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Posts tagged ‘deloitte consulting’

Sep 9

7 Comments

120 Case interview PhD practice sessions and failed a McKinsey mock-interview

“Dear Michael,

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

Jun 2

13 Comments

Understanding Deloitte Strategy & Operations

Monty (not his real name, but the name he asked us to use!) is a principal with Deloitte’s Strategy & Operations practice in the tri-state area, primarily working out of the New York office. He holds an MBA from a top-5 school, an engineering degree and has worked around the world for Deloitte.

He offered to pay for lunch. I am not saying this will sway the writing in a positive way, but if he lets me order the lobster…than I can only be so strong. He has gratefully agreed to an interview in Toronto, Ontario’s King West restaurant scene on this cooler June morning. Read more

Apr 7

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My first Bain project with real responsibility: My life as a management consulting star and partner

A Storm at the Airport

Image by Stuck in Customs via Flickr

Terence was a consulting partner at 2 leading international management consulting firms. He has worked on engagements in the USA, UK, Brazil, Turkey, Russia, France, Mexico, South Africa, Dubai and Canada. He rose rapidly through the ranks and made partner in a very short time frame. He has graciously agreed to write a limited series of posts about his journey from Pepsi into management consulting and his life as a consultant. This is his story and his fourth post.

In his first post, he discussed his move from Pepsi to Bain & Company. His second post discussed his early years at Bain & Company. His third post discussed his first client-facing engagement as an analyst at an airline client. His fourth post examined his role in developing the business case on an IT strategy project for an airline company. His fifth post examined turning around a struggling Eastern European airline in preparation for an IPO. His sixth post reviewed a project to create a new low-cost airline. His seventh post looked at Bain benchmarking techniques. His subsequent posts, approximately 15 additional chapters have been converted into a 287 book which completes the arc of his career started in these articles. Read more

Oct 29

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How the so-called McKinsey Quarterly-Killer, Deloitte Review, died a painful death

In an earlier post we discussed Punit Renjen and Deloitte Consulting. We also discussed a new initiative by their strategy and operations practices. It is time we followed up.

In 2007, Deloitte Strategy & Operations (S&O), a part of Deloitte Consulting was really excited about a new internal project. The firm was going to launch an-house journal called the “Deloitte Review”. At the time, while we liked the initiative, we had some reservations:

  • Deloitte S&O did not have a culture of producing well written articles. They produced many articles but not at the same quality levels as HBR and MQ.
  • Deloitte had a team of researchers sitting in a unit called Deloitte Research. We were concerned that if only this small group was writing the articles, they would appear too academic, would be drawn from a too small  pool of contributors and eventually die off as these few writers ran out of ideas.
  • Did Deloitte S&O have a mechanism internally to extract the key insights from projects? After all, that is what clients were most interested in reading.
  • Could Deloitte S&O write in a prescriptive way? The writing needed to be very simple, straight-forward and practical.

Despite all the excitement and, we have been told, an initial version produced, the project was cut. The latest Deloitte Review can be found here and is no match for the HBR and MQ. It is so far from the original idea as shown in the screenshots below. Clearly the idea lost traction and probably its funding as well. What happened?

  • Sources tell us it was impossible to convince partners outside the UK and US practices to contibute.
  • This goes back to our earlier criticism of Deloitte Consulting. We explained why a federated consulting firm cannot drive the right behavior.
  • The researchers at Deloitte Research also apparently monopolised the journal and did not allow interest to grow.
  • To see this fail is all the more shocking since, as we reported before, Deloitte hired the former head of the McKinsey Quarterly.

We could not find examples of the Deloitte Review anywhere on the internet, except on one place on Deloitte’s own website. It therefore cannot be such a popular journal. A random call to Deloitte S&O (usually called consulting in many smaller offices) offices in New York, London, Moscow, Paris, Hong Kong, Beijing, Munich, Rome, Buenos Aires, Rio de Janeiro and Dubai indicated that 100% of the reception staff had never heard of the publication and could not point us to the correct person for the latest copies.

A Booz partner mentioned that they were originally “worried” when Deloitte S&O decided to launch the journal . They felt Deloitte had the resources to make a real impact and could give their Strategy + Business publication a credible competitor. Seems a pity the idea died. Clearly it was going in the right direction. Some screenshots provided, by a Deloitte partner in the UK, of the original mock-ups show a really polished and professional looking publication. Lets hope Deloitte S&O brings this back. It was a great idea. It still is.

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Planned cover page

Edition 2 cover page

Edition 3 cover page

Oct 24

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Consulting Magazines “Top 25 Consultants” and “Best Firms to Work For” awards are very misleading

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Providing awards and recognition for the management consulting sector is a good idea. However, it should be done correctly with the data collected use to draw the correct conclusions. This is especially important for candidates who are not familiar with the industry and heavily rely on this information. Let’s start with the “Best Firms to Work For” survey:

Headline: According to this survey, a management consulting firm can be voted the best place to work simply by the opinion of its employees, or number of its employees’ votes. Therefore, if a firm did average work, did not attract the best employees and received average client ratings, it could still win. We think the best place to work is heavily determined by whether or not the firm sets you up for future success. That in itself is heavily dependent on what clients think and how they value a firms name on your resume. The client feedback is missing. That creates a major flaw in this survey.

