After 11 years of corporate strategy consulting with the firm, 3 of them as principal, I have tended to take for granted that everyone knows the difference between corporate strategy and other types of strategy engagements like developing a market entry strategy or a pricing strategy. Yet, that is not true.
Many aspiring and active consultants use the “term” strategy to describe a broad mix of engagement types. Corporate strategy is very different from other forms of strategy. It is by far the most exciting. And the difference is not difficult to explain. It comes down to the type of objective function in each case. Corporate strategy only has one objective function, while any other type of strategy engagement does not have a prescribed objective function.
This podcast uses detailed engagement examples to describe the difference. In the first example, we will discuss the work Bain, and particularly the partner Alan Bird, did to help De Beers turn around their entire corporate strategy. In the next example I will discuss an engagement I led as a partner to help a state-owned-bank completely change its direction. This was one of my most memorable engagements.
“There is an opinion that McKinsey’s interviewing approach is very different from BCG’s and Bain’s in the following respect: for the same number of final offers McKinsey interviews much more people than the last two companies. This means that it is easier to get interview invitation from McKinsey than from BCG or Bain, but the odds of getting a final offer after you go through interview process are lower. There is an opinion that McKinsey intentionally invites too many people to interviews as a sort of marketing itself to potential future clients. Do you think it is true?
I ask this question because I have been invited by McKinsey to the second round after a remarkably weak performance during the first round. I simply cannot understand why I was invited. The only explanation I can come up with is that they have a target number of people whom they want to interview in the second round, and they are going to interview this number regardless of the quality of people. Read more
I have a question about case interview preparation which I was hoping you could answer for me. I provided some context and I am sorry if the email is far too long. I listened to the Firmsconsulting podcasts and articles I like the honest views provided.
I am currently a PhD candidate at Princeton, with an undergraduate degree from South Korea. I started casing about 6 months ago and completed about 120 cases with casing partners in my consulting club and over the internet. I bought several books and other programs. I paid to have my resume edited with an online service.
The problem is that I cased with a friend of a friend recently and it did not go well. He is a McKinsey manager. It was very, very bad and he really did not like my resume. I was embarrassed to explain to him that I did so much work. I am now a little confused and frustrated. I do not know what I did badly or correctly, and not sure what to do. I feel all my efforts have been wasted and concerned that if I continue, I will keep wasting my time.
Should I quit pursuing management consulting or am I using the wrong services?
SK” Read more
You are unlikely to pass a McKinsey, BCG, Roland Berger or Bain case unless you can brainstorm. Although, you may never receive an isolated/explicit brainstorming request in a case, the skill is needed to identify drivers and build out an analyses structure.
Why is this important?
Candidates who can brainstorm well will never need to memorize a case framework for the rest of their lives, or get stuck in a case when they cannot recall a framework. No matter how many frameworks they memorize there is bound to be a case which requires a type of analyses they have never seen before, and if they cannot brainstorm, they cannot develop the required analyses approach. Moreover, comfort with this technique plays a major role with confidence building since the candidate never needs to worry about facing a case without a bag full of frameworks. They will not need them. Read more
In just 2 weeks, Firmsconsulting has seen six clients withdraw from the interview process to accept lucrative energy industry offers. Three had written offers in hand from BCG, Bain and McKinsey. The geographical scope of the offers, range of degrees affected and that such poaching has happened since at least June 2011 warranted us discussing this trend in more detail.
For context, since mid-2011, a client has withdrawn from our program every single month to accept an energy industry offer. That our clients span over 60 countries and the trend keeps increasing indicates the energy sector is far from its peak in hiring. All degrees have been positively affected, though MBA’s with heavy construction and/or energy experience and PhD’s with energy backgrounds are the dominant group.
Consulting firms are therefore even more desperate to find oil and gas talent since they are losing so many consultants, candidates in the interview process and interested profiles. Read more
Candidates should never begin their case preparation by learning the McKinsey approach. For the simple reason that if the interviewer is leading, which is the McKinsey style, how does the candidate know they would have identified the area of analysis without guidance? Those prompts from the interviewer are more important than candidates realize and many cannot solve cases without them.
So we start from the BCG approach, where the candidate must lead, and we can test their ability to prioritize issues and solve the case. Only after they can prove their skill to lead us in the analyses, we will switch and lead the candidate. McKinsey, and Bain, use an answer-first approach, sometimes called hypotheses. The problem with building hypotheses is that they are messy; it is difficult to apply MECE and application thereof usually requires some knowledge of the subject. For example, how easy is it to brainstorm the drivers of Pharma trial success if you know nothing about the industry? Not easy at all.
