5 reasons why strategy consultants transition to a role in the industry

16 April 2018 Authored by Consultancy.uk

Every year, top talent from the likes of McKinsey BCG, Bain, Oliver Wyman, Roland Berger or Strategy& make the transition from strategy consulting to the industry. Despite all the personal and professional flavours out there, new research shows that, at the basic level, there are five reasons why consultants decide to leave consultancy to embark on adventure outside the industry.

For corporates across the globe, consultants that work in the top of the strategy consulting world are an in-demand commodity. Professionals that have built a solid base at firms bring analytical rigiour, demonstrated consulting and programme management skills and more to the job. They also have have knowledge of industries and change programmes, experience with operating at strategic level and other benefits of consultants.

For consultants, the move into the industry commonly occurs for several reasons. They can gain more line responsibility, and improve their work-life, dodging work weeks which often top 70 hours. The jump can also provide for a better salary package in many cases. While this has traditionally been a matter of speculation, however, new research has sought to provide concrete evidence for why some of strategy consulting’s top talent opt for a consulting-exit.

In a study performed by the River Partnership, the firm interviewed 250 participants from leading strategy firms, with all respondents holding a background with one of McKinsey & Company, The Boston Consulting Group, Bain & Company, Oliver Wyman, Roland Berger or Booz & Company (now Strategy&). Of that pool of interviewees, 126 transitioned into corporates, 88 transitioned into start-ups/SMEs, 30 transitioned into private equity, and the rest opted for a self-employed career as an independent consultant.

The largest strategy consulting firms in the world

The majority of these each gave reasons for their shift which relates to one of five categories: salary, working hours, travel demands, personal circumstances and professional challenge (i.e. wanting a different role). Of course, there are plenty of individual situations which prioritise these factors differently, and personal developments which can change all the time and influence this, but these were always found to be the base “ingredients” by the analysts. While shifts in the personal circumstances of an employee are almost impossible to legislate for, the report was able to deliver some insights regarding strategy advisors’ routes away from external consulting.

Work life balance

One ex-McKinsey Associate Principal polled told the researchers, “if you want to be well-paid, stay in consulting; if you want to be well-rounded, leave.”

Despite being the most obvious material draw for people to typically change jobs, salary was found to be the least important factor in deciding to transition to industrial life, at 5.2 overall. This is perhaps unsurprising, given the generous packages offered at the top strategy consulting firms. The fact is that industry salaries remain largely competitive (particularly in Central Strategy functions), and most employers know what they need to offer, although interestingly the researchers did see this vary across levels of experience, with compensatory packages mattering more to individuals with between 4-8 years’ experience (69% more than the other demographics), suggesting groups looking to hire individuals with these criteria may still need to up their pay offers.

In contrast, of the 35% of the participants in the survey who had industry experience prior to joining consulting, 83% considered working hours at least “fairly important” when deciding to leave (compared to 45% of the rest of the group), highlighting a significant difference in priorities. This is most likely because line roles in industry typically demand fewer working hours than consulting.

However, these individuals are likely to get a rude awakening upon arrival in new roles, as strategy teams in industry will still demand high amounts of time. Of those who had already moved, barely 20% found much difference after transitioning, something which will no doubt impact job satisfaction in the long run.

How important are the following factors for a successful transition to the industry

Travel demands and professional challenge

Management consultants in general can spend up to 80% of their working time at locales away from home. High-intensity periods of travel are part and parcel of strategy consulting more specifically, too. As a professional’s career progresses, this is more and more likely to push them toward changing jobs. Individuals with between 1-3 years’ consulting experience were 72% less likely to be turned off by travel demands, compared to their more experienced piers, as the demands made by business travel become more tiresome over time. This, balanced with the growth of ageing consultants’ families, and the desire to spend more time at home, along with other changes in personal circumstance also play into the factor.

Meanwhile some employees simply take a change of role as a means to challenging themselves professionally. According to the study, wanting a new professional challenge may seem like an obvious reason to look for another job, but the strategy talent market is unusual as many job-seekers within it are not only looking for a different short-term challenge, but in most cases would seek a different role altogether, at least in the mid-term. This desire to have a change in working roles sees the strongest motivations for leaving consulting listed by participants as being able to execute and implement initiatives, and to take ownership of a functional area, P&L or team. None of these responsibilities are easy to get in the strategy consulting space, and in any case most individuals approaching the Partner level are disinterested in the addition of revenue-generation to their job description.

Interestingly, the data also revealed that strategy professionals do not often shop around, when searching for such a new challenge. Rather, over 70% of participants looked at three or fewer career alternatives, with younger individuals in particular being less likely to look at multiple options. Meanwhile, 37% of all respondents examined a single opportunity before deciding to leave their role.

The reason for this is likely due, in large part, to time pressure. The first years in consulting are arguably the most intense, with the workload being new and the challenge of managing the pressure being at its steepest, and eventually this combines with a 70+ hour work week and 80% travel burden. The fact is, then, strategy consultants rarely have the time to consider their next career step, let alone manage an extensive job search directly.

How do the following compare to working in strategy consulting

Growing appetite for start-ups?

Trends in the figures suggest that consultants are also increasingly interested in joining start-up or SME environments, believing that, perhaps with a less ingrained corporate culture, or fewer executives to answer to, they are more capable of making a substantial impact there. As with the perception of workload, however, this generalisation is often inaccurate, with 76% of the 88 individuals surveyed who transitioned to start-ups or SMEs saying that they felt they made an impact – barely improving on 72% of the 126 participants who joined  larger corporate firms.

When in the job, the data also seemed to reveal that it was of more importance for consultants to have good senior leadership than during their job searches (nearly 2 points higher overall). The reality for most consultants is that industry work – whether corporate, SME or start-up – demands very different soft-skills and relationship-building capabilities. As a result, most need help to adjust culturally, and in some cases become frustrated with the slower pace associated with longer-term “internal” projects.

Thanks to what they were used to in their project work as a strategy consultant, many also placed high importance on having a clearly-defined role. Meanwhile, despite having had the intention of moving into Line Management, some found the grass was not in fact greener elsewhere, and regretted pushing this too quickly. An ex-Bain & Company Manager, now managing a sizeable salesforce operation, told the researchers, “I became very bored very quickly when I joined a functional team directly after consulting. I missed the diversity of project work. My brain was not used to thinking about the same problem all the time.”

Related: Why strategy and management consulting are so popular among graduates.

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