Pier Carlo Trucco is the current managing director, co-founder and main shareholder of Keydos, a management-consulting firm based in Milan and Rome, Italy. He holds an MBA from UCLA and made his career as a partner in large multinational consulting firms including Ernst & Young and Deloitte Consulting. He advises large Italian and international corporations in the fields of strategic planning and organization. He has published a large number of articles in business journals and the general press. The Dartmouth Business Journal had the opportunity to ask Pier Carlo Trucco about his views on the field of management consulting, recent events in Italian industry and finance, and the connection between the Italian economy and the US economy in this time of financial crisis. 

Dartmouth Business Journal (DBJ): What led you to choose a career in management consulting?

Pier Carlo Trucco (PCT): For a young MBA, that was probably the most sought-after profession in Italy and Western Europe. I’m not sure it still is…

DBJ: Which do you feel was most valuable to the success of your career: your college and post-college studies or the experience you picked up on the job? What does an average day of work at your consulting firm entail?

PCT: Frankly, in my country, a U.S. degree is quite appreciated in the job market. That means you get a good start, which is essential. But, overall, I should say that what you learn on the field is way more valuable. Each day, we focus on results and on project deadlines. This may, and usually does, result in long workdays, including weekends. I have seen American colleagues getting home at 5 p.m. on a regular basis, though. This may have many explanations, including a more efficient way of organizing work on that side of the Atlantic.

DBJ: What, in your opinion is the most difficult or stressful part of the management consulting profession? What do you find most rewarding about it?

PCT: What is difficult and stressing is also the most rewarding: client satisfaction is the key. This is a very difficult and moving target, especially since competitors do exist.

DBJ: Has your consulting firm been involved with the airline industry in Italy? What, in your opinion, led to Alitalia’s decline?

PCT: I have worked for the airline industry and for Alitalia. The projects I’ve been involved in focused the matter of alliances and strategic development of routes.

Alitalia’s decline has come a long way. We can date it back some 20 years. I know this may seem like an exaggeration, but we must keep in mind that Alitalia, like many European flag-carriers, used to be a subsidized, state-owned company. Failure to cope with the changing market was its main problem. As the European Union acted against national monopolies, starting in the early nineties, two types of competitors emerged. The first type would be a European company with a similar cost structure but possessing a stronger hold on the market, granting it a lead in the business traveler segment. Examples are British Airways or Lufthansa. The second type of competitor was the emerging low-cost airline, such as Ryan Air or EasyJet. These names may mean little to an American, as they are point-to-point carriers dedicated to serving the European market. Think of Southwest, to give you an idea. While the dominant flag carriers weakened Alitalia’s competitive position with the European business passengers and on the intercontinental routes, the low-cost airlines hit the economy class passenger market. Alitalia found itself with an unchanged cost structure but with declining revenues. As we know, this is the path to bankruptcy, unless the government rescues you. However, the EU rules now prevent governments from rescuing airlines. So you can guess what happened then.

DBJ: So, it went bankrupt?

PCT: It underwent a procedure similar to that involved in Chapter 11 Bankruptcy in the United States. Then, an industrial group came and bought the majority of assets.

The US press has covered this rescue you refer to of Alitalia Airlines by an Italian industry group and an impending investment in Alitalia by Air France. How is the new Alitalia planning to stay afloat?
There are controversial opinions on the price paid for the so-called rescue. Most analysts believe that the price paid was too low. Furthermore, the government has suspended the anti-trust regulation for a period of six months in order to favor the new company’s take-off. European competitors are not exactly happy and have appealed to the EU. To answer your question, I would say that the new Alitalia heavily counts on preferential treatment and the ability to take its first steps in a protected environment.

DBJ: What, if anything, is fundamentally different in the new Alitalia that will make it successful?

PCT: The financial ratios of the new company are definitely better than in the previous version. Now, there appear to be decent profitability ratios, and the fleet is adequate with respect to the company’s operations. The routes will be focused on one main hub (Rome) while previously there was an ill-optimized strategy based on two hubs (Milan and Rome), which constituted too many for a medium-sized airline. Furthermore, the alliance with Air France will help to offer Alitalia passengers a truly global network with lots of destinations and frequencies.

