Travel partner of management consulting companies
Management consulting is not always management consulting. As in every economic sector, there are also small and large representatives, regional specialists and global all-rounders in the consulting firms. But which type of advice fits which type of consultant?
As an orientation aid for your path to becoming a successful consultant, I will show you the most important differences between management consultancies in this article. You will also find out which type of consultancy suits you best at the moment.
Management Consulting ≠ Management Consulting:
The different types of consulting firms
If you think that all business consultants work exclusively at the top management level and advise on strategic issues, then I have to disappoint you right at the beginning of the article. Only a few management consultancies actually belong to the classic strategy & management consultancies. Rather, the various types of consultancy operating on the market fan out.
In the following figure I have shown the different shapes as a morphological box. To do this, I span a space along several criteria and define the various characteristics. The characteristics of my advice as of the beginning of 2019 are shown in yellow.
In essence, the consultancies have the same business model in common. However, the specific design, in particular of the target customer and the value proposition, as well as the workforce and corporate culture, differs. Before you apply for a position at the first consulting firm unprepared, you should check whether this type of consulting suits you at all. I would like to help you with the following systematisation.
Criterion # 1 - the size of the consulting firm
Large management consultancies
International projects in global corporations is the area of activity of large management consultancies. Like their customers, they are represented around the world and advise on various topics with an operational, tactical and strategic focus. Unlike their smaller representatives, they have defined hierarchies with a professional and anonymous working atmosphere. The strong, heterogeneous teams of consultants operate worldwide and are very willing to travel. The projects are mostly cross-country skiers and offer sufficient opportunities to develop.
A large consultation is an option for you if the reputation of your employer is important to you and you can (or want to) deal with internal political wrangling in corporate structures. Especially during or immediately after graduating from university or college, I recommend gaining initial work experience in a well-known international consultancy. Between 2 and 3 years for a major consultancy - that sends a signal to all other employers. In your career you can always refer to your creative time with this global player and advertise yourself with his brand.
Are you at the beginning of your consulting career and do you feel comfortable in large organizations?
Then you should hire a large, renowned consulting company!
Small & medium-sized management consultancies
With a specialized portfolio of products and services, small to medium-sized consulting companies primarily advise customers from medium-sized and large companies. Flat hierarchies, a familiar and personal working atmosphere as well as compact, pragmatically thinking project teams characterize this type of company (see web tip). A single-digit number of branches as well as regional and national consulting mandates often guarantee you moderate travel.
Personally, I prefer small and medium-sized consultancies, so-called consulting boutiques. Here the individual employee still counts, new topics can be developed and direct contact can be made with the board of directors. The direct line to customer decision-makers, on the other hand, is not a bad starting point if you plan to set up your own small consultancy after a while.
Are you an entrepreneur and doer, but want to have a company behind you at the same time?
Then you are in very good hands in one of the small, flexible consulting houses!
One-person management consultancies
Until you have been working as an employed consultant for some time and want to work freely and flexibly, then you can set up your own small one-person consultation (see interview with Jörg Schambach). The management of employees is completely eliminated. Instead, you trust in your partner network and a network of reliable service providers. The operating costs are very low compared to medium-sized and large consultancies, because there are only a few things to manage.
Of course, personal freedom and maximum participation in the income also have their downsides. For one thing, you are taking full risk. As a one-man consultancy, you are responsible for all value-added tasks, whether marketing, IT infrastructure or sales. Client companies also do not like to outsource challenging - and mostly lucrative - projects to individual consultants. This could namely get sick and does not scale with increasing work volume.
Do you want maximum flexibility and self-determination and already have consulting experience and a broad network?
Then you can also set up your own small consultancy.
Criterion # 2 - the consulting segment
Strategy & management consultancy
Strategy & management consultancies support customers of large international companies in small, very well-paid teams. The big wheel is spun, strategic issues relating to marketing, production, logistics and leadership as well as, increasingly, digitization and information technology (IT) are on the agenda of the busy consultants. In general, the self-image and the image of others in this consulting guild are very close to one another: willing to travel, highly resilient and extremely ambitious. Typical customers are located in mega-companies and corporations. The team of consultants, who like to call themselves the supreme discipline of consulting, makes up for their ambitious daily rates with a high level of work.
Opinions differ when it comes to strategy and management consultancy. Some rave about the steep learning curve, the life out of the suitcase and the tough nights in the office (see interview with Tobias Schütz). Others speak of exploitation, senseless foil battles and burnout after just one year of work. You should like the work and lifestyle temporarily if you commit yourself to this type for at least 1 to 2 years. This type of advice was not and is not my case.
Would you like to give full throttle for a while and learn what keeps the economy and managers rotating?
Then I recommend buying a ticket for a strategy & management consultancy.
In organizational consulting or change consulting, the focus is on people as an important element of a company. Typical projects are in the management of a company, employee management and personnel development. Organizational consultations do not have to be very large. Even small specialized houses provide support in questions of organizational development, communication, leadership, systemic coaching and human resources (see interview with Florian Grolman).
In 2016 my Munich employer decided to found a subsidiary with a focus on organizational consulting. The background to this was the growing need for coaching and training for agile organizations, perceived on the market. As an employee of this type of consulting, you love working with, for and on people. With methods, models and empathy, you can get organizations to change slowly but steadily.
