#3 SKILL DEVELOPMENT
I'm biased, but I received the best business training possible in my years at McKinsey. Intense and thorough exposure to textbook business principles and practices. In addition, the team-based model leads to mentorship opportunities with managers, partners, and coworkers. Finally, you have close client interaction which develops "client skills" - from managing client teams to leading meetings to learning how to navigate diverse corporate cultures.
That being said, here's a quick list of what you can expect to learn in both fields:
Aside: by "hard skills", I mean software (ie Microsoft Office Suite), analytical methods (eg, financial valuation). By "soft skills", I mean people-interactions with coworkers, the broader firm, clients, etc
CONSULTING
Hard skills:
1) Microsoft Powerpoint - you will become master at this, and eventually be able to produce slide presentations that are precise and complex
2) Microsoft Excel - you'll get less exposure to Excel than in investment banking. Still, "modeling" is an important component of consulting work. Note - "financial modeling" in consulting work is not identical to financial modeling that you find at investment banks
3) Business expertise - you'll get exposure to different industries and functions, and begin to develop specializations if you are interested. This expertise may be as broad as "market entry strategy" and or specific as "benchmarking for consumer goods companies".
Soft skills:
1) Client handling (explained above)
2) Close team interaction
3) Presentation skills - this is a cornerstone of consulting work. After all, findings don't mean anything if you can't convince the client to believe in and adopt them
4) Workflow and project planning - this is critical. Consulting is focused on you owning a specific project or workstream, setting timelines and deliverables, and executing against that framework. This makes you independent and "standalone".
INVESTMENT BANKING
Hard skills:
1) Microsoft Excel - clearly you will become a master at this, and is a mandatory for success. You'll know the ins-and-outs, every keyboard shortcut known to man (and then some), and so forth
2) Microsoft Powerpoint - much less exposure here depending on the focus of your work (for instance, more in Corporate Finance, less in Mergers & Acquisitions). Very little experience in building a presentation from scratch
3) Financial valuation - differs based on your group and focus, but at the very least you'll understand financial statements, and have a strong knowledge of how companies are financed
Soft skills:
1) Work endurance - this is the upside to those 100+ hour weeks, which is the ability to work incredibly long and incredibly hard. Basically, every job you take post investment banking will feel somewhat like a vacation. It's a great trait to have
2) Understanding the deal-making process - bankers have close access to leading business executives. As a junior banker, you may not interact personally with these people but will be exposed through meetings and conference calls and get to see how industry-changing deals are done
The last 2 elements are briefly covered, because I will write full posts on each of them soon.
#4 NETWORKING
Consultants move on to a broad array of careers - from corporate to academia, non-profit to public sector. Investment bankers generally continue within the financial world. Your professional network and future career opportunities will be influenced by your firm connections and colleagues.
My perspective is that consulting firms encourage more networking between alumni and current employees than investment banks. However, large investment banks have very strong alumni bases, and it's certainly possible to build a strong and broad network provided you actively seek opportunities and are sociable.
#5 EXIT OPPORTUNITIES
Corollary to point #4, this is influenced by your firm's alumni and also the following:
-the different headhunters and recruiters that reach out to you
-the different paths your "hiring class" takes and the knowledge and opportunities you share with each other
-the relationships you've built with more senior colleagues and the doors they can open for you
The conclusion is simple: if you want career flexibility, consulting is the right choice. If you want career flexibility WITHIN finance (and corporate financial roles), investment banking is the right choice.
A great post to read is my "Large management consulting firms versus boutique consulting companies" post for more info on differences between the two. - 15224
I'm biased, but I received the best business training possible in my years at McKinsey. Intense and thorough exposure to textbook business principles and practices. In addition, the team-based model leads to mentorship opportunities with managers, partners, and coworkers. Finally, you have close client interaction which develops "client skills" - from managing client teams to leading meetings to learning how to navigate diverse corporate cultures.
That being said, here's a quick list of what you can expect to learn in both fields:
Aside: by "hard skills", I mean software (ie Microsoft Office Suite), analytical methods (eg, financial valuation). By "soft skills", I mean people-interactions with coworkers, the broader firm, clients, etc
CONSULTING
Hard skills:
1) Microsoft Powerpoint - you will become master at this, and eventually be able to produce slide presentations that are precise and complex
2) Microsoft Excel - you'll get less exposure to Excel than in investment banking. Still, "modeling" is an important component of consulting work. Note - "financial modeling" in consulting work is not identical to financial modeling that you find at investment banks
3) Business expertise - you'll get exposure to different industries and functions, and begin to develop specializations if you are interested. This expertise may be as broad as "market entry strategy" and or specific as "benchmarking for consumer goods companies".
Soft skills:
1) Client handling (explained above)
2) Close team interaction
3) Presentation skills - this is a cornerstone of consulting work. After all, findings don't mean anything if you can't convince the client to believe in and adopt them
4) Workflow and project planning - this is critical. Consulting is focused on you owning a specific project or workstream, setting timelines and deliverables, and executing against that framework. This makes you independent and "standalone".
INVESTMENT BANKING
Hard skills:
1) Microsoft Excel - clearly you will become a master at this, and is a mandatory for success. You'll know the ins-and-outs, every keyboard shortcut known to man (and then some), and so forth
2) Microsoft Powerpoint - much less exposure here depending on the focus of your work (for instance, more in Corporate Finance, less in Mergers & Acquisitions). Very little experience in building a presentation from scratch
3) Financial valuation - differs based on your group and focus, but at the very least you'll understand financial statements, and have a strong knowledge of how companies are financed
Soft skills:
1) Work endurance - this is the upside to those 100+ hour weeks, which is the ability to work incredibly long and incredibly hard. Basically, every job you take post investment banking will feel somewhat like a vacation. It's a great trait to have
2) Understanding the deal-making process - bankers have close access to leading business executives. As a junior banker, you may not interact personally with these people but will be exposed through meetings and conference calls and get to see how industry-changing deals are done
The last 2 elements are briefly covered, because I will write full posts on each of them soon.
#4 NETWORKING
Consultants move on to a broad array of careers - from corporate to academia, non-profit to public sector. Investment bankers generally continue within the financial world. Your professional network and future career opportunities will be influenced by your firm connections and colleagues.
My perspective is that consulting firms encourage more networking between alumni and current employees than investment banks. However, large investment banks have very strong alumni bases, and it's certainly possible to build a strong and broad network provided you actively seek opportunities and are sociable.
#5 EXIT OPPORTUNITIES
Corollary to point #4, this is influenced by your firm's alumni and also the following:
-the different headhunters and recruiters that reach out to you
-the different paths your "hiring class" takes and the knowledge and opportunities you share with each other
-the relationships you've built with more senior colleagues and the doors they can open for you
The conclusion is simple: if you want career flexibility, consulting is the right choice. If you want career flexibility WITHIN finance (and corporate financial roles), investment banking is the right choice.
A great post to read is my "Large management consulting firms versus boutique consulting companies" post for more info on differences between the two. - 15224
About the Author:
Management Consulted is the ultimate resource for prospective management consultants. Written by a former McKinsey consultant, it covers topics including recruiting, resumes, and consulting interviews. Read the complete guide to consulting jobs and interviews today!
