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After I published How My Friend Caleb Became A Legend Among Wall Street Junior Analysts, a reader asked me what my thoughts were on management consulting firms such as McKinsey & Company since these firms also have a "reverse pyramid" organizational structure that are similar to investment banks.

Like many things in life, Management Consulting is not as good as some people think, and it is not as bad as some people think. Overall, my view on Management Consulting is more positive than my view on investment banking.

I tend to discourage people from getting into investment banking, but occasionally I would encourage people get into management consulting if I think they can benefit from the training and industry exposure brought by management consulting.

Management Consulting is a very loosely defined term. It could mean many different things. For the purpose of this article, I’m going to narrowly focus on "strategic consulting firms" such as McKinsey, Boston Consulting Group, and Bain Company. These are the three most well-known firms in this space. Other well-known firms include Monitor, Mercer, Mars, LEK, etc. There is also a growing number of "boutique strategic consulting firms". "Big 4" consulting firms such as Deloitte, PWC, Accenture also have strategic consulting practices.

The Good

I know many former and current management consultants. I can say that overwhelming majority of them are bright, intellectually curious, and communicative. It’s fun and easy to carry a conversation with them.

Management Consulting firms have very competitive selection process. They tend to hire analysts from only the top undergraduate programs, and hire associates from only the top business/law/graduate programs. So, almost all of the consultants are "academically smart". If you’re the type of person who enjoys an academic, intellectual discussion with your colleague, I think management consulting provides a better environment than most other industries.

Over the year I have also developed a very health respect for the professionalism of management consulting professionals. When I was working at one of the aforementioned management consulting firms, whenever I called a colleague, he or she would always return my call. Whenever I asked a question in the firm’s knowledge base, I could always expect someone answering my question. Whenever I set up a meeting, my colleagues would show up on time. I’ve never experienced this kind of professionalism since I left management consulting.

I joined a management consulting firm fresh out college. I was a computer science major in college. I was not as "polished" and "business ready" as some of my classmates. Management Consulting provided me great training. I learned how to interact with clients. I was exposed to several industries, which really helped me figure out what industries I wanted to work in the future. I also traveled a little bit since I had to work for different clients at different locations. I was young and single, so I really enjoyed the travelling experience.

However, I do want to say that business travel gets tired after a while. I was fortunate that I only worked in management consulting for a little bit over a  year, so traveling never wore out on me.

The Bad

Have you wondered why management consulting exists? A mentor of mine once told me that "management consulting firms exist largely for political reasons".

This is a very profound statement and it is very true.

When large companies need to make controversial decisions such as cost cutting, layoffs, or strategic changes", instead of taking on all of the responsibilities (and potentially blames), it’s "wise" for the senior management team to bring in outside "expert management consultant" to provide 3rd-party opinions/recommendations. It makes the decision more "legitimate", and help reduce senior management team’s risk (i.e. you cannot put all of the blame on me — it was recommended by McKinsey.)

Of course this is not the only reason that management consulting firm exists. But, it’s a very important reason. And that’s why I quitted management consulting.

I worked at several client projects. At each client site, I’d spend a few months there. But, I was never really part of the company. I was simply going in, doing some research, making a few presentations, and giving some recommendations. I never saw my recommendation being implemented. I didn’t feel that I was making any impact — I didn’t see tangible results.

I started questioning myself — how did I know my recommendation was correct? It was my first job out of college. Many of my seniors in the project team had been in consulting for their whole career. They didn’t have the from-the-trenches operational experience. They were all very smart and quick-study. They could learn a lot about a company in a very short period of time. But, sometime I felt that we were like a group of medical school students who had studied medicine for two years but had never operated on any patient. But, we were making recommendation about how to do surgeries. There were a lot of assumptions, modeling, and intellectual thought experiments.

The Ugly

Similar to investment banking, management consulting firms have a reverse pyramid organization structure. Analysts and associates are at the bottom of the pyramids. They’re asked to work long hours. In term of career progression, you’re either "up or out". Certain number of people will become managers, principals, partners, etc. If your time is up and you don’t make to the next level, you’re out.

It’s less an issue for entry-level analysts since you’re expected to go back to business school to get your MBA after working at the firm for a couple of years. But, once you’re an associate, your career path is "up or out". That’s a lot of pressure. It could get quite political and demoralizing.

Also, I’ve found that some management consulting professionals have developed an "elitist mentality" over the years. They tend to be really good student throughout their lives. They attended really good universities. They then went through a very competitive process to get into McKinsey, Bain, BCG, etc. After working in those firms for a year or two, although they might not like the intensity and pressure of management consulting, they felt that their employers were the most prestigious companies in the worlds. They simply felt that there wasn’t much option outside of the management consulting firms. Basically, they stuck. They didn’t like their jobs, but they felt that it’d be "a step down" to switch to a non management-consulting company.

My advice for those folks is simple: Management Consulting is just a job. It’s no more or less prestigious than other corporate jobs. Focus on your true career interest. If your heart tells you that you no longer like your management consulting job, then look around. Don’t let the "prestige factor" prevent you from trying something new and different.

What do you think?

I’m interesting to hear from all of you – do you agree or disagree with my view on the good, bad, and ugly of management consulting?

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• The McKinsey Engagement: A Powerful Toolkit For More Efficient and Effective Team Problem Solving
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