The Consulting Industry's Comeback
Grads Increasingly Turn to Companies Like Booz Allen Hamilton
Perhaps your ultimate career ambition is to become a CEO
by the age of 45. Maybe you want to hit the ground
running for a few years, then scale back to raise a
family. Or, perhaps the only thing that’s crystal clear
is your desire to contribute to the business world in a
meaningful way.
As different as these scenarios may seem, they are all real reasons that draw McCombs MBA alumni to the consulting industry and to Booz Allen Hamilton.
But as recently as five years ago, consulting had lost much of the luster it achieved during the go-go 1990s.
After 10 years of “sizzling growth and enviable profits, the consulting business was forced to pull in its reins” during the early part of this decade, according to Plunkett Research Ltd. The stock market downturn of 2000–01—particularly in the technology and telecommunications sectors—was a key factor, as was a “general economic slowdown in most of the developed world,” Plunkett Research reports.
Booz Allen wasn’t affected as dramatically as other companies because of its diverse client base, which includes government entities. While corporations halted nearly all decision-making, the government’s need for consulting expertise continued to grow during this period. Booz Allen scaled back its hiring levels during the downturn but was able to avoid a hiring freeze.
By late 2004, the industry was back on the upswing. Booz has posted a capital annual growth rate of 13 percent for the past 15 years and reported $3.7 billion in sales for its 2005 fiscal year. Recent success translates to an increase in staffing levels and increased interest from MBA students.
“The volume of jobs has come back, salaries have come back and signing bonuses have come back…and they’re larger than they were in the past,” says Stacey Rudnick, director of MBA career services at the McCombs School.
McCombs MBA students’ interest in the industry have mirrored economic highs and lows. Back in 2001, 37 percent of graduating MBA students went into the consulting industry. That was followed by a recent all-time low of 7 percent in 2002, when the bottom fell out of the market, Rudnick notes. Interest has crept up every year since, with an anticipated 20 percent of 2007 graduates going into the consulting industry. Many such grads cite the diversity of work that awaits.
“It’s difficult to find an environment as rich as consulting,” says Nikki Rath, MBA ’00 and senior manager of MBA and graduate recruiting for North America. “You’re exposed to the biggest problems affecting the executive agenda.”
New Business Is IT-Oriented
Experts note much of the growth consulting companies—including Booz Allen—are experiencing is in the information technology (IT) sector and in serving global markets.
“IT clearly is a major part of consulting because for most companies, IT investments are their largest area of capital outlay,” says Tim Ruefli, a professor in the Department of Information, Risk, and Operations Management at McCombs. “Historically, business executives thought IT was a technology problem and in fact it’s a business problem. And historically most executives weren’t well versed in IT. On the other hand the technologists weren’t well-versed in the business.” That confusion often led to expensive investments in technology that may not have been the right fit for a company.
Consulting in information technology has evolved to address those complex challenges. “We’re coming to the point where we have a lot of the data we were lacking in the past,” Ruefli says. “We also have the computing power to crunch that data. And we have algorithms that can yield sophisticated answers.”
Booz Allen, for example, offers a variety of IT services—from strategy and design, to telecom and network services. In commercial markets, the firm primarily provides IT strategy services, Rath says, and a full range of IT consulting services to government markets.
“Consulting companies are finding out that general prescriptions and general advice are no longer satisfying the clients,” Ruefli says. “They want evidence, numbers and models that let them run ‘what-if’ scenarios.”
Travel But Don’t Unravel
Big problems require multifaceted solutions, which generally materialize after experts spend a great deal of time on site with the client. That translates to a lot of time on the road for consultants, including Booz Allen employees.
“Recruiters are “very up-front about the amount of hours you work and the amount of travel involved,” says Bryan Lares, MBA ’07. He notes the summer internship he did with Booz Allen in 2006 helped him gain a realistic sense for the job demands and associated travel.
Lares says the significant level of travel means the decision to enter and remain in the field needs to be one the entire family makes. For Lares, the benefits outweighed the negatives associated with frequent traveling. He plans to begin working full time for Booz Allen in September.
