If you’ve been reading about what it’s like to work at a consulting firm, or if you’ve been talking to friends in consulting careers, you may have heard about the up or out policy – how consultants are expected to continually advance in their careers or else find a new role. While this can sound scary, it doesn’t have to be! The up or out policy also means you will always be working alongside people who are motivated to do their best – so it’s all about going in with the right expectations around what this policy is.
In this article, we’ll demystify the up or out policy:
- What is the up or out policy?
- Why up-or-out?
- Which firms practice up or out?
- What happens if you get off track?
- 7 reasons the up or out policy is not as scary as it sounds.
Let’s get started!
What Is The Up Or Out Policy?
The up or out policy is an unwritten norm at top management consulting firms where underperformers are asked to leave if they are not fit for the next promotion point at the expected time. Consulting firms rarely fire underperformers on short notice. Rather, firm management will give underperforming consultants extensive feedback to help them turn around their performance, and if they show insufficient progress, they will be encouraged to look for jobs that will suit them better.
No firm wants to let people go after spending effort, time, and resources in hiring and training them, and consulting firms invest far more than average in developing their people. The decision to manage a consultant out of the firm only comes after thoughtful discussion between the decision-makers, typically during semi-annual performance review committees attended by partners.
In many cases, the consultant will leave before even reaching this point. This is because by then they have already received feedback about their performance and are most likely not enjoying their time on the job.
Even if a consultant ends up in this position, they will have access to great job opportunities. There is actually a benefit here for both parties. The consultant gets access to job postings and an alumni network that will elevate their careers, while the firm expands its network and may end up winning a project with one of their former consultants.
To learn more about career opportunities after consulting, you can read more here.
It is worth noting that the rule is rarely applied to consultants who have spent less than a year on the job as firms do recognize that the learning curve is very steep. It only happens after sufficient time and feedback that the consultant is not well suited for the next role.
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Why Up Or Out?
The management consulting industry is very competitive and the most important advantage you can have is people. When you tell your employees that they need to move up to the next performance level within 2-3 years or else move on, you will build a culture of striving to improve at every opportunity. Constant improvement is very hard to achieve at most companies, and getting to that level will ensure that you are ahead of your competition.
This can make it a very appealing environment for professionals who are highly competitive and ambitious, though certainly, an up-or-out environment is not a fit for everyone. There is no doubt though that spending some time in this environment will elevate your performance across technical and soft skills. That’s why the job market likes to see 2 or more years on your resume from top management consulting firms.
Which Firms Practice Up Or Out?
The top management consulting firms (McKinsey, BCG, and Bain often known as MBB) practice up or out more rigorously than other firms. They can afford to let people go faster than others since there is always interest from new potential hires. Other consulting firms can be more relaxed with their policy in terms of the time frame and performance expectations (e.g., 4-5 years to get promoted to project manager versus 2-3 years in an MBB for post-graduate roles).
The bottom line is that management consulting firms will have to apply a version of the policy to ensure that their people are growing to meet client demands and stay competitive. It creates a competitive environment that attracts the best talent, while ensuring the firm grows and remains competitive in the market.
If you’d like to learn more about the rapid career progression at consulting firms, you can read more here.
What Happens If You Get Off Track?
The top firms are always two steps ahead regarding people development. Before a consultant is asked to manage a project, for example, they will have already received feedback on their abilities to coach junior consultants. Top firms excel at identifying performance improvement areas prior to that skill or behavior becoming a real barrier to an employee’s advancement. Underperforming consultants will be given extensive feedback to help them turn around their performance.
Beyond the feedback consultants receive, staffing managers are always thinking about a consultant’s performance improvement areas when staffing a project. If a consultant shows a skill gap in building a model, for example, the staffer will make sure that he or she is staffed on a project managed by someone who excels at this skill and has the time to provide plenty of hands-on guidance. Larger firms also have a library of resources that cover essential skills for management consulting (e.g., story-lining, financial modeling, and slide-making).
Most importantly, the greatest resource you will have if hit a bump in the road will be your colleagues. Be open about where you need to improve at the beginning of every project. You will find that your peers and manager want to help ensure your success. More experienced consultants see it as a core part of their job to develop others – and of course, a manager can only benefit if the performance of one of their team members improves.
As long as you have the right attitude and openness about improvement, there is nothing that can stand in your way. They hired you because they believed you could do a good job, so there is no reason to doubt your abilities.
Typical improvement areas for Analysts, Associates, and Project Managers include:
- Speed of execution (i.e., Can you deliver your work product on time with minimal/zero errors?)
- Top-down written communication (i.e., Can you synthesize what is most important for senior clients to make critical decisions?)
- Executing analysis with minimal/zero errors (i.e., Can you build an end-to-end model with reasonable assumptions, structure, and output?)
- Workstream ownership (i.e., Can you independently identify a question, find the new information and develop a work product that answers it?)
- Working with clients (i.e., Can you work effectively and build trust with the client, getting the message across and driving them to action?)
- Teamwork (i.e., Does the team trust you? Do they enjoy working with you?)
- Managing up (i.e., Can you communicate what is important to your manager and to client leadership? Can you clearly defend your analysis? Can you ensure that client input is captured in the recommendation?)
Obviously, the bar for the above is incredibly high at the top firms. Falling behind the bar in any of the above will be noticed quickly and consultants will hear about areas for improvement well ahead of their next review.
So now that you have a better grasp on what up-or-out really means, what can you do to go in with a healthy mindset about it?
7 Reasons The Up Or Out Policy Is Not As Scary As It Sounds
- Firms are very good at hiring for anticipated demand, meaning their employee base stays close to “right-sized” – rather than competing with colleagues for work, consultants “compete with themselves.”
- Feedback is constant, so you’d know early and quickly if you fall behind the bar.
- If you do find yourself in a tough spot, you’ll be given substantial time and resources to turn around your performance.
- Even if it doesn’t work out, you will likely be given paid time and access to your firm’s alumni network to look for your next role.
- By the time you leave, you would have learned essential skills that you can leverage in any company of your choosing (e.g., problem-solving, analytical modeling, and slide-making). For additional information, make sure you check out our article on “Consulting Exit Opportunities”.
- Few people stay in consulting forever, anyway – if you decide to leave after a couple of years, regardless of the reason, it looks totally normal.
- Since many of your colleagues will exit consulting eventually too, you’ll build a large network of top performers across multiple industries.
– – – – –
In this article, we’ve covered:
- Definition of the “Up or Out” policy.
- Why this policy exists.
- Firms that practice it.
- What happens when you fall below the performance bar.
- Why you shouldn’t fear the up or out policy.
Still have questions?
If you have more questions about the up or out policy, leave them in the comments below. One of My Consulting Offer’s case coaches will answer them.
Other people learning about the up or out policy found the following pages helpful:
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