Would you say management consulting is the most intellectually stimulating career in finance?

As title suggests hoping for some input on this. If not, what would you say is the most stimulating career path to follow out of undergrad?

 

Valuing intangible assets. Like how much is a given key employee worth to the company. It's actually a fascinating field, research intensive and they work through mountains of data. But the work is stimulating as far as finance goes.

 
thebrofessor:

know a guy who worked at Bain who said that exact thing. he said basically companies would have an agenda, tell them what the agenda was, miraculously the consultants would come to the same conclusion, then they'd go to the board/employees/shareholders and say "look! Bain told us to do this, so let's go!"

People who use this as an example of the "bad" of consulting just fundamentally don't understand the work. Sure, there are some projects (not most projects btw) where management might give you a clear picture of their hypothesis. If so, you would be an absolute fool not to start with examining that hypothesis. What you do, however, isn't a "rubber-stamp." You test that hypothesis, you compare it against reasonable alternatives, you craft a fact-based story that shows why that hypothesis is correct. If the hypothesis is correct, then its correct. Of course you aren't going to pretend it isn't just so you can say you came up with something new. At the same time, however, if the hypothesis turns out to be wrong or there are other viable alternatives then you don't just bury the evidence.

 
thebrofessor:

know a guy who worked at Bain who said that exact thing. he said basically companies would have an agenda, tell them what the agenda was, miraculously the consultants would come to the same conclusion, then they'd go to the board/employees/shareholders and say "look! Bain told us to do this, so let's go!"

That is exactly my problem with the field of management consulting. It seems that a lot of their research is nothing but expensive talking points prepared by factions within a big corporate bureaucracy to counter rival corporate bureaucrats. And if the idea they were pushing turn out to be terrible they can then exonerate themselves by saying that it was endorsed by prestigious outside expert consultants from MBB .

I guess that is why F500 companies, conglomerates and government officials love management consultants.

And then of course there is the classical example of McKinsey's blunder with AT&T and the cellphone market.

Too late for second-guessing Too late to go back to sleep.
 

Economic consulting (aka litigation consulting) is probably the most intellectually rigorous in the academic sense. The firms tend to be filled with the top econ/finance faculty from Tier 1 business schools, and the work can be academically challenging since the expert witness(es) you are supporting are going up against other experts at other firms with equally stellar credentials. You can't b.s. on things like cost of capital analysis, modelling/valuation, and other microeconomic arguments. Every argument you make needs to have a solid academic basis, and you need to be able to identify holes in the opposing experts' analysis (the fun part...)

I think intellectual property valuation is probably the most stimulating within the litigation consulting discipline, but also found the big class-action securities fraud cases to be pretty challenging/interesting. I would def look at this before banking or traditional management consulting at the junior levels, but if you feel like you have an opportunity to land a HF/AM/PE job out of undergrad there could be a debate there... Econ consultancies also tend to place very well into top b-schools (again given the connections you will develop there), so that is another consideration.

 

only type of consulting that i find stimulating is a type when couple of consultants go to a BMW factory and cut the time required to produce an A6 in half

management consulting is in most of the cases one of the following: -general advice and tap on the back.. nothing new for you really, maybe a bit more structured PoV by someone from outside of the company -coach giving advice to fat guy which exercises to do and what to eat.. but the fat person stays fat as usual and makes minimal changes -tool to justify pre-made management decisions to for example shareholders

as somebody above said, implementation is what matters and also somebody mentioned economic consulting - it can be extremely intellectually stimulating, but actually implementing any of it happens like never

 
animalz:

as somebody above said, implementation is what matters
and also somebody mentioned economic consulting - it can be extremely intellectually stimulating, but actually implementing any of it happens like never

Economic consulting never gets "implemented" because you're essentially asked to assess damages after some sort of calamity. What's to implement?

I would argue it is the most intellectually stimulating because you are not convincing the party who paid you that you are correct.

In settlement talks, you need to convince the other party, who is against you, that you are right and it would be unwise to proceed with the litigation.

In cases that go to trial, you need to convince the judge and the jury that you are right and the other side is full of it.

There is a reason why Economic Consulting firms hire more PhDs than Management Consulting firms. ;)

 

Upfront disclaimer: I'm definitely selling my own book a little.

Jumping in a bit late, I'd argue that equity research is the most intellectually stimulating field I've found so far. By way of background, I did a mix of work in big4, some of which was in their consulting/advisory divisions. While not what would be considered traditional strategy work, we did a lot of operational /process improvement work. While possibly interesting for some of the higher ups, there was little to no actual thinking on the ground. We were basically grunt labor that crunched through mundane numbers and reports to come up with meaningless analysis that was thrown away or misinterpreted by the client/partners.

This isn't to say MBB isn't a more interesting place to work. Anyone who would equate MBB to big4 is either ignorant or being flippant.

Having said all that, now that I'm in equity research, I find that the field gives even junior people a chance to really think about a company/industry and learn to develop ideas early on. Despite having been here for a relatively short period of time, if I don't fuck up, I'll basically have my own small coverage in about another 1-2 years where I'll really have to generate ideas.

Mandatory risk statement about pursuing this field: whatever coverage you get stuck in is likely to be where you're staying. There are always exceptions, but if you're (un)lucky and get stuck in O&G or FIG or something, good luck moving to a 'normal' group.

