Skip to content

Posts from the ‘consulting alumni’ Category

Aug 27

14 Comments

Case Interviews in BCG Istanbul & McKinsey Boston

“Dear Michael,

Thank you for the wonderful discussion about management consulting in Turkey. 

If you recall, I am very likely to interview with BCG Istanbul & McKinsey Boston. I worked for another major consulting firm in Dubai prior to pursuing my MBA. While I like my current firm and it is highly regarded, I am keen to go back to Turkey and join a larger firm.

It would be great if you could offer me any advice in making this decision.

Melike*” Read more

Mar 17

One of Marvin Bower’s best speeches…from 1964

Annual McKinsey & Company Partners’ Conference

Tarrytown, New York October 16 and 17,1964

MR.MARVIN BOWER: Since our last conference, since we last met together in this conference, we have lost by death two directors. Howard Smith, in the sunset of his career, died of cancer and Bob Hall, in the high noon of his career, was snatched out of the sky. These two men have made great contributions to the good things that we have here, and I’d like to pay tribute to them by simply saying that; but more specifically, to illustrate in some of the remarks that I make the contributions that they made so that they would be more real than just words. In these discussions that I’ve carried on over the years I’ve tried to pull together these meetings in terms of a single theme, and that theme is the role of the firm and the individual and what the firm’s program means to the individual. As I did that a good many years ago, I used to prepare very thoroughly for it: I would write it out and get it thoroughly in mind, and then I found that as the session went on everybody was saying everything I had planned to say. So I got wise to that and I don’t prepare any longer. What I do is to make some notes—if I showed you the pack of notes that I’ve got you’d surely be staggered—and I try to tie the things that have been said into the total theme of the meaning of the firm to the individual, and I found that that works better. Read more

Sep 19

21 Comments

Behind the Scenes on a BCG Engagement: Liberal arts major building her first economic model

Maria, not her real name, is a current consultant in a BCG Eastern European office. She has kindly agreed to share her experiences from the perspective of a non-quant. Maria holds a master’s degree in literature from her country’s most prestigious university and worked as an intern at a FMCG company before joining BCG as an analyst. Maria encourages readers to ask questions about BCG and not be afraid to enter consulting with an Arts degree.

Straight off, I want to say that I have never used a spreadsheet throughout my life. Read more

May 30

7 Comments

Unsung Icon of Management Consulting…Booz & Co.

In the world of management consulting a few firms gain the majority of attention. They suck the oxygen out of the media placement leaving little room for some other giants to get their fair play. Beyond BBM, a few firms stand out which deserve far greater attention than they now receive, far greater eminence than their brands have, and far greater recognition for their dominance in selected fields. AT Kearney is a star in the operations consulting space. Roland Berger is the fast-rising general consulting firm. And then there is Booz & Company. Read more

May 27

11 Comments

Resume and Interview Tips from Oliver Wyman

Max (not his real name) is an aspiring consultant who is looking to secure an analyst role with one of the top firms for the upcoming recruitment cycle in September 2011. His interest in management consulting was sparked by a failed McKinsey interview last year. In this series of blogs, he will be sharing his background, case preparation process, useful resources, and any breakthroughs or setbacks that he experiences.

I would like to take a quick break from my series of posts regarding case preparation, and share some information which I acquired during an Oliver Wyman (OW) information session a few weeks ago. An OW partner, who is an alumnus of my university, came to campus to talk about opportunities at OW, as well as resume/interview tips. Read more

May 21

1 Comment

Friendliest Consultants

We recently polled some of our candidates going through the case-athon training. We wanted them to rank BCG, Bain, McKinsey, AT Kearney, Booz & Deloitte consultants in two ways.

1 – In terms of how many responded to requests for discussions, from our candidates, to learn about the firms.

2 – How friendly and helpful they were. The results follow: Read more

Mar 1

2 Comments

Former McKinsey Managing Partner – Rajat Gupta – Accused of Insider Trading

The Securities and Exchange Commission has filed civil charges against a former director of Goldman Sachs and Procter & Gamble, accusing him of passing illegal tips about those companies to Raj Rajaratnam, the hedge fund manager set to go on trial next week for insider trading.

