Inside A McKinsey Financial Services Engagement

Emerging markets and micro-finance are hot topics at the moment. Whether it is micro-finance in Mexico, Brazil, India, Pakistan or Indonesia, the sector is definitely growing. All the major consulting firms from McKinsey, the Boston Consulting Group to Bain have tried to break into this sector. As expected, McKinsey has been heavily involved in micro-finance work and has undertaken some of the work significant and landmark projects. This posting is based on a series of discussions we have had with several McKinsey consultants working on a micro-finance project in Latin America. We follow them through a real engagement and see how they tackled the study. The McKinsey consultants interviewed spoke off the record and where not authorized to speak about the engagement. Background The country setting for this engagement is a power house among emerging economies. It is usually mentioned in the same breath as Brazil, India, China, Russia, Turkey and Indonesia. A vibrant commercial sector has seen many consultants and consulting firms enter the market. A new president and more open trade policies saw a steep increase in the per capita GDP of the country. It was becoming awash with wealth and this excess liquidity was causing an equally…

Inside a McKinsey Electricity Strategy Engagement

Stories which delve behind the scenes of consulting engagements are very rare. Today’s lengthy post is just such an article. It is an in-depth analysis of a major McKinsey assignment in a developing economy, South Africa. Background There are many ways in which we collect this type of information. We obviously have an extensive and active network in management consulting who feed us information and serve as corroborating sources. Sometimes we get lucky and are fortunate in that a user sends us lots of material about a critical project. We treat this information from the latter source carefully. Usually we do not do much with it. We try to honor privacy codes and where we share information; we present such a sanitized view that it is difficult to decide the overall impact of the study. Early this year we received over 45 documents by email from an employee of a South African state-owned-enterprise called Eskom (Pty) Ltd. We did not know much about the company and simply ‘filed’ this as an interesting set of documents worth looking at later. Then the FIFA 2010 World Cup came along and shined a spotlight on South Africa and we learnt a few interesting…

Learning From Consulting Mentors

I have spent a long time examining my own career path from associate to principal. Mainly because there was always a fair degree of luck involved. It is not as if I was a break-out superstar and knew I would become a partner. I was good, but there were other better associates who did not become partners. So, I must have done a few things differently to compensate for this perceived disadvantage I possessed. I eventually realized that I succeeded not only because I was analytical, could communicate well, develop great storyboards, was great at math etc. Let’s not be mistaken, I needed those skills. Yet, they were not enough if you did not know how to use them. Everyone had those skills when they entered BCG, McKinsey et al and these were not enough to distinguish oneself. Even today, many outstanding candidates are managed out every month and most are surprised when it happens since almost all have the skills listed above, and in great abundance. I know because we receive several emails a week from distressed management consultants seeking guidance. I succeeded because a partner took me under his wing and personally mentored me when I was just…

Career Lessons from McKinsey’s Hypothetical Death

Using the hypothetical decline of McKinsey as an example, this article reveals several crucial career lessons on how to combine frugality, or efficient living, with ethics to significantly improve your career options and career flexibility. *** Firmsconsulting is built on a strong foundation of ethics. Many clients struggle to understand how that leads to business success. They assume it is an intangible benefit. It is not. There is a clear, measurable and direct link. This piece explains how such a model can be used to create significant upside in your career. Career flexibility is a pre-condition for career success. However, you cannot have career flexibility unless you live well within your means. And if you live outside your means you will be forced into poor ethical choices, which further reduce your career flexibility. How does that work in practical terms? Ethics, Frugality & Career Flexibility Most people who breach their values do not get up one morning and decide that today is the day they will cross the Rubicon. It happens much more subtly and usually with a forced drift into such a situation. Good people routinely do not do good things. There were times when I have done things I…

Ethical Standards are No Small Matter for McKinsey

After major scandals driven by ex-McKinsey employees like Jeff Skilling (Enron debacle), Rajat Gupta (former 3x McKinsey managing director) and Anil Kumar, McKinsey is on their toes trying to prevent another disgrace. The ethical standards of prospective candidates and employees has never been under a more searing spotlight. Other top consulting firms have a similar mindset, as their success depends on an unimpeachable reputation for integrity. Will you measure up? I recently put out a note about a trend around the world where candidates record their telephone-based case interviews with McKinsey, BCG and Bain. They doing it knowing full well it is wrong to do so. Moreover, they are sharing it with us and their network, and asking for comments. We believe that you should not do this, since it is illegal to record someone without his or her permission. A few people wrote back to me and said they did not know it was illegal or it is not illegal in their country, that’s why they did it. This highlighted a great misunderstanding some candidates have about what is ethics, how to approach ethical decisions and how to determine if you measure up to be considered a person with high ethical standards, the kind of person…

Ethics is Shaped by Your Social Network

In light of major scandals driven by ex-McKinsey employees (e.g. Jeff Skilling, Rajat Gupta and Anil Kumar) and consequent sharper focus on ethics by top consulting firms, lets continue our discussion about ethics and delve deeper into how to think about ethics, and what shapes ethics. Ethics is required when the law is not written, not enforced or wrong To think about ethics, let’s picture a bar chart running vertically. The entire bar represents all the actions you could undertake in your country. It is obviously a hypothetical bar since we could not list every action we could take. Yet, we know we can do countless things. The bar chart goes from one all the way to the one billion things you could do. The bar is split into two parts. Twenty percent of the bar is dark blue and eighty percent of the bar is white. Everything that is dark blue depicts every action you can undertake in your country that is covered by the legal system. Therefore, for the dark blue part there is a law that determines if what you are doing is legal or illegal. Everything in the white section depicts actions not covered by laws in your country. When we talk about…