  • There are many, many flaws with this survey. However, there is one overriding flaw which makes the findings moot. Consulting Magazine surveyed the employees of the firm! Give me a break. Should we not be interviewing clients? This is a little like asking employees of Toyota about whether Toyota cars are any good. How would that point out the extreme dissatisfaction with customers who faced recalls or experienced unplanned accelerations in their Prius’?
  • How can interviewing employing determine which consulting firm is best at strategy? That does not make any sense at all. If Deloitte consultants say they are extremely pleased with the strategy work and McKinsey consultants say they are slightly pleased, how is that even comparable? Why are they given the same weighting? How does the survey account for the fact that employees of one firm will likely have higher standards and be better trained?
  • This award should be called the “Most Loyal Employee Awards” because that is measured at the end of the day.
  • The award measured five broad areas:
    • The Job – McKinsey & Company was not even in the top ten. Are you kidding me? Does this mean McKinsey consultants do not think there work is important?
    • Culture – Do you really expect junior employees to understand the culture of a firm? Understanding the culture takes years to develop and understand.
    • Leadership – Again calculated from employee surveys only.
    • Work/Life Balance – Frankly if you are looking for work/life balance you should not be in management consulting.
    • Compensation/Benefits – This is what the site says,” This category reflects consultants’ satisfaction with their compensation and non-cash benefits and does not necessarily reflect which firms pay the most. The happier consultants are with their job, the more they’re willing to settle for making less. Such is the case with consultants from smaller firms who continue to report higher satisfaction despite smaller pay checks. But when consultants are unhappy, this category tends to be the easy scapegoat for their frustrations.” There are so many things wrong with this. The lower the salaries, means it is more difficult to hire the best people. This creates a cycle of lower quality work, lower fees and even lower salaries. Why would the top Harvard, INSEAD, Wharton etc graduates work in management consulting for lower salaries? It does not make sense. They would choose other sectors for lower salaries. This description also contradicts itself. It says this measure does not examine salaries sizes, but immediately thereafter it says that happier employees accept lower salaries.

Now let’s look at the “Top 25 Consultants” awards.

Headline: Every year, only one employee from each of the major firms wins. Can that be right? It would seem that the awards are designed to please all the firms so that they would sponsor the event, buy tables at the event and continue to support Consulting Magazine. Moreover, has anyone spoken to clients? No. So how do we know these are the best consultants besides what the firms are telling us? These awards would appear to be an opportunity for every major firm to collect a prize and feel good about themselves.

We like the award of a Top 25 Consultants but it should realistically be lowered to five and it should only be opened up to companies to nominate and vote. The idea of consulting firms nominating themselves is wrong. It’s debatable if this award can even be given. Some firms will measure success by the amount of billed work while others will measure success by the quality of the work. McKinsey, the gold standard of management consulting firms, does not take part in this event. That by itself should tell you something!

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If you really want to compare the top firms, use the rating system we developed. It is unbiased and will force you to think about the correct considerations where comparing firms: Top Management Consulting Firms: Use our exclusive scoring system to identify the best firms

Oct 13

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To which McKinsey or Bain office do you apply: New York, Chicago, Sao Paulo, Santiago, London, Dusseldorf, Prague, Moscow, Mumbai, Johannesburg or Dubai?

Sunset over Lower Manhattan, New York City
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This is a critical question that is certainly worth answering in this longer post. This applies to candidates considering four choices:

  • Staying in the home town.
  • Applying to another country with an established office.
  • Applying to another country where an office will need to be established.
  • Applying to another country with a younger and smaller office.

We havelots of experience in this area and will provide some practical advice. It’s worth discussing the broad considerations when making this decision. Personally, we at Lillilooloo.com and Firmsconsulting.com love the emerging markets. They are vibrant and exciting places to be, but they are not for everyone. So read this and then decide how you want to pick your office.

Be careful of asking your friends whether it was a good idea of serving in a foreign country immediately upon joining. They will talk to you about the value of learning new culture, styles of working and so on. Those are not valid reasons. This is what you should ask:

  • Are you a better consultant, because of the foreign office posting, then you would have been if you stayed? Be critical and apply the firm’s criteria for success when asking this question.
  • What did the firm gain from this?
  • What would you have done differently if you could do it over again?
  • Why did you choose (city/country)?

If after reading this you would still like to start in a new country, or even return to your country of origin after many years, then do it. Only you know what is best and we can only offer guidance. We would appreciate your thoughts and perspectives. At least by thinking through the potential obstacles/limitations you may develop a plan to mitigate them. Hmmm…that’s a great idea for a followup post.

