Consulting Job Applicants: 4 Best Case Interviewees We Ever Trained
In this article, we will share the key lessons of the top 4 consulting job applicants we trained, as measured purely by their consulting interview skills.
A consulting job applicant who was the first person in her country, and university, to join McKinsey
At #1 is Sanda, an undergraduate from one of the poorest countries in South East Asia who barely spoke English. She was the first in her family to attend university, a university without a website, and became the first person in her country, and university, to join McKinsey.
So what distinguished Sanda from other consulting job applicants we trained?
First, she watched the videos so carefully that she could recall and apply all key concepts during her 1-on-1 consulting case interview coaching. Just how efficient was Sanda? We only did 4 hours of case interview coaching before she received her offer! That is just 240 minutes of one on one case interview training or half a season of the Big Bang Theory.
Sanda clearly identified her weaknesses and requested help. For example, one of her consulting job interviews was in a luxurious restaurant, and she never been to such a restaurant, so we had to guide her on sitting, using the utensils, and so on. The thing about Sanda is she told us about this weakness, even though it was hugely embarrassing.
Many people hide their weaknesses because they are ashamed of them. And because they hide them they can never ask for help to fix them.
And finally, Sanda is also a doer who aims high. She immigrated to Singapore after McKinsey and joined a Fortune 500 company. She then returned to her country to join a Fortune 100 Company. She is constantly moving up and did not see getting a consulting job at McKinsey as the pinnacle of her career.
Many clients assume that getting a consulting job at McKinsey or BCG is the best they will ever do. After consulting they tend to move on to smaller companies with an attitude of, “Hey I worked at McKinsey and I am exceptional, so I deserve special treatment”. And Sanda, by comparison, just kept on climbing higher and higher, taking on roles with higher levels of responsibility and impact after consulting.
Sanda was the first recipient of our Emerging Fellows Scholarship program. Her success encouraged us to expand the program.
A consulting job applicant who joined BCG while pursuing a part-time MBA from a non-target school
Ivan is at #2. Ivan is an Eastern European immigrant in North America, just like me. He went to a little known state university in North America and he joined BCG while pursuing a part-time MBA. 99% of you would not recognize the name of his school. What we liked about Ivan is that he just kept on trying. Just like Sanda, he watched every video; he absorbed every piece of information.
And because he was so well prepared we could practice more difficult concepts with him. That is an important distinction with both Ivan & Sanda.
As a side note, the training we have within our Premium membership, let alone within FC Insider, is way more than sufficient to prepare for consulting job interviews with top firms like McKinsey, BCG, Bain, Deloitte, etc. The reason many consulting job applicants still feel they need to apply for one on one coaching is that they do not make the most of online programs we offer. It is very common for members to apply for our coaching without even first working through our membership content. So we had to introduce a rule of someone having to be at least a Premium member before they can apply for our case interview coaching because it is not productive to use job applicant’s time or partner’s time working through basics when it is in-depth covered in our programs.
Back to our story, he also took feedback very well. We told Ivan that the biggest problem he faced is that he appeared to be a caricature of those nefarious traders you see in a Martin Scorsese movie, with the sleek black hair trying to talk their way into things. He was a hustler and desperation does not work in consulting. When it comes to consulting job applicants firms like McKinsey, BCG, Bain, Deloitte expects candidates to have options. They do not want someone who is desperate. Ivan immediately changed his image after we gave him this tough feedback.
Since Ivan grew up so poor and had so few options in life, he took advantage of opportunities and made them count. Once Ivan had access to a partner who could guide him, he made the most of the opportunity and respected the mentor-mentee relationship: he ruthlessly executed every single piece of advice.
A consulting job applicant who joined McKinsey and was not embarrassed that he never heard of Yale
At #3 is Peter, an undergraduate from Arizona state university who joined McKinsey. When we asked Peter why he did not apply to Yale or Harvard, Peter said he had never heard of Yale.
It was a fact – he had never heard of Yale when he was applying to schools. Yet, he was not embarrassed about it and he was proud of picking Arizona for its football program. He was a true Sun Devil.
The most important observation about Peter is that he never puts himself down. Most people would demonstrate some discomfort for not attending an Ivy League school. Peter was never like this. He was proud of his alma mater, proud of his 4.0 GPA and proud of his choices. This was not an act. He was genuinely comfortable with his path.
He also worked part-time in a trucking company during his studies. He was a driver. He did so well that he was promoted to COO for that small business.
And at the end of the day, Peter’s track record of success and high GPA is what mattered. With a 4.0 GPA, a stellar leadership record, and solid case interview preparation, obtaining a consulting job at a major firm was not an issue. Every major consulting firm was interested in Peter.
Harvard business school Baker Scholar and Stanford undergraduate who joined McKinsey
Rounding out the list is Michael at #4: a Harvard business school Baker Scholar and Stanford undergraduate who joined McKinsey. The most outstanding quality about Michael is that he does not seem to have an ego and is very respectful. So much so that we invited him down when we were shooting The Consulting Offer II in Atlanta (led by former McKinsey senior partner and worldwide strategy practice co-leader, Kevin P. Coyne). And this guy with a great background was helping us set up stuff, carry around boxes and bring pizza for the production crew. And he just did it. He is very humble. This may sound like a small thing but genuine respect is rare these days.
Michael did not need to attend Stanford and Harvard to be somebody. He went there because he is somebody. And that is easy to see in his behavior. He does not appear entitled.
He, crucially, followed our advice. We advised against any networking and instead to focus on grades because for the rest of his life he would have “Baker Scholar” behind his name and most senior partners graduate with distinction.
