1、The University of Michigan Business SchoolConsulting ClubConsulting Interview Preparation BookBased on materials provided by:AT KearneyBooz-Allen HamiltonMcKinsey and Companyand theOffice of Career DevelopmentCONSULTINGUNIVERSITY OF MICHIGANCONSULTING CLUB1999 EditionSECTION 1 - INTRODUCTION 5OVERVI
2、EW.5MAXIMIZING YOUR RETURN.5SECTION 2 OVERVIEW OF THE CONSULTING INDUSTRY.7WHAT IS CONSULTING?.7Why Do Companies Hire Consultants?.7Consulting Project Types 7Trends 9The Structure of Consulting Firms 10Compensation 11Lifestyle11SECTION 3 CONSULTING ARTICLES .13THE MANAGEMENT CONSULTING INDUSTRY .13S
3、egmentation .13Trends 15REFLECTIONS ON FIRST-YEAR RECRUITING.18Why consulting? 18Knowing the firms18Preparing for the case interview .20SECOND-YEAR RECRUITING: LOOKING FOR THE LONG-TERM.22Investigating Consulting Firms .22The Recruiting Process23The Decision-Making Process.24Career Paths24Remunerati
4、on 25IS CONSULTING THE RIGHT FIELD FOR YOU? .27The Options .27The Skills in Demand.28Landing the Job You Want 29Recommended Resources 30SECTION 4 - OVERVIEW OF CASES.32SECTION 5 - DIFFERENT TYPES OF CASES.34SECTION 6 - FRAMEWORKS FOR CASES.35ADDITIONAL MODELS .36The Four Cs36Economics374Ps 39Value D
5、isciplines.39Porters Five Forces40“Star“ Diagram/Organizational Analysis41The BCG Growth-Share Matrix 42Value Chain .42Generic Strategies (Porter) .43Consulting ClubInterview Preparation Book 1999 EditionPage 2 of 118CONSULTINGUNIVERSITY OF MICHIGANCONSULING LUBStrategic Types (Miles another quarter
6、 come from Europe. While management consulting fluctuates with the business cycle, the industry has nevertheless grown more than twice as fast as GNP for the last decade. Such a large, dynamic industry is by no means homogeneous, however. This article describes how the management consulting industry
7、 can be segmented and identifies some important trends in the industry with attendant implications for those intending to pursue a career in management consulting.SegmentationThe first, and probably most significant, way to segment the consulting industry is to compare large and small firms. Most co
8、nsulting firms are small, often one-person, operations: half of all consulting firms generate less than $500,000 in annual billings, and one-third employ fewer than four people. If the typical consulting firm is small, however, the typical consultant works for a large firm: the fifty largest consult
9、ing firms in the United States account for approximately three-quarters of domestic revenue, while an estimated three-quarters of all consultants work in firms employing more than 100 professionals. This skewed size distribution reflects the low barriers to entry to this industry: anyone can hang ou
10、t a shingle bearing the title “Consultant,“ and many former executives do just that. Corporate policies of early retirement, downsizing, and outsourcing have created both the supply and the demand for independent consultants, and, many of these small shops exist, often serving a single client. Wheth
11、er these firms are attractive starting points for new consultants is debatable, since they lack both the breadth of clients and depth of support of the big firms. However, veteran consultants often end their careers in their own consulting firms.A second and often overlooked distinction in consultin
12、g is between in-house and external consultants. While the industry definition, strictly speaking, covers only outside consultants, many large corporations have their own internal consulting arms, usually affiliated with a planning department. Internal consultants perform essentially the same functio
13、ns as external consultants, while enjoying a more direct career path into line management. Contrary to the prevailing belief, only 1 in 1000 consultants makes a direct transfer to a top executive position in a client organization and only then after many years in the consulting firm. Transfers at ju
14、nior levels are common, but most of the 20% annual rate of turnover among consultants is not due to consultants being hired by clients. For those who are not convinced that consulting is a lifetime career but who want a variety of experiences and exposure to senior management problems at an 2 Econom
15、ist survey, February 13, 1988, p. 7.3 Data estimates are from Consultants News, June 1992, and various earlier issues.Consulting ClubInterview Preparation Book 1999 EditionPage 14 of 118CONSULTINGUNIVERSITY OF MICHIGANCONSULING LUBearly stage in their careers, albeit in a more limited number of sett
16、ings-there are five times as many external consultants as internal consultants.4 Internal consulting can be an attractive option.The third important basis for segmentation in the consulting industry is degree of specialization. While all firms provide a variety of services, most consulting firms gen
17、erate the majority of their revenue from one type of work. The two main dimensions of specialization are function-for example, logistics, organization design, management information systems (MIS), or management education - and customer group or industry, for example, health care, financial services,
