Sep 19
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Earlier today we posted a report about Monitor company. In that post we profiled a pretty bad study Monitor performed for Debswana, a mining company in Botswana. We were emailed this study by a reader who says that Monitor was called in to fix the “debacle that was Bain’s 2001 study.” That’s a direct quote from the email. Read more
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Stories which delve behind the scenes of consulting engagements are very, 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. We are going to give critical coverage of the behind the scenes issues and outcome of the project. This will be one of those rare articles. Upfront we must add this will not be a biased critiscm of the firm. McKinsey actually did very well on this engagement. In some ways this is a complimentary article. Read more
Sep 19
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You worked hard to get your MBA, graduate degree or undergraduate degree. It was not easy. You made sacrifices. Your family made sacrifices. You spent tens of thousands of dollars. You need to make sure the firm you join is as committed to your development as you are to succeeding. In today’s post, we will discuss Monitor Company. Monitor Company was a firm founded with great promise. No less a person than Michael Porter gave his blessing (but not his complete time and attention) to this firm as a founding partner. In the late 80’s and early 90’s Monitor was so full of promise. It was mentioned in the same breath as McKinsey, Bain and BCG. To say Monitor has fallen would be to mislead you. It never rose very far for it to fall much. Although, we can say it never lived up to its potential. Read more
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Terence (not his real name) 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 first 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.
Money, or should I say, lack of money was one major reason to join management consulting. It was not the only reason. At 21 years of age, I was an assistant brand manager for Pepsi. The pay was not great as I had only been in the position for 1 year and I had no advanced degree. The work at Pepsi was interesting but not dynamic. Read more
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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
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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 second 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.
Bain & Company is an interesting company. “Bainies” as they refer to themselves take enormous pride in their culture and the “true north” value system which lies at the core of their cultural values. On my first day at the office, sitting through an induction led by a team of partners, the following three points were driven home:
We went through a long induction period lasting one complete week. A whole host of topics were covered in this intense mini-Bain MBA week:
The thing that immediately hits you at Bain is the intellect and wide-ranging skills of the people in the room. In my group of 12 new hires there were a: NASA rocket scientist, a Rhodes-Scholar economist who served on the Clinton campaign, several Harvard, Wharton and Stanford MBA’s, a former musician and now MBA from the University of Chicago (now the Booth School of Business), a poet and Fulbright scholar…and then me; a physicist. Therefore it is an intimidating place. That kind of pedigree exists throughout the rest of the organization.
Bain is unique among management consulting firms for several reasons:
You do not read much about the jockeying for personal profile, power and prestige. It’s there. With so many big ego’s around the room, everyone is trying to outdo the other and be seen as serious competition. The positioning and verbal spars do across clearly. The Bain partners and existing employees try to create a more collegial atmosphere but it is bound to happen and is a consistent theme in management consulting firms. With such high salaries, so much at stake and reputations on the line, everyone is trying to one-up the other person even if this is done subtly.
The business analysts/consultants (different firms use different names for the entry-level position) were separated from the more senior associate level recruits. The six of us went through a more detailed orientation about the Bain approach to research. Typically, even the consultants are staffed onto engagements. However, Bain was going through a period of rapid growth and the research support systems worldwide were struggling to keep up. A decision had been made that three of the consultants would be assigned to an internal role primarily to support the partners on client-development studies. I was one of the three. We would be a type of internal research unit supporting partners in this office only. Another Bain partner and three managers would be assigned to the unit full-time to ensure it could operate to the highest Bain standards.
I remember looking forlornly at the other consultants as they went out onto client site. It was seen as a badge of honour to be on a live engagement working with clients. Despite what the firm told us, we felt as we were not ready and needed to be trained in this safe environment. Of course it was not true, but that’s the way we felt. On our first day in the unit, we three consultants from the unit went out for lunch. One of the consultants was quite upset because she felt her career would be held back and she was not developing by working in the office. Over steak and grilled vegetables we decided that if we were going to be the internal team, then we would be the best internal team ever. We would make the Bain partners see the enormous value we were generating. It went without saying that we all three were wishing we would be the first to be assigned out of the unit and onto a project.
A couple of massive sales put a crimp in our plans. Rather than having a generous leadership group with a full-time partner and three managers, we were soon down to a part-time partner and one full-time manager. In hind-sight that turned out to be an amazing blessing. The senior partners in the office started spending more time with us, we were given more senior roles to carry out and since we needed more support, we were sent on much more formal training to exotic destinations like London. Spending time with the senior partners was especially important. For our colleagues on engagements, their performance was fed through several lines of communication before it reached the partners. We were working directly with the partners. Our success or failure was squarely in our hands.
One month into our time in the unit, a major opportunity arrived to demonstrate the unit’s value. Bain had been trying for some time to break into a major biscuit (not the real category) company. For the sake of writing, we shall call this company Nabisco (although it was not Nabisco). Bain had tried a few times but nothing ever really happened. McKinsey had somehow always managed to arrive at the right time to snatch away the work. Nabisco was going through a CEO transition and the new CEO wanted to relook at the portfolio of brands in the business. Since the new CEO did not have a preferred consulting partner nor did he know the industry, he invited a Bain partner to discuss ideas for improvement. With the change of the guard, change in the clients board and conflicting diaries, the first of these meetings was set for 10 weeks into the future. That gave us plenty of time to put together something formidable to support the partner.
Working with the partner we mapped out a strategy for the discussions. We did not know enough about the sector and client. Therefore we developed a two-pronged approach.