The former director, Rajat K. Gupta, is the highest-profile business executive charged by the government in its sweeping investigation into insider trading on Wall Street. As a longtime senior executive at McKinsey & Company, the most influential management consulting firm, Mr. Gupta counted as friends and associates some of the most powerful people in business. He ran McKinsey from 1994 to 2003.

In comparison, many of the defendants earlier charged with insider trading by the government were junior traders and lawyers or mid-level executives. Over the past 18 months, federal prosecutors in Manhattan have charged 46 people with insider trading; of those, 29 have pleaded guilty.

But the S.E.C.’s civil case against Mr. Gupta brings the government’s inquiry into a more rarefied air, reaching into the most elite boardrooms of corporate America.

It perhaps most acutely stings Goldman, which has had at least three run-ins with the S.E.C. over the past year. Last summer, it struck a $550 million settlement with the agency over its sale of a complex mortgage investment without admitting or denying wrongdoing. And earlier this year it canceled an opportunity for its clients to invest in Facebook because of worries that the publicity surrounding deal could violate S.E.C. rules.

The S.E.C. case ties Mr. Gupta to Mr. Rajaratnam, the Sri Lankan-born billionaire hedge fund manager at the center of the government’s insider trading inquiry. Mr. Rajaratnam, who is fighting the criminal charges brought against him, is set to go on trial next Tuesday.

Among the tips that the S.E.C. says Mr. Gupta provided to Mr. Rajaratnam was word that Warren E. Buffett would invest $5 billion in Goldman Sachs in September 2008 as the financial crisis raged. That information, the S.E.C. says, generated “illicit profits and loss avoidance of more than $17 million” for various Galleon funds.

Mr. Gupta is also accused of disclosing to Mr. Rajaratnam information about Procter & Gamble’s 2008 fourth-quarter results on the eve of their release.

The S.E.C. in its filing recounts a number of phone calls between Mr. Gupta and Mr. Rajaratnam but does not detail the content of those conversations. In the criminal case against Mr. Rajaratnam, federal prosecutors have hundreds of hours of wiretapped phone conversations. Earlier this year, federal prosecutors reportedly notified Mr. Gupta that they had intercepted conversation between him and Mr. Rajaratnam.

Gary Naftalis, a lawyer for Mr. Gupta, said that the S.E.C. allegations were “totally baseless.”

“Mr. Gupta has done nothing wrong,” he said. “There is no allegation that Mr. Gupta traded in any of these securities or shared in any profits as part of any quid pro quo.”

Gary Naftalis, a lawyer for Mr. Gupta, said that the S.E.C. allegations were “totally baseless.”

“Mr. Gupta has done nothing wrong,” he said. “There is no allegation that Mr. Gupta traded in any of these securities or shared in any profits as part of any quid pro quo.”

Mr. Gupta, he noted, lost his entire $10 million investment in a fund managed by Mr. Rajratnam during the period of the S.E.C. allegations.

Mr. Gupta, 62, served on Goldman’s board from November 2006 to May 2010. On Tuesday, he resigned from the board of P.&G., which he joined in 2007. A company spokesman said he had resigned to prevent any distraction to the P.&G. board and the business.

“Directors who violate the sanctity of board room confidences for private gain will be held to account for their illegal actions,” said Robert Khuzami, director of the S.E.C. division of enforcement.

The S.E.C.’s accusations were outlined in an order that institutes administrative and cease-and-desist proceedings against Mr. Gupta.

The order provides some detail on what Goldman’s board was told in the chaotic wake of the collapse of Lehman Brothers. At a special meeting on Sunday, Sept. 21, 2008, the board was updated on the strategic alternatives the firm was considering and the strong net revenue Goldman was seeing even with financial markets in turmoil.

The S.E.C. says that the next morning Mr. Gupta and Mr. Rajaratnam “very likely had a telephone conversation,” noting that the Galleon Tech funds bought 80,000 shares of Goldman that day.

The following Tuesday afternoon, the board held a conference call to approve Mr. Buffett’s $5 billion preferred stock investment in Goldman.

“Immediately after disconnecting from the board call, Gupta called Rajaratnam from the same line, ” the S.E.C. order says. A minute later, Galleon Tech funds bought more than more than 175,000 additional shares of Goldman just before the market closed, the agency says.

After the close, Goldman announced the investment and its shares rallied the next day.

