How many consultants are there?

Like a typical market sizing problem you might get during a consulting interview, it’s an interesting question. According to the last population census, there are 700K+ people in the United States who identify as a consultant.

Of course, consulting is growing

There are a half dozen reasons why consulting is a bullish career bet:

• An enormous secular change in the way we work (think: remote work, automation, machine learning)
• Projects have become the de-facto way for high-value work to be organized
• Simple problems have been solved; what’s left is the ambiguous, cross-functional, messy, new stuff
• M&A only continues to grow; complexity requires simplicity. Consultants simplify
• Consulting skills are fungible (oh, GMAT words) and apply to numerous career paths 
• (Controversial statement coming) Companies have woefully under-invested in their human capital, so they hire in temporary talent (read: consultants) to solve problems and make things happen 

Yet, Not everyone is a management consultant

So this might come off as a bit arrogant, but that’s okay. 

A lot of people have “consultant” on their business card because they serve clients, but they are not really consulting the client. For example, my first job title out of college was a “financial consultant” for a large brokerage firm. In reality, I sold financial products – stocks, mutual funds. I sold stuff.

There’s nothing wrong with that. Sales is one of the hardest and most valuable activities; if you are a great sales person, you will always have customers that love you = you will always have a high-paying job. The robots will never become more efficient and machine learn their way to gaining a B2B buyer’s trust. That’s a human thing.

Okay, so what do management consultants do?

Okay wise-guy.  So what exactly do management consultants do so differently from sales, customers service, marketing, researchers, project managers, subject-matter experts, bankers, accountants, administrators, facilitators, trainers and others?  What make these wild flowers so special?

I’ve written 500+ blog posts on consulting-ish topics, so while this is not the only answer, I would submit that a workable definition might be:  Management consultants 1) help executives 2) break down problems, 3) make difficult decisions, and 4) create change.  Why just executives? read more here. 

2) Break down problems

This sounds simple, right?  Everyone solves problems at their work. Heck, if there were not problems, we wouldn’t have jobs.  So what makes the problems that management consultants solve unique?

• Clients don’t self-diagnose themselves well; (think: do patients know what’s wrong with themselves?)
• Many problems cross functions, departments, and business units
• The data is often messy or missing
• Can’t anticipate the future by only looking at old data
• Organizations inertia is usually to do nothing 

Consultants get the messy problems 

Not all problems are the same.  Some are big, others small. Some are ambiguous, while others are clearly defined. Guess which ones the clients solve themselves (rhetorical question)?  Yes, clients get the problems shown in with the red triangles below.  If I were to illustrate with some examples, they might be:

• Massive merger (size) between two global (scope) companies with 100+ locations globally
• Scenario planning for potential changes in European (complexity) tax regulation (ambiguity) 
• Digital transformation for 100+ year-old bank (stakeholders) 
• EBITDA improvement in a private-equity owned (urgency) company 

What kind of problems do consultants solve?

Clearly, this part of the blog post could go on for days, but instead, I went to the websites of the big 3 (McKinsey, BCG, Bain) and this is how they described their capabilities and functional work. Basically, these are the kind of problem that they solve. Definitely see some commonalities including: digital, M&A, operations, marketing & sales, strategy, transformation, sustainability, diversity/equity/inclusion.

Of course, this is probably a simplification since BIG, messy problem a Fortune 500 companies probably touch on many of these functions/capabilities.  Of course the implementation will be different depending on the industry, lifecycle, strategic positioning within the industry, but you get the idea.

Exercise: What kind of consulting project would this be?

As a sample exercise (remember, I am a teacher at heart), when you read the Wall Street Journal or news, think about what kind of consulting project Deloitte, PWC, etc. . . might be proposing the the clients.  You will be surprised at how “right” you probably are. . . 

How do consultants break down problems?

Will write more on this topic later but let’s think of this in two simple steps: 1) lazily opening the problems up 2) aggressively closing them down.  This hypothesis-based approach is both nuance, fun, and a little wonky.  It’s quite different than what you might think. Based on research, experience, and intuition consultants “guess” their way to the answer(s). Tell me what you think of the follow graphic, and more posts to follow.