18、 or government.Of these specializations, the largest is MIS consulting, which is, for the most part, the domain of the accounting firms: six of the ten largest consulting firms in the world are the consulting arms of the big six accounting firms. In the United States alone, these firms generate over
19、 $3 billion in billings annually. The second largest specialization is compensation and benefits consulting. Four of the top twelve U.S. consulting firms fall into this category, with annual billings exceeding $1.5 billion. In third place as a specialization is management/strategy consulting. This a
20、rea includes the generalist management consultants, such as McKinsey, Booz Allen, and their newer first cousins, the strategy consultants, such as BCG and Bain. Although these firms are ostensibly full-line consultants, clients often find their cost structure uneconomic for consulting on functional
21、activities such as logistics. Instead, the generalist consultants concentrate on higher value-added consulting for senior management. The other functional or industry specialists in consulting tend to be small, reflecting their origins as one-person shops run by an executive with a particular skill
22、or industry knowledge. Understanding how each consulting firm specializes, and ensuring that it matches your interests, is therefore a vital first step in considering which firms to approach for a position.The consulting industry no longer draws a distinction between formulation and implementation.
23、All firms in all categories of consulting recognize that their role must involve effecting change in the client organization, and differences between them are now of degree, not of substance. Some specialists in “change management“ exist, but even they would like to be involved in developing the dir
24、ection of change. Similarly, although some firms may be known for a particular technique tool, such as BCG and the experience curve in the 1970s, these reputations are usually more a reflection of marketing than of a fundamentally different approach to consulting. When the publicity for a firm surro
25、unds a particular solution to a general problem, like time-based competition for strategy, it is usually not representative of a profound difference in the type of work the firm undertakes.A last distinction among consulting firms is their degree of internationalization. Most firms now have offices
26、or affiliations outside their home country, but the extent of non-domestic business varies substantially. Among the worlds top twenty consultants, for example, one firm, Hewitt Associates, does only 7% of its work outside the United States, compared with McKinseys 60% and the U.K. firm did 94%. Howe
27、ver, even those firms with extensive overseas networks tend to have independent offices, so they can be responsive to local needs. This implies that working for an international consulting firm will not necessarily allow you to work overseas. You usually have to ask explicitly for an overseas assign
28、ment and often have to recruit with the overseas office in addition to the domestic office.4 Journal of Management Consulting, Vol. 3. Summer 1984.Consulting ClubInterview Preparation Book 1999 EditionPage 15 of 118CONSULTINGUNIVERSITY OF MICHIGANCONSULING LUBTrendsManagement consulting will continu
29、e to grow, more cyclically than in the past, but still faster than GNP. The rationale for hiring consultants to access the specific expertise needed to quickly solve a current problem will remain and will, if anything, cover more tasks in the future as firms reconsider the costs of all their interna
30、l functions. In fact, predicting which corporate activities will be outsourced could give you a head start in identifying the next growth specialty in consulting.The industry will also continue to move to an hourglass shape: increasingly, there is a bimodal distribution of firms into the large (annu
31、al billings in excess of $100 million) and the small (less than $5 million in annual billings). This structure results both from the ease of entry for newcomers, and from the competitive advantages of larger firms-reputation, diversified client base, and broader geographic base. While a few firms ar
32、e able to break through the mid-size plateau to become recognized large players - or are acquired by other firms looking for broader scope-many bump along unsteadily at $ 10 million to $20 million in billings before falling back as the initial momentum subsides. For the potential consultant, this su
33、ggests that the key question to be answered before committing to the attractions of fast promotion at a newer rapidly growing consulting firm is, “Does it have the capability to break through to the first tier?“ This question is particularly important if you anticipate a lifetime career in consultin