The Galleon funds netted a profit of more than $900,000 on the Goldman shares, the S.E.C. contends.

Mr. Gupta lead McKinsey from 1994 to 2003 and left as a partner in 2007. A former colleague at McKinsey, Anil Kumar, pleaded guilty to fraud charges related to the Galleon case.

Mr. Kumar admitted receiving $1.75 million in payments from Mr. Rajaratnam after providing information from 2004 to 2009.

(Taken from the New York Times)

http://www.scribd.com/doc/49804468/S-E-C-Case-Against-Rajat-Gupta

 

Dec 20

“I have a chance to work with ex-McKinsey consultants setting up an internal consulting unit at Bank of America – should I take it?” Be careful what you wish for.

Thunder Storm Over Manhattan

Image by Dan Patterson via Flickr

Management consultants are all over the place. You do not simply find them in McKinsey, Bain, BCG, Roland Berger, Booz and so on. The rise in the use of management consultants throughout the 1990’s and their rising fees led to some clients trying to replicate consulting skills.

The banks have been particularly guilty of this. They also never seem to learn. Every three years or so another banking executive, in the same bank, thinks he can set up an internal consulting unit which will work. Despite years of failure, he thinks it can be done correctly this time. It’s a predictable pattern; like death and taxes. Every bank we have met is doing this, trying to do this or exploring the idea. If I tried to name them all I would need a few pages. Nonetheless your private, retail, corporate, merchant or investment bank is also planning this. The thinking is almost always the same:

  • Hire ex-McKinsey/Bain/BCG/Monitor/Booz managers.
  • Hire a team of “managers”to run and control assignments.
  • Hire senior consultants and analysts to do the work.
  • Save money by not hiring management consultants.
  • The idea that a few smart people can find ideas for improvement and opportunities for growth is a supposed no-brainer.

Each week we get several queries from readers asking about joining these internal consulting teams at banks. The reader reasons that since the team is led by ex-BCG partners and managers then the it would be the same as joining a consulting firm. The reader is trying desperately to justify their wish to take the opportunity. And why would they not? Given how hard it is to get into McKinsey surely the idea of working for an internal consulting unit staffed with consulting alumni must be the second best option.

There are some major and critical differences between working for an internal consulting unit at a bank versus joining an élite management consulting firm. If you really want to join an internal consulting firm, then that is fine. Just do not justify it on the basis that it is the same as joining a top management consulting firm. It is not. Here are the critical reasons why:

  • In a consulting firm you will be carefully taught a rigorous problem solving approach which you can apply to any situation. This flexibility is one of the values of management consultants. They can work in any situation, at any time, anywhere in the world and at a moments notice. In a bank, you will be working on very similar issues. Therefore it is unlikely you will learn the ability to apply the problem solving approach across issues and industries. In a perverse case, you will acquire industry knowledge and rely on this knowledge than applying rigorous problem solving. If you see how much effort goes into testing the case interview capabilities at the top firms, you will realize just how important problem solving really is.
  • When you work in a bank, you will be encouraged to bond with your peers, colleagues in other divisions and basically make friends. Given that close bonding and the fact that recommendations need to be publicly debated for them to have any impact, how likely is it that you will produce analyses calling for a colleagues department to be right-sized. What about an analyses pointing out that the leader of the largest and most important business division is actually underperforming? Do you have the backbone to do this? Are you willing to put your career on the line given that fact that power lies in the operating divisions? Unfortunately, when you work in internal consulting units at banks, the existing power structure forces you to put out politically correct recommendations. You have not choice. If you put out correct material which challenges an important person, it is sidelined. You can choose to continue being sidelined or play the game and progress. Offering lukewarm recommendations to get ahead is not management consulting.
  • Speaking about power structures; in any bank anywhere in the world, the power and influence lies with the operating units and the operating leaders. It is a badge of honour, a sign of recognition to be awarded the chance to run an operating unit. In fact, you can Google this, read about the careers of Jamie Dimon and Mike Carpenter. Dimon was a brilliant HBS graduate who led Sam Weill’s strategy and planning.  Dimon did everything in his power, according to his own biography, to get into the operating units and lead a profit centre. In his words, “planning was half of the game”. Carpenter was a star BCG partner who was recruited by Jack Welch. He ran Kidder Peabody and eventually went to Citigroup. There he was “exiled” into strategy planning when his performance dipped.Sir Deryck Maughan the former head of Salomon Brothers experienced the same issues. When his performance dropped he was asked to move into strategy planning. The bottom line (no pun intended) is that strategy units at banks are seen as killing fields for under-performing executives. It’s hard to admit this but it is true. The exception to this rule is Goldman Sachs. Of course, they do not staff the unit with ex-consultants and the unit works on organisational issues. Assuming you are not going to Goldman Sachs’ internal consulting unit, why would you want to work in a part of the business with such a bad reputation and absolutely no influence?
  • Consultants from even the top firms are given a really tough time when they work at banks. What makes you think you will fare any better? It will be much worse by a factor of 10 to 50! Your advice will be ignored, analyses openly ridiculed and questioned. It can become debilitating. This would not happen to you if you were a BCG case-team assigned to JP Morgan. You would get respect even if the employees resented you.
  • The internal consulting units inevitably respond to these internal organizational issues in two ways.
    • Despite their moniker of being an internal strategy unit they end up picking up fairly mundane work. They focus on conducting surveys, and, especially, undertaking business-process-rengineering work. There is nothing wrong with BPR work, but even here, they struggle to get any traction for the reasons listed above.
    • They also become quant jockeys. They put out fancy analyses which makes them feel all warm inside but which is never ever used. A management consultants job is to give the correct recommendations AND make an impact at a client. Consultants are sometimes unfairly mocked for producing reports which sit on a clients desk, I would argue that dishonour belongs to internal consulting teams at banks.
  • Whether you like it or not, you must realise that in a bank, to rise you must run a business. Please make sure you understand this distinction. Consulting firms are designed to promote and reward thinkers. That is how you make partner and eventually senior partner. In the internal consulting unit at a bank, your reward for doing great work is to have your entry into the operating units fast-tracked. Understand that for a minute. No matter how well you do in the internal consulting unit, you will still need to very much prove yourself in the operating side. At least if you came to Bank of America from BCG as a manager you would have that incredible brand on your résumé and respect it confers.
  • Banks do not reward smart ideas. A banks currency is its share price, net profits and risk profile. If a bank produces this then it is a success. Those who help the bank produce these things are rewarded and recognized. Smart strategy guys are not rewarded unless they meaningly and directly contribute to the bottom-line. How many guys who are just smart but have no operating control can actually pull this off? Not many. Consulting firms on the other hand build value via ideas, publications and influence. Can you see the mismatch? Your unit will march to a different beat.
  • About 70% of McKinsey, Bain and BCG employees are managed out of the firm. That means they are asked to leave since the firm did not think they would make partner. In laymen terms, they are no good enough. So when you meet an alumnus of these firms you have to ask yourself the following:
    • Were they managed out?
    • They may be a McKinsey alumnus, but how long where they actually there?

     

Do not be afraid to ask these questions. Its your career on the line. Can you learn anything from someone who was managed out? What can anyone teach you who spent just 12 or 18 months at a consulting firm? If they shot to partner that is a different story. The bottom line is to be wary or working with internal consulting units stocked with alumni of the top firms. Quality is an issue.

  • This point comes at the end but it probably the most important. People who served at the junior levels of consulting think true management consulting is all about analyses. They are wrong. Unless they made case manager or associate principal then they have likely never learned how to take the pieces of information from analyses and construct recommendations. This is a critical point. Knowing how to break down an issue with analyses is only part of the way in an engagement. The other part is to bring it all together to create the recommendations. Only partner level consultants can do this. Junior employees are always analyses junkies. You can read more this here at the end of the post. My point is that you can only be exposed to the full collection of required skills at a consulting firm. Moreover, you need to learn the consulting value system. It is vague but without it, learning how to size a market means little. Learning the culture and value system of management consulting takes time to understand.

So if you get an offer to join the internal consulting team at a bank because it is led by “ex-McKinsey managers” think very carefully about what you are getting into. I can assure you it will not teach you to be a management consultant or expose you to even 10% of the true experience. If anything, you will learn the wrong skills and never gain the correct training.

If you do not get into McKinsey, Bain or BCG then do not subject yourself to an internal consulting unit. It will not help your chances. Rather wait and apply again.