What is your reason for wanting to work in a foreign office? You need to be true to yourself. If you are salivating at the thought of spending winter in a beautiful city like Prague or watching a future superpower grow out of Mumbai; then cool down a little. Those are the incorrect reasons. Management consulting is tough. It will certainly be tougher than any other job you ever had. If you choose to go to a city then it must be because being there confers on you a unique competitive advantage that will make you a better consultant than in your home office. This is important. Moving to a newly developing office or new city is not a holiday. You will find it tough anyway and need to be looking for a competitive advantage. If the new city does not give you this, then it is wise not to do this.

Skill sets. Now that we know you have the correct reasons, let’s look at the skills needed. I am sure working in Paris is every consultants dream. It can be a nightmare. Do you speak French? Do you understand the culture? Did you graduate from the Grand Ecole’s? Each country has specific requirements for you to be accepted and become successful. Ask around and make sure you do not set yourself up for failure. Do not think only the emerging markets have quirks. Italy, Spain, France and Germany all their unique wrinkles. That’s why we love them.

How do you know what you will need to be successful as a management consultant before you join? Until you spend about 12 months in a management consulting environment, you actually do not know how you will cope. And if you do not know how you will cope, then it is wise to wait a bit before moving to a new city. Maybe you really need your family, friends and  your home town or city where you studied. These coping mechanisms can be critical. They help you adjust as you settle into a new career. It is important not to be presumptuous about how you will handle the work load. Remember about 60% of consultants at the top firms are managed out. I can assure you that many are working in their home towns and are still struggling to make the cut. It is wiser to wait and understand what you need to be successful. After a 12 month period, you may change your first choice and want to go to another city.

What is the rush? Really, will Prague disintegrate into a soulless metropolis in 2 years? Will Mumbai solve all its transport problems in 5 years? Will Jakarta’s millions of poverty-stricken citizens’ vault into the middle class before you can move across? No, it is very, very unlikely this will happen. Whatever the rush, it can wait. Unless you have some pressing personal reasons for going away, take the time to make the correct decision. In fact, try to get yourself on an assignment in this city/country before moving there. Visiting as a tourist and working as a professional is a totally different ball game. If you think I am kidding, walk around Bangkok in shorts, sandals and a T-shirt. Now trying wearing a full suit in Bangkok with black socks and taking the subway, or heaven forbid a taxi. The experience is very, very different. Do you like walking around? Try visiting South Africa for a different experience. No one ever walks due to violent crime. Their streets are deserted. It is surreal. Make sure you can cope with these differences before you arrive.

Emerging markets are wickedly competitive. Let’s apply simple economics. The market for McKinsey, Bain and the BCG is smaller, as a percentage of the total business sector, versus developed industrial markets. So you have a smaller market and are still competing against your fiercest rivals. Since you target the top firms, and there are fewer of them, on average the best educated locals migrate to these few institutions. So you are likely facing Wharton and Harvard educated professionals as your clients, who are not so easily impressed with western credentials. In Eastern Europe, especially Russia, the problem is the same whereby Russians highly regard their local mathematics, science and economics institutes. So you have tough clients, fewer of them and more competition against which to land them. This does change the dynamic substantially.

For example, in the US, if things were tough, you could switch focus by changing cities. Did that work? No? Try targeting the public sector versus the private sector. That also didn’t work? Okay, try targeting another company in the same sector in another part of the country. The US economy’s size gives you options. In business and economics, options have value.

In some emerging markets all the major companies are state-owned. You have to work through one client – the government. Private companies are sometimes run by interconnected family concerns. Although you have options, there are less of them. One common problem is the concentration of business in just one city unlike the US, Germany, France and so on. This has its advantages and disadvantages.

The learning curve is different. Assuming you had the choice to go to a major established office like Cleveland or San Francisco versus Bucharest, the learning curve is different. In New York you will be exposed to more choices, more consultants and more of the firm’s culture. In the new office, you are likely to experience less of this. The top partners, the figureheads in the media, are usually resident in the established offices, although this is not always the case. You could get lucky and pair up with a Dominic Barton as he is opening a new office. Imagine how valuable that relationship and mentorship would be.

The flip side of this is that some offices, like the German offices, tend to be very strong and offer excellent training. So while the point above is about staying in your home office since the learning curve may be better at home, also remember that it could be better elsewhere. Just choose wisely.

Watch out for the “cool partner” syndrome. Consultants place a large part of their decision-making on whether they like the partner leading the new office or setting up a brand new office. Be wary of this. Most people are cool when you have never worked with them for an extended period, when you see them every now and again, or when your opinion is shaped via corridor chatter. These guys are cool because they also have another channel to vent their frustration. If you move to a new region, or open a new office with them, they will become your life. You will spend every waking moment with them and see a whole new side. If you can live with this, then go buy that air ticket.

