize its staffing and operations during festivals.
How would a consulting team help Concert-mania to take its use of digital tools and data to the next level?
- Assessment of Symptoms: Consultants define the problem.
- Diagnosis: Consultants collect and analyze data.
- Prescription: Consultants recommend a course of action.
- Bedside Manner: Consultants gain consensus among the client’s leadership team.
- Follow-up care: Consultants help implement recommendations, if necessary.
Assessment of Symptoms: Consultants Define the Problem
Suppose Concert-mania knows it can do more to take advantage of digital tools than just make festivals cash free. But management disagrees about what opportunities would be the best to pursue.
The head of marketing wants to use digital tools to increase revenue at each festival by making it easier for attendees to buy drinks and merchandise, and encouraging them to buy more. The head of operations, on the other hand, wants to use digital tools to reduce costs. Quicker transaction speed means less staff will be required in the beer tents and merchandise booths.
Part of the value consultants provide is quickly assessing the opportunities. By doing an 80/20 estimation of the value of digital tools and whether the high-value opportunities lie in increasing revenue, decreasing cost, or both, the consultants can help ensure the entire management team is focused on the right problem.
The importance of quick but reasonably accurate assessments of alternative courses of action is why market-sizing cases are used in consulting interviews.
Diagnosis: Consultants Collect and Analyze Data
While an 80/20 estimation of the opportunity is enough to define the problem and get the client and consulting team organized to solve it, further analysis is needed. At this stage, consultants dig deep into data that is often hard to gather or not clean/organized enough to yield insight without significant work.
For instance, the Concert-mania consultants might attend a festival or two, not to see the performances, but to count the number of people in line for beer and merchandise, time the speed of transactions, and measure the frequency of stock-outs to assess how much revenue might increase if digital technology was used to streamline operations. They’d also evaluate alternative technologies to determine which would work best.
Consultants will talk with the marketing and operations teams to get the client’s input on the improvement opportunities and best tools. They’ll also talk to clients to find out what they like or dislike about how festivals are run and the changes under consideration.
The team will calculate the expected revenue increase and cost savings, and compare them to the cost of investing in digital tools to evaluate whether there will be a positive return on investment.
Prescription: Consultants Recommend a Course of Action
After completing a robust, data-based analysis of how much Concert-mania can increase revenues or decrease costs through using digital tools, the consultants will develop a recommended course of action and discuss it with senior management. This course of action includes details of the implementation steps needed for the plan to be successful.
Bedside Manner: Consultants Gains Consensus from the Client’s Leadership Team
In the same way that consultants help to define the problem, they also help to gain consensus around the solution.
Suppose when they defined the business problem, they found that most of the opportunity was through increasing revenue, not reducing costs. Nonetheless, the marketing group can’t implement the new digital tools on its own. The operations group needs to be on board because their staff will operate the beer tent and the merchandise booths.
If the operations group’s input into the best tools and new processes isn’t taken into account, the project rollout will not be successful, and the festival’s net income won’t change. It’s also critical that all parts of the client organization see the decisions as being driven by data, not by management favoring one department over another. This is why consulting firms hire people who are great problem-solvers and consensus builders.
Follow-up Care: Consultants Help Implement Recommendations
When Concert-mania decides to adopt new digital tools to increase revenues, there’s still a lot of work to do. This work includes buying the tools, customizing them for their operations, and training staff on how to use them.
The consultants on the Concert-mania study will lay out a step-by-step plan to implement the recommendations. This plan will identify the capital and staff time needed to purchase and customize tools and roll them out. It will also include a timeline for the final implementation.
As you can see from this example, consultants don’t just solve problems. They also ensure they are solving the right problem, being data-driven in their recommendation, getting the entire client organization on board, and assisting with implementation.
If needed, they will also help the company learn new skills so they can hire or build the new capabilities they’ll need to succeed in the future. Consulting is all about helping the client build a self-sustained, well-run business.
Examples of the Impact of Consultants
How BCG Helped Starbucks Create the Starbucks App
If you’ve ever ordered a drink from Starbucks, you’ve most likely benefited from the application development that BCG helped Starbucks implement.
Starbucks hired BCG to help develop its personalized recommendations. The goal was to increase revenue by engaging and attracting more long-term customers by giving them more personalized experiences every time they open their app to order a drink.
Have you ever been lured into purchasing a drink by the Starbucks app? Convinced you need another mocha latte by a double-star promotion? Or played one of the games to earn that big bonus or free Starbucks for a month?
