Not a day goes past that I don’t speak to a strategy management consultant with aspirations of moving from consulting into a “sexy” start-up environment… bring on the free lunches and foosball!! From juniors to senior level consultants, it seems everyone wants a piece of the dynamic, fast paced rollercoaster lifestyle that comes with working for such a business.
So I decided to investigate the allure of this trendy industry and see if it really does meet the hype…. I spoke to my esteemed network, consisting of serial entrepreneurs who have worked in many a start-up or tech environment, and some have been there and done that in both start up world and the ASX corporates and have war wounds to show. I have compiled and analysed their input and have come up with my top 10 things to consider when considering this career path.
So it seems that… yes, there are some definite pro’s with this career path. Start-ups can offer you massive amounts of freedom; you get involved in a wide variety of tasks for a company where every day is different. You get direct access to C-suite, you are at the centre of power, and decisions are made quickly. It is a casual working environment and there is usually a strong culture filled with missionaries (rather than mercenaries) and there can be some equity incentives for the right roles.
However you also need to consider…
1/ A lot of the “tech start-ups” in Australia are actually local branches being set up by tech companies that HQ’s are based in the US/London/Singapore. The reality is being based in Australia and working for one of these satellite branches removes you from the centre of power and decision making. The Australian team will often be handed decisions and key strategic changes as fait accompli and won’t have any real input into it. This can often mean regular shifts in strategy and tactics without much advance notice which can be extremely frustrating, especially when the decisions are being made by people who don’t really understand local market conditions. So you need to go into such a company and role with your eyes open and a realistic assessment of how much impact you are going to be able to have on the business.
2/ With regard to a “local” tech start-up, my veteran contacts believe most people they talk to have a completely unrealistic view of what it will be like when they are leaving a management consultancy or industry position. They cite “They are used to the trappings of the corporate environment…nice offices, good pay, bonuses, expense accounts, business class travel….and also very defined roles where they can focus on say “pure strategy” because there is a whole hierarchy of other support staff to look after everything else for them. In a true start-up, you need to be prepared to pitch in and work right across the business, often doing work that is tangential or completely unrelated to what you see as your core role. There aren’t big teams of support staff so suddenly you are doing everything yourself and there certainly aren’t big expense accounts and luxury travel. Working in a true tech start-up is not like what people see at Google or Facebook. It is unglamorous, often involves “unsexy” work, very long hours, and few perks while the business is struggling through its first years”.
3/ Because of the points above, the people who thrive in start-ups are typically different to people who love corporate consulting. To really enjoy your start-up experience you need to have a high risk tolerance, a huge degree of comfort with ambiguity and uncertainty, a willingness to work across a really diverse range of activities (so you might be a strategy consultant but suddenly find yourself having to attend an expo, man a stall, and sell the product face-to-face to a potential customer). Have no pretensions about the work you are doing, and an ability to get on with people from very different backgrounds to yourself (you will no longer only be working with commerce-law and engineering graduates from UNSW and Sydney Uni).
5/ Many typically have completely unrealistic views on the likely success of start-ups. An almost infinitesimal number of start-ups become unicorns. The vast majority of start-ups fail. So you have to go into this with the mindset that you may devote 3-5 years of your life to this business and end up with little more than a modest salary and a huge amount of experience. Some scale ups can burn out in spectacular fashion but the experience certainly can be character building.
6/ People also often also have unrealistic views about the value they add and therefore the equity stake they should be given. Unless you are a founder or one of the senior management, if you are lucky enough to get any equity at all, your stake is likely be very small and simply as part of a general employee equity scheme. You are very unlikely to get super rich on this due to the high level of business failure and the small stake that you have been given.
7/When thinking about career development generally start-ups (and digital business generally) do a better job of accelerating capable people through levels of seniority quicker. You often see people with 5-10 years of experience reaching quite senior levels in digital businesses. In corporates, this is less the case – promotion tends to be more a balance of experience gained and capability. However unless a start-up really hits it big, then the brand recognition is likely to be far less than any brand name corporate. Therefore, a future corporate employer could undervalue your experience.
8/The lack of structure can be a real issue for some people, especially those who are coming straight out of a top tier management consulting environment like McKinsey, Bain or BCG. In start-ups people often work outside of the traditional org structure, and tenure is often just as important as role title.
9/Many have visions of changing mindsets and being a thought-leader when they join a start-up however it takes a special type of entrepreneur to listen to an outsider and admit they are wrong. In many cases they will just plough on with their gut feel, so gaining their trust is key, but this is also difficult as most of the other execs have also been on the journey with them.
