What does change of "industry" and"function" mean

Question

Location vs industry vs functionI get the location, but for the other two, I am a little confused on the definitions and how AO will view it based on my career goal essay.

For instance, I am a big 4 auditor serving oil and gas clients now, and say I want to do IBD/consulting in another industry (healthercare, TMT, etc.) post MBA. Does this count as a change in both? Narrowly speaking I'm doing something completely different than audit so it is a change, but broadly speaking I am still serving in professional service (opposite to working for a corporate) and providing expert opinion, so at least I am not changing my function from a general perspective but only industry (energy to healthcare/TMT).

I am trying to figure this out cause it would be ideal if such change wouldn't count as both in industry and in function, as I think it is most ideal to change just one of the three elements.

MBAPrepCoach · Answer

I’m not sure what you mean by IBD here but in terms of consulting right now, things are so lean that they are not hiring people for specific industries. They can’t afford that.

I’m not 100% sure about shops like Oliver Wyman, where they used to do that, but what I’m hearing is that there are so few resources each needs to be as versatile as possible, and even for large offices, they’re not allowing people from jump to pick projects for specific industries.

So it might not even be a relevant point and you might want to focus on the industry switch as something long-term. I would focus on the skills gain as an auditor, and how they would be applicable to consulting or investment banking, if you are meaning IB when you say IBD.

Posted from my mobile device

skakd · Answer

Thanks for the reply! Yes when I say IBD it is IB (Investment Banking Division).
The reason I'm asking specific industry is in the career goal, I want to say my long-term goal is to do in house M&A within a specific industry to help them succeed in the business, and in order to achieve that, my short-term goal will be investment banking, better if focusing on that industry. Now back to my question, is the move from big 4 oil and gas auditor to healthcare/TMT banker considered a change in both industry and function, or do you generally feel like it is too big of a jump?

Consulting is similar to IB, but that might pose a bigger potential challenge as an industry move, as consulting and financial services were usually seperately look at

MBAPrepCoach · Answer

I’d like to hear from others on this but yes I think investment banking is already ambitious and if you don’t have any industry or finance background to bring to that employer how are you gonna be competitive in that recruitment? What’s the value proposition ?

I would probably stick with IB in energy as short term goal. I think auditing to consulting would be more feasible (ie. my B4 auditing clients more successful post mba in consulting - if summer internship converts - than IB unless they have a finance background) and it would also give you wide range industry exposure - TMT/HC, and from there you can get into corporate, PE, lots of optionality.

skakd · Answer

It is interesting to hear this view becuase I was thinking the other way around. Audit requires a lot of understanding in financial numbers, accounting knowledge, excel skills, etc., which will be exactly what an IB job needs. On the other hand, consulting requires a more generic understanding of how bunsiness sets strategic goals and operates and also the ability to use powerpoint for presentation (in contrast of just analyzing the financial statments), which is not essentially the core skill set of audit. But in general, audit is the same as IB and consulting from the perspective of being a client-serving expert, so I would like to consider both options for sure.

Another note on energy IB vs healthcare IB - I know that the more senior bankers are in a specific industry, the less likely they will be switching (or they won't want to). But is this the case for MBA recruiting? I was thinking since I am not setting my foot in IB yet, this difference of industry sector won't cause too many challenges as of why I want to do IB in general and whether I can be a good banker.

AugustAcademy · Answer

Alright - the change you are suggesting is arguable.  Technically, it would be a change in industry, but not function. But any reasonable person reading your essays would agree that you have industry knowledge if all your clients are in oil and gas right now (while you work for an audit firm), and later you end up working in the oil and gas industry.