The Starbucks application collects data, including your most-purchased beverages, the time between your purchases, and even the time of day that you most frequently purchase drinks. All this data and more are analyzed so that Starbucks can monetize your caffeine addiction.
“The personalized games have helped to triple Starbucks’s marketing campaign results, double email redemptions, and generate a threefold increase in the incremental spending of customers who redeem offers. The results come with increased marketing effectiveness, enabling Starbucks to reduce its mass-marketing spending and invest in more-personalized marketing dollars with the right customers, thus incentivizing the right
Consulting is a term for providing business advice on various topics including, corporate strategy, product development, marketing, information technology, and operational improvement. But what most people mean when they talk about consulting is management consulting.
Management consulting firms include top strategy firms such as Bain, BCG, and McKinsey. These firms hire business-savvy problem-solvers to help their clients:
- Define the problems or opportunities their businesses face,
- Collect and analyze data to better understand the problem/opportunity and identify a recommended course of action, and
- Plan the implementation of that solution across the company.
Think of consultants as “doctors” for businesses – brought in to diagnose the root cause of an issue and then prescribe and implement treatments.
My Consulting Offer’s coaches have experience as consultants at Bain, BCG, McKinsey, and various other management consulting firms. We can give you insight into the industry and tell you what consultants do.
In this article, we’ll discuss:
- What do consultants do?
- Benefits of a career in consulting
- Downsides to consulting work
- Typical management consulting salaries
- How to become a consultant
Let’s get started!
There are multiple ways to answer the question “” To dig deeper, let’s continue with our analogy of consultants as doctors for businesses.
- Assessment of symptoms: A client knows they’ve got a business problem (such as declining revenue or a new competitor in their market). They turn to a consultant for help getting to the root of the problem, as a sick patient would turn to a doctor.
- Diagnosis: The consultant assesses the client’s business performance, taking into account similar problems they’ve seen at clients in the past, like a doctor would check their patient’s symptoms against known illnesses.
- Prescription: The consultant recommends a course of action to improve revenues or meet a competitive threat, much like a doctor would tell their patient what’s wrong with them and prescribe medicine or recommend a medical procedure.
- Bedside manner: The consultant has the experience to steer a client to the right course of action as a doctor would advise a nervous patient.
- Follow-up care: The consultant provides the client with a step-by-step process to improve their business results, much like a doctor provides a patient with the steps necessary to regain their health.
Why does anyone trust a doctor? Because they are experts in their field and have extensively studied the human body, the injuries and illnesses that can afflict it, medicines, and surgical procedures.
Consultants, similarly, are business experts. They can lead the client through a fact-based analysis of their business problem and the evaluation of alternative courses of action. They can also leverage their firm’s collective knowledge to bring extensive industry and functional expertise to bear to solve the problem.
In addition, consultants can provide expert capabilities on topics that businesses rarely face.
For example, a manufacturing company might only consider a merger or acquisition once every 10 years. Because of this, it doesn’t make sense for them to have M&A experts on staff full-time. But mergers and acquisitions are high-impact business decisions that a client won’t want to get wrong. Consulting firms look at M&A deals all the time, and by hiring consultants, a client can access this specialized expertise when needed.
Exclusive Free Training on passing consulting case interview.
What Do Consultants Do?
Consultants solve complex business problems using their expertise and knowledge in specific industries or functions. This ranges from cutting costs to growing sales or evaluating a new market the client is considering entering.
Let’s explore this question by walking through a sample case from start to finish.
Sample Case: Concert-mania
Concert-mania, Inc. runs several music festivals featuring big-name recording artists each year. Recently, they transitioned to cashless events, with customers paying for tickets, food, drinks, and merchandise with credit cards.
Concert-mania wants to leverage its new digital capabilities to increase revenue and optimize its staffing and operations during festivals.
How would a consulting team help Concert-mania to take its use of digital tools and data to the next level?
- Assessment of Symptoms: Consultants define the problem.
- Diagnosis: Consultants collect and analyze data.
- Prescription: Consultants recommend a course of action.
- Bedside Manner: Consultants gain consensus among the client’s leadership team.
- Follow-up care: Consultants help implement recommendations, if necessary.
Assessment of Symptoms: Consultants Define the Problem
Suppose Concert-mania knows it can do more to take advantage of digital tools than just make festivals cash free. But management disagrees about what opportunities would be the best to pursue.