Niche assignments. A young office will rarely have the resources to chase all types of assignments. It is prudent to go after a sector or a particular type of client and thereby build a critical mass and reputation. This means you end up doing similar kind of work more often than not. It is worse when an office is just setting up. The partner running the show will go for the path of least resistance and likely favour work or sectors he knows well. Although not always the case, younger or newer offices tend to have loosely defined niches and this may inadvertently force you to miss out on opportunities to gain a broader perspective.

Entrepreneurialism is nice…if you make it. Did you join Bain to be an entrepreneur or learn about business?  When a new office is being opened or a really small office is growing, you will need to do mundane things that you take for granted. Now, why would anyone do this? If you want to be an entrepreneur go join a start-up. If you like answering phones, join a call-centre and get it out of your system.

Language, ethnicity and culture clash. We have come a long way in the last 100 years but the world is still divided by language, religion, skin-colour and ethnicity. While you may have always dreamed of back-packing through the steppes of Russia on your weekends, if you are dark-skinned the dynamics are different. Much of the world is still hostile to certain types of people. Accept that you may need to compromise some freedoms if you want to move.

Personally – If I could do it all over again. I would choose London, Prague, Vienna or Munich. There is so much happening in Europe, Turkey, Eastern Europe and North Africa. Any of these cities would be an ideal place. Of course you would need to speak Czech, Russian, German, Turkish or French to make this work.

Choose wisely.

Oct 13

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Official Proof – McKinsey thinks highly of BCG, Bain and one surprise firm (it’s not who you think), while thumbing it’s nose at the rest.

Over the weekend we were debating how to map out a hierarchy of the management consulting market which is not based on hearsay and opinion. We wanted something more mathematical and precise: something which would be hard to dispute or was at least independently replicable.

Over the weekend an idea emerged. Watching Marissa Mayer celebrate her new promotion and Mark Zuckerberg topple Steve Jobs as a tech titan, we developed a pretty good and original way to do this. You can read about the approach at the end. It may be a good idea to start there otherwise the concept of “votes” will not make much sense to you. Download the presentation here.

Findings

 

 

 

Overview of the Management Consulting Market

 

  • McKinsey, Bain and BCG receive the most votes. They are the top-dogs as voted by their competitors. McKinsey is the most popular. Notice how the élite firms in blue receive lots of votes but are in the stingy part of the graph for giving out the least votes.
  • Notice the auditing firms PWC, Deloitte, Accenture in red (okay, former auditing firm) also cluster together. They give out an awful lot of votes but receive much less. You may ask why they would give out so many votes. Our guess is the non-consulting divisions of the auditing firms are citing reports from consulting competitors. The other explanation is that consultants in the auditing firms are referring to their competitors and do not realise the damage this causes.
  • Firms which have really weak brands in green also stand out. The Oliver Wyman, Booz and Monitor brands operate in a vague and undefined space. They are not the first choice when describing strategy (that’s McKinsey), operations (that’s AT Kearney), implementation (that’s usually Deloitte) or technology (that’s invariably Accenture). So the brand and votes languish. They need to be known for something.
  • Look at the strong showing by AT Kearney. It clearly occupies a niche and does quite well. AT Kearney’s focus and positioning seem to be paying dividends.

Who does McKinsey admire?

  • The top-dog, McKinsey, gives 25% of its votes to BCG and an equal percentage, 17% to both Bain and PWC. Wow! That’s a surprise. Take that Deloitte, E&Y and KPMG. We did not expect PWC to get this much recognition from McKinsey. Although, Marvin Bower did once refer to PWC as the “Rolls-Royce” of accounting firms. So the admiration may make sense.

Who does BCG admire?

  • If McKinsey rates BCG tops, who does BCG rate as tops? It simply returns the favour to McKinsey. BCG is stingy when voting for other firms. Of the 32 votes on its site, 30% go to McKinsey and the rest are fragmented.
Bain rates Accenture and McKinsey as equals. Surprising.

 

  • Bain, rates Accenture and McKinsey equally by giving them 27% of all votes. (Note: the Global Leader for Bain’s Technology Strategy practice is Accenture’s former Senior Partner. That could explain part of this.) It rates BCG third with 17% of the votes.
The auditing firms vote for everyone but do not get much votes

 

  • It’s no use analyzing PWC, Deloitte and Accenture. They all liberally name their competitors. We counted over 30 votes per a competitor. We stopped counting since at some point a vote is meaningless.

 

Monitor is stingy with votes and the sentiment is returned

  • How’s this for a shocker. Monitor is the most frugal with its votes. It voted only 12 times and evenly spread its votes. Although, as discussed in an earlier post, the Monitor website is poorly maintained and updated. So their true feelings may not be captured.

Here’s the summary:

  • Every firm votes for McKinsey.
  • McKinsey votes for BCG, Bain and PWC.
  • BCG keeps it exclusive and votes for McKinsey.
  • Bain votes McKinsey and Accenture at the top followed by BCG. The élite consulting firms are stingy with their votes but extremely popular with their peers (Reminds me of high-school)
  • AT Kearney is an unexpected winner carving out a distinctive niche. So is PWC who gets a nod from McKinsey.
  • The auditing firms are liberal with their votes but do not get many in return.
  • There are a pack of floaters who have no distinctive identity or group. Wonder what they are known for?

