Is Management Consulting becoming irrelevant? | Future of Management Consulting | Consulting

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In this weekend's special episode, I talked about the future of Management Consulting as an Industry. In this video, I covered the traditional ways in which consultants used to work, ways in which consulting industry got disrupted, and what takeaways we can draw from this. To start with a simple example of the problems that consultants solve. If the CEO of a grocery store chain is having a problem growing his business, he would reach out to consulting firms. Then a consulting firm would send 3-4 consultants to that specific client so that in 8-12 weeks these consultants would come up with a solution.
The recommendation or solution can be around introducing a new product such as organic products. Or it can be around improving marketing by dividing the customer base into different subsets and targeting them separately. Or it can be around introducing deliveries, scheduling pickups, and so on. A different problem can be a pharma company coming up with a new product and having a problem deciding the pricing for their product.
Consulting company would again send 3-4 consultants who would try to figure out ways to solve this problem. Recommendations can be around the size of the pack or how many pills i.e. include in each packet and what should be the price of each pack. Secondly, consultants can do research on the competitors and share the best practices across industries. So, in the traditional sense, Consultants used to only share recommendations and advice. They were not a part of the implementation.
Talking of human capital, each consultant works really hard on each client's side. They move from one client to another getting broad experiences. These people want to work in consulting because it is a well-paid job that offers a lot of quick learning. The most important one is the fast-track promotion that consultants receive in comparison to other industries. A consultant starts with being an associate, then becomes a manager, and afterward a partner. The partner or principal level role gives the consultant a share in the consulting company. Nobody knows how much these private consulting companies make. Nobody knows the mix of the clients and which industry is dominating.
7 to 8 years out of business school these people get ownership in one of the top consulting firms. The glamour associated with it is unparalleled. Even if someone owns 0.1% or 0.5% of a consulting company, they can expect to make a lot of money on top of their salaries and bonuses. These carrots are enough to encourage anyone to join a consulting company. And consulting is a relatively low-risk career path. As long as one works hard and sticks to a company long term, they will make a lot of money and become partners soon.
Coming to advice large organizations look up to consultants for advice because the CEO and board members need to be pushed. CEO and board members will not be pushed by their employees. This is why it takes an external person to come along and say how the industry is performing and what should be the future steps for the company. This important view is needed for the CEO and the board members. Nobody else but only consultants can give it. Secondly. Consultants are not a part of the implementation process which makes them come up with the best advice or an ideal solution without any other considerations. So, from the human capital and advice perspective both, consultants play a very important role in an organization.
This was the scenario until the early 90s before the data was democratized. Consultants couldn’t leverage early access to data anymore. Every company started collecting data and doing analysis by themselves. Companies started investing in tools that would help them syntesize the collected data. After 2005, data democratization called into question the value offered by consultants. But Consultants started evolving even before the clients questioned them. McKinsey came up with McKinsey solutions in 2007. After this, I talked about various other developments and disruptions in the consulting industry. And lastly, shared what we can learn from this scenario.
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Chapters
0:00 - Intro
0:52 - Pointers
1:07 - Problems Consultants Solve
3:18 - Human Capital
5:50 - Advice
7:45 - Disruption
10:48 - Takeaways
12:32 - Outro

[@PavanSathiraju]

Please find the link to the Management Consulting Program that I personally lead at Blue Chapter! bluechapter.com/consulting-experience-program-gen/ If you are applying for fall 2024 MBA programs, check out the global MBA fellowship program: bluechapter.com/global-mba-fellow/ ** Please do like and share the content if you find it meaningful & check out my LinkedIn and Insta if you haven't already:) LinkediIn - www.linkedin.com/in/pavan-sathiraju/ Instagram - instagram.com/pavan.sathiraju/

[@avinashjha555]

I submitted my contract details, but no one from your team contacted back.

[@PavanSathiraju]

@@avinashjha555 Did you fill the application form? Drop an email to [e-mail]

[@pranzalsingh5279]

I think the biggest plus of hiring a consultant is the industry wide experience they bring to the table. Sometimes a fresh perspective about problem is a game changer, which is difficult to get in house.

[@shahabudink1354]

My key takeaways would be : 1. Data and data based products are picking up, so building a skill stack can help us differentiate from the rest. 2. AI is new and it's here to stay, let's stay ahead on how to leverage the power of AI in making more quality decisions. 3. Myself being in a product management domain, i can see how companies are adopting product led growth and on a whole how all companies are becoming a product company. Adding another point apart from this video, sooner or later our India ministry would have a complete data bank for the country and would restrict access to startups and companies to enable better decisions and implementations. Thus the government also becoming data driven and also product driven when it comes to ONDC as well. So, it is pretty much clear the whole world is marching towards product led, data led and now AI led. Thanks for this wonderful video sir, found it helpful and insightful as well 💯❤️

[@marketminute]

I have been following you for a while, and you are doing great work. Thanks for your efforts

[@YouMe-pj7th]

Key takeaways CONSULTING is continous improving from mega/macro/micro trends Consulting is not just advisory Consulting has become cross functional and techno-managerial

[@velichetyjayant5646]

My key learnings were 1) Not only for MBA 2) Evolving and also being able to cause disruptions like you mentioned data being democratized and they were all already prepared 3) Open for hiring more functional roles

[@abhishekinfra]

1) Implementation companies like Infosys and TCS are bidding for strategy contracts, with the value proposition of end-to-end delivery from strategy to implementation. 2) On the other hand, MBB firms and Big 4 firms have started doing some implementation. 3) Due to points 1 and 2, in a few years, you won't be able to distinguish between a BCG and TCS or between Wipro and Deloitte. Finally, why do only strategy consultants earn so much ? I also work at an IT services company as an "IT engineer". I analyze our client's systems and come up with solutions to optimize and scale their technological backbone. But I don't get paid as much despite applying enough mind to it. Why is that the case ?