DBJ: Has your consulting firm been involved with the Italian automotive industry? What, in your opinion, led to Fiat Group’s recent successes in that market?

PCT: Fiat has regained market share in the past few years, and profitability has come back. This has been the result of a more focused strategy, concentrating efforts on the automobile, as opposed to other traditional Fiat interests such as aerospace and industrial automation, as well as a renewed focus on domestic markets. I wouldn’t call this a long-lasting recovery though. In my opinion, Fiat’s thrust was on the downward slope even before the present global crisis. However, it is difficult to support this opinion with conclusive evidence since the European market is currently down 40% and Fiat’s stock is performing accordingly.

DBJ: The US press has covered the agreement between American automaker Chrysler Motors and Italian automaker Fiat S.p.A. to form a nonbinding, albeit strong connection between the two companies. What is the role of consulting firms in laying out the stipulations for this type of agreement?

PCT: I can only guess, having not been involved directly. I suppose management consulting firms may have advised on strategy, especially helping define the relative roles of the two partners in the future market. Some organization and project management consulting may follow. This should take one or more consulting firms that have strong expertise in the automotive industry.

DBJ: How has the global economic crisis we are currently experiencing affected your field of work? Do you think the crisis has hit Italy as hard as it has hit the United States?

PCT: I will begin by answering the second question. Analysts say that Italy may perform better than other countries in the present global crisis due to its peculiar business environment. We are stronger in the so-called real economy than in financial institutions. Although this used to be an issue, it no longer is. Our industrial structure is composed of a huge number of small and medium enterprises. Many observers make the point that this will dilute the risk of corporate failures, if adequate liquidity is provided to the system.
With regard to the management consulting industry, in theory we should be well-off, the same way as physicians prosper when you have some epidemic. In fact, we may meet the profound need for reorganization of companies affected by the crisis. The unanswered question is: will the patient have money left to pay for the doctor?

DBJ: How is President Obama perceived by the Italian business world? President Obama and his administration have announced plans to unfreeze the credit market and heighten financial regulations. What kind of effect do you think Obama’s new policies will have on Italian industry, if any?

PCT: Given the leading role of the American economy, any event developing in the US will clearly affect Europe. Nevertheless, I believe that the crisis will take different paths on the two sides of the Atlantic (and on the two sides of the British Channel). Continental Europe will suffer more from the recession than from “toxic finance”. The point of junction will undoubtedly be the liquidity crunch. However, I believe that from now on Obama’s actions will mainly be an American matter, i.e. they will have limited impact on Europe.

DBJ: What is the one piece of advice you would give to a college student interested in pursuing a career in management consulting?

PCT: It takes a real interest in the client to be a management consultant. So, take this test: if your dream is to spend your life in your beautiful office, don’t go for this job. Pursue management consulting only if your dream is to spend your life in constant contact with your client and on location in your client’s office.

Andrew Ervin is currently an MBA ’09 candidate at the Tuck School of Business. After attending Penn State University, he worked as an actuary for research and development (R&D) at Liberty Mutual Group, one of the largest insurance companies in the nation. After coming to Tuck, he spent his last summer at The Parthenon Group in their Boston office and will be returning there full‐term as a Principal.

Dartmouth Business Journal (DBJ): Why did you choose to go into business and consulting? How did you break into the field?

Andrew Ervin (AE): I’ve always been an analytical‐quantitative person and so I wanted to work with numbers. I like the problem solving aspect of business in general, and the strategic nature of it as opposed to a career like law, for example. The world of business is constantly changing: there are always problems to deal with and there is always a need for people to solve them. Although my tenure at Liberty Mutual involved less of a strategic role than Parthenon, it did have strategic element in seeing how the market is changing, or how we approach something differently versus a competitor.

After graduating college, I started work as an R & D actuary for the Liberty Mutual Group, where I worked on managing new pricing structures for auto insurance, which was basically a technical role with a strategy element. A few years went by and I realized I didn’t want to be in insurance forever, so I applied to business school and ended up coming to Tuck mainly because of the small size. For business school, I wasn’t just interested the classroom stuff but also wanted to develop my leadership and teamwork skills as well.

