Where Ph.D.s Morph Into M.B.A.s

As a postdoc at the University of California, San Francisco, Christopher Trepel studied the cellular mechanisms of memory in cats and rats until he ran into a serious obstacle: His allergies to the animals had become intolerable. He was also allergic to mice, guinea pigs, and rabbits. "I was fast running out of animals," Trepel recalls. "I kept moving up the food chain. I was going to have to use humans, and that's prohibited." He also had a qualm about academic science: A professor trains 40 people in his career, and vacates only one position when he leaves. "You've got 39 people floating around who aren't going to be able to replace you," he says. One day, Trepel, contemplating his love for science, his allergies, and his other options, attended a presentation at UCSF by the management-consulting firm McKinsey & Co. The talk piqued his interest. So he brushed up on economics and interviewing techniques and eventually got a job. In the past decade, many talented scientists like Trepel have left labs for consulting firms, where some draw six-figure incomes. This research-to-riches migration intensified in 1998, 1999, and 2000. That's when M.B.A. holders headed for dot-com startups and consulting firms increasingly turned to academia for able applicants, says Betsy Kovacs, president of the Association of Management Consulting Firms in New York. Global consulting-firm revenues swelled as the U.S. economy expanded, averaging 19 percent annual growth from 1995 to 1999, according to Kennedy Information Research Group (KIRG) in Fitzwilliam, N.H. Revenues topped $114 billion in 2000 and are expected to reach $130 billion this year. With the economic downturn, however, KIRG predicts that average annual revenue growth will drop to a more traditional 12 percent from 2000 to 2005. Many M.B.A.s are already returning to the safer haven of management consulting.1 Still, recruiters at consulting firms vow to continue wooing Ph.D. holders. "Ph.D. students whom we've brought in do at least as well as, and, in many cases--particularly when specialized knowledge is required--even better than M.B.A. students," observes Robert Victor, a recruiter at Boston Consulting Group (BCG). "So we're still quite committed to recruiting Ph.D. students." McKinsey recruiter A. Mini Harris notes: "[Our] offices don't use Ph.D.s as filler. They look for the best talent, regardless of background." What Consultants Do Consulting, unlike science, involves a preoccupation with moneymaking, a use of business lingo, and a willingness to wear suits. Consultants travel more than bench-bound researchers and often don't have to specialize for a few years--welcome news for scientists bored by the laser-like focus of lab work. Consulting projects explore how companies can become more competitive and efficient, market new products, and integrate with other companies after a merger. Compared to most science salaries, compensation for consulting work is terrific. The median salary in 1998 was almost $50,000, according to the U.S. Bureau of Labor Statistics. But many consultants earn close to $200,000 the first year, including bonuses and profit-sharing. The money "does take a little bit of getting used to at first," admits Shane Williams, a second-year BCG consultant. The job rarely calls upon specific scientific knowledge. One exception is a massive internal project at BCG that examines the commercial implications of genomics. This effort feeds into recent work that the firm has done for two top biotech companies, remarks BCG project leader Vikas Taneja. Consultants determined how genomics-based techniques could reduce the companies' research and development costs and how genomics, by increasing the number of drug targets, would force changes in the drug-development pipeline. Consultants interviewed researchers, analyzed financial data, and developed economic models, Taneja says. Who Gets Hired? Victor, the BCG recruiter, estimates that considerably less than five percent of applicants receive offers from consulting firms. The firms seek leadership skills, a well-rounded character, and an ability to get along with people. Applicants must also display superior analytical and communications skills during a grueling series of interviews that focus on hypothetical business cases. BCG manager Kimberly Wagner advises applicants to prepare by regularly digesting stories in the business press. Coming from a well-known lab or school also helps applicants. "You need to be on the top of your game," notes Wagner, who holds a biochemistry and pharmacology doctorate from Harvard Medical School. "You're not leaving science because you could not be a successful scientist." Otherwise, biologists who switch to management consulting fit no single profile. Examples of the disparate backgrounds and fields abound: While studying signal transduction at Harvard, Wagner became captivated by the commercial implications of science, though she had no business experience. In the middle of her Ph.D. program, she earned an accounting certificate