Consulting vs Banking - Some Thoughts

So I have alluded to many times that I will blog about the difference between bankers and consultants. We all know that there is an age old rivalry between bankers and consultants, as typified in the hilarious and oft-cited video below.

Now, my AV skills were tapped out creating a 21^st video for my bro so I won’t be dazzling you with my own musical today (legions of music appreciating fans heave a sigh of relief). Additionally, I find the process of writing b-school essays has sucked every last bit of my will to write extensively, so I am not going to offer you the comprehensive comparison you might be expecting. Instead, I thought I would focus on one question – What can consultants and bankers learn from each other?

So, in my limited experience, I think I have an answer to this question from both perspectives. From the consultants side, I think what we can learn is the concept of materiality. Bankers are concerned with money on the table, and they realise that small differences typically have little effect on the big picture. Consultants on the other hand care about literally every little thing. Bankers use the term materiality to denote a concept whereby they will focus only on the stuff that actually will really shift value. If you are reading closely this is of course an extension of the 80:20 rule – which is always on the tip of consultant’s tongues, but somehow goes out the window when your engagement manager is asking you to align boxes at 2am. If we focused only on appropriate levels of detail, our lives would much easier, without any reduction in client service.

From the banker’s side, I think they could stand to learn how to tell a story much better. For consultants, telling a story is at the heart of what we do. We gather facts, do analysis and make recommendations, but at the heart of what we do is taking the client on a journey such that by the end of the case, they are fully bought in to the result. See Steve Shu’s post on the topic for more detail. Bankers have the recommendation part down cold as you would expect, but from my experience they don’t do enough to get the client bought in – I think it would greatly improve the quality of some of their work.

Anyway there are my two cents. Anybody have thoughts on the topic?