Related Articles

Nov 13

5 Comments

Oliver Wyman vs. Roland Berger vs. Marakon

Hi there Michael,

I have recently graduated from university, and I just saw your “What are considered the best consulting firms?” post on Quora and found it really useful. I was wondering if you could help me though.

I have been invited to interview at both Marakon and Roland Berger, while Oliver Wyman (GMC) have invited me to sit their numerical test. I’m having some difficulty in deciding which of these firms I’d prefer, assuming I get more than one offer.

I have been told my some that Oliver Wyman would be my best bet, although according to the list you compiled, it’s not as good as the other two. More specifically, I was wondering if you knew much about Marakon’s current situation – i.e. after their failed merger and subsequent bankruptcy last year. Are they still as highly regarded as they once were?

I am applying to the London office of all three firms, if that makes much of a difference.

Any help would be greatly appreciated! Thanks in advance.

Best, xxx

***

Hi xxx,

Thanks for the email. I am very glad you are giving this serious consideration and thinking about your choices. As I tell my readers, having the right consulting firm on your resume is the equivalent of having HBS on your resume. It has that amount of impact and can open many doors for you.
Here is the unvarnished truth about these firms:
OW – OW is part of Marsh Mclennan. An giant insurance and risk conglomerate. OW partners typically move into senior management positions but in their niches of risk, transport etc. I have yet to meet an OW partner running a firm as CEO. They exist but are rare.
Furthermore, OW is totally at the mercy of its parent which could cut funding or have a scandal taint its name. This happened about 3 years when Marsh was caught engaging in fraudulent pricing activity. The subsequent fall-out led to Marsh pulling back funding and merging all the consulting units since it could not fund as many seperate businesses. So Marsh went from having about 7 consulting companies (Mercer, Nera, Lippincott Margulies, Delta etc) into just 3. Nera is a top economics advisory unit.
Now in terms management consulting, they are not at the top. Do not dilute your pedigree at a weaker firm. I can guarantee you will pine about McKinsey, BCG or Bain within 12 months of joining OW. Working for a consulting firm owned by a corporate is not fun. How do you tell Marsh’s biggest client they are doing something wrong? Will Marsh even allow that since it could jeapardise their fees? OW will tell you otherwise but I can assure you it is a problem on a daily basis.
Marakon – Marakon was a rising star in management consulting. For a firm of that size to have so much clout in the Harvard Business Review, have a Noble Laureate on their board etc. is impressive. There is nothing wrong with Marakon. It is a great firm.
But be aware of this. If you join Marakon and it never returns to its former glory, then you will for the rest of your life have to explain to people who Marakon is? If you join Marakon, you will need to stick it out and help turn it into a star again or the name will mean nothing on your resume. Furthermore, Marakon is not a major European player. If Europe is your aspiration then the Marakon name will not help you.
Roland Berger - In my opinion, RB is the only firm which has the potential (although some way to go, but getting there) to topple McKinsey. RB has a number of things going for it.
  • The most competitive consulting market in the world is not NYC or London. It is the German market. Partners from McKinsey etc from the German offices are typically the best. The competitive German market leads to enormous innovation from these consulting offices. The fact that RB dominates this market, is a very good sign.
  • Furthermore, RB has been very successful at cracking the Eastern European markets. If you want to be in Europe, thats where all the exciting work will be.
  • The brand is good, people are strong and they are growing.
  • Dr Prof. Roland Berger is still alive and will continue to influence the firm even though he stepped down.
Finally lets talk about the value system. This may not be apparent to you right now, but I can assure you that in 5 years it will be. Especially if you stay in consulting. Any consulting firm which talks about its clients, salaries and growth is not a true consulting firm. The best firms talk about there values. Last month RB walked away from a multi-billion dollar acquisition by Deloitte which would have significantly enriched the partners. That shows commitment. I cannot think of such a significantly important act in management consulting in the last 30 years. To be a great firm, you must be independent.

My advice is to aim for RB, but interview with the rest as a backup.
Hope this helps.
Michael.
Related Articles

Nov 2

Every management consultant MUST read this…

What Price Honor?
Image via Wikipedia

Read more

« Older Entries
Follow

Get every new post delivered to your Inbox.

Join 941 other followers

%d bloggers like this: