McKinsey Digital, the old BTO along with some new capabilities, is the practice within McKinsey that advises clients on everything related to information technology (the old term for digital) and everything related to the movement of data. Digital is, after all, just the movement of data in 1s and 0s.

Today we will answer a reader question about McKinsey Digital.

“Thank for the great podcasts, Michael. They have definitely piqued my interest in McKinsey outside of the strategy practice. I was always going to consider joining the strategy unit but I am now more interested in McKinsey Digital. Do you any suggestions for someone trying to join McKinsey Digital. I have a Kellogg MBA and joined Amazon as a Product Manager after graduation. The work was interesting but the salary was lower than expected and I am not fully challenged. I have followed the Digital & IT Strategy Program and that is the type of work I want to do. What should be my strategy for McKinsey Digital?”

 

 

What is McKinsey Digital?

You cannot join the McKinsey Strategy Practice as an associate. It is not possible. So it’s really a question of joining the McKinsey generalist path to Partner (includes the generalist Digital path as described below and what you refer to as the strategy practice along with operations, org design, marketing etc.) or McKinsey specialist path in Digital on an expert track.

When Dominic Barton headed McKinsey he shepherded the firm into three priorities:

Recovery & Transformation Services

Implementation

Digital

If you want to know McKinsey’s current priorities just look at their website homepage.

It is not possible for a practice to get any more prominent placement than McKinsey Digital. Even Climate Change is not as important as building the next Digital Disrupter.

Digital is defined as the movement of data. That is it.

You may have wanted a more sophisticated definition but if you think about it, an App is just the movement of data between some code on your phone and a server somewhere.

Netflix is just an App pulling in a video feed (data) from an Amazon server somewhere. And Amazon is saying Thank you Netflix! as they analyze the data stream and use the insights for Amazon Prime.

As an aside, Amazon will insist they keep a Chinese wall between everything, but we all know how outsourcing ends. The outsourcer eventually learns all the secrets and builds their own products. That is after all how Taiwan, Japan, South Korea, and China developed.

Digital Strategy is figuring how to move data around and manipulate that data while creating a business model that generates profits.

McKinsey Digital is a new initiative because the whole concept of a digital strategy is new. Neither McKinsey nor anyone else knows exactly what goes into Digital and how it will evolve.

When a field is new and still evolving everyone has to take bets on where to invest. McKinsey Digital is no different.

McKinsey first had McKinsey Analytics as a standalone support function. McKinsey Solutions was also a support function. Both have been folded into McKinsey Digital in an informal alliance versus a formal reporting structure.

McKinsey Digital is both function and the loose collective

There is a formal McKinsey Digital practice and a grouping of similar skills, belonging to different parts of McKinsey that all do digital work. That latter part is the loose collective. So if you want to join McKinsey Digital, you can join McKinsey Solutions and do some digital work even though you may not formally be part of the McKinsey Digital practice where you are on a formal partner track.

You could, for example, join one of the design firms McKinsey recently acquired. And thereafter work on a digital project to redesign the digital interface for the Norwegian Tax Agency. You would be doing digital work but you are not part of the McKinsey Digital Practice.

McKinsey Digital could be reorganized tomorrow and the design teams could be placed in digital. Yet, they are part of the loose collective right now and not the formal practice. And it is fair to say there will be a few more reorganizations of McKinsey Digital until the next big theme comes alone.

We define formal practice as that part of McKinsey Digital that leads one to the formal McKinsey partner track.

I am going to assume this is the part everyone wants to join. The formal McKinsey Digital practice with the path to the formal partnership.

McKinsey is not a partnership and this helps

McKinsey, like Bain and BCG, stopped being partnerships a long time ago. If a firm is a partnership it would have an LLP at the end of its name. Like law firms.

McKinsey is an incorporated entity where the partners are directors with shares in a private company.

They have to take out a low-interest loan to buy into the shares and they receive dividends from the shares in the form of profit sharing at the end of the year.

Your power in the firm is correlated to the number of shares you own. And the amount of shares you own is largely determined by the amount of revenue you generate. Seriously smart people who join McKinsey and generate mind-blowing insights, yet cannot sell end up as Principals who do not share in the profits of the firm.

This structure is important because McKinsey can create risky practices like Recovery & Transformation Services (RTS) and ring-fence those assets and liabilities in a separate company which is wholly owned by McKinsey or a trust that manages the partners’ assets on behalf of McKinsey.

So a McKinsey Partner on the McKinsey website who indicates he/she is in RTS may be a McKinsey partner of the main firm or just a partner in the ring-fenced entity. Most clients do not know there is a difference and that is deliberate. If McKinsey brought in the RTS partners into the main share structure they would likely not make them formal partners and the RTS partner titles would reflect this lower standing.

