Strategy consulting is a common term. But what exactly does it mean? And how does it differ from other fields in the consulting industry?
This article by our expert Agrim gives you a simple yet comprehensive introduction to strategy consulting. During the article, strategy consulting and consulting are used interchangeably.
As you read, it becomes clear how strategy consulting differs from other fields in the industry. In addition to the importance of strategy consulting, some disadvantages of it are also listed. Moreover, an overview is given of projects that a prospective consultant can expect.
- 1. What Is Strategy Consulting?
- 2. What Are the Other Forms of Consulting?
- 3. How Is Strategy Consulting Different From Other Forms of Consulting?
- 4. Why Is Strategy Consulting Coveted?
- 5. Why Do We Need Strategy Consulting?
- 6. Why Are Some of the Criticisms Faced by Strategy Consulting?
- 7. What Are the Downsides of Working in Strategy Consulting?
- 8. What Are the Exit Options From Strategy Consulting?
- 9. What Are Some Examples of Strategy Consulting Projects?
- 10. About the Author
To put it in the simplest manner possible:
“Strategy consulting is the business of advising other businesses on strategic topics.”
There are four parts to that sentence.
A) The business
B) of advising
C) other businesses
D) on strategic topics
Let us take a deeper look at this:
- The business: Strategy Consulting is highly lucrative if done correctly. By some estimates, the industry will be worth more than USD 30 billion in 2022 and might double in size before the decade's end. It was one of the few sectors that could weather the COVID storm with a unique show of strength. Typical pricing and gross margins in strategy consulting are very high – making it a viable business even on a small scale. BCG, McKinsey, Bain, Kearney, Roland Berger, and Strategy& are a few of the largest and most popular examples of firms that provide strategy consulting services.
- Of advising: Every type of consulting is a form of advisory. In strategy consulting – your key audience (or client) is typically senior management (Vice Presidents, Directors, CEOs, CFOs, COOs, and so on). Your clients are typically responsible for a business function and mostly have their own profit margin (P&L) to manage. They also typically have decision-making powers – thus allowing them to implement your strategic advice.
- Other businesses: Client firms can be from various sectors and value-chain positions. Key sectors include Energy, Healthcare, Logistics, Retail, Technology, Finance, and many more. Your client can also be the government – ministries, authorities, consortiums – and even non-profits. Typically, larger firms with deeper pockets will employ larger & more popular consulting firms in the hope that the strategic advice will be better. Most Forbes 500 companies have some form of strategic consulting projects ongoing at any moment.
- On strategic topics: Strategy Consulting topics have a horizon of 3 years or longer. The topics focus on long-term growth, long-term brand management, long-term customer retention, long-term market dominance, long-term organizational culture transformation, public policy, and so on. The answer to such questions is not always obvious. It requires leveraging inputs from industry experts with decades of experience in the topics.
Strategy Consulting is:
- Less of: Detailed implementation, tactical actions, capacity augmentation & secondment, hyper-granular project plans, and their management ...
- More of: Forward-looking, ideation, thought leadership, sharing experience & knowledge, working towards broader goals …
I know that the above probably does not help you much by not being definitive, but such is nature. There is no fine natural line between the various forms of consulting, and often consulting companies try to cross-sell their different services across projects.
Strategy Consulting projects are typically shorter in duration than most other consulting projects. A typical strategy project is about eight weeks - but can vary between 4 and 26 weeks quickly - depending on the client and the project requirements.
Strategy Consulting offers some of the highest packages for a given age & experience in the market. With post-MBA base packages ranging around $150k, it is surely an attractive option for people. Bonus amounts range from 20% to 60% of base pay depending on the firm, your level, and your performance.
Besides the attractive pay, you get to enjoy some creature comforts and perks such as hotel stays, free flights, free cabs, free food, all the miles & points that come with it, and then some.
Strategy Consulting attracts the best and smartest people from the crowd. You get to work with such similarly smart people, and everyone helps in pushing each other to their limits and then some. Your professional and intellectual growth in strategy consulting will be much faster and better than in other jobs.
Consulting firms place immense focus on learning & development. Most of them conduct bi-annual appraisal & review cycles where they identify your areas of development, and then you get to work on those going forward. Consulting firms even train you for the next level if your promotion is coming up soon.
Strategy Consulting involves dealing with CXOs, Ministers, and vastly senior decision-making authorities. When advising such people, pressure is imminent. You also get tremendous exposure and learning when you speak to such people. Understanding how the senior folks think is one of the best learnings I have gotten from my experience with BCG.
Strategy Consulting also has one of the fastest promotion cycles in the market. Typically you get promoted to the next level every 2-3 years. Consulting firms such as MBB also employ an “up or out” policy. If you cannot secure a promotion within the specified window - you are better off working elsewhere. However, tier-1 consults have dedicated departments that help secure your next job. The thought process is NOT that you are not good, but instead, it is considered that you are better suited for a different job.
When I was explaining my job at BCG to a non-consulting friend or relative - I often encountered the following statement:
“Why does a company need to spend so much money on a strategy consultant? They could easily create their own strategy in-house, no?”
Well, it is not easy for a company to create its own in-house strategy. A strategy consultant adds significant value from multiple dimensions:
● Consultants bring an in-depth industry & market view through their subject matter expert network, partners, and expert consultants.
● Consultants can look at the company in a cross-sectional manner. This allows them to create a more holistic and ambitious strategy. Employees within a company often suffer from the downsides of task specialization - they only know about their role and not about others to their side, above or below.
● Consultants have the license to provide unbiased opinions to their key clients without being mired in political pressures.
● Consultants often think in a first-principle manner - allowing them to be unshackled from any restrictions that company employees might adorn themselves.