I wanted to work on management consulting because it would give me a feel for different industries so I would get a better sense of what I want to go into in the long‐term. After my first year at Tuck, I went through recruiting and ended up accepting an offer at the Parthenon Group for many of the same reasons that I chose Tuck ‐ an intimate, entrepreneurial environment and a great culture.

DBJ: Are you planning to pursue this as a full‐time career or are you testing the waters in a variety of different options?

AE: Right now, I expect to be at Parthenon for about 5 years. At that point, I’ll decide whether I like consulting enough to stay there long‐term, or whether I’d rather move into a general management career. If I choose the general management route, I expect to move into a fairly high‐level management role in an industry that I am interested in.

DBJ: What does an average day in the office entail for you? If your job doesn’t really have an average day, what would be examples of projects that you work on?

AE: I was working on a case for a client in the for‐profit education industry (e.g., University of Phoenix or Princeton Review) in which we helped them revise their pricing strategy, increase revenues, and become more profitable. We found that there really wasn’t an established pricing strategy in the industry, so no one had a grasp on how to set pricing and no one really knew what students were willing to pay to attend different schools. We conducted a big research study among prospective students for the school and through it we gauged how students viewed price when choosing to attend a school. One result we found that was striking was that students viewed the cash they had to pay out of pocket at a much higher rate than they will value loans: a dollar of cash today is a lot more valuable than a dollar of loans they have to take out. We were able to quantify the consumer tradeoff between cash and loans, with those numbers we were able to turn to our client and tell them how to restructure financial aid packages in order to improve how attractive they were to students.

I think the most interesting part is when we conducted focus groups with students at the school, and put together a guide of different questions and information based on the groups. It is interesting to look at numbers but there is more credence behind them when you are talking to someone face‐to‐face.

DBJ: How would you respond to criticisms of strategic consulting firms that they are often too rigid and dependent on frameworks and models in analysis?

AE: When I was interviewing, I was a little turned off by the frameworks that strategy consulting firms follow and I personally feel that that does inhibit thinking out of the box. Structured frameworks aren’t always the best ways to approach things‐ especially a new type of problem. At Parthenon, we tended not to use many rigid frameworks, which was good, although it could have been the uniqueness of the project we worked on. We laid out a general layout of the project based on projects and pricing in the past but when we dug into the components there wasn’t prior frameworks to fall back on. I think that frameworks and models are good as a starting point but not something to rely on.

DBJ: How has the credit crisis affected you and your day‐to‐day work, and if it hasn’t, how has it affected your colleagues? In light of the crisis, do you think students would be better served working in another field for a few years before trying to break into financial services?

AE: The banks coming to campus are taking fewer people, so there are a lot more people are looking for other jobs like consulting, so it made competition a lot greater and harder for people to find positions. There are a decent number of people who tried at getting a consulting job but were unsuccessful. There are still a lot of general management, venture capital, and private firms recruiting here. It is too early to tell if my colleagues are going to struggle for a job generally but they may not be getting their first choice now.

DBJ: How do you think Obama’s recent election will impact the financial situation?

AE: I get the sense that people are excited for the change aspect that he brings, and the hope is that the new administration can calm the financial crisis. Tuck students are optimistic, and the majority of students are supporting Obama. The question is whether that will happen in time for the people who will be searching for jobs next summer. Personally, I don’t think any changes he brings to the administration are going to have a whole lot of impact by the time we enter the job market. The Street and investors out there think that he will bring changes to the industry. If volatility calms down, that will send a signal to the banks and especially VC and PE firms that the environment is getting better and they may return to their normal hiring capacity. Overall, there are still opportunities but they require that much more work. If you want to go into these industries you need a lot of work but also a plan b.

DBJ: Consulting/finance tends to have a reputation as a very stressful and time‐consuming career path. How have you balanced your work and social lives?

AE: It was pretty difficult ‐ it was definitely a demanding summer and I was working long hours. Fortunately, Parthenon also made sure we had a good time ‐ I had a number of friends from Tuck working at Boston but I didn’t see them as much not only because I was working long hours but because Parthenon would take us out and show us a good time during off hours. As a result, I got to know the other interns very well.

Parthenon tends to have less travel ‐ about two days a week for Full‐Time Principals. As opposed to other consulting firms, Parthenon (and Bain) consultants are working on 2 cases simultaneously, so you need to balance needs of two different clients, so you travel only when you need to because you need to be in the office for the two clients.

