Consulting involves solving business problems through structured, rigorous and evidence-based analysis. Essentially, consulting firms supply “brains for hire” to be used by organisations as and when needed. However, it would be wrong to think of a consulting engagement in the form of a one-off, off-the-shelf solution.
Consultants want to establish trusting, long-term relationships with their clients, acting as their “sounding board” as and when needed, especially as they know that real change only happens when the client is convinced of the wisdom of their advice.
As a result, clients are likely to work with consultants over long periods of time, across multiple projects. For example, the NHS has a long history of engagements with McKinsey, while BCG has continuously worked for Save the Children on a pro bono basis.
Consultants work across many industries and practice areas. When you join a consulting firm as a graduate, you’re regarded as a generalist, meaning you might be staffed on projects involving any industry or practice area your firm covers and will gain exposure to a wide range of businesses and business issues. One day you might be working on the organisational structure of a publishing company, and the next assessing whether a private equity client should buy a sports firm.
As consultants progress through the organisation to become project leaders, they tend to specialise in two industries and two functional practice areas. The generalist background allows them to apply knowledge from different areas to client cases, while specialist knowledge helps ensure that their work is cutting-edge.
What consultants do step 1: articulating the problem
A consultant’s first step in any case when given an issue to look at by a client is to articulate the problem. For example, if working with a client whose profits are falling, they might ask if the client is suffering declining revenues, or if its cost base has grown too quickly over the years.
What consultants do step 2: formulate a hypothesis
Whatever the issue consultants are working on, they’ll quickly formulate a hypothesis as to what could be at the root of it.
Generating a hypothesis helps to focus their efforts and provides a framework to hit the ground running. Instead of conducting “analysis for analysis’ sake”, consultants list a number of hypotheses, define the analytical work needed to prove/disprove those assertions, and create a roadmap that will lead to answering the problem.
It’s difficult to hypothesise with little or no information, so a bit of time upfront might be necessary to establish key issues and information. That’s why consultants are likely to be allocated some time to read about the industry and familiarise themselves with a client’s products/services and their recent business performance on the first day of working on a case.
What consultants do step 3: research
After initial hypotheses have been framed, consultants scope the quantitative and qualitative research work that they’ll need to do to prove or disprove them.
Qualitative research often first involves interviews – these can be done with in-house experts (usually partners or advisors hired by the consulting firm), clients’ contacts, or externally sourced specialists.
It’s usually the entry-level consultants who conduct the interviews and then religiously log the data. The second aspect of qualitative research is reviewing industry literature, such as industry publications, past in-house reports on the subject, press clippings and market research reports.
Quantitative research involves obtaining relevant data from the client and third party sources in order to make specific calculations. As a graduate joiner, you’re likely to be responsible for a case Excel model, which will aim to verify some of the hypotheses.
Surprisingly, requesting quantitative client data can be one of the most time-consuming tasks of a consultant – often client’s employees are reluctant to provide it as they’re worried that data will be used against them (this can often happen on cost-cutting cases) or that it will create additional work for which they won’t be rewarded.
In addition to client data, consultants can also use third quantitative party data, from more traditional sources such as the Office of National Statistics, through to Google Trends or specialist agencies.
What consultants do step 4: presenting a conclusion
As consultants obtain more evidence and gain a clearer view of the client’s problem, they continue to adjust their hypotheses – the problem-solving process is very fluid – and then eventually settle on a final conclusion.
Once consultants are comfortable with their answer, they’ll choose the most appropriate evidence and structure it into a report, and often Powerpoint presentation. This report (also called a “deliverable”) is then presented to the client.