We get asked about the differences between strategy and management consulting a lot. As a broad rule, strategy and management are roughly used in the same way. More often than not, strategy and and management are interchangeable in consulting cover letters.
However, there are actually some important differences, but it often depends on the context. There is certainly no hard and fast rule.
This article is a shorter one, summarising the different attitudes to the dilemma. It is certainly not definitive and opinions differ widely within the consulting industry.
1. Strategy is a subset of management
At least in the broadest sense. If you think of management as the governance of the entire organisation, then strategy deals with the specific decisions or indeed the overarching strategy. Management therefore comprises both sides of consulting – implementation and strategy. In this sense, strategy is comparable to other subsets of management like human resources consulting, IT consulting etc. This is what is meant by “strategy” in strategy statements.
A good example is the strategy statement of Leeds University, UK:
“By 2015, our distinctive ability to integrate world-class research, scholarship, and education will have secured us a place among
the top 50 universities in the world.”
This is confusing because many firms call themselves strategy consultancies when in fact they really deal with all management problems. Strategy is just the sexiest part. For example, Roland Berger and Strategy& would both say they are strategy consultancies, but would also accept the label of a management consultancy. That being said, they might take issue with any student who focused on the term management, instead of strategy, in their application.
This chart loosely represents where some firms fall in the management – strategy spectrum. Remember, almost all of these firms also work in the other verticals. It is a generalisation.
2. Strategy and management are different
In other contexts, strategy and management do express a difference. If you are speaking more in terms of the different elements of a consulting project, then strategy might refer to the business’ operations – distribution, costs etc – and management refers to the decisions taken in the C Suite.
Therefore, strategy consultants deal with a portion of a business whereas management consultants deal with the whole picture. Or at least, the whole picture from the perspective of the CEO. This line is probably the most blurry. It goes without saying that most of what a CEO does is intrinsically strategic.
This graph demonstrates how management and strategy can be exclusive. Management sits somewhere outside this venn diagram.
3. Management and Implementation
The other difference that these terms imply is that a management consultancy is more likely to deal with implementation. This has historically been true. But recently, is the least effective differentiating factor. Strategy consultancies are increasingly doing implementation too. Previously, management consulting firms thought in terms of transformation, requiring them to actually carry out their proposed strategies.
Our parting advice would be to refer to strategy consulting as much as possible. It sounds sexier in the industry, but “strategy” is generally more transferrable skill to other financial service sectors. Remember, all firms conduct some sort of strategising, but not all of them think in terms of management!