Posted by Khaled Kteily on in All About Consulting

The Pygmalion effect

In 1968, Robert Rosenthal and Lenore Jacobson reported the Pygmalion effect, and named it after Pygmalion, a play by George Bernard Shaw.  Students at a single California elementary school were given a disguised IQ test. Teachers were then told the names of some of the students, 20% chosen at random, could be ''spurters'' that year and outperformed their classmates. The actual scores of the students were not disclosed to the teachers.

This two-part series is written by David El-Achkar, an ex-McKinsey consultant and part of the MCN's Advisory Board. Haven't read Part 1? Check it out here. David is an engineer by degree, a consultant by experience, and an entrepreneur at heart. He also puts everyone to shame by being the world healthiest man. He writes for his personal blog, which you should absolutely check out here. His full bio is at the end of the article.

How 2 Years in Consulting Both Helped and Hindered My Startup Adventure: Part 2

Now that I’ve mentioned the benefits of moving from consulting to startups, it’s time to talk about the flip side, how consulting made things more difficult.

How Consulting Hindered My Startup Progress

A Large Company Once Said: Just do it!

consulting to startupsA common criticism of consulting is that it’s all strategy and no implementation. Consultants come in, analyze from 10,000 feet above, hand over slides with recommendations, and move on. This isn’t entirely true, but when I compare the work of a consultant to that of an entrepreneur, this exaggeration helps highlight how different the roles of each are.

My experience in consulting has taught me to be very meticulous and thorough when evaluating decisions—sometimes to a fault. On several occasions, I catch myself over-analyzing to the point of paralysis. This can prove to be a dangerous habit in the startup world.

The cost of an error in early stage companies is low. The underlying reason is that small size and nimbleness allows for quick detection of errors and rapid course-correction where needed. Hence, in a startup, I am better off quickly executing on decisions rather than cautiously over analyzing and vetting them. The insights I gain from evaluating actual outcomes are significantly greater than those gained from evaluating hypothetical scenarios. Often times, the best and only way forward is to just get your hands dirty.

Posted by Khaled Kteily on in All About Consulting

Today's post is a guest post from Badreddin Edris, a member of the MCN Advisory Board. After completing his PhD at Stanford and working at Bain for the last couple of years, he's familiar with the sustainability of a demanding lifestyle. He writes today about his tips on avoiding burnout in management consulting. b2ap3_thumbnail_burnout.gif

  1. Prioritization - becoming really good at knowing what is high-value work for your firm and client, and orienting your time to only working on those high-leverage efforts, will avoid needless hours spent doing busywork that doesn't contribute much to the answer you're driving towards. This is something that you learn with experience (pattern-matching) and that you have to force yourself to do on a daily basis (ruthlessly prioritization outstanding tasks).

b2ap3_thumbnail_David-El-Achkar-JPEG.jpgThis two-part series is written by David El-Achkar, an ex-McKinsey consultant and part of the MCN's Advisory Board. David is an engineer by degree, a consultant by experience, and an entrepreneur at heart. He also puts everyone to shame by being the world healthiest man. He writes for his personal blog, which you should absolutely check out here. His full bio is at the end of the article. 

How 2 Years in Consulting Both Helped and Hindered My Startup Adventure: Part 1

After two years spent as a management consultant at McKinsey, serving mega-companies, on mega-company issues, interacting with conservative executives, and otherwise leading a corporate life, I decided to take a 180 degree turn and join the startup world.

I’ll take this opportunity to share early insights and thoughts on the impact my consulting background has had on my current endeavours, and how it has shaped my thinking. In this first post, I will highlight how consulting prepared me to start a business. In the next post, I’ll look at how it made things more difficult, and I will wrap up with some thoughts on managing the transition.