[@jimbojimbo6873]

There’s many benefits of having a consultancy outside of just hiring a smart person: 1. You have an independent view that isn’t jaded or ruined by the companies internal culture 2. Trained on many frameworks your internal start wouldn’t even know the meaning of (op model, vendor selection, business case development, etc.) 3. You pay a single fee, there’s no legal costs or national security fees for their overheads 4. They don’t want to lose you ad a client and take a client first approach, they will do everything you ask, work stupid hours, and produce all the annoying documents you need 5. And most importantly, you have access to 100s of thousands of employees which they can pull in to provide subject matter expertise on. Provide you guidance on your job if needed. Compare that to hiring an internal project manager or business analyst that works 9-6 just doing their job… it’s not really a comparison, it’s just a matter of whether you think it’s worth the 1.5x money it’ll cost you for an internal person.

[@chidambaramvalliappan3730]

Useful topic

[@hemshah1567]

I have a final round of interview for a boutique Management consulting firm today 😅

[@kingOfTheAscetics]

The three takeaways from this video are: 1. Management consulting is not just for MBA grads. 2. Management consulting saw the disruptive trends in the 1990s and 2000s and successfully transitioned through these trends. 3. Management consulting is expected to stay on top of the latest AI trends.

[@prashanthhari3514]

Hi. Thanks for sharing. Any thoughts on AI disruption in Consulting? Will AI impact the research aspect of Consulting?

[@varunjoshi90]

Hey Pavan , this is some really good content that you upload. Really very engaging. Please make a video on wealth management and product management as a career.

[@Dat9601]

Three takeaways 1) Consulting is not restricted to MBAs themselves 2) being a domain expert is important. 3) Consulting will evolve over time to stay relevant in the market.

[@PavanSathiraju]

Fair takeaways!!!

[@nirajbirla1]

00:05 Management consulting industry trends and future 01:43 Management Consulting offers recommendations but not implementation strategy 03:17 Consulting offers fast track promotions and ownership within the company. 04:49 Management consulting attracts talent with low risk and high rewards. 06:24 Consultants play an important role in providing advice and human capital perspective to their clients. 08:04 Data democratization questioned consultants' value proposition 09:40 Management consulting is adapting to new challenges 11:08 Management consulting industry is evolving with the rise of product management and software roles.

[@chinmaykarnam6639]

we need more videos on such related topics.

[@LearningAndGrowingInLife]

Loved the video Pavan, insightful analysis.

[@PavanSathiraju]

Thank you:)

[@sanikasinalkar8173]

Hi Pavan, if you could make Produxt Management as a Career Option its’s scope in future, given that there are many people from diverse backgrounds coming into Product Management. Also job opportunities in India , US and Europe. thanks

[@aniket2812]

Another trend is in-house consultancy started by companies themselves.. skin in the game is critical for effective and pragmatic implementations

[@PavanSathiraju]

Agree Aniket!

[@prasadalc]

Do these companies hire someone who is 30 year old but never had consulting experience?

[@PavanSathiraju]

They do. That was my key takeaway #1 in the video. Please check it out again

[@prasadalc]

@@PavanSathiraju thank you. Yes i did go through the entire video, wanted to double check with my scenario. Thanks again for making such quality content. Much appreciated

[@princeofheaven19]

They take in as specialists

[@padmavathynadiminti9341]

@@PavanSathiraju That was really good to hear.

[@TechnicalVigyanrahulky]

I am in ey gds can switch to McKinsey or bcg?

[@palakgrover9925]

Three key takeaways: 1. Having ability to explore trends in the market and then suggesting solutions to the client 2. Should have 360 view to the problem statement (multiple possible solutions) 3. Good collaboration with the sales team helps receive Correct numbers and then providing solutions becomes easier

[@ravinaahuja922]

This is very insightful...saving grace for career confusion.

[@sayujnair1594]

Hi Pavan. Thanks for the insightful video again. I would like to ask a question. As you said expertise in one field might be helpful for getting hired in MBB. But along my journey I came to know that consulting is evolving from T shaped model to W shaped model. Where every individual needs to know bits and pieces of all the domains. How would you like to comment on this. Thanks in advance.

[@friendzhub]

Till there is risk in this world MC will not die.

[@PavanSathiraju]

Hahaha. Well said!

[@raja_hustle4347]

You look much younger in Linkedin but real aging can be seen in KZbin.

[@prahaladsuresh]

Consulting is basically corporate therapy in my opinion. The therapists here (consultants) deal with a plethora of cases and clients which makes their advice very valuable. Does everyone need this kind of advice? Absolutely not. Does this mean data analysts can take over these roles? Absolutely not! Domain expertise and case complexity gives consultants the knowledge edge but deep data analysis gives analysts the skill edge. When they work in collaboration, great value can be delivered. The future is definitely bright for both these professions. This is my take on consulting being a consultant myself.