By doing this McKinsey both ring-fences the risk and gives the RTS leaders the title of Partner, which sounds a lot better to clients than the non-partners title they would have in the formal partnership.

McKinsey Digital is the same. Some of the pieces that McKinsey assembled to build its skill in digital, apps, analytics and design are kept in these ring-fenced entities. If you join the ring-fenced entity, you are joining McKinsey but not the part you really want to join.

In other words, many of the leaders in McKinsey Digital are leaders only within their ring-fenced entity. They are not formal partners of McKinsey though they may share very similar titles.

McKinsey Digital Analogy

There was a time when Goldman Sachs had an onsite staff of caterers and cooks on their payroll. They may even have had cleaners, couriers, assistants, researchers etc on their payroll.

Let’s take an extreme example to make a very important point about how to prepare for McKinsey Digital.

Let’s assume there was a department called Goldman Sachs Catering. If Goldman Sachs Catering placed an advertisement in the Wall Street Journal asking for a Michelin Starred Chef to lead their kitchen, whom do you think would apply? It may seem obvious in this example because chefs would apply.

Would a Morgan Stanley banker apply for the role because it was at Goldman Sachs?

We can clearly see that the skills to succeed in Goldman Sachs catering as the head chef are different from the skills needed to join Goldman Sachs Investment Banking.

The name at the front of the title tells you little. It’s the name at the back of the title that tells you the most.

Bringing that back to McKinsey Digital, forget about the name at the front.

Ask yourself if you are applying for the formal Digital practice.

Ask yourself if you are applying to one of the loose collectives within the digital skills area.

So just because you see the name McKinsey in front of McKinsey Digital does not mean you always need to prepare like this is a McKinsey interview. That would be the equivalent of a chef applicant learning how to build financial models because the name Goldman Sachs appears in front of Goldman Sachs Catering.

Applying to McKinsey Digital

It goes without saying that a chef who has a Michelin star is extremely talented and quite likely wealthy. He probably owns more than one restaurant, hosts a television show, publishes books and owns a culinary empire. The point is that not being a banker at Goldman Sachs does not mean you are not successful if you are a talented person in a non-core part of that company.

But you have to be talented.

When people apply to McKinsey Digital all they see is the word McKinsey and assume there is a uniform application process, uniform interview process and uniform set of skills sought.

They assume they must be joining the McKinsey on which the brand is built.

It is far from it.

McKinsey Digital Generalist

McKinsey Digital which tends to hire MBAs from universities and is led by partners who came through the formal McKinsey path – from associate to engagement manager to associate principal to principal to director – is the part of McKinsey which follows the formal case interview process.

If this is the part you are joining then you can apply on the McKinsey website or contact the McKinsey recruiters online. It is the standard process for the generalist part of McKinsey.

And you have to be good at all types of cases since this part of McKinsey advises on the business models and efficiency. They do not build Apps, work with big data etc. If an engagement requires this work to be done, they will bring in specialists from McKinsey Digital to do the work.

You can join the generalist McKinsey Digital practice at any level but the associate level is easiest. We once had an assistant to the CEO of a Big 5 Technology Company join McKinsey Digital as an engagement manager. It is very hard to join this practice at the Director level since that requires an ability to bring in a book of business.

Unlike the generalist strategy, operations etc., practices joining at the McKinsey Digital Principal level is a little easier since there is more emphasis on technical skills versus client relationships at McKinsey Digital. That gap will close as the practice matures.

McKinsey Digital Specialist

If you are joining McKinsey Solutions or McKinsey Analytics or one of the numerous specialist firms McKinsey is acquiring and if you are working on digital issues then you are a specialist.

You may be assigned to work within or alongside a generalist team at an insurance client working on a new app for a health insurance product, but you are still a specialist. You could be helping with slides, meeting clients and even generating storyboards but you are a specialist.

How do you know you are a specialist? A specialist is someone who does approximately the same work across clients and/or sectors, and is not part of the generalist career path.

So a specialist need not just do technical work. You could be doing market surveys for digital consumers or even building specialist models to track election data. If you do approximately the same work all the time you are a specialist.

Finding opening roles for specialist roles is not easy. Each part of the McKinsey Digital loose collective will have their own recruitment pages, processes and it is not aggregated in one place. Some will test applicants with case interviews and others will ask you to code.

The offices, culture, remuneration and everything else are quite different from McKinsey even though it is all collectively called McKinsey Digital.