Approach

  • We know that management consulting forms do not like each other much and would rather not mention their competitors on their website. That’s a fact. They would rather repeat the analyses by using a neutral source like the Congressional Budget Office than reference a BCG analysis of the Congressional Budget Office’s figures.
  • Therefore if a consulting firm’s website mentions their competitor by name, we can assume they had no choice, the information must be that important and good. In essence we can consider each mention as a ‘vote’. A ‘vote’ of confidence in that competitor if you like.
  • By counting the ‘votes’ between the top 10 management consulting firms websites we can work out who is the top consulting firm. More importantly, we can work out who they think is the top firm.
  • That’s similar to Google’s back-link analyses. Except here we are counting a mere mention on the website. We do not care if it is hyperlinked or not. Management consulting firms rarely hyperlink their references so counting hyperlinks is flawed.
  • Now for part two.
  • Taking a lesson from Facebook we can see which competitor a consulting firm chooses to link to, to determine its pseudo-social network. For example, if everyone votes for BCG, but BCG only votes for 4 firms, then we can see BCG is the king-pin.
  • So we can ignore all the “diplomatic” things firms say about each other and have a look at how to they actually feel about their competitors.
  • We conducted this analyses using Google site search and catered for changes in names (Mercer Management Consulting to Oliver Wyman), variations of name (BCG or Boston Consulting Group) and false-positives (Monitor appears everywhere and not as the name of the firm).
  • We manually deleted duplicates of the same vote. A duplicate means the article was popular, not the reference material so there was no reason top count it twice.
  • We also ignore non-English sites. We applied the 80/20 principle.
  • We did not include every firm in this analyses. No matter which list we came up with someone would be unhappy. Nonetheless, we think the sample is representative of the total management consulting market and the broad results are valid.

You saw this first on Firmconsulting.com.

Oct 12

3 Comments

Moving from Deloitte or Accenture to the elite firms: McKinsey, Bain & BCG: is it possible and how?

Elite Model Look

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The short answer is yes, but it’s worth explaining how and building the case nonetheless.

Driving a top of the line Lexus is nice. It’s comfortable, parks itself and impresses the neighbours. However, I can assure you every Lexus driver wants a Mercedes. The only thing stopping them is the financial means to get one, or their earlier taunts about Mercedes.

The same happens when you work at Deloitte Consulting or Accenture. They are okay consulting firms; they feature well in rankings, offer a respectable salary and impress your colleagues. However, they are not McKinsey, Bain or the Boston Consulting Group. The élite management consulting firms pay more, train you better, treat you better, offer far greater value on your résumé and set you up for future success in a way Deloitte or Accenture cannot, because they are not pure management consulting firms.

That is not to say all is bad at Deloitte and Accenture. There are pockets of excellence and when it comes to understanding and implementing technology solutions, Accenture is the juggernaut. We receive many, many queries from consultants at Deloitte, Accenture, E&Y, KPMG, Hay Group, PWC and so on wanting to know if they can get into the élite firms, and if so, how. Today we will cover that.

The one point I want to really stress is that consultants from the best firms are not necessarily better than consultants from other firms. Some invariably are, but not all. They receive better training, development, coaching and opportunities. That is why they excel. If you think you have what it takes, then you have every right to try and gain exposure to the same advantages. Just like we trade up cars, we should be willing to trade-up exposure. You only have a limited window so you might as well make it count.

Despite your experience, focus on the basics. No matter your success at Deloitte or Accenture, do not let this go to your head. Expect it will be tough to get into the top firms, and expect to focus on the core attributes needed to be successful. The most important is an ability to solve complex case questions. Did you do exceptionally well at university or graduate school? Do you have strong leadership potential? Are you inquisitive? Do you have the soft skills like presenting, speaking and engaging well? If you cannot tick these off and say you are stellar, then it is highly unlikely you will get in.

Measure your experience for what it is. Let’s assume you were a brilliant analyst, consultant or even senior consultant at Deloitte and Accenture. Maybe you received the best rating you could receive. Clients may have written glowing testimonial letters. That’s great. You should be proud. Ask yourself this; did you do well despite the standards being very high? Are you a disciplined problem solver or did you do well since you were on the same kinds of projects? If you stripped down your success to its root-causes is it because you have the fundamental skills of a management consultant? This is important. Do not assume your success and skills will impress the interviewer. They may get you the interview but you must still show demonstrated competency. So it is not enough to say you can solve problems in the interview, you will be tested and must prove it.

Expect you past accomplishments in consulting to be re-rated. Unless you were a super-high flyer who performed at the highest possible levels expect to have some, if not a lot, of your performance heavily discounted during the interview process and after you get in. There is a reason for that. The top firms strongly believe in their own training programmes. Unless you achieve mastery in the skills they claim are important, your bragging rights diminish. You need to earn your stripes so to speak.

