Did you know that the first strategy consulting firm was established by a chemist from MIT? When Arthur Dehon Little started his firm in 1886, little did he know that he was pioneering the path for what would eventually be a multi-billion dollar industry.
Strategy consulting is a niche that provides strategic advice and guidance to organizations on the best way to achieve a goal. It involves analyzing the issue at hand through research, identifying present and future opportunities and challenges, and then making recommendations.
Strategy consulting can be seen as a subset of management consulting. While management consulting focuses on improving overall company health and performance; strategy consulting focuses on more specific goals. Management consulting can be seen as more big-picture while strategy consulting is more honed in on the details.
Why do organizations need strategy consulting services?
The main reason is that organizations need an objective and unbiased third party to help with decision-making. When decisions involve millions of dollars, a wrong move can topple the entire business. In the face of such uncertainty, strategy consultancies provide research-driven and data-backed advice on the right step to take.
Some of the projects strategic consultancies are hired for include:
- To improve company performance
- To create a competitive advantage
- To build brand awareness
- To increase revenue
- To reduce costs
- To find out whether a particular idea will work
- To get advice on legal matters
- To manage crises
- To perform due diligence
- To protect intellectual property rights
- To determine best practices
- To decide whether to change direction
- To restructure operations
- To diversify investments
- To set up joint ventures
- To align corporate objectives with those of shareholders
- To enhance credibility
- To gain access to funding
- To acquire assets
- To dispose of underperforming divisions
What does a strategy consultant do?
Have you ever played a game of chess?
There are various opening strategies, defense techniques, and tactical plays to finally result in the checkmate. Grandmasters spend years honing their craft; thinking and planning ahead for every possible outcome before a game.
Strategy consultants work in the same way, using their specialized industry knowledge and expertise to advise clients on the best route to take to achieve a particular objective. They anticipate problems before they arise and work out solutions to turn around challenges.
A Quora response by the CEO of a boutique consulting firm outlines the step-by-step process strategy consultancies usually follow. He says, “Strategy consulting firms will traditionally have the following model in dealing with a company:
1. Identify the problem and underlying issues
2. Research all credible options and solutions to the problem
3. Perform quantitatively each option’s benefits and trade-offs through mechanisms such as scenario analysis and sensitivity analysis
4. Recommend a solution and implementation strategy”
And if you’re a visual learner, here’s a video of a hypothetical example showing how strategy consultancies such as McKinsey, Boston Consulting Group, and Bain approach projects.
What does the strategy consulting market look like?
Strategy consulting – considered as among the most distinguished sectors in consulting – holds around one-eighth of the total consulting market.
In 2019, the global strategy consulting market was estimated to be worth $55.04 billion and this figure is expected to almost double by 2027 to $101.75 billion, according to Verified Market Research.
The head honchos in this industry are the top-tier firms such as the ‘Big Three’ (McKinsey, Bain, and BCG), ‘Big Four’ (Deloitte, Ernst & Young, KPMG, and PwC), and other global players such as Accenture, Oliver Wyman, AT Kearney, Booz Allen Hamilton, and Roland Berger among others.
What is the average salary of a strategic consultant?
It’s a known fact that consulting as a profession draws in a salary on the higher end of the pay spectrum.
Strategic consultants in the US earn an average of $90,189 per year which works out to $43.36 per hour, according to Zippia. The cities with the highest average salaries are San Francisco, Quincy, Piscataway, New York, and Austin. And professional and technology industries are those that pay the big bucks.
In the UK, the average salary is £42,930 according to Payscale. However, the range between an average entry-level consultant to a more experienced one varies between £32,671 to £90,000 based on the reported salaries.
What makes a good strategy consultant?
There are various skills, both natural and that can be acquired, which are essential for a strategy consultant to succeed in the industry.
A key skill required for any successful strategist is objectivity. It’s essential for a strategy consultant to remain impartial and not get emotionally attached to any specific solution or idea. A person who has no bias towards either side will always come up with better results than someone who favors only one option.
Deep Industry Expertise
It’s important for a strategy consultant to keep abreast of the latest trends, data, products, services, customers, competitors, markets, regulations, and changes in the industry. A good strategist draws upon his/her practical experience and is able to apply this information to different situations.
While it may seem like a strategy consultant is a lone wolf single-handedly turning the fortunes of a company around, this is definitely not the case.
Strategy consulting is a team effort and involves the cooperation and expertise of multiple colleagues and stakeholders. Thus, it is important to possess great interpersonal skills and be a team player. It’s also key to know which tasks to delegate.
Critical and Creative Thinking
An ability to think through complex issues is vital when analyzing situations. It’s key to be able to think on one’s feet. Critical thinking enables a strategist to look at the available information and find the best possible solution to the issue at hand as well as anticipate future consequences of the decision taken today.
Looking at the problem with a creative hat on helps a strategist think outside the box and come up with innovative ideas that may have been overlooked by others.
Change is the name of the game in strategy consulting. Being flexible allows a strategist to be open to changes and adapt quickly so that his/her work does not become obsolete. It requires excellent organizational abilities, open-mindedness, the capacity to multitask effectively, and the ability to keep a cool head under pressure.
Is strategy consulting a good career?
This answer depends on what exactly you’re looking to achieve from the job.
To go off-tangent for a second, the word strategy comes from the Greek root ‘strategos‘ which roughly means ‘general’. This dates back to ancient times when military commanders, also known as generals, devised various strategies and planned ahead to ensure victory before rushing into battle.
A strategic consultant acts like a general, using their industry experience and unbiased third-party perspective, to guide their client on the best way to achieve their goals.
So if your skills include natural leadership ability, strong communication, willingness to learn new things, a penchant for data and analytics, problem-solving abilities, openness to challenges, and an ability to understand human behavior; this might be the right career path for you.
You’ll also draw in a hefty salary, get to network with bigwigs in the industry, and learn about the overall big-picture as well as the nitty-gritty of how a business operates. The industry is a growing one and there are also a lot of opportunities to move up the career ladder.
However, this profession is not for you if you’re only entering it to make big bucks, gain some broad experience in a reputable career, or get a job that looks good on a resume. The hours are long are rigorous, and if you don’t harbor a liking or passion for at least some aspects of strategy consulting, you’ll easily get burnt out.
How can you become a strategic consultant?
So you’ve decided that strategy consulting is the right fit for you! That’s great!
But how can you get a foot in the door?
Well, becoming a strategic consultant has a similar entry process as joining the consulting market and there are three usual ways to get into this industry (especially at a well-known firm):
1. Pursue an undergraduate business-related degree from a top-tier college and apply for an internship or job at a consulting firm
2. Pursue an MBA from a top-tier college
3. Gain some years of specialized work experience under your belt in a consulting-related field and then make the switch
Strategy consulting is a lucrative field with established strategy consultancies charging a premium to guide organizations on the right path to achieving their goals.
I hope that this article has provided you with a clear picture of the strategy consulting industry and has helped clear up any confusion regarding whether this profession is a viable career choice.