It’s like living in the Beverly Hills 90210 Post Office code of Beverly Hills. It has the name Beverly Hills, the TV show made it famous, you paid millions for the location and all your friends are impressed. You think you will get the Beverly Hills City treatment and services.

But it is not part of the city of Beverly Hills.

It is part of West Los Angeles and when you have a problem the LAPD arrives, usually 7 hours late and not the BHPD.

This may sound funny and irrelevant but Demi Moore almost died because of this misunderstanding.

What does this mean? Just because it has the name McKinsey in front does not mean you are joining McKinsey nor even receiving the full McKinsey experience. Some parts are part of the formal McKinsey and will receive the same experience but many are not.

Expecting the full McKinsey experience is like buying a very expensive home outside the city of Beverly Hills, but within the Beverly Hills 90210 zip code, and expecting the service offered by the city of Beverly Hills. The names may look the same but the experience is different. Can you imagine how many people have made this mistake?

When it comes to McKinsey Digital Specialists, don’t worry about what McKinsey does or wants. Focus on the firm that McKinsey acquired to build that skill and apply, and prepare to interview in the way that the acquiree used to operate. The McKinsey name means little here.

McKinsey Digital Generalist vs McKinsey Digital Specialist?

The likely next question is where should you apply and/or which is better?

The answers are surprisingly easy.

You should apply to that part of McKinsey Digital where you have both the skills to apply and the interest.

A Kellogg MBA who works as a Product Manager at Amazon is probably not going to have the skills to pass the interview let alone work with the code for cryptocurrency specialist work done by that team within McKinsey Digital. Even if the MBA had the interest, the skill is just not there.

An associate professor from Carnegie Mellon who specialize in large datasets and spacial geometry could apply to the generalist path and/or the specialist path. They have more options. What matters here is their interests and preparation to pass both the generalist case interview and specialist interview.

My view is the associate professor should bypass McKinsey completely and go work at someplace like Uber and earn 3 to 4 times anything McKinsey could offer while solving incredibly important problems to mankind like how a retro-fitted Volvo could pick up a to-go coffee order at Starbucks and deliver it before the temperature drops by more than 5%.

In terms of prestige of the McKinsey Digital name on your resume, it matters where you want to work.

In the business world, the McKinsey name will carry more weight all things being equal. But all other things are not equal

Even in the business world, there are limits. Does the Chief Engineer at Spotify think working at McKinsey Digital will make you a better full stack engineer? Or does he think someone working at Disney+ in their new App rollout will be a better full stack engineer? He will probably go with the Disney+ guy.

Yet within Spotify, another part of the business may find the McKinsey experience very valuable.

The McKinsey name is only valuable to people who find it valuable. There are large parts of the business world where it is not helpful

Yet, the difference is that when it comes to a technical skill like coding we can check your skills in real time to know if you are good. Either you can solve the problem or not? Either you can code or not?

It will take us years to know if the advice you gave a client as a McKinsey Digital generalist was any good.

So a specialist will find it easier to prove their skill. Therefore, where you worked matters slightly less.

The McKinsey Digital generalist will get away with more since it is harder to prove if a strategy worked or why it failed. They often just blame the implementation.

Rules for navigating McKinsey Digital

Here are some simple guidelines to help you.

Do you have the base skills and resume to join McKinsey Digital Specialist or McKinsey Digital Generalist? If not, either do not apply or take the time to build your resume like completing an MBA or specialist coding program.

Do you have an interest in this type of work? If not, either do not apply or see it as a temporary career point.

Do you like being a specialist at general problem solving or being a specialist at one thing and doing it all the time? If not, do not do it or see it as a staging point for more interesting work.

All that said, I can short-circuit the answer for you.

If you are on this site you are probably interested in the generalist side of McKinsey Digital and want to learn about the business side. In that case, join McKinsey Digital Generalist.

Too many people join the specialist side hoping to impress the generalists and be invited across. That is most likely never going to happen mostly because you will rarely get opportunities to do the generalist work and prove you can be a generalist.

One of our best performing coaching clients worked in an administrative support function at BCG and transitioned to a consultant role. He is the rare exception that proves the rule.

Indren is a McKinsey BTO engagement manager. He holds an MBA from a top-ranked U.S. program and advanced engineering degrees from India. He graduated with distinction in all programs, including his executive-MBA. He spent 9 years at a services firm prior to completing his MBA and joining McKinsey BTO. He was a client of the case coaching program before joining the consultants program.

Why did you seek additional help for your consulting career once you joined McKinsey BTO?

