The consulting industry is incredibly diverse in its nature of work, with many niches and specialised sectors. Consulting is an advisory service and in the business world can cover every aspect of business operations from tax through to logistics.
It can be confusing to understand the differences between what kind of work is done by the various types of consulting services. Management and strategy consulting in particular are often confused as they can work together with clients, however, there are some key differences in the nature of their work, and this is reflected in the differences in their working hours, salaries and the projects they take on.
At the highest level strategy consulting is the "What" and management consulting is the "Do". Strategy consultants focus on the big questions and strategic direction whilst management consultants execute strategic vision. They are interconnected and often rely on each other.
The following article is a comparative guide to understanding the difference between strategy and management consulting to help you gain a better insight into what the difference is between strategy and management consulting.
2) Nature of Work
Organisations pay consultants to deliver unique projects that they cannot deliver with their in-house skills or capacity. These projects are centred around change in the organisation such as technology implementation, organisational restructuring etc. They are big, complex projects but once completed can be maintained by significantly fewer people and therefore it does not make sense to permanently hire expensive employees until the change is implemented thus, consultants are a popular solution.
Consultants also bring experience working on similar projects and so bring their learnings with them to maximise the project value and efficiency.
Strategy and management consulting are interrelated and therefore there is often a 'handing over' point in the project from strategy to management. This can create difficulties and implementation challenges and to overcome this firms such as PwC have acquired strategy firms to be able to offer an end-to-end consulting solution from strategy through to execution.
At the start of a consulting project will be the strategy phase. This is working with c-suite executives to research and prioritise the highest value strategic project to maximise value for shareholders and business growth (usually profit margin or revenues).
The most common point that strategy consultants are engaged is when a new CEO is appointed. The CEO will want to set a strategic vision for their tenure, usually a 5 year timeline, in order to meet a business target such as grow revenues by 20% in the next 5 years.Strategy consultants will then work with the executive to decide the best way to achieve that goals based on competitors, market conditions etc. Once the strategic direction has been set then it will fall to the business and potentially management consultants to implement the strategy.
These projects are much shorter than the implementation phase and typically last 4-8 weeks. This means they are often fast-paced and heavily research based.
Strategy consulting requires a strong aptitude for problem-solving and arithmetics as well as out-of-the-box thinking and high adaptability. Excellent people skills, time management and organisation are also skills required from top strategy consultants so they can quickly engage with multiple stakeholders within a business to extract the information they need to make robust decisions.
The ultimate goal of strategy consulting is to give clients a clear path to more market share and a competitive edge in their industry.
Some examples of projects a strategy consultant might be engaged in are:
Launching a new product, service or line of business
Increasing market share
Mergers and acquisitions
Current and future trend analysis
McKinsey, Boston Consulting Group and Bain & Company are known as the ‘Big Three’ of the consulting industry and are the most competitive and well-established strategy consulting firms in the world.
Management consultants focus on implementing change in an organisation and that can be improving existing operations or implementing strategic change (usually preceded by a strategy).
The typical management consulting project involves the following steps:
Deliverable agreement (what will be delivered)
Project plan (when will milestones be delivered)
Discovery (what are the possible solutions)
Solution design (how will the problem be fixed based on budget and client situation)
Implementation plan (what are the key tasks required to deliver the agreed change)
Implementation (delivery of solution)
All implementations have recently adopted an approach that originated in technology deployments:
Pilot: small scale implementation on test group to mitigate risk of failure
Learn: any failures or issues with the solution in the pilot is recorded
Iterate: any issues are corrected before wider rollout
Implement: mass scale implementation is carried out across the client organisation
Monitor: the implementation is monitored post implementation for any further issues
Steps 1-6 can be done by both strategy and management consultants. However, management consultant expertise typically tends to lie in implementation, as outlined in step 7.
Some of the biggest management consulting firms are IBM, EY and the ‘Big Four’ (Deloitte, Accenture, PwC, and KPMG). These companies hire competitively and deliver high-quality services, implementing innovative and sustainable solutions to their clients across a broad variety of industries.
Management consultants can be specialised in a various business areas and so have a deep understanding of their respective fields of work. For example, consultants at IBM specialise in cloud solutions and consultants such as EY and the ‘Big Four’ offer consulting services across risk, tax, people and technology with each practice area only delivering projects in their respective area. Across the board, quantitative and problem solving skills are required as they are for strategy consulting however for management consultants excellent communication and interpersonal skills are even more important as they typically work side by side with employees from the client on difficult topics such as process change.
The hours in consulting, as with most corporate career paths, are infamous for being long. They can range from 8-16 hours per day, depending on the nature of the ongoing project.
Strategy consultants aim to provide the expertise and resources needed to solve business problems such as those mentioned above. The nature of these projects can often be short due to strict deadlines, but of a high intensity, so can result in longer working hours for the duration of the project.
Contrastingly, management consultants are often employed for longer-term projects involving the implementation of new strategies for a client organisation, and can last for 6 months to more than a year as consultants work closely with their clients to ensure a smooth transition period during the solution implementation. Due to the reduced time pressure management consultants can tend to work the standard 8-hour workday (9am to 5pm) on projects with periods of longer hours as implementation deadlines approach.
However, it is important to note that the working hours of both strategy and management consulting are variable and can change depending on the nature and complexity of the client’s project, so whilst these times can give an average estimation, they are not an exact answer. Additionally, many other factors can affect working hours in consulting such as location, client demands, travel requirements and firm expectations.
For a full breakdown of the working hours of a consultant, see our weekly working hours analysis here.
4) Salary Differences
Consulting firms in have a large range of starting salaries for graduates, ranging from $30,000 to $80,000 depending on the firm, with an average of around $50,000.
Our analysis of 60 of the top consulting firms in the world suggests that on average, strategy consultants can expect to earn 23% more than management consultants. This is a combination of longer working hours and also complexity of work attracting higher prices.
The difference in salaries is apparent even between firms that have both strategy and management consulting practices within their service offering. Salaries are aligned to market rates and therefore consulting graduates in the same firm will likely experience differences in starting salaries.
The salary differences exist all the way up the organisational period as well as ultimately strategy consultants charge a higher price for their work and this is reflected in salaries.
5) Project Examples
Below listed are some examples of project types and services offered by strategy and management consultants. Typically, management consulting involves the ‘implementation stage’ of professional business advice and is therefore more time consuming and extensive, whereas strategy consulting projects tend to be sporadic and intense in a tight schedule.
Technology transformation (changing an organisation’s tech systems including all hardware, software, data storage, internal/external networks and information systems)
People & culture change (creating a new and more motivating environment for workers, improving recruitment processes and appraisal systems)
Digital implementation (digitising areas of business operations by implementing digital technology)
Cloud migration (moving all documents and data for a company from on-site locations to a digital cloud space)
Programme management (overseeing day-to-day operations)
Organisational restructuring (re-working the hierarchy and chain of command for more efficient communication and effective leadership and delegation)
Cybersecurity implementation (improving firewalls and online security systems company-wide)
Organisational design (creating a new/better structure for the organisation including all roles, line managers, and directors to improvise lines of communication)
Cost reduction (lowering raw material or production costs (fixed or variable) for a product)
New technology market scan (market analysis and tactics to search for new tech and competitors)
New business model design (innovative and unique strategies to renew the existing model and restructure the business)
Pricing strategy (working to create competitive pricing schemes and models that fit the market)
Market Entry (entering a new market with a new product or service successfully)
Growth strategy (trend analysis and forecasting to formulate business development strategies)
Both strategy and management consulting are fast-moving, varied and fascinating areas to work in within the consulting industry. Consultants are always learning, collaborating and striving to deliver the best possible results to their clients.
6) Firm examples
There are thousands of consultancies across the globe with many spanning more than 60 countries and employing thousands of employees.
MBB is the acronym given to the three biggest strategy consulting firms; McKinsey, Bain and BCG. These firms are accompanied by numerous other strategy firms that compete for the same work, Strategy& and Oliver Wyman are two of these.
Management consultancies have grown significantly in the age of digital and technology transformations. IBM famously transitioned from selling IT hardware to software and now is a global supplier of technology consulting services focusing on cloud migrations, cyber security and artificial intelligence. The big four professional services firms (PwC, Deloitte, EY and KPMG) have all moved into this space in the last 10 years, leveraging their existing client relationships to provide transformation services.
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