Most candidates build terrible hypotheses, which overlap and not really insightful We teach candidates a very clever and simple technique to build elegant, appropriate and MECE hypotheses by using the BCG style approach they have learned until now. In other words, candidates have to make just one change to the approach we already taught them, and they can use hypotheses. After this session, candidates should now be able to handle Bain, BCG and McKinsey cases.
Beyond a logical way to build hypotheses, we also teach a simple and useful technique to develop more than one key hypothesis. This is one of the most effective techniques to generate multiple relevant hypotheses.
There are profound differences between BCG, Bain and McKinsey, both in terms of their approaches to cases and the firms themselves. In this session we take some time to discuss these differences, and the implication for the candidate’s style of working and preferences.
Clients will find this video in Session 6 of the online case solution library. The video is only available to clients of our case coaching service.
Competition cases are a misnomer and misleading. If all cases should examine competitors and the competitive dynamic of an industry, how can there be isolated competition cases? There cannot be, and trying to prepare for competition is really a waste of time. So why do we teach this technique? We teach the competition strategy case technique not because we expect a candidate to receive cases using just this isolated competition logic, but rather to present a way to analyse competition issues within any case. That an entire session is dedicated to competition analysis should indicate just how important this technique is. Too many candidates apply the Porter’s Five Forces, thinking it is enough to analyse competitors. There are too many problems using the Porter approach. Primarily, we have yet to see a candidate apply this technique correctly, because the majority of candidates have a very high-level understanding of the theory and techniques behind this type of strategy analyses.
A deep and thorough understanding of competition analyses will provide most of the skills a candidate needs to solve any strategy case. So taking the time to understand our counter-intuitive way to solve these cases is important.
Moreover, competition frameworks are not intuitive and therefore not easy to apply in a case. It is important for candidates to first understand the logic of competition case before trying to apply frameworks. This video explains that logic.
This case video is animated. Selected screen shots of the video are presented below. Clients will find this video in session 8 of the online case solution library. The video is only available to clients of our case coaching service.
Operations cases are difficult. Most candidates struggle to generate frameworks and invariable use a trial-and-error approach to find their way through. This is a messy technique which fails most of the time. Yet, the approach to solve operations cases surprisingly sits at the core of solving estimation and IT cases. Therefore, understanding proper operations case techniques is vital.
Moreover, operations consulting is a major part of McKinsey, Bain and BCG’s business as we discussed in this overview of the difference between strategy and operations and this overview of a McKinsey supply chain project. There is a severe shortage of candidates for these practices. Remember, all consultants at the top firms are treated equally, and due to the generalist model, you will be expected to do operations and strategy projects. So entering here makes you as good as any other consultant at these firms.
The video which follows presents an elegant method to solve operations cases. This case expects candidates to have a thorough understanding of some basic operations concepts. Any MBA graduate should easily be able to solve this case. Therein is the challenge. This case does not test any complex ideas. It merely tests the most basic principles of operations, and unless a candidate understands them very well, they will fall short. Operations cases can always be reduced to a 3-step analysis of a supply chain, but this needs to be carefully presented to the interviewer. Moreover, lack of familiarity with the approach will lead to lots of wasted time. Understanding bottlenecks in operations cases is also vital. A related concept to understand is marginal cost analysis. When joined, operations cases and marginal cost cases tend to be very challenging. Operations cases tend to be very long. It is essential the candidate uses guidance from the interviewer to focus on that part which will likely generate the answer.
This case video is animated. Selected screen shots of the video are presented below. Clients will find this video in session 6 of the online case solution library. The video is only available to clients of our case coaching service.
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.
A few weeks ago I had the chance to attend a “Crack the Case” session offered by one of Bain’s North American offices. I would like to share my notes from the session, and I hope that you find them useful! Read more
About 2 months ago we were contacted by a very pleasant young man who had obtained an interview with one of McKinsey’s toughest offices. He had previously been dinged at Bain and BCG without an interview and saw this as his last chance to get in. The first time we speak to someone, we can tell with 75% accuracy if they will place or not. How can we do that, when our screening calls contain no case questions? Surely case questions are the main decider? No, they are not. Read more