I joined a rapidly-expanding office and was put onto an engagement on my 3rd day. I was told this was very unusual, never happened and the firm would support me closely through the study. I was out of place from the first minute of my first day, and whatever support there was never seemed to help me!

Things were moving very fast to set me up with regards to laptop, general development, training etc. I never settled down and getting thrown into a study was the worst thing that could have happened. It was an associate, associate principal, partner and I on the case. I had no idea what was happening.

I was supporting the associate principal in completing a total-life-time cost study for a systems upgrade. I found the entire approach confusing and could not do basic things like figuring out how we would analyze the implications of shutting down the legacy system. I had done this before but the McKinsey BTO approach was driven by issues and not a general checklist, which was my preferred approach.

I ended giving the AP lots of things I thought was interesting but could never get my hands around the pulse of the study. It was deeply frustrating. The AP would ask me to complete the storyboard and that took me about 6 hours and it was all wrong. Having a lot of time when you have no clue what to do just leads to confusion and a mess.

I could not build any of the analyses and struggled at everything. I really have nothing bad to say about my previous firm, but none of the problem-solving toolkits I had used previously helped me at McKinsey BTO. Not a single one. It was that bad. It was like I was speaking Hindi in a town in Nebraska. No matter what I did, no one on my team seemed to know what to do with me.

I stared at my screen for about 30 minutes on the first night I had to develop a hypothesis. I was a manager but managing at McKinsey BTO meant getting stuck in the analyses and guiding others. The associate knew more than me and just by-passed my input since I could provide no useful advice. He was very nice about it and really had no choice since relying on me would lead to no progress.

That is why I applied to this program. I was not going anywhere by myself.

What was your strategy for using the program?

I was already on a case when I joined, so I had no strategy. I just dumped my frustrations on Michael and asked him for advice. My only objective was to not embarrass myself and come out of the engagement having completed the work I was given. I wanted to meet expectations.

At this point I was panicking and desperate about my career.

I don’t know how other experienced hires felt in similar situations but I am pretty sure both my performance and confidence were sunk. It was hard for me just to get up in the morning and mental fatigue led to physical fatigue.

Mental fatigue was causing me to lose weight, lose my appetite and lose my hair! The fear of failure was very real and a terrifying feeling.

How did the program help you, if at all?

The program helped me in some concrete ways both expected and unexpected.

• I was expecting general guidelines since I did not think ex-partners would have the time to get involved in all the nitty gritty details. The advice I received was to-the-clock timed to perfection. For the Monday after we had done my planning, I was given an objective of not falling behind. We built a “deficit-reduction” strategy to keep me from building up a backlog. I was given objectives for the day and guidelines and rules for prioritizing items. That was good and it worked.

• We spent much more time planning than anyone else on the team. While I was trying to prevent myself from falling behind, we would spend each night of that week building out a different part of my planning: timeline, milestones, issues, hypotheses, and analyses to test hypotheses. I like auto analogies and I think I went from looking at the review mirror to looking ahead to see what was possible and the route I would take. I was encouraged to keep the planning documents with me all the time and use it for any discussions.

• I was so desperate to add value that I was hunting around for opportunities to use my subject matter expertise even when it meant relegating my analyses work to the back-stage. Michael guided me away from this hurtful practice and switched my priorities. That was tempting and hard to do but I can see the slippery slope I was heading down. It is funny because I always thought the firm simply wanted me for my extensive IT experience.

• I isolated myself for the first two weeks because I was afraid people would realize just how little I knew. Michael was effective at forcing me to build better relationships and taught me a nice way to ask for help without creating the impression I was making no progress. This was very useful since it prevented me from falling further behind and breaking the isolation allowed me to see that others were more than happy to help me. I just needed to ask for help in the right way, since the people at McKinsey BTO are genuinely friendly and did whatever was required to help me.

Do you recall any memorable moments?

An opportunity arose for me to showcase my IT technical skills. The AP was presenting to the CIO about a legacy system, which I knew well because I had helped write the software for the system and I had the brilliant idea of preparing a few slides on the system and going along with the AP to help with the discussion.

Michael thought this was a very bad idea, and to him, worrying, because I still did not understand how they would evaluate me. This cold-water suggestion was hard to hear but shocked me back to reality to understand the implications of my actions.

This is the way Michael explained it:

• McKinsey BTO knew that I knew IT. I didn’t need to prove it. Talking about the legacy system on a technical basis simply proves what they already know about me.

• I must resist the urge to hide in my technical comfort zone. Doing this may make me look good in the short term but does not improve my analytical skills for the long term. It will not provide opportunities for me to develop my weaker areas.

