- Management consulting news
- 07 March 2017
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Are strategic business consultants really wannabe business execs? The consultancy world’s list of alumni-turned board members of major global brands certainly gives that impression.
Top CEOs and business execs; it stands to reason that not all of them can come from the Mark Zuckerberg university whizz-kid mould, or rise from obscurity in their garage (think Jeff Bezos, of Amazon), or bedroom (Richard Branson). The fact is most top execs are an eclectic bunch – but, if the list of alumni from strategic consultancies is anything to go by, there’s one trend that’s very clear: a lot of them are ex-strategic consultants.
Just a glancing look at corporate life today shows a business world swimming with ex-consultants. From McKinsey alone is Oliver Bäte, CEO (since 2014) of Alliance, Wendy Becker, NHS board member, and former CEO of clothing brand Jack Wills; Vittorio Colao, the boss of Vodafone; Jorgen Vig Knudstorp, CEO of LEGO, Sheryl Sandberg (COO Facebook) and Bob Haas, chairman of Levi Strauss & Co. This is not including Dr. Wolfgang Bernhard, board member of Daimler and Ian Davis, the chairman of Rolls Royce and many more besides.
To be precise, a significant minority of 5% of CEOs at S&P 500 companies hired between 2004-2010 were former consultants according to Spencer Stuart (1) - and the same data shows that when these people did take the reigns of a company, they tended to improve the condition of it over the course of their tenure more often than other leaders (71% of the time versus 42% for those without management consulting backgrounds). On reflection, some might say it’s hardly surprising this trend exists. To have gotten into consultancy in the first place means these people are already the cream of the education crop. Many will have MBAs – which also means they’re highly connected – and after gaining exposure to top brands in their day-to-day consultancy roles, some say it stands to reason they’ll get poached. According to career portal, thegatewayonline, some 10-20% of stategic consultants alone exit their world to join the private equity and venture capital industry alone.
But with McKinsey not the only firm with an impressive list of alumni (see box), it perhaps begs the question of not the fact such high numbers exist – but why? For example, do talented individuals simply enter consultancy to deliberately upskill themselves and move on, seeing consultancy simply as stepping stone to their real chosen career faster? Or do they simply get lured away by clever headhunters, who manage to persuade them to think bigger where?
“We see a multitude of strategic consultants jump the fence”, says Michael Barrington, founder of CEO and executive headhunting firm Barrington-Hibbert. “A former consultant is like an exec on steroids! They been in business, they’ve created solutions for clients, they’ve proved they are adaptable, and they know the way corporates work. That makes them very attractive hires.”
However, while these people are often the right candidates, Barrington argues he still sees two very different types of consultants: “There’s a definite smaller cadre of people within this broad group who demonstrate an extra edge”, he says. “These are consultants who are much more the go-getters, the people that want their MBAs, and strategically think about where they want to be in five-ten years’ time. These are the ones who’ll reach out and become the MDs and board members of the future. These differ from their peers who are happy to stay in consultancy, and simply want to develop their career there.”
To this extent, he argues the spectrum of ambition by those working in strategic consultancies is no different to elsewhere. However, what he does argue, is that of those that do leave, rather than it being down to a failure of consultancies to keep good talent, the consultancies are actually happy for this to happen.
“It might sound strange, but Bain, McKinsey, Boston Consulting Group et al, don’t mind their very brightest leaving,” he says. “They understand that if they help – even prepare – them to go off into industry and become the next big CEO, the payback will be when that that said CEO then needs consultancy services. Who will they turn to? To their old employer of course – if they get the exit right.”
Serving their time
Not all current execs are flash in the pan consultancies. Some have stayed the course. Gerald Corbett (alumni of Boston Consulting Group) – who has served at director-level at 13 different companies so far (including Britvic, Betfair and Moneysupermarket.com), was a consultant for seven years before joining the Dixons Group in the 1980s. Jim Whitehurst, was a partner there for 12 years before leaving to become COO at Delta Airlines.
However, there will always be those that dip into consultancy to earn their spurs, then check out again, or those that had already signalled wanting to do bigger things. Nick Wheeler, the serial entrepreneur and founder and chairman of Charles Tyrwhitt was a Bain consultant for just two years before launching the business he first dreamed about doing while he was at university. In a perfect example of irony, two former Mckinsey consultants - Nick Patterson and Richard Rosser have launched their own business – MoveMeOn.com – which specifically exists to help strategic consultants find jobs in top organisations. It boasts 24,000+ alumni on its books that are eager to move.
‘Sophie’ is just one person it’s helped. After four years at Deloitte she says: “Since moving outside consultancy I now feel I manage my own career, rather than it being dependent on my next project. Working in-house I know my employee experience is cared for. I didn’t even know who the HR person was in consulting!” As for her advice to other consultants, she says: “Don’t wait to leave until it’s too late. The best advice I was given was that you should always be looking and knowing your value on the market.”
And this is the rub. Consultants today are far more aware of what they’re worth by doing their time in consultancy for a bit, and moving on. But, if this raises consultancy alarm bells though, Barrington offers advice of his own too. Being a strategic consultant on its own isn’t always someone’s fast ticket into top corporate director roles: “We’re looking to place a CEO into a FTSE 50 firm,” says Barrington. “Given the choice between someone who has been in previous CEO or director roles, or someone that just has the theoretical knowledge, we’d still go for the candidate with experience every time. Sometimes consultants are great at knowing the theory, but to deliver change requires leadership and being able to have people follow you. Not all consultants have this essential executive skill.”
Spencer Stuart’s own analysis into consultants who became CEOs supports Barrington’s view too. While consultants might have brains, it cites a ‘massive bias’ amongst directors against them because the perception is still that they are ‘not good operators’. In essence, they must prove their worth in business first – by taking a bridging job first. Then, the evidence suggests, if they are successful at that, the world really could be their oyster.
BOX: Who’s been where?
Former McKinsey Consultants
- Hubert Joly, CEO, Best Buy
- James McNerney, recently retired chairman and CEO of Boeing
- Mario Greco, CEO of Zurich Insurance Group
- Stephen Green, former chairman, HSBC
Former Bain Consultants
- Mitt Romney, Republican nominee for President in 2012
- Kevin Rollins, former CEO, Dell Computing
- Greg Breenman, former CEO PwC Consulting
- Jon Wright, co-founder, Innocent and JamJar
- Annabel Hoult, COO Save the Children
Former BCG Consultants
- Jean-Christophe Babin, CEO, Bulgari
- Roland Berger, founder of Roland Berger Strategy
- Ian Cheshire, former CEO Kingfisher
- Andy Hornby, CEO of Coral, former CEO of Alliance Boots former and HBOS plc
Peter Crush for Consultor.news
Freelance business journalist
1 - Research by Spencer Stuart quoted in the Harvard Business Review