Post MBA consulting --> CEO of a startup?
Has anyone ever heard of someone doing a path described in the title? I know Meg Whitman did consulting before working as an executive at Disney, Hasbro, Stride Rite, FTD before landing the CEO job at eBay. Is consulting --> CEO of a startup possible given someone has strong ties to the startup world while working as a consultant, or are there some skills that would need to be developed as a company executive before heading up a small company?
Also, any examples out there of someone who went straight from being a partner at MBB to being a CEO of a company?
I'm trying to plot out whether it would be a good idea to apply to b-school with the intent of doing post-MBA consulting to eventually run a small company with funding (I have no ideas / skills to start a company on my own so I think my best bet would be to go into a developed startup at the executive level).
Anything is possible, even aliens.
MBB -> CEO of midsized company is rare, but happens
normally oyu exit to a "strategy" position, such as corporate dev or corporate strategy. it's less common to exit to a position with P&L, especially a CEO position.
that said, i know of at least one MBB partner that exited to a smaller F500 oil and gas company as CEO. it happens, but it is rare.
....exiting as CEO of a startup? sure. anyone can be CEO of a startup.
Thanks, that is what I was asking. Although what I meant by "startup" was more like the later stage startups like when Meg joined eBay (already having significant revenue).
Maybe I should rephrase as: if someone is interesting in leading a growing, recently formed company that has a decent amount of venture capital already, is coming in from an MBB background a good enough launching point or would VCs prefer people with corporate strategy experience? Does the client service aspect of consulting make it less desirable for VCs/established startups to pick consultants over corporate executives?
Just trying to figure out what kind of opportunities to expect from consulting careers, especially if I'm less interested in doing the typical latering over to a company as a Sr Manager after 3 years.
Can you transition to be a CEO after ~3 years at MBB? Likely no, especially not a decently funded start-up. Can you transition to be a high-level executive with equity that does really cool stuff at a start-up? Absolutely (there are plenty of examples).
What is your opinion on people staying in consulting longer than 3 years (maybe even 5-8 years)? How uncommon is that, and what kind of exit opps do they see? I saw from here:
http://www.charlesaris.com/Charles%20Aris%20Strategy%20Consulting%20Com…
That they tend to go straight into Director / VP positions after 5-8 years. Do similar exit opps ever happen for smaller sized companies, but for even higher positions (i.e., instead of going in as a VP of a F500 company after 7 years at a consulting firm, maybe landing a job as CEO of a 30-50 employee company)?
Most MBB engagements do not involve small companies. A $1M (or more) expense is a percent of margin if your revenue is only $100M. That's a lot to pay for a power point deck.
That said, my experience with small companies has mostly been due to PE engagements. A PE company bought a ~$400M company. They canned the CEO/founder and brought us in. We cut labor costs by about 15%, they had a RIF (reduction in force e.g., fired some people), and then they appointed the COO as CEO. We worked with the new CEO / old COO a bunch (without the knowledge of the work force) during the transition. But the point was the COO was "clean" of all the cost cutting. The bad guys were us and the PE firm. That's our job.
My point is, generally, when you hire into a position you have experience in it. Whether it's the industry you're in or the function or whatevef. Most consultants have a lot of experience with big companies. Some consultants know mid-sized companies. It's less common for current MBB consultants to have experience in VC atmospheres, but I'm sure it happens. MBB is expensive for a start-up.
That said, consulting is probably still pretty relevant to running a high-growth start up, but it's not a perfect fit. A lot of consultants start their own companies as they have good business fundamentals. I've seen consultants exit to industry, PE ,or their own startup. Off the top of my head I can't recall a consultant exiting to an already-well-funded startup, but I'm sure it has happened.
Sorry for the rambling answer. No time to refine it. Hope it helps.
p.s. When I said, "Off the top of my head I can't recall a consultant exiting to an already-well-funded startup, but I'm sure it has happened." I meant "exiting as CEO to an already-well-funded..." I've seen plenty of juniors (post-undergrad or immediate-post-MBA/pre-manager exit to companies like Uber, Instagram, etc.)
I should caveat by saying that I’m not that well-versed in this topic (as in, I don’t work at MBB). I worked at a Tier 2 firm, and did a bunch of research into 2-4 year exit opps from MBB for my b-school apps, so I have talked to a number of people about this.
My guess is that only senior partners exit to be CEOs of established companies. My guess is that these partners also make sense. That is, maybe it’s a PE backed company, and the partner’s work mostly focused on Portfolio Ops for PE firms.
My opinion is that as well-respected as MBB consultants are, I’m not sure how many companies would hire one as a CEO without them proving that they can handle everyday decision making first. As in, hire someone as SVP of Strategy, and then when they do well, maybe they’re your next CEO. A 30-50 person company is very well-established in most cases (didn’t SnapChat have less than 50 employees when it was bought?). I can’t imagine VC’s going to McKinsey for their next CEO when they can likely hire someone that has multiple stints as a start-up CEO to run that company.
As for staying for 5-8 years, I think it’s great if 1) you’re able to and 2) you like it. One is obvious – McKinsey and everyone else are Up or Out, and not everyone makes the next cut. The back end of your range is when you’d make partner, which is obviously quite difficult to do. The second is really about liking it – most people don’t want to stay in consulting, mainly because most people have some sort of non-consulting aspiration (like running a Venture-backed company).
In your case, if you’re ultimate goal is to be CEO of a 30-50 person company, you’re likely better off going to work for a company that fits that profile in a relatively senior role. As @BigPicture mentioned (great post btw), you really won’t work with too many of these at MBB. Once you’ve gained some of the core skills that consulting provides, I would think that you would want to jump ship to something that better leads to your goals.
This is a good article about consulting exits by Duff McDonald, the guy that wrote The Firm. No mentions of anyone exiting to CEO (immediately I should say).
http://observer.com/2013/09/the-ceo-factory-ex-mckinsey-consultants-get…
J Michael Pearson went from being a director at McKinsey to CEO of Valeant Pharma (http://en.wikipedia.org/wiki/J._Michael_Pearson). This kind of transition is very rare though...
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