● Consultants are specialized in creating a strategic vision and are working on the project dedicated 100% of the time. Company employees instead would be held back by their day job’s ongoing responsibilities.
More often than not, consultants are subject to allegations of a wide nature from multiple parties. The two main critics are the following:
Client employees: Many clients look at consultants with spite and fear. Regardless of what is the actual project you are working on, many company employees think that they will lose their job because of the consultant - even if you are working on a growth strategy project - which would probably be only talking about job increases and promotions. Many client employees put up obstacles, obfuscations, goose chases, and even complete defiance to support the consultant’s requests. People don’t understand that if the project is indeed about layoffs and cost reduction, it is the company management who has hired the client to work on it. Further, it will be the company management and the Board who will approve any layoffs. Finally, a consultant has no decision-making power over the clients. So if someone loses their job, it is because their company decided to lay them off.
Anti-Consultant League: Many people also believe that a consultant disrupts and destroys more value than they create. The accuse consultants of guzzling clients’ money and delivering nothing. Many of these people are outsiders, fringe client employees, and often people who feel envious of Strategy Consultants. They forget that a consultant is only an advisor - the strategy implementation is still to be done by the company itself. No matter how good a strategy is, if it is not implemented properly, it will likely not produce the right results.
It is a well-known fact that Consulting is not kind to work-life balance. Long working hours, unpredictable schedules, last-minute rush, weekend work - the lot. However, things are not that bad - there is always a bias to public opinion. It is a ship that could be navigated with minimum damage if managed well. A consulting job with zero personal compromises is tough to find - and you will always be annoyed if you keep trying to find the perfect balance. It is an active process that you must keep doing day in and day out.
The fallout from the problematic work-life balance is health. Both mental health and physical health. There are ways to tackle both. And I am more than happy to share tips with anyone keen on it. The idea is to not take too much to heart and always voice your life’s priorities. Consulting is a marathon profession, not a sprint profession. So good managers and partners always ensure that the team’s voice is heard. If you stick to your principles, you will slowly gravitate toward people with similar practices, and hence you will be able to carve out your own niche in the organization.
Consultants are a confused lot when it comes to exit options. They might feel everything is within their reach - and hence can find it difficult to calibrate what is the best next step. The opportunities in front of you are endless. I will list down some of the exit paths taken by people in my network thus far, and you will see why:
● Own startups: People have started their own companies - ranging from a podcast agency, a yoga Youtube channel, a B2B e-commerce marketplace, a merchandising firm, a health-tracking app, a fantasy league company… and whatnot.
● Other startups: You could join any budding startup position. Consultants are perceived to have a high horsepower compared to candidates from other walks of life and are thus ideally suited for startups. I will not even list examples here, as the list can be anything you imagine.
● Technology Corporates: Product Management roles are scooped up by many consultants looking for their next step out.
● Other Corporates: Departments such as Corporate Strategy, Business Development, and Financial Planning & Analysis make for a good target.
● Financial roles: Private Equity, Venture Capital, and Family Offices are also attractive choices - albeit the openings in the sector are generally limited.
● Creatives & Freelancers: Again, the sky is the limit regarding your choices on this. Some people do independent consulting, while some even go for a completely different line, such as coaching here on PrepLounge.
I will give a short list of sample projects from my own knowledge - perhaps that can give you a good understanding:
- A Private Equity firm wants to acquire a fitness chain with 1,500 gyms. Do they want to understand if this is a good idea or not? Is there scope to grow the chain and make it more profitable? How can this be achieved in the next 5-7 years? If possible, what is the best commercial construct to help them maximize their returns?
- A national government wants to strengthen its relations with other select countries to further its own national agenda and boost the welfare of its people. Which countries should it partner with? What should be the pillars of partnership? What are some example partnerships to begin with?
- A national government wants to revamp its sports performance in the international arena in various sports. Which sports should it focus on? What should be the improvement roadmap? What are the actions that the government needs to take to make this a reality? Is there any reorganization required at the ministerial level?
- A multi-billion dollar petrochemical merger is taking place. What should be the strategy of the merged entity from now on to make the best use of the merger? What are the synergies? What are the initiatives that will need to take place? What are the reorganization requirements that will unlock the full potential of the merged entity?
- A well-established boomer-era bank wants to re-invent itself and cater to the new market. What should it do? Should it rebrand itself? Or should it start an entirely new bank? What are the banking products that have the best future outlook? What customer preference trends should the bank aim to capture before the market?
- A major electronics company wants to develop a strategic roadmap to becoming carbon neutral over the next 15 years. How should it go about it? What are the initiatives that it should implement? How can it design products that increase carbon neutrality?
50+ | 48 Reviews with 100% Recommendation Rate | 192 meetings
- Professional Experience: BCG, Opera Solutions
- Languages: English,
- Location: United Arab Emirates
Agrim is an interview coach, former BCG Project Leader, and Solutions Analyst at Opera Solutions. He is a Specialist in PEI / Fit / Unorthodox Cases / CV / Market Sizing. Agrim helped a lot of candidates to land offers from McKinsey, BCG, and Bain. He is an expert in the Middle East (Saudi Arabia / Dubai / Qatar / Abu Dhabi / Oman / Kuwait). As a consultant, Agrim worked as a Project Leader at BCG for four years. Before that, he was a Solutions Analyst for Opera Solutions for two years.
Continue to Learn
Traveling as a Consultant
Get insights from former top consultants!
What’s the Difference Between Strategy and Management Consulting?
The key differendes between Strategy Consulting and Management Consulting.
Free Guide to Strategy& Consulting Case Interviews
Learn more about the application process at Strategy&