Lessons from Management Consulting

9 Life Lessons I Learned As A Management Consultant

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I have been extremely fortunate to work for some of the premier management consulting organizations in the world.  Some readers are probably wondering what management consulting is.  These firms specialize in helping businesses, organizations and governments to improve their performance. Management consultancies are successful for many reasons but perhaps the biggest driver is that they routinely attract some of the most entrepreneurial people, the sharpest critical thinkers and some of the most aggressive personalities.  There are tremendous opportunities for personal development and acquiring business and life skills.

Though I no longer travel as much as I used to, and I don’t miss it :), I am forever grateful for the important lessons that I learned while living out of a suitcase and earning platinum status at every major hotel chain, airline and car rental company.

Below are some of the top lessons I learned:

  1. Communication is Key—Management consulting companies are successful because their communication is crisp, concise and cogent. Professionals get paid for their skills. Effective management consultants possess many technical and soft skills but perhaps one of the most important is communication. A colleague once commented that while surgeons get compensated for knowing how to use a scalpel on the human body, the consultant’s equivalent of the scalpel is communication.  Consultants have to be able to explain complex concepts in a simple manner to audiences at all levels.  A good consultant can find the right words to explain things to the manufacturing line worker, the mid-level finance manager and the CEO.  I never dreamed that I would be spending so much time polishing slides in Powerpoint, creating pithy bullets, and rehearsing speaking notes. This, however, is a great skill as it serves me in all areas of life today.
  2. Your Word Is All You Have—I will never forget a senior partner saying to me “Your reputation hinges on your Say/Do ratio.” I had to pause and absorb that. I thought it was deep and a great example of lesson #1 above. I had just started in consulting and was in between projects. I was trying to add value doing research for various proposals while being “on the beach” (consultant speak for waiting for a project).  The partner told me that I will have a lot of opportunity to contribute on projects but he liked my effort and enthusiasm. He advised that one thing to be mindful of in the profession was “doing what you say you would do when you say you will do it.” He noted that clients, superiors and colleagues all value this immensely. He was right and this applies everywhere else in life. It is a lesson I strive to teach my kids. In today’s gadget-filled world it is easy to get distracted, procrastinate and not deliver. Soon friends, family, co-workers and acquaintances notice when things that you promise don’t get done. Reputation is hard to build and easy to destroy. Your word is indeed all you have.
  3. Take Notes—In my early years as a consultant I had the privilege of working for some very thoughtful and intelligent partners. One of these partners instilled in me the practice of taking notes during meetings and publishing these notes to all attendees present. I quickly learned that often times different people hear different things. Circulating notes after an important meeting served a number of key purposes. It ensured that the key points were documented and understood the same way by all attending parties. Having a written record with clear next steps, actions and owners of each action, holds people accountable to get work done. It offers everyone an opportunity to correct or clarify any points that may have been misrepresented. The net result is that confusion is avoided, resolutions are sped up and facts are recorded. I have carried this practice with me to life outside of consulting.  Sometimes there are just too many things to remember and writing notes is my secret super power. I jot down the names of other parents I meet at kids sporting and school events. I voice record interesting facts I hear on the radio when I am driving. I jot down ideas I have when I am out running, etc. My iPhone Notes app is filled with all kinds of notes, some of which I never return to, and others that I use daily.  People often tell me I remember things.  What they don’t know is I remember things because I write notes.
  4. Pay Attention To The Details: They Matter—Management consultants get hired and paid significant fees to do things that clients cannot do, do not want to do for internal political reasons, or cannot do well in the time available. Frequently consultant recommendations are reviewed with client senior leadership, company executives and the boards of directors.  Part of the job is to thoroughly understand the issue from all angles and devise a smart solution taking into account the technical, business and human variables. Another part of the job is to synthesize a complex problem and to communicate the solution in an accessible and easy to digest manner. All of these require consultants to know the details and be able to provide insights that were previously unavailable to executives and veterans of the business.  I have taken this approach to other aspects of my life. If something is worth doing then I want to understand the details.  In those aspects of our lives that are important such as relationships, parenting, how you spend your day, money and investing, we would all benefit from doing better than average. To accomplish this it is important to obsess over the details.  If something is important to you then spend time thinking about it, improve your knowledge in this area and elevate yourself.
  5. You Are Only as Good As Your Last Project—In a service business you always have to deliver. I have seen partners that have delivered many a successful project get blacklisted at demanding clients due to a project gone bad or a less than optimal outcome. This translates to life outside of consulting. Think about going to your favorite restaurant and getting bad service. You may try it another time but if that continues chances are you will not return.  This is a hard lesson to learn as sometimes things are indeed outside of your control.  All you can do is be diligent and methodical in everything you do. Do not rush work if you can help it.  It is comforting to know that you have made the best possible decisions given all of the data that you have available. Also know that sometimes that is not going to be enough.
  6. Your Company Is Not A Family But More Like A Professional Sports Team—This lesson has been memorialized by a presentation titled Netflix Culture: Freedom & Responsibility which you can find here. However, I did experience this as various people left the firms where I worked over time. Management consulting firms are ruthless in hiring and firing to optimize their teams.  The firms’ biggest expense is talent salaries and benefits. Similar to professional sports teams they lay out the red carpet when they are recruiting talent and once the team is together everyone has to perform at a high level. When someone is not a good fit management consultancies make trades or cut players. Over the past 18 months and at the height of the global pandemic there was tremendous uncertainty for consultancies. They used this period to optimize their teams.
  7. Work Travel Is Fun But It Does Get Old—When I started my career as a management consultant one of the big things that my wife and I discussed was what it would mean for us as a family due to all the travel I would be doing. We had heard the stories. We had one child at the time.  We agreed that if we ever felt that the travel was too much I could always get a different job. We decided to give it a go.  The transitions from work to home, home to work were tough but we adjusted.  It worked for us but we had to constantly work at it, consciously, together.  Many young consultants start in this career path before they get married and start having children. That can certainly be fun for a long time. The perks of travel miles and points add up to luxurious vacations.  As a family we have been on some really nice trips using those points.  But when all is said and done it is difficult to be absent so much from people that you love and care about. For most consultants as they progress and become more senior their travel decreases ever so slightly. Others become industry specialists and eventually change their residence to an area where the majority of their clients are. Many hang up the consulting career and take a job in industry where travel is significantly reduced.
  8. Learn To Put Yourself First—Having been born in the former Soviet Union one of the things that I love about capitalism is that it provides the ultimate incentive for meritocracy. Competition of ideas and effort are rewarded. Nowhere is this more true than in management consulting. In an environment filled with type-A personalities where you are expected to routinely work 60+ hours a week, everyone is trying to stand out. As with all human organizations politics exist. When it comes to getting promoted you need to run a full out political campaign. This involves getting and promoting positive client feedback about you. It includes being organizationally savvy and being noticed for the right things. Being attached to successful, high-visibility projects helps. Getting to know all of the partners responsible for your advancement is paramount.  Making sure that they not just know of you but that they actually have a personal connection with you is important. Often this is a challenging task as you may live in different cities. You may never work on those partners’ projects. You really have to make a concerted effort to have meaningful interactions with the right people.  You have to learn to ask for the things you want. As the saying goes, “If you don’t ask, you don’t get.” If you don’t advocate for what you want, the right engagements, working on things that interest you, getting the promotion that you know you deserve, nobody else will.  Everyone is busy with their own problems.  The downside of capitalism is that the system will chew you up and spit you out if you don’t have a compass to guide you to your destination.  If the lifestyle, the client, the project team is not a fit for you, then you need to be true to yourself and put yourself first. Learn when to say “no” to others and to say “yes” to yourself.
  9. It’s All About Taxes—One of the themes that permeates the teachings and aspirations of our parents, our schools and colleges, is that we need to study hard to get good grades which will present many opportunities for getting a great job with wonderful benefits. We pursue this dream and are rather successful at it. Both my wife and I have two graduate degrees. I have worked with a number of colleagues that have three graduate degrees: PhDs and a couple of Masters degrees, or MD/JD/MBA combinations are common. Then we end up in this interesting predicament which is a mixed blessing. We have accumulated many skills and because of this we are highly compensated, respected and sought after. We work on things that are intellectually challenging, exciting, stimulating and often make a difference. We are also, however, often stressed due to the responsibility of the job, frequently feel like we don’t have enough time to accomplish everything we want to, and are often juggling work and family priorities. In addition we are highly taxed.  In fact we are taxed at the highest level possible because we are professional employees. We are not a business.  In my final year as a W-2 employee I was truly impressed with the numbers on my tax return. I was happy and somewhat proud about the top line and dismayed and angry about the bottom line. How come we were keeping so little? In true consulting fashion this was an issue I needed to solve for myself.

