Chaitanya Shravanth, Founder, Cureyo Health
The management consulting space in India busted in the 1990s, with various international consulting firms setting up shop in India to address the opportunity created by a growing globalized economy. While the largest firms (Mckinsey et al) were among the first to enter, by mid-2000s all major names in the consulting industry had established their presence in India.
In India, management consultants are typically hired to either provide deep domain expertise in certain strategic areas or to take management priorities to fruition. Further, given the growing market, a majority of projects/ assignments are growth focused (e.g., strategy to enter new markets, expand product offerings or geographies, forward integration, etc.) or efficiency focused (e.g., improving sales or operations efficiency, etc.). Unlike the west, cost reduction projects do not form a significant majority, except in times of recession.
Nature of Management Consulting in India
Within management consulting, projects/ engagements are usually one of two types - Strategy or Implementation. Strategy consulting assignments, by definition, are shorter term engagements focused on creating a strategy/ roadmap for key business problems. Most assignments are 8-12 weeks long (while some may stretch further) depending on the nature/ complexity of the assignment.
Implementation projects are focused on making the strategy (whether created internally or by a consultant) a reality. Such projects are typically longer in duration and run into 1-2 years. Typically implementation projects entail running pilots, educating the relevant workforce, handholding, ensuring adoption, internalizing and finally monitoring/ tracking.
Traditionally, at the highest level, management consulting firms are divided based on the nature of work indicated above, into ‘Premium Consulting’ and ‘Value Consulting’. Besides these, there are other boutiques or niche consulting firms that are sector or horizontal specific.
Premium consulting firms typically include the likes of Mckinsey, BCG, Bain, AT Kearney, etc., which are characterized by relatively higher billing rates (per hour) for the resources and hence higher margins. The consulting arm of the Big 4 typically constitutes the Value Consulting firms.
Earlier, Premium consulting firms focused primarily on strategy consulting assignments while Value consulting firms focused on Implementation assignments. In line with the nature of the work, Premium consulting firms had lower leverage ratio (Partners to Other resources ratio) of 1 partner to 10-15 resources and hence had smaller teams.
Over the past few years, even the so called Strategy Consulting firms have been exploring and grabbing implementation opportunities and vice versa. Firms are now focused more on finding ‘flywheel’ clients with longer term relationships and providing a one stop, end to end solution to clients from strategy to its implementation. This new philosophy has also driven consolidation in the industry - for example, PWC’s acquisition of Booz & Co., Deloitte Consulting’s acquisition of Monitor Consulting.
While almost all corporates in India (including some of the larger startups today) are potential clients, nature of the engagement and the consulting firm engaged differ based on the affordability of the clients. While almost all the large companies in India engage management consulting firms for both strategy and implementation projects, mid-size companies tend to engage consultants primarily for strategy projects, taking over the mantle of implementation upon themselves.
Indian conglomerates such as the Tata Group, Reliance, Adani, etc., usually work with multiple consulting firms on different parts of the business depending on the firms’ past experience in the space. Consequently, consulting firms have also begun to be known better for certain type of assignments, e.g., A T Kearney, thanks to a stellar impact on a large project for an FMCG giant, is now well known for operations improvement projects. Similarly BCG is well know for operations improvement in the financial services space.
From personal experience, India being a value conscious market is known to be one of the tougher consulting markets, second only to the Middle East. For example, a large number of projects, especially implementation assignments, have outcome linked fees, where a significant percentage of the total fee is variable and dependent on the achievement of the target revenue, profitability or cost reduction goals.
Consulting staff/ consultants constitute close to 90-95% of the workforce in almost all management consulting firms. The entry is from 3 routes. A majority of the consultants are hired directly from campus (management or other schools), where management consulting jobs are typically among the most sought after placement opportunities. The nature of consulting work is highly academic and hence academic performance is a significant criteria while hiring. Firms also look for “all rounded” personalities during their campus hiring process. Consultants also move between firms frequently. Typically moving to a so called better firm could result in taking up one (or half) level lower than the previous designation and vice versa.
Consulting firms also hire a number of specialists, who typically come in with relatively deep/ long experience in a sector and are usually considered Subject Matter Experts. Such hiring usually happens for mid/ senior levels in consulting. More recently, consulting firms have been placing greater importance on hiring SMEs as against other routes.
Given the primary resources in management consulting firms are the consultants themselves, firms are very careful about nurturing and growing the right talent. The work environment while highly collaborative is also very competitive. Most strategy firms follow an “Up or Out” policy, which means that consultants who are unable to progress to the next level within the stipulated time period, are usually asked to leave. On the other hand, top performers are frequently promoted out of turn.
Personally, I believe, consulting is one of the best work experiences one can have at early stages of their career, especially post MBA. Consulting skills are largely “life skills” and hence the job teaches you the basics of what you need, to succeed as a professional. Beyond fine tuning written and oral communication, consulting equips one with a structured way of thinking that helps in breaking down problems and analysing situations even with insufficient data. Further, the experience of working with senior management/ CXOs on the client side and seasoned consultants within the firm is invaluable in building perspective and character.