He also was impressed with the company’s “5-4-3-2-1” policy, which he says is an effective way to ensure work-life balance and combat potential burnout. That policy stipulates: Employees are expected to work five days a week (meaning weekends off), work on site four days a week, spend no more than three nights a week away from home, have the opportunity to work on at least two projects each year and focus on only one project at a time.
As different as these scenarios may seem, they are all real reasons that draw McCombs MBA alumni to the consulting industry and to Booz Allen Hamilton.
But as recently as five years ago, consulting had lost much of the luster it achieved during the go-go 1990s.
After 10 years of “sizzling growth and enviable profits, the consulting business was forced to pull in its reins” during the early part of this decade, according to Plunkett Research Ltd. The stock market downturn of 2000–01—particularly in the technology and telecommunications sectors—was a key factor, as was a “general economic slowdown in most of the developed world,” Plunkett Research reports.
Booz Allen wasn’t affected as dramatically as other companies because of its diverse client base, which includes government entities. While corporations halted nearly all decision-making, the government’s need for consulting expertise continued to grow during this period. Booz Allen scaled back its hiring levels during the downturn but was able to avoid a hiring freeze.
By late 2004, the industry was back on the upswing. Booz has posted a capital annual growth rate of 13 percent for the past 15 years and reported $3.7 billion in sales for its 2005 fiscal year. Recent success translates to an increase in staffing levels and increased interest from MBA students.
“The volume of jobs has come back, salaries have come back and signing bonuses have come back…and they’re larger than they were in the past,” says Stacey Rudnick, director of MBA career services at the McCombs School.
McCombs MBA students’ interest in the industry have mirrored economic highs and lows. Back in 2001, 37 percent of graduating MBA students went into the consulting industry. That was followed by a recent all-time low of 7 percent in 2002, when the bottom fell out of the market, Rudnick notes. Interest has crept up every year since, with an anticipated 20 percent of 2007 graduates going into the consulting industry. Many such grads cite the diversity of work that awaits.
“It’s difficult to find an environment as rich as consulting,” says Nikki Rath, MBA ’00 and senior manager of MBA and graduate recruiting for North America. “You’re exposed to the biggest problems affecting the executive agenda.”
New Business Is IT-Oriented
Experts note much of the growth consulting companies—including Booz Allen—are experiencing is in the information technology (IT) sector and in serving global markets.
“IT clearly is a major part of consulting because for most companies, IT investments are their largest area of capital outlay,” says Tim Ruefli, a professor in the Department of Information, Risk, and Operations Management at McCombs. “Historically, business executives thought IT was a technology problem and in fact it’s a business problem. And historically most executives weren’t well versed in IT. On the other hand the technologists weren’t well-versed in the business.” That confusion often led to expensive investments in technology that may not have been the right fit for a company.
Consulting in information technology has evolved to address those complex challenges. “We’re coming to the point where we have a lot of the data we were lacking in the past,” Ruefli says. “We also have the computing power to crunch that data. And we have algorithms that can yield sophisticated answers.”
Booz Allen, for example, offers a variety of IT services—from strategy and design, to telecom and network services. In commercial markets, the firm primarily provides IT strategy services, Rath says, and a full range of IT consulting services to government markets.
“Consulting companies are finding out that general prescriptions and general advice are no longer satisfying the clients,” Ruefli says. “They want evidence, numbers and models that let them run ‘what-if’ scenarios.”
Travel But Don’t Unravel
Big problems require multifaceted solutions, which generally materialize after experts spend a great deal of time on site with the client. That translates to a lot of time on the road for consultants, including Booz Allen employees.
“Recruiters are “very up-front about the amount of hours you work and the amount of travel involved,” says Bryan Lares, MBA ’07. He notes the summer internship he did with Booz Allen in 2006 helped him gain a realistic sense for the job demands and associated travel.
Lares says the significant level of travel means the decision to enter and remain in the field needs to be one the entire family makes. For Lares, the benefits outweighed the negatives associated with frequent traveling. He plans to begin working full time for Booz Allen in September.
He also was impressed with the company’s “5-4-3-2-1” policy, which he says is an effective way to ensure work-life balance and combat potential burnout. That policy stipulates: Employees are expected to work five days a week (meaning weekends off), work on site four days a week, spend no more than three nights a week away from home, have the opportunity to work on at least two projects each year and focus on only one project at a time.