• Presenting to a client is dangerous since I did not have the analytical basis to support my conclusions. I would simply be drawing on old information I had acquired over time. This would reinforce bad behaviour and betrays the management consulting ethos of data-based conclusions.

I felt Michael was always keeping me focused on learning the skills McKinsey BTO wanted me to learn, while I was trying to use my technical skills. Good thing Michael won at the end.

Would you like anything changed in the program?

My first engagement was average but would have been a disaster without Firmsconsulting. The second engagement was better and third engagement was even better. So I would like nothing changed in the program. It would be nice to have an online training facility for new consultants to brush up on these skills. I find that many of the things we discussed were useful and could have saved us time if I read them myself.

It would also be a good idea to have a “Succeeding as a Management Consultant” program tailored for those who join McKinsey BTO. I see programs for banking, public sector, energy and agriculture. BTO would be a popular choice for this.

Otherwise this is a great program and Firmsconsulting does an excellent job. The feedback, insights and commitments from the coaches are the best I have experienced.

We have published the most useful client feedback. Our commitment to confidentiality prevents us from disclosing the identity of our clients and other confidential information, and we may alter details to prevent such disclosure. Some client feedback may be lightly edited for grammar, spelling or prose, though we never alter or remove any information. Clients in our consultants coaching program are forbidden from sharing sensitive client data with us.

Did you enjoy the program? If yes, how?

Yes, I enjoyed the program because of the following reasons:

Material – The videos, podcasts, and the coaching itself presents material that can be easily consumed, and practiced.

Michael – As a mentor, Michael has successfully managed to literally eradicate “myths’ about management consulting. For example, how communication plays a much more important role than simply “cracking” cases. How one really doesn’t need to work on the “magic” number of cases, but can do a lot by focusing only on a handful.

Morals – Firmsconsulting sets, mentors and expects the highest standards of morals, ethics, and holding oneself to a value system through its programs and coaching.

Did the program meet your expectations? If yes, how?

Yes, the program met my expectations. The reasons are an extract of what I have mentioned above. The program provides the “relevant” material, mentoring, and also coaches one on what it takes to be a good consultant both technically, and ethically.

What was the most important learning’s from the program?

If the process of preparing, networking, interviewing, getting an offer, and performing on the job is considered a value chain, I learnt quite a few things in each of those areas. It is difficult to prioritize among those things. However, if I were to highlight one thing it was when Michael said, “Consulting is just one thing in your life. If you really enjoy screenwriting, or cross country skiing to the extent you are brilliant forget about the fact that your friend is a partner in BCG or McKinsey and focus on the other skill, not consulting.”

Do you feel the program provided an advantage for you versus your own/other preparation? If so, in what way?

I remember Michael asking me this question and in fact making a comment. He said, “I am not the happiest when people say that we are the elitist, I want them to know us as a firm which holds the highest standards.”

To that I responded, “I don’t think of Firmsconsulting as elitist but one that provides an edge to its clients be it cases or a simple conversation with a partner”.

To me (personally, given Michael understands exactly where I seriously lack) the “edge factor” is not something that I could have gleaned myself.

Can you recall any memorable moments?

Two mentioned above.

What would you like changed in the program?

A couple of things:

I am already talking to Michael about an idea. Doesn’t change the existing program, but includes another line of service.

More time with Michael to coach us on other deficiencies. I have realized that it is far easy to talk to Michael about our weaknesses than anyone else.

Open the MBA basics to clients outside the capability center. For example, I would definitely like to go over the slides that Firmsconsulting has put together on Marketing, Accounting, Finance etc…Reason being, even though I am done with the MBA program those slides help keeping in touch with the basics, and is more efficient than opening a book always.

Do you believe your coach was effective?

Definitely. I know that he has received comments on toning down his excitement when he teaches, but other than that he is very good at what he does.

Do you personally believe the sessions were tailored for your own development?

For most part, yes it was. Starting from the cover letter, resume related discussions; tips on where I was making mistakes were very personalized. Additional discussions on “Plan B” if MBB does not work out or if even consulting does not work out will be really helpful.

What are your thoughts on using former McKinsey/BCG worldwide practice leaders to coach clients?

Bringing in Senior Partners like Kevin was a brilliant idea. It is not only important to prepare, and practice but also to observe, ponder (over their thoughts) and tweak.

We have published the most useful client feedback. Our commitment to confidentiality prevents us from disclosing the identity of our clients and other confidential information, and we may alter details to prevent such disclosure. Some client feedback may be lightly edited for grammar, spelling or prose, though we never alter or remove any information. Clients in our consultants coaching program are forbidden from sharing sensitive client data with us.