The answer for me was to get organized as a business and t0 create my own company. The next step was to look at what activities the government incentivizes with taxes. Real estate investing is one of those activities. The government does not want to provide public housing for millions of Americans.  I have seen public hostels in Eastern Europe. I grew up in one of them. I agree that individual entrepreneurs can provide a better product. The US government incentivizes entrepreneurs to take on this effort by providing massive tax deferment and lower taxation level incentives. The more debt we can put to use investing in the right opportunities the more tax incentives we can stack up in our favor.

Summary

A number of years ago when I started my own boutique consulting firm it was scary and felt like a big risk.  When I decided to start a real estate investment business it was uncertain and I questioned if I was doing too many things. Both have flourished beyond my wildest expectations. While management consulting is not for everyone I am grateful for stumbling across this interesting profession.  It has allowed me to learn valuable lessons that I have used to improve all aspects of my life. Sometimes I wish I had learned these lessons sooner but when I reflect I come to the conclusion that every moment was worth it and has served to ingrain this knowledge on who I am.

At Cape Sierra Capital we focus on providing investors with passive cash flow by investing in multifamily real estate.  To learn more about how cash flow works and how you can gain back control of your time download a free copy of The Personal Cash Flow Formula.  To hear about our upcoming investment opportunities join our Exclusive Investor Network.

 

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