10/And finally a word on remuneration. For most start-ups, a significant proportion of income can be through equity in the business. This has the potential to be quite lucrative over the longer term but won’t pay the mortgage in the short term. When candidates come to me asking about roles in a start-up the first thing I tell them to consider is if they can currently afford it… Many are unaware of the drop in base salary that will be offered compared to many corporate or consulting roles.
So there you have it… there is certainly a lot to think about when considering a move into this space, it can be hugely rewarding for some but it is certainly not for everyone.
If you have anything to add to the above I would love to hear your thoughts.
Interview Preparation Tips
While some people are confident and love being tested in interviews, others get nervous and don’t always show the best version of themselves. No matter which one of these is you, the following tips will help guide you to perform at your best.
Remember you only get one chance to make a good first impression and preparation is key.
We have even seen confident candidates fail in interviews. Overconfidence can sometimes lead to a lack of preparation for an interview, and it often shows up in an attitude of “sell this job to me”. So even if you are the smartest person in the room, with the gravitas to match, you need to do the basics well and remain professional at all times or hiring managers will be put off by a perceived lack of commitment to the interview process.
Whether you feel the position is one you would love to be offered or if you’re merely there to explore the opportunity further, you need to put your best foot forward at all times. Be professional and humble and never let complacency or arrogance come across – it is a small market, people talk, so do yourself proud each and every time.
1. Always do your due diligence on the company you are interviewing with
What have they been in the news for lately?
Read the companies last annual report.
Who sits on the leadership team?
Who are their biggest competitors?
Speak to anyone you know who has worked or does work for that business to get their insights.
2. Have an opinion on what problems they could be trying to solve
Even if you are not currently in the same sector as the hiring company, make sure you understand the issues this sector is facing and come with a view on how, as a business, they may tackle some of these challenges. Clients like that you’ve had a think about their organisation and come with some points of view. It shows interest in them and also a proactive approach that will distinguish you.
3. Rapport is key
It is an unconscious bias that people hire people they like. Always try to build rapport with the interviewer in an authentic way. Be curious, inquiring and also aware that the hiring manager will be evaluating your style and personality against other major stakeholders in the business you would support in order to be effective in the role. They will be asking themselves if you have the style, maturity and gravitas to lead people as well as senior stakeholders while also challenging them without getting them offside. Keep this in mind and always have examples on hand of previous relationship building successes both from team leadership and senior stakeholder perspectives.
4. Keep it concise!
One common reason for rejection is not being able to articulate your answers in a concise way. Often candidates will give long-winded answers and go off on a tangent. Yes, it’s imperative you need to build rapport BUT interviewers have a limited amount of time and want to get to know you as much as they can in a professional capacity more than a personal one, at least at first.
5. Your Questions
Come prepared with two or three good questions to ask the interviewer when the opportunity arises. This usually happens towards the end of the interview. Always remember when asking questions, the manner in which you ask is often more important than the question itself. Be humble and well intentioned when asking questions about the opportunity so you can determine if this is the right role for you.
When asking about career progression opportunities should you be successful in the current role, please be acutely aware that hiring managers want to be assured you are excited and interested in the role at hand as opposed to the next promotion. It is all in the positioning of the question and can easily be asked more generally like “what do you see as the career pathways from this position after a few years in the role and strong performance”.
6. Money talk
Never ask about salary in the interviews where possible, talk to your recruitment consultant about the salary levels beforehand. Let us do the negotiations for you. If asked about salary expectations in the interview (and yes, it does happen!) gently advise the hiring manager that you haven’t given it too much thought because you’ve been focussed on the role and fit for the position. Advise them that you believe your recruiter would have provided all this information to them prior to the interview.
We have seen these types of conversations go south very quickly if not handled correctly in the moment despite good interview performance up to that point.
7. Behavioural Style Interviews
In behavioural psychology, past behaviours are the best predictor of future behaviours unless those behaviours weren’t helpful and you’ve adopted new ones. Behavioural questions evaluate how you’ve handled situations in the past and what you would do if faced with a similar situation again in the future. It’s about articulating your approach and process but also having learnt from situations that didn’t turn out well. Clients also like to understand what you have learned from failures and how its changed your approach and subsequent behaviours.
For example: Tell me about a time you have failed on a project you were working on? What did you learn from this?