34、g: more than half of the consulting firms currently operating did not exist fifteen years ago, and only I% of consulting firms are more than fifty years old.Other industry trends are the acquisitions by outsiders of consulting firms and the move toward broad scope consulting firms, under which singl
35、e ownership provides a variety of consulting specialties. At least half of the top twenty firms have made recent acquisitions-three of which propelled the acquiring parties into the top twenty-and there have been more than fifty substantial acquisitions since the mid-1980s. The rationale for these a
36、cquisitions lies in the economies of scope that a broad line competitor can exploit, particularly in marketing. It has been estimated that only a third of a consultants business comes from repeat clients, while new business, increasingly, is won in competitive bids against comparable consulting firm
37、s. As a result, about 20% of a consulting firms costs lie in acquiring clients. If an accounting firm can leverage its audit relationship into MIS consulting, or if a strategy consulting report can recommend hiring the sister benefits consulting firm for the follow-on organization study, this expens
38、e could be substantially reduced.Unfortunately, the success of broad scope consulting firms and of outside ownership remains doubtful. Saatchi nor is the ease of buying a range of consulting services from a single source of much value to a client when compared to the ability to choose the best speci
39、alist for a given type of work. As a result, most of the broad scope firms are essentially umbrella-holding companies for a set of independent specialists having little interaction with one another. One reason is the difficulty inherent in Consulting ClubInterview Preparation Book 1999 EditionPage 1
40、6 of 118CONSULTINGUNIVERSITY OF MICHIGANCONSULING LUBmerging cultures. There have been, for example, few acquisitions of one strategy consulting firm by another, partly because the problems resulting from merging cultures cause the firms major asset-people-to leave. In considering a career in consul
41、ting, I would therefore suggest that the ultimate ownership of the firm you might work for is not of great importance. Although it is true that these acquisitions are occurring, their impact on your daily activities, particularly in the junior positions, will be relatively limited. Working at Braxto
42、n (now owned by Deloitte these discussions will provide you with the most pertinent, nitty-gritty details of what life is really like at Firm X or Y. If you are particularly attracted to a certain firm, seek the perspectives of many people who have experience at that firm. You will often find that o
43、ne friends views of a summer or pre-business school experience at a firm differ considerably from someone elses at the same firm. Given the variables of personality, office location, lifestyle preference, and the nature of the projects worked on, you are sure to pick up important new insights with e
44、ach informal conversation with classmates.The focus of your information search will also differ in the second year. When interviewing with consulting firms for summer positions, the primary goal of most first-years is simply to land a job at the firm of choice, with less emphasis placed on such “det
45、ails“ as location, lifestyle and culture. The summer experience is a relatively risk-free way to figure out whether or not consulting in general and a firm in particular will make sense for the long-term. Second- year recruiting is for the longer term. The “details“ that you were willing to live wit
46、hout for an 8- to 10-week summer will become critical second year, which will help you to differentiate between the many opportunities you are likely to have.Consulting ClubInterview Preparation Book 1999 EditionPage 23 of 118CONSULTINGUNIVERSITY OF MICHIGANCONSULING LUBYou may find it helpful to ev
47、aluate consulting firms on three broad criteria: 1) the nature of the work they do; 2) the characteristics and cultures of the firms; and 3) the nature of the career opportunities offered. In terms of their consulting work, firms (and even different offices within the same firm) differ markedly in t
48、heir degree of emphasis on the following dimensions: implementation vs. strategy; industry focus; revenue- generation or cost focus, and functional specializations. Issues such as the size of a typical case team and the role of the new consultant on a team should be considered. Though every firm wil
49、l highlight the collaborative nature of its client relationships, there are significant differences in policies relating to the amount of time spent at clients offices that will have a direct effect on the amount of travel and often the level of client impact you can expect.In assessing the characteristics of each firm, one of the most critical attributes to consider is the culture of the firm, as reflected by its employees. This is also important when looking into various office alternatives within a firm. Can you see yourself working well with the people you have met