If you can make the switch but will need to go through this painful transition, why would you do it? Mainly because of the training, exposure and brand value of the top firms and their powerful alumni networks. I can assure you that someone spending even six months at McKinsey flashes it on their résumé because it conveys such prestige. These firms train future CEO’s. There is nowhere else you can get this training.

You may argue all the firms have prestige. Not true. If you do not believe this, here is a perfect example:

The winner of the second Apprentice with Donald Trump (Kelly Purdue) was more than happy to talk about this Rangers Army training, his MBA and JD Law from UCLA. The runner-up in the second season (Jennifer Massey) flaunted her Harvard Law degree.

The runner-up (Kwame Jackson) in the first season played up his Harvard MBA and employment at Goldman Sachs.

Did you know the winner of the second Apprentice (Kelly Purdue) was a manager in Deloitte Consulting’s Strategy & Operations practice? He never mentioned that even once. Not even when attacked about his business skills. I can assure you if he had a McKinsey background he would have thrown it out there. That is the difference in brand value. One can get you the top job and the other cannot.

That may be a 4-year-old example. Yet it is real, visible and hard to argue. There are many recent examples. The training, compensation, prestige, values and networks of the top firms are worth the shift.

Oct 12

Are you struggling with McKinsey, Bain or BCG case interview preparation? Here are the common mistakes made when using MECE, decision trees, hypotheses and 80/20 to solve case questions.

Mi Poster de Homer

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It is peak interview season and we are working overtime helping candidates prepare. These are our observations for why so many candidates are failing to master the case questions. Read this carefully since you are likely making these same mistakes. To see video tutorials to answer case questions go here or join our Case-Athon training program. It’s the only online global interview preparation program for McKinsey, Bain and the BCG. You can attend via Skype and we cover all the questions you will encounter. We still have some places left.

Not knowing that there are different types of cases. There are five types of case you will encounter. You can read about them here. The guide below is for general business cases, which are the most common and toughest to solve. To solve brain teasers and logic questions you will apply a different approach.

Not knowing the definitions of the common techniques. Yes, this is common. Every single candidate we have coached misunderstands at least one of these concepts and applies it incorrectly. If you do not know its definition, how can you use it?

MECE – means mutually exclusive and collectively exhaustive. It means you have listed every single option available and each option is independent of the other. That means you can isolate one option and test it without impacting the other options.

Decision tree – A decision tree takes an issue, decision or question and logically breaks it down into a sub-question. When you do this correctly, it looks like a tree lying on its side with the top on the left and the base on the right.

80/20 – It means focusing your time and effort on that part of the problem/or solution which will generate the majority of the answer. Usually, 20% of the issues impact 80% of the desired outcome. It means ignoring, or dedicating less time, to problems which are real but have a smaller or negligible impact.

Hypothesis – This is one that is widely focused upon and used. It has become a cliché but is widely used incorrectly. A hypothesis is not the problem. A hypothesis is also not the reason. It is both: it is a statement containing both. For example: The store lost out on peak summer shopping times because the trucking strike meant that merchandise was delivered too late to be unpacked. Can you see the problem (also called observable phenomenon) and reason (the problem)?

Not knowing how to apply them. Just about everyone gets this wrong. They do not know how these concepts fit together or when and how to use them. They all fit together and should not be used in isolation.

  • In every case, the first thing you need to do is confirm the problem statement you are solving. This may sound obvious, but about 50% of candidates do not do this and fail the case since they solve the incorrect problem.
  • Next, develop the framework you will apply. Irrespective of the framework you choose, you will need to build the framework using a decision tree and by applying the rules of MECE. If this is not clear to you, look at our video guides. Or read our book which explains this is excessive detail using a live example.
  • As you build the framework out using the decision tree, see which branch will have the largest impact on the problem. That branch is the one you analyze first and in greatest detail. That is how you apply the 80/20 principle.

Never ever, ever, ever, ever, ever, ever, ever blurt out answers. McKinsey, Bain or any of the other top firms do not want people who have the answers. You can never have all the answers. They want people who can solve a problem even if they know nothing about the sector. So never blurt out the answer. You may fail. Always follow the methodical steps above to develop the correct answer. The final answer is not important. How you developed the answer and the reasoning and logic you applied is critical. How you engaged the interviewer to extract information is very important.