How Consulting Helped me Start a Company

Three years ago, I accepted an offer to join McKinsey as a Business Analyst. Of course, I was thrilled and grateful for this opportunity. But I would only be saying half the truth if I didn’t mention that a part of me was worried; worried that I would brand myself solely as a business/strategy guy. I knew early on that I ultimately wanted to follow an entrepreneurial path. The engineer in me always wanted to keep tinkering and building stuff. I took the job, worked hard for two years, learned a ton, grew professionally, and came out the other end even more determined.

This is my account of how those years spent in consulting helps me today.

...

Are you starting to think about your course selection for next semester? A recent publication by Harvard Business School - titled "Why Unqualified Candidates Get Hired Anyway" - can teach you a thing or two about the courses you should be taking. 

The article is based on the results of a study called 'Inflated Applicants: Attribution Errors in Performance Evaluation by Professionals', and it focuses on a concept called the 'fundamental attribution error'. This is people’s tendency to "overemphasize internal explanations for the behavior of others, while failing to take into account the power of the situation." 

The research paper shows that "the fundamental attribution error is so deeply rooted in our decision making that not even highly trained people-evaluators, such as hiring managers and school admissions officers, can defeat its effects."

For example, "the first study asked professional university admissions officers to evaluate nine fictional applicants, whose high schools were reportedly uniform in quality and selectivity. Only one major point of variance existed between the schools: grading standards, which ranged from lenient to harsh. Predictably, 

In fact, "admissions officers tend to pick a candidate who performed well on easy tasks rather than a candidate who performed less well at difficult tasks," says [Gino, one of the authors], noting that even seasoned professionals discount information about the candidate's situation, attributing behavior to innate ability." 

...

Posted by Khaled Kteily on in All About Consulting

The facts: 

Announced just a few hours ago, PwC is planning to purchase Booz & Company, pending a vote by Booz's 300 partners in December. For those of you who read our post two months ago - "Will mid-sized consulting firms exist in 2015?" this does not come as a huge shock, although at the time talks were focused on PwC acquiring Roland Berger. 

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How big is the acquisition?

According to the Financial Times, "Neither group would disclose the value of the transaction, though it is understood to be worth several times Booz’s $1bn of annual revenues, according to people familiar with the agreement."

For reference, PwC's Advisory revenues are about $9B, and Booz's revenues have recently been pegged between $1B and $1.4B, meaning that this is a fairly substantial acquisition. 
 
What does this mean for the industry?
 
Large consulting firms are increasingly pressured to provide 'complete services', which includes major strategic work. Historically, this has been the strength of strategically-focused firms such as McKinsey, BCG, Bain, Oliver Wyman, Monitor Group, etc. and represents an immediate new threat. Such firms might have beaten out Booz and PwC independently, but it will be increasingly difficult to compete against a firm that can provide both top-tier strategy consulting and large-scale transformational capabilities. 
 
The better question is: Who's next?
 
Check out our original article for some more background on potential acquisitions, relative sizes of firms, and our projections for what will happen. 

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We recently came across an iPhone app called LoungeBuddy - we haven't used it yet but it's making the rounds on a number of travel sites and it seems promising if you're traveling to a new or foreign airport. 

The way it works is you tell it what frequent flyer memberships you have, what airline you're traveling on, what airport you're in, and it'll tell you what lounges you have access to. The list is actually pretty comprehensive - ranging from various AmEx cards to whether you have a military ID. It'll also let you specify amenities that you're looking for (e.g. showers), which sounds pretty handy. 

Drop us a line in the comments if you've used it and let us know what you think!

Posted by Khaled Kteily on in All About Consulting

As interviews are heating up and the offers start rolling in, you should be taking the time to consider what's really important to you. For some it will be culture, for others it will be prestige, flexibility, or project work. 

I know that when I was going through the recruiting process, I cared about all of those things. Flexibility was probably the lowest on my list - I wanted to come in, work hard, do a good job, and then figure out what comes next.I'll be at the two and a half year mark soon - putting me just around the median tenure for a consultant. And what you don't realize as a student - or what you talk yourself into downplaying - is that consulting is hard work, man!