Physics PhD -> Business Consulting?

[Mépris]

Physics PhD ---> Business Consulting?

How does that work out? Why are Physics PhDs hired to do this kind of work? Why not somebody with with a Finance degree or some such?

I actually know someone who's partners with somebody else in a (new-ish) business consulting firm and I asked her if they had anyone from a science background working for them or if she would even consider hiring someone with a Physics degree. She said it was the other partner who was in charge of the hiring but the few people they have now all have bachelor's degrees in Management.

I'm guessing the PhDs do different jobs to the management guys?

 

[twofish-quant]

How does that work out? Why are Physics PhDs hired to do this kind of work? Why not somebody with with a Finance degree or some such?

Other people may have different experiences, but I've found it's rare for physics Ph.D.'s to do business management consulting, although it is a very large source of employment for people with bachelors in physics from big name schools.

Also a lot of business consulting turns out to be programming work. The way that it works is that a big company hires someone like Accenture or IBM to do "consulting" which is a fancy name for a big programming project.

The other thing is that 99% of finance jobs have no particular use for physics Ph.D.'s. It's just that while there are very few finance jobs for physics Ph.D.'s, there are fewer physics Ph.D.'s. The reason that those jobs require physics Ph.D.'s is that they require hard core programming or modelling skills that aren't very common among finance majors.

I actually know someone who's partners with somebody else in a (new-ish) business consulting firm and I asked her if they had anyone from a science background working for them or if she would even consider hiring someone with a Physics degree. She said it was the other partner who was in charge of the hiring but the few people they have now all have bachelor's degrees in Management.

My guess is that a physics Ph.D. that submits their resume would get it junked for being over qualified,

 

[elkement]

Other people may have different experiences, but I've found it's rare for physics Ph.D.'s to do business management consulting, although it is a very large source of employment for people with bachelors in physics from big name schools.

On principle I agree - it is not common. But I would add that there is a higher physics PhD density in consulting jobs that require some advanced mathematical skills. I have been working as an IT security consultant - that type of job comprises both business consulting aspects and consulting / training with respect to e.g. cryptography. I have met other physics or maths PhDs in similar roles.

Editing my posting and adding more evidence:

I just checked McKinsey's website out of curiosity. The international website does not explicitly mention physics, but obviously refers to PhDs that worked in academic research before:
http://www.mckinsey.com/en/Careers/Your_background/Advanced_professional_degrees/PhD_FAQ.aspx

At the German website I even found an announcement of an event in 2009 that specifically addressied physics and mathematics PhDs.

McKinsey e.g. did the following technical and economical modelling of energy generation in the EU:
http://www.roadmap2050.eu/downloads
I think assessing different technologies and modelling the energy transmission in the smartgrid is a task very appealing to a physics PhD.

Also a lot of business consulting turns out to be programming work. The way that it works is that a big company hires someone like Accenture or IBM to do "consulting" which is a fancy name for a big programming project.

So true! It is very unusual that consulting is what the term implies - supporting the customer to complete the project on his own. A real consultant should work efficiently to make himself or herself redundant.
But especially the larger consulting companies basically sell "project resources" or hours. There is a a huge pressure on employees to meet challenging goals in terms of billable hours.

 

[twofish-quant]

I have been working as an IT security consultant - that type of job comprises both business consulting aspects and consulting / training with respect to e.g. cryptography. I have met other physics or maths PhDs in similar roles.

I know a few Ph.D.'s (not physics but CS/EE) in those roles and people that work for Accenture and companies like that tend to **hate** it, because there is a glass ceiling. and it's obvious to everyone that it's the people in sales and marketing that run the show, and there is a ton of resentment there. The technology/management conflict also happens in other places, but in places like IBM it's much less bad.

Also the reason that investment banking is attractive is that you have physics Ph.D.'s in senior roles. There *is* a glass ceiling but it's quite a bit higher in investment banking than it is in management consulting. That makes a difference not only because you can imagine yourself being the boss, but also if you have a boss that comes from a similar background, the decisions they make are more similar to the one's you'd make if you were in their shoes.

On the other hand, there is a sample bias here, because most of the people that I know that did business consulting hated it, and went into investment banking.

I just checked McKinsey's website out of curiosity. The international website does not explicitly mention physics, but obviously refers to PhDs that worked in academic research

One thing about McKinsney is that they are extremely brand name sensitive. The like graduates from big name universities so that they can tell their clients that they have consultants from big name universities. I know a ton of MIT physics undergraduates that went to work there, and I've lost track with most of them, but most of them thought the work was decent.

I think assessing different technologies and modelling the energy transmission in the smartgrid is a task very appealing to a physics PhD.

I think I'd hate it. One thing that I dislike about consultant's reports is that they often get themselves in a lot of trouble saying non-sense things, because "we don't know" is an not an acceptable answer even if it happens to be the truth. One other thing that I find annoying is that one thing that I've never seen a consulting company do is to go over old reports and see how good their model really was.

So true! It is very unusual that consulting is what the term implies - supporting the customer to complete the project on his own. A real consultant should work efficiently to make himself or herself redundant.

Business consulting is extremely political. Something else that I've seen is that often the client wants an answer "WE NEED TO SPEND MORE MONEY ON X" and the role of the consulting company is to provide an report that officially gives the answer that the client wants. If you reply "NOT X" then the report gets buried and you hire someone else.

Sometimes this is a *good* thing. Something I have seen is that you have a company in which everyone knows that unpopular thing X needs to be done, but no one wants to be screamed at for doing it. So you hire a consultant, pay them a ton of money, and they issue a report stating the obvious, and X gets done, and everyone screams at the consultant.

One other problem is that the math isn't really that sophisticated. If you look at what math actually gets used in those models, the most sophisticated thing that I've seen is regression. Often linear regression. Now it happens that some of the people in charge of those companies are mathematically illiterate and a linear regression might as well be string theory. Still, not what I want to do...

That work is useful, but it's not really want I want to do.

But especially the larger consulting companies basically sell "project resources" or hours. There is a a huge pressure on employees to meet challenging goals in terms of billable hours.

Google for the term "death march" and "project management."

Which is not an environment that I'd find "fun." A while ago I did interview for a job that was associated with a consulting company. I did talk to some of the technical people there, but it was disturbing because they had this "traumatic stare" and I figured that it wasn't going to be fun working there.

I had an interview with another consulting company, and after talking with them for five minutes I realized that I was completely unqualified and incompetent for the job they were looking to have me do, and I was extremely disturbed by the fact that the interviewer had no clue that I was totally unqualified for it.

But YMMV.

 

[Pyrrhus]

It is not unusual. It has become increasingly common. Most big consulting firms prefer PhDs over MBAs. They prefer to spend money teaching you an MBA in one month (they call it Mini MBA) rather than hiring a MBA. Why? PhDs are just better prepared at solving problems. They have hard skills, which are useful. They can do (projects are studied in teams with diverse skills) Cellular Automata, Agent-Based Modeling, Mathematical Optimization, Statistical Modeling, Econometrics, PDEs, ODEs, Stochastic Processes... PLUS all a MBA can do after learning it in one month. You name it. Can MBAs do this?

 

[elkement]

On the other hand, there is a sample bias here, because most of the people that I know that did business consulting hated it, and went into investment banking.

I would say most consultants do this for a few years, but move to a different position then - either they get hired by a client, they become consulting managers, start they own business (the latter is what I did) ...

We agree on the reasons - I do not need to google for "death march" ;-)

But I think if you start a position in consulting as sort of adventure that will last for a limited period of time it can still provide valuable experience and knowledge.