What’s the Difference Between Management and Strategy Consulting?

Posted on October 28, 2010

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The two terms are often blurred together, because “strategy” seems to get students, such as you, to perk up their ears. A firm that calls themselves a “management consulting” firm on their website, may tell recruits that they are a “strategy” firm in their information session.

Let’s try to distinguish these two terms. You can rest assured that any business consulting firm you apply to is a “management consulting” firm. This term differentiates these firms from all the other companies and individuals calling themselves consultants (see “Lactation consultant” above).

Strategy is a specific function of management consulting firms. Go to McKinsey’s website, and look under “Functions”. You’ll see one category labeled “Strategy”. However, you’ll also see functions such as:

  • Corporate Finance
  • Marketing
  • Operations
  • Risk

Now, go visit any other major consulting firm’s website, and you will see similar breakdowns of its services. There are many levels and types of managers, so it makes sense that there are many different functions within management consulting. These other functions tend to be more tactical in nature, executing their portion of the corporate strategy.

For example, if a company wants to increase sales by 10%, then it’s up to the sales/marketing department to determine how to achieve that. And they may hire a management consultancy to help them. It starts to get complicated when you consider that you could have a strategy in each one of these other more tactical functions, as I alluded to. Conversely, a high‐level strategy, such as increasing profits, will necessarily have a tactical side to it as well. There’s overlap of strategy and tactics in every function.

Strategic questions are touted by consulting firms as the “most critical” to a business, and while I wouldn’t downplay the equal importance of how to execute the strategy, the strategic questions certainly are at least:

  1. Critical – strategic issues are those on the CEO’s agenda, and so will receive an unusual amount of response from the client. The converse is the pressure to perform is highest, so strategy firms must be careful with their recommendations – this is one reason I believe why they are careful to avoid “cookie cutter” solutions: what may work for one client may not work for another.
  2. Ambiguous – Strategic issues are by their very nature broad. The upside is there’s ample opportunity to significantly help the client – a great strategy, combined with the appropriate execution, can turn a company around. The downside is there is seldom a clear cut answer – if the answer was obvious, the client probably wouldn’t hire your firm, and their competitors have probably already discovered the answer.

    For example, take the question: “Should Apple enter the video game industry, and if so, how?” If you ask 10 reputable consulting firms that question, they’ll give you 10 different answers, and the answers will probably all make sense. Which one is the optimal strategy? There are probably a few effective answers, and a lot of ineffective answers, and you won’t know for sure
    until years after the decision has been made ‐ welcome to strategy consulting.

At the end of the day, however, you will not be hired as a strategist but instead, as a consultant. Strategy consulting is still just a niche of management consulting. As such, I’m going to refer to all of these firms as management consulting firms unless I am specifically discussing the strategy function within a management consulting firm. This is all just nomenclature though. During the application process, presenters from various firms will stress the strategic nature of their work. So even though this blog is intended to help you land a job at a management consulting firm, it will focus primarily on strategy.

[LINK]Now, what are some types of strategic problems?

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