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Joined: 11 Mar 2008
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Location: Southern California
Concentration: Investment Banking
Schools:Chicago (dinged), Tuck (November), Columbia (RD)
Culture comparison of PE and Consulting
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16 Jan 2009, 19:02
Alright, I gotta say that I really enjoy this guys commentary. This is another gem from PE_Wharton_Guy on BusinessWeek. He worked at McKinsey immediately post-MBA and he now works in PE. He posted about the culture and work differences at both.
I was hoping you could comment a little on firm culture, both yours and that of other firms (i.e. do your bosses seem like they would eat their own young?) Care to share some anecdotes? How about comparing the work environment at McK vs. your current PE shop?
McK is a very tough place to work and you need very thick skin. People there are hyper critical and you will be thoroughly evaluated all the time. I found the experience to be a good one in retrospect but I honestly disliked it when I was there. I actually found banking to be more tolerable and less exhausting.
That said I got ALOT out of the experience. And working for McK signals something unique to the market place. I am not saying better, but unique. For instance working at Goldman signals something entirely different. Additionally I found it to be incredibly helpful to work in a broad variety of industry and business challenges. The exposure of multiple company problems was very helpful to me in my current job. When I go into a due diligence prcess, I often know exactly what I am looking for. Think about it, there a million possible things that could go wrong with a company once you buy it. But certain types of companies and industries tend to have similar problems. When you have been exposed to many of them, you get a sense of what to prioritize.
What was most surprising to me about consulting is that it is the most hierachal place I have ever worked. There is huge power distance between each level. The guy directly above you might be 1 year your senior, but if he is a promotion ahead, he OWNS you.
PE in contrast is extremely flat. Its wierd, I can walk into a senior partners office anytime to chat about something I've thought of. A senior partner at a top PE, ironically is MUCH MUCH further up the food chain that a partner at MCK. I think partners at consulting firms get dumped on so much by their clients that they need to feel like their are the king of something......
One thing I dawned on me recently is that consulting partners are very very low on the pecking order of business. If you have the CEO, or a board member at the top of a business ecosystem, consultants are near the bottom, below the banker, the accountant, the lawyer, etc. Why? Unlike these other vendors, you never really need a consultant. You can't raise capital without a banker or even sell you portfolio company. You can't possibly function without a law firm or an accounting firm. For all of these other service providers, the question is not whether to hire them, its is soley WHO to hire. With a consultant, the question is not first who, but whether to hire a consultant at all.....
So if you are a partner at a consulting firm trying to sell work, you are not only trying to get picked, you are also trying to justify why you even exist so to speak. This tends to lend to a pretty pathetic senior existence. Believe me, I don't care which consulting firm you work for, the partners there are constantly nervous and have to grovel all the time. It sucks....
I feel like at McK we spent an enormous portion of the day on non-value add activities. So for instance, one time I was tasked to brainstorm a list of possible items to put on a KPI dashboard. I thought of usual things such as revenue, EBITDA, growth, headcount, market share, etc. I handed this list to my boss. He called me into my office and then proceeded to lecture me for 45 minutes about the importance of "exhaustive and mutually exclusive" lists. He said I need to spend more time thinking through the order of my bullet points and I need to develop a framework and defend my logic. Why Revenue on top of EBITDA. Why not market share??? Ect. ect. And of course this came in my formal project review as a core area for development.....
The reason why McK, BCG people in particular tend to have extremely painful people to work for is because of their hiring practices. Its no mystery that these firms LOVE academic pedigree. I have never seen such a congregation of 3.97 GPAs walking around. Think about people who get that kind of GPA from an ivy league school. You don't get a 3,97 at Yale by being a cool guy and giving it an honest to goodness try. You get that GPA because you are an obsessive perfectionist and the thought of getting an A- makes you want to jump infront of the first train you pass by. Now imagine you work for this guy.... Fun. If you are not extremely detailed oriented by nature and are not a highly structured person, you will NOT enjoy consulting. No free spirits need apply. The brochure from these places are a joke. Also the lifestyle absolutely blows. I used to tell candidates that"its like investment banking but at half the price: and now it has wings." That used to piss off the recruiting team immensley.
PE the stress is very very different. You are actually accountable for your work. As a junior guy, you are somewhat insulated from the consequences of your actions. But by the time you are a principal, you had better not miss anything in due diligence. If you do, EVERYBODY will know this in due time. Its tough because people here expect you to have a point of view and defend it. But if you are ultimately wrong, its your ass. So its hard to want to put your neck on the line for any deal. I tend to try to look for reasons to kill deals versus trying to find a reason to do them. From where I sit, the balance tips heavily in favor for being pessimistic. But as you become more senior, you realize that you can't make money by NOT doing deals. Thats the problem. At some level, you are forced to put capital to work and you have to pull the trigger on stuff you have only rough visibility on. I ALWAYS get nervous when we actually sign a purchase and sales agreement. I am ALWAYS nervous that the company will whiff the 1st quarter out of the box.
That said, I still love my job and count my blessings every day. In life, all you can ask for is a chance at bat. And indeed, you will have your chance in this industry...
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