The head of marketing wants to use digital tools to increase revenue at each festival by making it easier for attendees to buy drinks and merchandise, and encouraging them to buy more. The head of operations, on the other hand, wants to use digital tools to reduce costs. Quicker transaction speed means less staff will be required in the beer tents and merchandise booths.
Part of the value consultants provide is quickly assessing the opportunities. By doing an 80/20 estimation of the value of digital tools and whether the high-value opportunities lie in increasing revenue, decreasing cost, or both, the consultants can help ensure the entire management team is focused on the right problem.
The importance of quick but reasonably accurate assessments of alternative courses of action is why market-sizing cases are used in consulting interviews.
Diagnosis: Consultants Collect and Analyze Data
While an 80/20 estimation of the opportunity is enough to define the problem and get the client and consulting team organized to solve it, further analysis is needed. At this stage, consultants dig deep into data that is often hard to gather or not clean/organized enough to yield insight without significant work.
For instance, the Concert-mania consultants might attend a festival or two, not to see the performances, but to count the number of people in line for beer and merchandise, time the speed of transactions, and measure the frequency of stock-outs to assess how much revenue might increase if digital technology was used to streamline operations. They’d also evaluate alternative technologies to determine which would work best.
Consultants will talk with the marketing and operations teams to get the client’s input on the improvement opportunities and best tools. They’ll also talk to clients to find out what they like or dislike about how festivals are run and the changes under consideration.
The team will calculate the expected revenue increase and cost savings, and compare them to the cost of investing in digital tools to evaluate whether there will be a positive return on investment.
Prescription: Consultants Recommend a Course of Action
After completing a robust, data-based analysis of how much Concert-mania can increase revenues or decrease costs through using digital tools, the consultants will develop a recommended course of action and discuss it with senior management. This course of action includes details of the implementation steps needed for the plan to be
Bedside Manner: Consultants Gains Consensus from the Client’s Leadership Team
In the same way that consultants help to define the problem, they also help to gain consensus around the solution.
Suppose when they defined the business problem, they found that most of the opportunity was through increasing revenue, not reducing costs. Nonetheless, the marketing group can’t implement the new digital tools on its own. The operations group needs to be on board because their staff will operate the beer tent and the merchandise booths.
If the operations group’s input into the best tools and new processes isn’t taken into account, the project rollout will not be successful, and the festival’s net income won’t change. It’s also critical that all parts of the client organization see the decisions as being driven by data, not by management favoring one department over another. This is why consulting firms hire people who are great problem-solvers and consensus builders.
Follow-up Care: Consultants Help Implement Recommendations
When Concert-mania decides to adopt new digital tools to increase revenues, there’s still a lot of work to do. This work includes buying the tools, customizing them for their operations, and training staff on how to use them.
The consultants on the Concert-mania study will lay out a step-by-step plan to implement the recommendations. This plan will identify the capital and staff time needed to purchase and customize tools and roll them out. It will also include a timeline for the final implementation.
As you can see from this example, consultants don’t just solve problems. They also ensure they are solving the right problem, being data-driven in their recommendation, getting the entire client organization on board, and assisting with implementation.
If needed, they will also help the company learn new skills so they can hire or build the new capabilities they’ll need to succeed in the future. Consulting is all about helping the client build a self-sustained, well-run business.
Examples of the Impact of Consultants
How BCG Helped Starbucks Create the Starbucks App
If you’ve ever ordered a drink from Starbucks, you’ve most likely benefited from the application development that BCG helped Starbucks implement.
Starbucks hired BCG to help develop its personalized recommendations. The goal was to increase revenue by engaging and attracting more long-term customers by giving them more personalized experiences every time they open their app to order a drink.
Have you ever been lured into purchasing a drink by the Starbucks app? Convinced you need another mocha latte by a double-star promotion? Or played one of the games to earn that big bonus or free Starbucks for a month?
The Starbucks application collects data including your most-purchased beverages, the time between your purchases, and even the time of day that you most frequently purchase drinks. All this data and more are analyzed so that Starbucks can monetize your caffeine addiction.
“The personalized games have helped to triple Starbucks’s marketing campaign results, double email redemptions, and generate a threefold increase in the incremental spending of customers who redeem offers. The results come with increased marketing effectiveness, enabling Starbucks to reduce its mass-marketing spending and invest in more-personalized marketing dollars with the right customers, thus incentivizing the right
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