This is not easy but if prepared you can come out on top.
We suggest you tackle these type of questions using the STAR method. This method also ensures you stay on point and concise.
Think of a situation similar to what the interviewer is asking you about that had a successful or learning outcome. It doesn’t necessarily have to be work related as long as it’s relevant. Remember to include the who, what, where, when and how.
Describe the task you were responsible for in that situation. Keep it specific but concise. Make sure to highlight any specific challenges you faced.
This is the part where you describe exactly what you did. How did you complete the task you were assigned? Remember to focus on what you did and highlight traits (qualities) that a hiring manager will find desirable (initiative, teamwork, leadership, dedication, etc.)
Share what the outcome of the situation was and how you specifically contributed to that outcome. What did you accomplish? What did you learn? What were the results of your actions?
This is where you also get to be introspective and share some of the softer learnings over and above the hard facts or results.
Here are more behavioural interview questions to practice with.
8. Watch your ego!
Clients find candidates that display a high level of ego in interview are either covering up for some insecurity they have or have a lack of Emotional Intelligence (EQ). Either way it is not a good look. Clients prefer to hire humble, achievement-oriented people who are universally likeable, no matter how talented they are.
9. Mind your manners
Wherever possible write a thank you email to the hiring manager for their time.
Some clients have a real issue with candidates that do not send thank you messages post interview. A recent survey on this showed that 25% (one in four) interviewers appreciate or even expect this courtesy. If possible, it is recommended you end it straight after the interview or at the very least the same day of the interview.
Research shows that people with manners are perceived as more likeable. Writing a thank you note post interview, reiterating that you would be excited to work with them or that you’re excited about next steps, allows the hiring manager to re-engage with you, thereby making you more memorable too. This small act can place you front of mind during their refection time on candidates they’ve met.
Salary Guide 2019
In the past few years we have seen strict salary bandings in most major ASX listed businesses, however this year we are finding that many hiring managers have put cases through to raise these bands when hiring the best consulting talent into their business units. The war for talent is real, and whilst there are many reasons a candidate will take a role, salary is a very important factor. We have seen some top tier candidates obtain offers above market rates at the more senior level when moving into industry, however we always urge candidates to take a holistic view of the company and the role.
We are often asked for traditional salary information by our clients who are looking to benchmark their own teams against the market. We feel this is a good idea as salaries can change and you want to ensure you retain your top performers who have been loyal. They are undoubtedly being approached by your competitors and you want to reduce their options to leave. Having this information to hand at performance review time is also very useful for both the manager and the consultant.
These salaries are base only – not including superannuation or bonus
Top Tier Consulting Salaries
The top tier management consulting firms pay pretty well and up to a certain level consultants can expect a commensurate level of base salary compensation if moving to industry. This changes at the Executive Manager level. Above this level companies will rarely offer parity. Decent bonuses can we achieved and vary at each level
Partner $380k +
Associate Partner $280k-$380k
Executive Manager $190k-$260k
Project Leader/Manager $150k-$200k
Senior Associate /Consultant $130k-$170k
Business Analyst /Associate $100k-$140k
Big 4 Consulting Salaries
Salaries in the Tier 2 or Big 4 consulting firms usually can be matched when candidates take a role into industry. We find some consulting firms, we deems as underpaying their consultants in the market for the title they hold. Bonuses are generally minimal.
Partner $280k plus
Director $190k -$250k
Associate Director/Senior Manager $140k- $180k
Manager $110- $150k
Associate/Consultant $75k- $120k
In-house consulting roles in Financial Services
With most of the Financial Institutions fighting for the same talent, this has pushed up salaries a little in recent years. They pay better bonuses that the non-Financial Services players in general. A Executive Manager/ Junior Director can expect circa a 30-45% bonus.
Executive General Manager/Senior Director $300k +
General Manager/Director $250k-$340k
Executive Manager/ Junior Director $180k -$250k
Senior Manager $140k-$170k
Senior Consultant/Manager $110k-$150k
Associate/Consultant $90k- $120k
In-house Consulting Roles in non-Financial Services
The major players in this space are the telco’s, retailers, airlines and to some extent the energy/infrastructure organisations. We find bonuses generally slightly lower in these organisations.
Executive General Manager/ CSO- $330k plus
General Manager/ Principal/ Head Of $250k-$340K
Senior Manager $160k-$220k
Senior Consultant $100k- $140k
Associate. Consultant $80k-$110k
For further specific information please contact us directly.