at Northeastern University. She joined BCG upon graduation in 1994. Williams worked for the chemical company ICI before college. He then spent a year at the accounting firm Price Waterhouse before attending graduate school at Cambridge University, where he imaged blood flow through tumors. After a postdoc in an MIT tissue-engineering lab, Williams chose consulting. His reasons: Accounting was too dry, industry research too vulnerable to cost-cutting; and academic research too focused for his restless tastes. Diana Camaur loved studying HIV genes during her doctoral studies at the University of California, San Diego. Nearing graduation, however, she itched for the challenge of doing something completely new. Spurning two postdoc offers, she went to McKinsey in 1997. She told herself that if she didn't, she'd never forgive herself for passing up the opportunity. She also reasoned that she could return to science within a year if she didn't like consulting. (Returning to science after a stint in the lucrative consulting world, however, occurs rarely, if at all.) Science vs. Consulting Management consulting and science aren't entirely alien species of labor. Both involve grueling workweeks of 60 hours or more, as well as the excitement of generating and manipulating ideas. While lunching last February at a restaurant near their office, Trepel and two colleagues brainstormed on how an insurance client could apply customer data to maximum advantage. "It was as creative as anything I had ever done in science," he recalls. In consulting, "you are often working toward a solution without being able to clearly articulate exactly what you're doing for the first week," notes Wagner. "Then all of a sudden, things start to fall into place. It's not unlike when you first have an unanticipated scientific result. You know in your gut that you've hit on something new, as opposed to having done an experiment wrong. And now you have to figure out what to do with it." Because of their background, "Ph.D.s are usually a little bit more analytically rigorous," Camaur suggests, "and folks with M.B.A.s usually want to get to the answer quicker." Otherwise, sources contacted for this article all said that the two groups are indistinguishable after two years of consulting. During that time, non-M.B.A.s have essentially morphed into business mavens, thanks to their own efforts, on-the-job training, and a two- to three-week course given by firms that covers the essentials of an M.B.A. education. About seven years after a "class" of recruits joins a consulting firm, a small percentage advances to partnership. Long before then, many consultants--charged with ambition, enticed by headhunters, tired of the grind--have left to take diverse jobs in business. N. George Ugras, who trained as a physicist and then worked for McKinsey for four years, is an example. Now a partner at a venture capital firm, he says he never could have gotten the job without his consulting experience. Consultants are "hired away with the titles of vice president into large corporations because the consulting industry gives you a lot of exposure to senior-level decision-makers," observes Mark Allen, a recruiter for the firm Dean & Co. "Several [former consultants] have done startups. And some folks have just said, 'Well, I've made some money, and I'd really like to do some not-for-profit-type work.'" S Douglas Steinberg (dougste@attglobal.net) is a freelance writer in New York. 1. J.D. Glater, "Business students do an about-face," New York Times, p. C1, Feb. 14, 2001. Who Hires PhD's? Consultants identify the two firms that hire the most Ph.D. holders as McKinsey & Co. and Boston Consulting Group (BCG). Founded in 1926, McKinsey has more than 7,100 consultants worldwide. It began targeting non-M.B.A.s about 10 years ago, according to A. Mini Harris, manager of advanced professional degree recruiting. A quarter of the firm's consultants now have Ph.D.s., and in North America, about 150 people with Ph.D. and M.D. degrees were hired in the 2000 recruiting season, compared to 75 in 1997. BCG, a 38-year-old firm with 2,400 consultants worldwide, began pursuing non-M.B.A.s five years ago. Since then, their numbers have risen from 10 to 15 percent of hires to 20 to 25 percent, reports Robert Victor, head of North American non-M.B.A. recruiting. Given the success of its healthcare practice, BCG made a push this year to hire more physicians and life scientists. But the effort fell short of its goals, a disappointment that Victor attributes to insufficient publicity. The firm is trying again this year, and he urges life scientists to apply. Smaller, lesser-known consulting firms may hire even higher percentages of applicants with doctorates than do McKinsey and BCG. For example, doctorate holders represent about a third of those hired this year by Dean & Co., an eight-year-old firm with 50 consultants in Vienna, Va., says Ph.D. recruiting manager Mark Allen. --Douglas Steinberg

Where Ph.D.s Morph Into M.B.A.s

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