Do not mismanage your interviewer. In the case interview, your interviewer is judging everything you do. Do not ignore them, do not make them uncomfortable and do not leave them in the dark. As you develop the case solution, make sure you explain why you are doing things and ask for additional detail and confirmation of the steps you are taking. Work with them. Have a conversation with them and make it entertaining. These are all covered in our interview videos. When solving the case, it is worth doing the following:

  • Do not ever revert to things you know about the industry or what you have seen on TV. Work with the data provided. Only work with the data provided. Use common sense.
  • Explain what you are doing as you build the framework.
  • Explain why you built the framework.
  • If you do not understand a phrase or information point provided to you, ask for an explnanation.
  • As you build each branch of the framework ask the interviewer if there are parts missing or if she can divulge additional information. Do not make this robotic. Do not become stuck if she provides no additional information. Just move on.
  • Seek confirmation as you move further along the analyses. Does the interviewer agree with your prioritization?
  • Ensure everything you do is clearly sketched on a sheet of paper, in clear writing so that you can explain it.
  • Where you can, ask for more information and test how this information changes your answer or thinking.
  • Don’t say you are applying the 80/20 rule or use similar clichés. Just do it.
  • As you move ahead in each step of your analyses, do a sanity check:
    • Does this make sense?
    • Does the interviewer understand what you are going? Do they agree?
    • Is this analysis a priority?
    • Are you solving the overall case problem?
  • At the end make sure you have explained how you have solved the case problem.

You do not need to apply sector or industry specific skills. If you are reading up about different sectors, watching Bloomberg and so on; stop right there! You have not understood the management consulting approach to case problem solving. The problem solving approach is specifically designed to solve cases of which you have little or no prior knowledge. You should better spend your time understanding this approach and practicing.

Not all cases have obvious frameworks. Sometimes, you get lucky and the case problem requires you to  improve revenue, cut costs or increase profits. Then the framework is easy. You simply break-down the income statement. What happens if you need to improve productivity? This is slightly harder. What about fixing an organizational structure? This is much tougher. Therefore do not memorize frameworks. It is better to learn how to define problem statements and solve the cases from first principles.

Do not quit and do not rush. Wow – this is common. A candidate gets stuck and throws his hand up in resignation. How you respond under pressure is just as important. If you make a mistake, it’s fine to start over or ask for a blank piece of paper. Work in pencil and accept that you will make mistakes. Just do not rush and do not give up.

Convey yourself as a professional. Do not mumble. Do not make self-deprecating comments. Do not tell the interview how tough the case was and you are not sure if you made it. This is not high-school. There are no cliques for drama-queens at management consulting firms. Be polished and professional. If you get rejected at Bain, leave with dignity and learn from your mistakes. You still have a shot at Mckinsey and the BCG. If you get rejected, do not complain and try to find faults with the interviewer and process. Move on. Learn.

Learning the case interview process is tough, but not at all impossible. Make sure you are prepared before you go in.

Oct 7

“Do consultants from boutique consulting firms have a reasonable chance of moving up to McKinsey, Bain or the BCG? If so, what does it take?”

Extreme Makeover: Home Edition

Image via Wikipedia

We received the following query through our website. We will answer this in an open forum on the site since we think it is relevant to many of our readers. You can apply our own process to determine your chances.

[To the candidate, We would need to see your resume to properly determine your chances.]

“My first consulting job was with a small boutique firm of performance specialists. Their engagements were geared toward performance improvements. They did not perform any strategy work but guaranteed their performance results. Analyses were a two week ’blitz’. It was a combination of day in the life studies as well as manager and supervisory behavioral observations. The projects were geared toward coaching managers and supervisors to increase hourly output and then reducing headcount (savings) due to lack of work. Due to the guarantee there was great pressure to achieve results. The company was very heavy-handed with staff and turnover was very high (up or out was very much a part of the culture). If you stuck around past 3 years you were pretty good. The company did not have any formal training and most of what was learned was obtained on field projects (on-the-job-training). This approach made it difficult for many employees to survive past 10 months. It was very much a sink-or-swim environment. New staff learned how to identify issues (using gap analyses) and then coach supervisors to resolve these issues. However, learning how to ‘human-engineer’ clients to resolve these issues required a skill many individuals didn’t have and struggled to execute. Yet, for understanding management at the “floor level” it was a great way to get started.

I currently work at small turnaround specialist consulting firm. They deal with small firms with approximately >$1M<$5M in sales. The challenge is most of the clients need a turnaround specialist, so it’s difficult to sustain an engagement for more than a few weeks as many of these firms have major cash flow problems. Sustained solutions tend to take longer to ‘mature’ and the “quick hits” don’t always generate enough cash to even pay the fees. It can be fun to work with these types of businesses but you have to “show value” quickly if you expect to come back the next week. In this environment we look at a company’s financial data (sales, operations, and finance) and then try to sort out the cash flow issues early so we ‘stop the bleeding’. It is very hard not to feel the weight of the world on your shoulders when you work with these types of clients – sometimes the help they require comes in just too late. In total, I spent 5.5 years at both firms.

Given the above, do consultants from boutique consulting firms have a reasonable chance of moving up to McKinsey, Bain or the BCG? If so, what does it take?”

We offer a career coaching service both for MBA’s and current consultants. In this post we will show you how we would assess this candidates chances and whether she has a shot at making it.