DBJ: Many of my friends have expressed that Dartmouth is doing students a disservice by emphasizing consulting and finance as the most desirable paths out of college at the expense of other fields like non‐profit, environmental sustainability, poverty alleviation and development, education, art, etc. How do you feel about this issue, and why do you think so many students want to break into these two fields when many don’t even know exactly what the work entails?

AE: I’ve heard the same feelings from people at Tuck as well, and I think the truth is that banking and consulting firms have the money to spend on very comprehensive recruiting efforts, so they are more than willing to be up here on campus as much as possible because they have the resources to do that and it pays off in the end. From the point of the students, I understand that those who don’t want to go into consulting or banking might become a bit overwhelmed and I think it would be great if something Dartmouth could do to increase the prominence of less popular tracts. However, it is tough to get other firms and other industries to spend the money on recruiting efforts because they don’t have quite the resources of banking or consulting firms. I think that getting other options on campus involves getting alumni in other fields to help out, get up here on campus, tell students how to pursue these strategies and tracks, and step up the visibility of some of the other industries.

I think that students want to go into consulting or banking because they aren’t sure what they want to being doing a few years from now. I think all alumni of consulting or banking firms would agree you get a lot of exposure to a variety of different industries. These careers are basically a platform to the business world, and it allows people to put off the decision of what they want to do specifically. After working in finance or strategy consulting, you can go into a lot of different industries, whether its financial services, consumer packaged goods, or anything else.

Giacomo Sonnino is currently a MBA ’09 candidate at the Tuck School of Business. Hailing from Rome, Italy, he holds a Master of Science in Engineering from the University of Rome “La Sapienza”. There, he rowed on the crew team and conducted research on Internet wireless networks. After college, he worked for three years in the strategy and internal consulting department at the Italian aerospace, defense, and energy conglomerate, Finmeccanica. At Tuck, he is studying general management and spent his last summer as a Summer Associate at the consulting firm McKinsey & Company, where he will return after completing his time at Tuck.

DBJ: Why did you choose to go into business and consulting?

Giacomo Sonnino (GS): At Finmeccanica, I worked on corporate strategic planning, mergers and acquisitions (M & A), and internal consulting. During my tenure, I was able to work constantly with high‐level directors, managers, and C‐level executives. This exposure to leadership led me to look into business and management. When I came to Tuck, I wanted to go into consulting because I was looking for a dynamic, fast‐paced career with opportunities to face very different and diverse business problems in different industries. I applied to a bunch of consulting firms, and I ended up choosing McKinsey at their Mediterranean office.

DBJ: Are you planning to pursue consulting as a full‐time career or are you testing the waters in a variety of different options? What are the usual exit options for management consulting?

GS: Looking back at my summer experience, I would probably do it for two or three years. I want a family in three to four years, and four to five days on the road is not always sustainable. When I was working at Finmeccanica I had a more balanced life and most projects were based in Rome, where I lived. It was easy to balance work and a social life because I was home four or five nights a week. However, when I worked as a consultant I was on the road four to five days a week. You can only have a life over the weekend, and that is the reason why the average turnover rate in consulting is three years.

Most consultants follow two main paths after their stint ‐ internal work for a corporation, such as a management or vice president position, or private equity, which is less travel‐based but requires more risk. It basically depends on what skills you develop, and most of the time you will end up working for a client that you did consulting for. Going into consulting, I was exposed to many corporate functions from marketing to operations to finance so I’m aiming at specializing in one of the functions in the future.

DBJ: At McKinsey, what did an average day in the office entail for you? If your job doesn’t really have an average day, what would be examples of projects that you work on?

GS: At McKinsey, I worked in the Rome office, where I was working on a project in Istanbul, Turkey with a Fortune 500 company. During the week, I was flying out Sunday nights to Istanbul and spending two days there with the client company. Either Thursday or Friday I was flying back Rome for Friday in the office. Usually, McKinsey consultants spend most of their time on the client side.