Working with the partner was a fantastic experience. He drummed into me and showed me the value of an approach that I still use to this day and have carried with me even when I left Bain for another consulting firm:
This is the management consulting way. In every single engagement and across thousands of issues, I have successfully used this approach. It is the root of consulting success. Of course, learning how to do this is a painful and difficult process.
It is very difficult to understand what a storyboard is when it is explained to you. I do not know about other people, but I personally have always struggled to generate a perfect storyboard. It took me many iterations to get it just right. The same goes with preparing perfect slides. So many people do not know how to prepare slides and are comfortable with this. At Bain, you need to learn their templates and learn how to deploy it well.
We split the work up. Given the partners experience, he would work on the storyboard and slides for the framework to analyse the company and I would handle the in store experience analyses. Completing the in store study posed a big problem. What was the central question I was answering? How would I do this? Eventually, after much iterations I settled on showing the disconnect between what Nabisco was trying to achieve in store, as explained on their website, annual report and numerous analyst calls, and the actual customer experience.
So off I went and designed my storyboard and decision tree. Once that was signed off, after 5 iterations, I then designed the tests and started the data collection. Management consulting is a lot like the show CSI.
The theme I choose is a Day-in-the-life of a Nabisco Brand. Using a set of photo’s and time series analyses we tracked the packages all the way from the distribution warehouse, supermarkets and stores, their warehouses, onto the shelf, shelf replenishment and to the consumer.
Doing this was tough since many stores do not like shutterbug consultants snapping away near their loading docks and display units. Customers also do not like this. This was also way before the iPhone and digital cameras. I am sure it would be much easier to do this now. We also solicited some consultants to send us photos of the biscuits when it was opened up at home. Was the box easy to open? Were the biscuits broken? Could the box be stored without damaging the remaining biscuits? What did children do with the toys inside?
We timed deliveries, timed the OOS (my Pepsi experience came in useful here) and were able to show the client how damaged the boxes were, how peak shopping time traffic was missed since the stock was not replenished and many other useful insights.
The pack we put together went far. Further than I thought it would. The client loved it and eventually awarded Bain the portfolio analyses work. The deck itself became something of a best-in-class internal study guideline on how to combine field work with desk-top research to produce powerful and insightful presentations.
My time in the unit was interesting and very beneficial. I actually liked knowing where I would be the next day unlike my colleagues who were sometimes given a days notice for their travels. I also liked to have one office which I could call my own; where I could develop a routine. The office had a great cafeteria and the food was excellent. While I travelled out to collect data, I could predict with a high degree of accuracy when I would finish my work. I now had more money and the time to develop a social life. Late nights were very rare since we had ample time to plan.
The biggest benefit was spending one complete year working and learning from the firms most talented partners. That was priceless. I had built relationships with them. By the end of the year I knew how each partner operated and could tailor my communication and work to meet their expectations. It was especially gratifying when partners tried to get me onto their projects after the Nabisco study. Spending all this time with the guardians of the firm also allowed me to see how they operated in front of clients, nurtured the firms valued, managed client expectations and developed multi-million dollar engagements from the kernel of an idea.
Once things settled for Bain worldwide, the need to keep the internal unit disappeared. However, given its success the global firm decided to set up a dedicated research team in that office. I think that was a great feather in my cap and the good for the rest of the team. I was willing to take any credit I could.
Many aspiring consultants feel they have to get out to clients to move ahead. That’s partly true. There are many, many benefits to first joining the internal research units. That worked very well for me and I would say gave me a major advantage over other consultants.
I did one other similar study for a retail bank before I was hauled off onto my first engagement; analysing an airline. I was the first person out of the research unit. Things seemed to be looking up for me. I should have known better.
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When I was asked this question today, I had a flashback that took me all the way to the early days of my career. When I first joined management consulting I wanted to only do strategy work for the greatest blue-chip stocks on the planet; GE, GM, P&G, Pepsi, Exxon-Mobil, Verizon and AT&T where the kinds of the companies I dreamed about advising. After all, they were the leaders of corporate America. Why would I want to do anything else?
Unfortunately life and circumstances take us on a different path. I eventually ended up doing a tremendous amount of work in the emerging markets. Even then, emerging markets were dominated by state-owned businesses. In hindsight, working in emerging markets and the public sector served me well and in many ways equipped me with better skills. Thankfully, many consultants today see things that I only learnt after much time in emerging markets. If you speak to many consultants today, they are attracted to major markets like Brazil, China, Dubai, Russia, India, Indonesia and the Philippines.
You would have noticed I have not mentioned the public sectors in Germany, France, the USA, UK, Canada and other emerging markets. While important work is still being done in the public sectors of developed countries, especially in healthcare, defence and education, most of these governments suffer from overly bureaucratic layers, depleted coffers and somewhat limited ambitions. Public sector clients with quick decision-making, lots of funding, really complex problems, lots of these problems and major ambition mostly exist in the developing markets. Of course, within these generalizations, exceptions exist:
However, by and large, public sector work in the emerging economies rivals the thrill off doing private sector work for the world’s leading companies. Here’s why:
To answer the question; yes public sector projects can be both extremely boring or extraordinarily exciting and challenging. It really depends on where you want to work. Personally, I would avoid public sector work in developed economies. The opportunity to drive major change is fleeting, there are too many committees and the ambition to change the world has disappeared. Today, it is more about protecting the status quo.
Although operating in emerging markets is tough, there is scope to make a bigger impact.
Oct 13
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
Who does McKinsey admire?
Who does BCG admire?
Monitor is stingy with votes and the sentiment is returned
Here’s the summary:
Approach
You saw this first on Firmconsulting.com.
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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.
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:
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.
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