The advantage of hiring an ex-consultant in a private equity portfolio company

Former management consultants make up a sought-after talent pool, and they’re commonly hired into strategy roles at large companies. But what can they contribute to smaller private equity-backed businesses?

Ex-consultants carry a set of tools that help them work through complex problems. This “strategic toolkit” can be understood as three core skill sets: business analytics, problem solving and executive communication. In other words, these individuals are used for heavy analytical work, developing insights and crafting a roadmap for execution that can be communicated across the entire business.

Their approach is shaped by time at firms like McKinsey & Co., Bain & Co. or the Boston Consulting Group, which cultivate business athletes who can ask the right questions and navigate ambiguity with confidence. The result is a unique mix of agility and discipline that becomes extremely valuable in the right operating environment.

Plus, most consultants leave their firms to target their industry of choice, so the right hire will come into your business with a deep understanding of the environment you’re navigating. Sometimes this knowledge is built through having a niche in their consulting work, but it’s also common for these candidates to have pre-consulting experience in the same field they want to pursue post-consulting.

If you’re interested in hiring from this talent pool, here’s exactly how ex-consultants can deliver value to private equity portfolio companies:

Serving as the strategic right hand during periods of change

Our private equity clients often seek ex-consultant talent during transformations, integrations or when preparing to hit their next stage of growth, where they need someone to apply structure to a turbulent moment in their business. Ex-consultants are prone to becoming a “sounding board” for the CEO or operating partner. When the team faces tough decisions, they can help break things down and move them forward without losing sight of the broader goal.

Management consultants get dropped into unfamiliar spaces all the time. They’re taught to take in information quickly, find the patterns and come back with a plan. That kind of training pays off when a company needs to rethink how it brings a product to market, change its pricing model or merge business processes.

This strategic capacity is shaped early at the top consulting firms. At the analyst level, consultants are trained to work in Excel, analyze datasets and extract insights that inform business direction. By the time they’ve reached the associate or manager level, they’ve built the muscle to not only interpret the data but also guide decisions that impact growth, cost and scale.

Even a lower-level ex-consultant hire will likely earn their seat at the table during big decisions. Their input and guidance will be invaluable for any kind of far-reaching initiative. If you plan to hire someone further up the reporting stack, you will find that they’re ability to serve as a one-person strategy team will cover areas that usually require an entire group, which can be advantageous for private equity-backed business that tend to run “lean and mean.”

Ability to wear multiple hats, sometimes all at once

A common gripe among consultants is that they never get to see the results of their work. Despite evaluating a business and making a strategic plan, they then have to leave and partner with the next client. This is good news for private equity portfolio companies, because you can hire an ex-consultant to build your strategy and run it, too.

These hires don’t just come in to assess a situation and leave. They help implement the change, adjust as needed, serve in any capacity required of them and stay accountable for results. Their understanding of the business also compounds over time, which improves the quality and speed of future initiatives. And if you don’t need someone to run the strategy full time, they can rinse and repeat their process in another portfolio company.

That’s right, ex-consultants entering a private equity environment don’t always stay in the same portfolio company. In many cases, these hires are valuable enough to “graduate” into a firm-level position and shift their focus to a different company in need of the same strategic thinking they applied to the last.

If there’s one thing we’ve learned from placing over 1,400 consultants during the last two decades, it’s that these individuals are always hungry for the next challenge. They’ll flex into whichever role you give them and, most of the time, will deliver far beyond your expectations.

The takeaway:

In the world of private equity, ex-consultants sometimes get branded as pontificators who don’t have the ability to roll up their sleeves, dive into the real work and make tangible change happen.

While that is true for some consultants, there are many who have the mindset of a private equity operator and fully understand that their only role is to move the needle in a quantifiable manner. You just have to find the right ones who possess that mindset and will run through walls to help you fully execute on your value creation plan. We assure you that they are out there if you just know where to look.

To learn more, contact Blaine Ayres at (336) 217-9140 or blaine.ayres@charlesaris.com.