Consultants have a wealth of business experience which in theory make them ideal candidates to run a business: they are highly intelligent, have the best MBA’s and “Leadership training” and know how to differentiate from competitors.
Yet some fail and others succeed. Why…?
After many decades of successfully hiring for both listed and privately-owned businesses, here is the EM take on why some ex-strategy consultants fly and why others flounder:
• Can theory be applied in practice? They might possess an in-depth knowledge of the latest models and tool-kits, but, as a business leader, they don’t have the runway to trial and test ideas that a consultant enjoys. Theoretical ideas have a myriad of (unexpected) real-life impacts, and ex-consultants may jump in headfirst with their strategy playbook. They need to tailor their ideas to fit your business.
• Do they have the commercial imperative? When every decision affects their P&L, they need to be able to “smell the money” and put the intellectually-pleasing decisions to one side in favour of the financially-pleasing ones. The long-term risk-free nature of strategy consulting results in fiendishly clever schemes that make clients reach for their cheque books, but the reality of running a business requires a practical approach that has the bottom line at its heart.
• Can they look both ways? Every great leader understands the needs of those who deliver their products and services. Boardrooms are littered with the gravestones of undeliverable strategies. “I wish I had included operations in the loop: Rest in Peace.” One of the biggest challenges for any strategic thinker is also to get into the nitty gritty of their business – they need to understand every aspect in order to implement successful change.
• Can they instil confidence? Management is about organising processes, but leadership is about motivating people. They need to put the presentation skills to one side. Business leaders often need to influence the hearts before they can influence minds. If they show that they care about their people, they can take them alongside on the journey. Listening, empathising and encouraging. Ex-strategy consultants have to demonstrate they have the capacity to do this before being offered the job.
• Machiavellian vs. non-political. Business can be perceived as a zero-sum game where it pays to vanquish all opposition. A Machiavelli-type leader might enjoy some early wins, but the long-term attrition in internal relationships will make it an increasingly lonely experience at the top. An isolated leader makes bad decisions because they do not grasp the truth of their business (people are scared to tell them).
• Ambition. Over 70% of Strategy Consultants at Senior Manager / Director level will declare their goal is P&L leadership. Though for how many is it a “give it a go” approach in the knowledge that consulting is always a fall-back option? The sacrifices they will necessarily make to work-life balance in building their MD / CEO career can be tough. Long-term tenacity and staying power need to be tested.
• Timing. With tech-enablement and the lure of entrepreneurship seemingly anyone can now run a P&L – at any age..!
Smart (ex-)Consultants have run FinTech businesses in their mid-20s with less than 5 years’ experience. Larger, more complex product-based businesses or multidimensional companies transition candidates later, in their early-30s when they have amassed greater breadth and depth of experience.
Ultimately though there is a point beyond which it is too late: with 15+ years of experience it becomes less likely that a transition can be made. Businesses want to mitigate risk, and with no previous P&L experience and candidates’ higher salary expectations there becomes a cut-off.
Strategy consultants are incredibly capable individuals, and many excel and go on to become exceptional business leaders. However, it only takes one Achilles heel to fail. Thinking through the characteristics and behaviours above will help you appoint the candidate to make your business thrive.
EM can help. Please contact David Howell to discuss further: [email protected]