admitStreet · Answer

@skakd - The work profiles of a management consultant and investment banker are quite different from that of an auditor. Auditors are usually historcial looking, whereas consultants are strategic/ forward looking. The stakeholders and problem statements are also different, e.g. in consulting you work with CEO's/ CXO's on topics like growth strategies, market entries, M&A's, digital strategies (to name a few) which require business acumen, analytical rigour and client/ stakeholder management skills. The latter two skills could be common b/w consulting and audit, but for all practical purposes, they are different functions/ domains. MBA grads with prior consulting exposure (even if it's in a different domain) usually have an edge in consulting recruitment. For example, I worked in big-4 tech-consulting before my MBA and transitioned to management consulting post-MBA, and one of the Partners that recuited me told me that my prior consulting stint helped differentiate my profile. If your edge is industry exposure (Oil & Gas), it'd be important to highlight the transferable skills you'd bring to consulting (or IB) e.g. do you understand in-depth the unit economics, competitive landscape of O&G, etc. Most post-MBA grads get recruited for a generalist consultant position. There are some boutique firms e.g. Oliver Wyman, Roland Berger, and sometimes domain-specific arms of MBB's that recruit specialists (with experience in a certain sector) so understanding your industry-specific knowledge and firms that work with clients in that industry can help narrow down your goals. IB is a different beast altogether, and firms usually prioritize candidates with prior finance/ consulting background, and younger chaps given the grind and "coachability" angles. There are exceptions ofcourse, but probabilistically, coming from audit, you would have an easier transition to consulting than to IB. Let me know if it helps, and if there are any further questions. Regards, Arvind Founder, admitStreet | Schedule a free chat W: https://admitstreet.com | E: consultingteam@admitstreet.com | LinkedIn

skakd · Answer

Thank you so much for the reply!

Regarding the switch from audit to either consulting or IB, I actually have a different taste than what you described and here are the reasons:

1) When I looked at IB prep material like BIWS, 400 questions, valuation model, etc., I felt pretty comfortable and found the technicals intuitive, partially because my accounting knowledge accumulated in audit helps me to understand the financial statements and the number crunch. Of course the soft skill part for IB recruiting (networking, coffee chatting, etc.) will be a monster, but the reason behind such exercise (making sure I am a normal people who can make conversations and is not just a machine) makes sense to me and it is requied for all professional services professionals in consulting/IB/audit/law, etc. Even if I want to stay in audit, I still need to be a likeable person in order to maintain good client and colleague relationship. Now regarding the grind and coachability you mentioned, auditors have busy season that is close to IB hours and I've also seen plenty of people finishing MBA in late 20s or early 30s to get into IB associate position (hours are not as bad as analysts out of undergrad), so I feel like those two elements are not going to be an issue for auditors like me.

2) Now for consulting, I actually feel a bit lost when I look at the case prep material (again, very shallow glimpse of course and I might do better should I give a significnat amount of practice), and honestly I don't feel that any of my professional hard skill as auditor will help me directly except for soft skill to serve the clients. As you might know, auditors think more about the logics and reasonableness behind financial numbers and internal control systems, rather than strategy or business development. For example, whenever we know the client made an acquisition, we only cared about the financial impact and how many more numbers we needed to audit and find supports for, but we rarely focused on why the client made the acquisition and how we should help the client to manage the acquiree for business improvement.

Again thank you so much for the detail reply and I do value your perspective, but I'm also interested to hear about your thoughts on my 2cents above.

MBAGuide · Answer

skakd

To answer your question about function: yes, audit and IB or consulting are all very different functions. I will not go into the details again as I see they have already been covered. You can argue in the application why you would be a good fit for either function based on your transferable skills and knowledge of finance, and that is what the admissions committee wants to hear in the goals essay. Your reasoning will also underpin the need for an MBA degree as it is recognised in many industries and is even a requirement for career progression, allowing you to move from one industry to another or from one function, region or country to another. The admissions committee will get an indirect idea of the quality of your mind from your essays (especially the essay about your goals). But they will also look at your resume and other areas of your application to see if there is a trigger that made you realise that your goals are not in O&G, but in "healthcare or TMT". It's safer to say that your interest in an industry is rooted in a previous experience, either professionally or through an extra-professional involvement.

Its better to show a trigger point for being fascinated with a function too if it applied to your case. For example, your choice of function may have crystallised during your professional career, perhaps you had exposure to consultants, or you observed a leveraged buyout for an energy company and were intrigued by the operations and investment side of deals and so on. Your mini-successes can be "learnings" that you have gained from the mini accomplishments in such a project that you incorporate into your career progress narrative. What I am trying to say is that choice of function and/or industry shouldnt come out of thin air. It could be based on your experience in the past where you worked closely with people in these industries/functions or because of a gap you have identified in your industry (makes you want to change your function and contribute to your industry)

Best wishes
Aanchal Sahni (INSEAD MBA alum, former INSEAD MBA admissions interviewer)
Founder, MBAGuideConsulting
LinkedIn |WEBSITE: https://mbaguideconsulting.com/| Message(WA): +91 9971200927| email- mbaguideconsulting@gmail.com

What does change of "industry" and"function" mean

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