Step One: Resume check. Let’s look at the cold hard facts that are important to consulting firms

  • Does she have a degree? Did she do well; as in getting an 80% average or more?
  • Where did she study? Is it a good to great school? Do not read into the hype too much. Tier-1 firms do not just hire from Harvard and Wharton. Great grades from a good school will get you in.
  • Was the degree full-time or part-time? Part-time degrees will not count for much.
  • Do any of the consulting firms recruit from this school? This is not a decider, but it does influence the decision.
  • Does she have a post-graduate degree or MBA?
  • How old is she? A 25-30 year old candidate without an MBA is okay. There is still time to get a degree. The older you are, the more bad habits are ingrained and the less willing and capable you are to work the long hours and learn the management consulting approach. If you are 35 and above, and do not have an MBA or advanced degree, then the question would be what did you do during all this time? Realistically, the earliest you could get into an MBA program would be at the age of 38. That’s too late.
  • What is her experience? The tier-1 firms do not think much of the training of the other firms. So do not think this experience will count for much unless it was at a top boutique firm. The wrong kind of experience in consulting will count against you while the right kind of experience in industry will count in your favor. The worst mistake candidates make is assuming they are doing McKinsey or Bain a favor by bringing this experience to the table AND refusing to be re-taught. She must understand that she needs to go out of her way to explain why she stayed here if it was not ideal, why she understands she needs to learn the correct problem solving skills and most importantly, she actually can learn the right skills.
  • Any blue-chip experience? It would be great if this candidate served some time or an internship at a blue-chip like Coca-Cola, Pepsi, Nestle or GE.
  • What kind of leadership activities has she been involved in? The more time you spend out of school, the more this becomes important.

So let’s look at some scenarios.

Scenario 1: Let’s assume the candidate is 28; same background as described above, has a degree from a good school and graduated with a high GPA (greater than 85% average). She has a track record of being successful, shown leadership and is willing to unlearn all the bad habits picked up, and relearn the case method to get in. In this case, she has an okay chance.

Scenario 2: If the scenario was the same but she had a master’s degree, her chances become good.

Scenario 3: Same as scenario 1 but she was 36 years old. Her chances would be very slim.

Scenario 4: Same as scenario 1, she is 36 years old but has a doctorate. This is still tough. Age is a big factor here. It will come down to the candidate’s determination, school and her success in her career. Yet, it is still slim.

So as you can see; age, experience, willingness to learn, degree, grades and school count for a lot.

Step 2: Does resume and reality match?

Let’s assume, we looked at the resume, and the candidate fell into scenario 1 or 2. We would then arrange for a discussion to look for the following:

  • How does the candidate dress? Is this someone we could imagine in front of a client?
  • How does the candidate speak? Are they engaging, articulate and presentable?
  • What are the candidate’s values? Is integrity important?
  • Is the candidate worldly? Does she know what is happening in the world? Does she have a considered view-point and can debate topics?
  • Is she confident? Can she stand her ground and intelligently debate?
  • Does she command attention?
  • What is her etiquette?
  • Is she curious about the world?

If she does not have the right school, then she needs to minimize every other conceivable reason why she should be rejected. That means looking, acting and speaking like a polished consultant. This can be taught.

This is how we rank candidates:

  • She has all the attributes.
  • She does not have all the attributes but she can be coached and taught.
  • She does not have key attributes which cannot be taught.

If you are ranked in the first 2 groups, then its fine and we allow you to join our coaching program. If we think you lack key attributes which cannot be taught, then we would decline, since you would be unlikely to get in even with the best coaching.

We also want candidates who can be brutally honest with themselves. For example, if we tell you that you need to improve your dressing, speaking style and etiquette, some candidates become upset. However, if you are willing to change these things, you have a shot.

To Summarize:

Summary: Yes, you still have a shot; provided your grades are good and you are in your twenties. However, age is working against you. The more elapsed time since undergraduate studies equals fewer excuses for not getting a MBA, succeeding at your chosen career or notching up more accomplishments. You also learn bad habits which are hard to unlearn. If we knew more about this candidate, we may even advise them to consider Booz or AT Kearney. These are not tier-1 in terms of strategy, but AT Kearney is tier-1 in terms of operations consulting and Booz is as good as the top firms in some geographies and markets.

Next Steps: Polish your resume and you need to apply as early as possible. However, if your grades are not good, you may want to consider getting an MBA to improve your chances. You need to really prepare for the case interviews, speak to consultants in these firms and also learn the soft skills to impress the interviewer.

The reader also sent in the question:

“When consultants leave the tier 1 firms, how are they able to move into top positions with Fortune-500 companies?

Every significant head hunter is scouring Bain, BCG and McKinsey for the right candidates. Therefore, it is partly due to having worked or still working at the firm. Remember, these are training grounds for executives.

Second, you will spend 80% of your time in front of clients who are potential employers. If you are good, they will come to you.

Third, these consulting firms exist to groom future business leaders. It is natural they will end up in a corporate role.

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