Do you consider people to be the focus of your company?
Take a look at exciting organizational consultations.
Process & IT consulting
Automation and optimization of business processes is the central playground for process and IT consultancies. Focused on the business and / or technical aspects of a company, the employees of this type of management consultancy act as experts. This specialization enables smaller players in particular to successfully position and assert themselves in a consulting niche.
If you apply to a smaller consulting company, you will most likely be advised on process or IT topics. Your area of responsibility is by no means narrow. For example, you can specialize in a technology that is in demand, become a technical expert for business-critical processes or work just like me at the interface between business and information technology. An exciting field of activity in times of digital transformation. Since 2008, I have also been working in process & IT consulting as a business analysis at the interface between specialist and IT departments.
As a wanderer between worlds, do you enjoy working on both professional and technical topics?
Process or IT consulting should be exactly the right thing for you.
Full service advice
'Everything from a single source' is the motto of so-called full-service advice. As a full-service provider, this type of consulting covers the entire consulting spectrum. Starting with the strategy development up to the operation of the developed software solutions. Historically, full-service consultancies have mostly emerged from IT companies or audits (see interview with Torsten Alberti). With their wide range of services, they act worldwide in rather long-term large-scale projects for international customers.
If your employer is a full-service consultancy, then he is certainly one of the larger representatives of the industry. All the advantages and disadvantages of a large management consultancy apply: Broad spectrum of activities in front of an international backdrop with anonymity and exchangeability. Certainly not a bad choice for the first few years of work and the steep learning curve.
Would you like to become a consultant, but you are not yet sure which topic will ultimately appeal to you?
In a full-service consultation you are in good hands for the start of your career.
Would you like to strengthen your methodological skills?
- To the top consultant in consulting method training
- 12 methods - 8 hours - 1 goal
- The most important techniques in (agile) project business
- You ask, I answer - Consulting Life
- On site at your place or at my office in Munich
Criterion # 3, # 4,… - further differentiation criteria
Specialization by industry
Another distinguishing feature of a management consultancy is its industry specialization. This in turn depends on their customers. My employer mainly advises in the automotive and supplier industries. Other consulting firms have their market, for example, in the chemical, energy or financial sectors.
If your employer specializes in a certain industry, this brings you advantages and disadvantages. On the one hand, you benefit from the profound specialist knowledge and experience; your company can usually call up a higher daily rate for you. On the other hand, the well-being of your company and you is firmly tied to that of the industry. I recommend that you seek advice with two branches: a main branch and a secondary branch. In times of crisis, you and your employer stay in the game.
Is there a certain industry close to your heart and you have already built up a lot of specialist knowledge?
Then apply to a consultancy that specializes in a certain industry.
Specialization according to corporate function
Finally, consulting companies can be differentiated according to the corporate function for which they advise. For example, a consultancy can concentrate exclusively on production optimization, offering everything from strategy to implementation for this function. Further functions would be marketing, sales, research & development etc.
What applies to the industry also applies to the function: the more extensive your specialization or that of your employer, the greater your expert status. But the lower the flexibility. Therefore: choose a consultancy with at least two corporate functions. The more independent they are, the better.
Are you interested in a specific area in the company?
Then keep an eye out for such consultations that offer consulting services for these functions.
Special form in-house consulting
In-house consulting is a special form of the consulting company. The basic idea is that internal consultants - the in-house consultants - advise your own company on projects as permanent employees. In addition to their employer, in-house consultants increasingly also support associated companies (subsidiaries, holding companies, group of companies, etc.), partner organizations as well as suppliers and customers.
In my experience, the work of an internal consultant is very similar to that of an external consultancy. In a dialogue with in-house consultants, they told me about typical consulting tasks in process and IT management. Also with regard to the workload, I could not find any differences between in-house and external advice. Depending on the team, project and customer, a working day could normally end after 8 hours or last all night.
Are you planning a medium-term career in the group, but would like to gain experience at several positions in the company beforehand?
Then you should take a closer look at Inhouse Consulting.
Special form of product consulting
Medium-sized and large tech companies in particular offer their customers additional consulting services for their product portfolio. As a rule, the products require explanation or must first be integrated into the customer's process and IT landscape. It is the consultants who accompany and design these adaptation, configuration and customizing activities.
Big advantage of this type: As a consultant, you support a specific product. In addition, the company usually offers you numerous career and development opportunities. The disadvantage is internal and external perception. Customers and colleagues could see you as a sales assistant for the product and not as a trusted advisor looking for the best solution.
Would you like to promote the development of specific products in addition to consulting services?
Then I recommend looking for advice units at the large hardware and software companies.
When I decided to pursue a career as a consultant at the beginning of 2008, I had no idea what different types of management consultancies actually existed on the market. Over 11 years later, the different forms are clear to me.
As a junior consultant, you should test which consultation is right for you during your training. Internships, career fairs and consulting events help you to find the perfect type of advice for your person.
IUBH distance learning: Business Consulting I - Lesson 2: Forms and functions of management consultancy - an alternative systematization of consultancy according to Walger, the Federal Association of German Management Consultants and the forms of consultancy by provider
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