That's my two cents, lemme know if any of you have questions.

 
Braininajar:

Upfront disclaimer: I'm definitely selling my own book a little.

Jumping in a bit late, I'd argue that equity research is the most intellectually stimulating field I've found so far. By way of background, I did a mix of work in big4, some of which was in their consulting/advisory divisions. While not what would be considered traditional strategy work, we did a lot of operational /process improvement work. While possibly interesting for some of the higher ups, there was little to no actual thinking on the ground. We were basically grunt labor that crunched through mundane numbers and reports to come up with meaningless analysis that was thrown away or misinterpreted by the client/partners.

This isn't to say MBB isn't a more interesting place to work. Anyone who would equate MBB to big4 is either ignorant or being flippant.

Having said all that, now that I'm in equity research, I find that the field gives even junior people a chance to really think about a company/industry and learn to develop ideas early on. Despite having been here for a relatively short period of time, if I don't fuck up, I'll basically have my own small coverage in about another 1-2 years where I'll really have to generate ideas.

Mandatory risk statement about pursuing this field: whatever coverage you get stuck in is likely to be where you're staying. There are always exceptions, but if you're (un)lucky and get stuck in O&G or FIG or something, good luck moving to a 'normal' group.

That's my two cents, lemme know if any of you have questions.

I think you make a good case but I disagree. A lot of investors (e.g. hedge fund analysts) do essentially the same work as sell-side equity analysts, but also get to contribute to investment decision making, which adds an extra level of excitement (and intellectual honesty). In general, you will also work on more companies/ industries than any single equity analyst.

I actually think this is a good comparison to consulting though. The most interesting work I've seen consultants do have been industry/ product/ competitor analysis similar to what equity analysts sometimes do. Inevitably, the consulting work is done on such a basic level that I wonder why management didn't just talk to an experienced equity analyst. Any analyst that's been covering the same company/industry for a few years will absolutely blow a consulting team out of the water (unfair competition since the actual work in consulting is done by 24 year olds with no domain expertise)

 
hobonumber:

The amount of close minded folks on this thread bashing consulting is amazing, using second hand anecdotes and cherry-picked examples. I am very glad I don't have to work w/ any of you. =)

Is it intellectually stimulating? go try it out yourself.

What makes you think people are not speaking from personal experience ... I certainly am. Dont assume stuff up that you know nothing about. That leads to fuck ups like the AT&T cellphone engagement.

My last thoughts on the following points brought up above:

  1. Management consultants exist, hence they must be providing value. Just don't ask details: Well, terrorists, rapists, muggers, murderers & kidnappers exist too.

  2. Consultants are getting paid hence they must be worth the price: No. Consider apartment brokers in NYC who charge 15% of annual rent as their commission. Do they deserve 15% for posting an ad on craigslist and opening the door? Hell NO. Why do people pay them then? It is the opportunity cost to the payer who can save some time and do something much more meaningful to themselves. The brokers are parasites feeding off of that.

Lastly, nothing is black and white. I am sure there are consultants who are doing true life-altering, meaningful work. From my experience, they are a minority.

Anyway, this thread has become an argument rather than a discussion. I am out.

 
MBA_Junkie:

What makes you think people are not speaking from personal experience ... I certainly am. Dont assume stuff up that you know nothing about. That leads to fuck ups like the AT&T cellphone engagement.

My last thoughts on the following points brought up above:

1. Management consultants exist, hence they must be providing value. Just don't ask details:
Well, terrorists, rapists, muggers, murderers & kidnappers exist too.

2. Consultants are getting paid hence they must be worth the price:
No. Consider apartment brokers in NYC who charge 15% of annual rent as their commission. Do they deserve 15% for posting an ad on craigslist and opening the door? Hell NO. Why do people pay them then? It is the opportunity cost to the payer who can save some time and do something much more meaningful to themselves. The brokers are parasites feeding off of that.

Lastly, nothing is black and white. I am sure there are consultants who are doing true life-altering, meaningful work. From my experience, they are a minority.

1. Really? You're comparing consultants to rapists and terrorists? That's some Fox News level bullshit. 2. You just contradicted yourself. You yourself admitted that realtors saves their clients time and lets them focus on other priorities in exchange for their fees. It might not be a pleasant experience, but that's not to say that their work isn't valuable. Same goes for consultants. 3. There's a big difference between life-altering and meaningful. Many of the consultants I know are definitely doing the latter.
 

In my experience, there really are consultants that care about their client and do their best to improve their businesses. The good consultants understand and are realistic about what the amount of actual "change" they can implement in a F500 company because let's face it - consultants only have influence, no real decision-making power.

At the end of the day, consulting is a business that provides a professional service. Clients pay for this service for a number of the reasons already stated above and consultants need to sell work and make revenue and profits, like all businesses

One reason for why consultants are often brought in that I haven't seen highlighted is the corporate "espionage/research" appeal. Because consultants often work with multiple players in the same industry (albeit, different geographies/offices), buying a consulting firm's recommendation and report on best practice can often give insight into what your competitors are doing.

Example: you are major auto manufacturer. You want to understand best practice on the creation of sedans, or whatever. You hire MBB to do so - they provide a report that highlights best practice used across the industry, i.e. what everyone else is doing. You now can measure how you do vs. the competition.

 

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