I was working on a high‐level team with two directors, one partner, two associate principles, one engagement manager, and one associate ‐ me. Two to three times a week I was working with the team on problem solving. Probably the most thrilling part of working here was that after only month in the firm I was expected to challenge directors and partners. They were asking me for advice in my field, and I was as important as they were.

In terms of the work, I was doing performance transformation, which is a strategic review and cultural review of the corporation. The client went through dramatic changes in the last few years, when the plant doubled from 2000 to 8000 employees in two years. They had a huge intake of workers who hadn’t assimilated into the corporate culture and the friction among old and new works were impacting the ability of the companies to deliver solutions. We came in to analyze company strategies, pick the best one and looks at the cultural obstacles that were threatening its implementation.

DBJ: Did your college education help you in your day‐to‐day activities in your job?

GS: Absolutely. When you study engineering, you learn how to solve problems in a structured way, so how to take a big problem, decompose it in smaller problems, and solve them one by one in terms of priority. This approach goes beyond technologies or math‐ you basically learn how to address problems and this applies to any job, and I think that’s why engineering is helpful in so many careers.

A downside to engineering is that engineers are often too rigid and don’t think out of the box, but that’s why we go to business school.

DBJ: Describe some of the most challenging projects that you have worked on.

GS: At Finmeccanica, I worked on one project I enjoyed a lot, in which we basically built a mobile operator (something like Verizon or Unicel) from scratch. We had to implement a network, access it, establish a marketing plan, a phone plan, and basically launch a business from the ground‐up. I was sitting with the CEO of the company at a table, and discussing how to launch a business that was targeting 2 million consumers. It was crazy because I was only 25 years old.

DBJ: How has the credit crisis affected you and your day‐to‐day work, and if it hasn’t, how has it affected your colleagues? Do you think as a result more/less students will try to enter your field? In light of the crisis, do you think students would be better served working in another field for a few years before trying to break into investment banking, trading, private equity, or hedge funds?

GS: I think this crisis is absolutely affecting everybody, both consciously and unconsciously. It has really reduced working opportunities and career prospects. Right now, I think I was very lucky to have a job and most of my colleagues are struggling to find a job when most companies are looking for one or two new people and they are going through a stack of resumes.

It is hitting banks the hardest right now, but
the crisis will start to affect other
businesses, including consulting. For
example, Finmeccanica has reduced hiring
and investments and other firms are doing
the same. This will affect their ability to invest in other new projects as well. It will take one or two years for the market to get better.

I recommend to juniors and seniors who can’t find a job in finance or consulting now to try to look for alternatives that are constructive towards one in the future. For, example if someone wants to enter an investment bank an alternative would be working for a private equity firm or in the corporate finance division of a company. Someone interested in consulting should look at working for strategy with a corporation, or try to start their own entrepreneurial project. A crisis doesn’t mean the world is stopping ‐ there are opportunities to build up your opportunities and skillsets.

DBJ: What advice would you give for students who are interested in breaking into consulting, finance, or related fields? What do you want to tell them about the work that you didn’t know but would have appreciated knowing going into the field?

GS: In the recruiting process there is really no room for margin of error, so students need to prepare very carefully for the interview, because competition is tough and the bar is set very high. You may not get many opportunities so you need to take advantage of those that you are given.

For McKinsey, I applied through the website in which I had to send in a resume, a cover letter, and fill out an online application. In 2‐3 weeks, you either receive a rejection or an invite to the first‐round interview. I was invited for the first round, which is 2 interviews, usually with an engagement manager or an associate principle. Each one is 45 minutes long and is divided into background questions and a case. McKinsey cases tend to be a bit more structured than other consulting cases. In 24‐ 48 hours you get feedback on your performance, and if you make the second round, the firm will fly you to the office and you will have two to three interviews with partners of the office. These tend to be longer ‐ about an hour ‐ but are similar to the first round interviews otherwise. After that, the company either extends you an offer or politely declines you.

My advice for nailing an interview is just be yourself, because at the end of the day they are evaluating who you are, and you are evaluating them. The important question to ask yourself is whether or not you will have a good time working with them. When I worked at McKinsey, I had an amazing time ‐ the people were very approachable. The McKinsey stereotype is that they tend to be more rigid personalities, but I didn’t find that at all. I had a lot of fun working there and I developed a really good relationship with my co‐workers.