Lecture on Management Consulting

Introduction to Management Consulting

• Consultants are prevalent in urban areas and high-status locations.
• Management consulting firms are prestigious and highly selective.
• The role of consultants is often misunderstood by society.

Major Consulting Firms

• "Big Four" management consulting firms: BCG, Bain, McKinsey, Deloitte.
• Receive 200,000 applications per year; 1.5% acceptance rate.
• More selective than top Ivy League universities.

Understanding the Role of Consultants

• Ambiguity around what consultants do.
• Bureau of Labor Statistics: Consultants improve organizational efficiency.
• Investigative approach: Talked to Tyler Cook, a former BCG consultant.

Insights from a Former Consultant (Tyler Cook)

• Main activities: attending and preparing for meetings.
• Hypothetical case study on solving business issues (e.g., widget company).
• Consultants provide solutions through multiple teams focusing on different aspects (PR, manufacturing).
• Cost implications of hiring consultants.

Perspectives on Consultants

• Critics argue consultants are sometimes redundant and regurgitate client information.
• Advocates argue they bring organizational change and strategic decisions.
• Example: McKinsey suggesting staff cuts to CEOs.

Case Study: McKinsey and Company

• Authors: Mike Forsyth and Walter Bogdan.
• Book: "When McKinsey Comes to Town."
• Detailed McKinsey’s controversial partnerships.
• Consultants as "brains for hire" with a secretive business model.

The Secrecy of Consulting

• Industry standard: Non-disclosure of client names and fees.
• Public perception influenced by secrecy.

Why People Pursue Consulting Careers

• Attractive for "insecure overachievers."
• Opportunities to travel, learn, network, and earn high salaries.
• Considered a prestigious career path post-Ivy League.
• Consulting as a stepping stone to high-level corporate positions.

Conclusion

• Management consulting is influential with significant global impact.
• An "everything" and "nothing" job for the well-educated, but directionless.
• Extensive use of buzzwords reflects the industry's culture.