People who graduate with distinction generally end up better off. Focusing on networking is a myopic strategy. It may help you obtain a slightly better consulting job in the short term but at the expense of learning and building a foundation for the long term.
The main lessons from the top consulting job applicants
Let’s review some of the main lessons from our top consulting job applicants: Sanda, Ivan, Peter and Michael.
First, you can achieve anything regardless of your background. As you can see, only Michael attended an Ivy League school.
Second, Peter, Ivan, and Sanda all maintained 4.0 GPAs and strong leadership roles. This is the antidote to a weaker school brand.
Third, remember that The Consulting Offer (TCO) is where consulting partners download everything they know about consulting case interview preparation. It is the most important tool you should use to prepare for your consulting job interviews.
And fourth, if you want influential partners to guide you, you must be a good mentee, by executing the advice provided and being very honest about your weaknesses without complaining. If you hide your weaknesses you can’t fix them.
Sanda’s audio interview is on our website in the client’s section. You can listen to her explaining how she became the #1 client in Firmsconsulting history.
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Recommended books:
When people think about the business strategy we often think about the field of strategy consulting/management consulting and firms like McKinsey, BCG, et al. If you are interested in learning how to conduct a management consulting engagement, you will likely enjoy this book. Succeeding as a Management Consultant is a book set in the Brazilian interior. This book follows an engagement team as they assist Goldy, a large Brazilian gold miner, in diagnosing and fixing deep and persistent organizational issues. This book follows an engagement team over an 8-week assignment and explains how they successfully navigate a challenging client environment, develop hypotheses, build the analyses ,and provide the final recommendations. It is written so the reader may understand, follow ,and replicate the process. It is the only book laying out a consulting assignment step-by-step. (Published by FIRMSconsulting.) One of the best business books if you are interested in management consulting and strategy. This book will be very useful as well if you are a small business consultant.
Bill Matassoni’s (Ex-McKinsey and Ex-BCG Senior Partner) Marketing Saves The World is a truly unique book. Never before has a McKinsey partner published his memoir publicly. This book is a rare opportunity – a true exclusive – to see what shapes the thought process of a partner and learn about marketing and strategy. The memoir essentially lays out McKinsey’s competitive advantage and explains how it can be neutralized. (Published by FIRMSconsulting.) One of the best business books if you are interested in marketing, strategy, how McKinsey and BCG operate, and overall in management consulting. This book will be very helpful if you are a small business consultant.
Bill Matassoni speaks highly of Kenichi Ohmae in his memoir Marketing Saves The World. He is one of a few people Bill calls “brilliant.” The Mind of The Strategistremains one of a few strategy books we recommend to understand how to think critically. Now you can read Bill’s memoir, a book about Bill’s mentor (Marvin Bower), and a book by one of Bill’s close colleagues at McKinsey (Kenichi Ohmae). Definitely, one of the best business books, especially if you are interested in management consulting and strategy.
One of the best business books of all time. The Innovator’s Dilemma – “By the nineties, most books on management were just rhetoric, but this book is the real deal. A well-researched classic,” says Bill Matassoni. Named one of 100 Leadership & Success Books to Read in a Lifetime by Amazon Editors. In his book, Clayton Christensen showcases how even the most outstanding organizations can do everything right and still lose market leadership.
There is no better book than McKinsey’s Marvin Bower to explain the philosophy of strategy and the way in which management consultants develop a strategy. What we do is very different from the way a researcher of strategy would develop a strategy. I highly recommend this book and have read it several times. Bill Matassoni (see Marketing Saves The World) was a mentee of Marvin so reading both books will allow you to see things from both sides.
Get a list of the best strategy books and other business books we recommend …
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I am going to start my consulting case interview preparation soon. I have decided to brainstorm what I need to improve in order to have a shot at getting an offer.
In Australia, consulting graduate intakes happen in April 2012, so I still have over 7 months to prepare. However, as I mentioned in my previous post, I have a summer internship in an Investment Bank for 2 months. I don’t think I will be able to do any preparation at all while working those hours. That leaves me with about 5 months in total.
I remember reading somewhere, a person was making comment on getting into Ivy League school and he said, the key is to “build a life, not a resume”.
I divided my care preparation process into 4 main categories:
(1) Polish up my resume and gain more experience
I think “polishing up the resume” is a misleading thing to say. I remember reading somewhere, a person was making comment on getting into Ivy League school and he said, the key is to “build a life, not a resume”.
As I mentioned in my previous post, I am in my University’s consulting club doing a bit of pro-bono consulting work. The projects are very interesting and have given me a good taste of management consulting work. However, the competition to get into consulting is fierce and I know a number of other students who have started and run their own business. I should not become complacent and rely on the consulting club alone (as my other experiences are very finance oriented). I will always be on the lookout for more interesting life experiences.
(2) Skills for Case Interview
I would like to further segment skills for case interview into two different categories: structured communication and structured problem solving framework.
These skills can be seen as a tool to a) solve the problem in a systematic manner b) deliver your solutions in an easy to follow and structured way.
From what I have read, skills for case interview can be acquired quickly through training. I still don’t know a lot about this yet, in the coming posts I will start compiling free and paid resources that I think might be helpful. I did recently purchased Barbara Minto’s “Pyramid Principle”. I will review the book once it is delivered.
(3) Business acumen
Skills for case interview are a problem solving and communication tool whereas business acumen is what will solve the case. I believe Business acumen is the most difficult and time consuming to develop. In the coming weeks, I will find different ways to develop my business acumen.
(4) Networking
As a student, the opportunity to networking with consultants is somewhat quite limited. I won’t have the opportunity to network with them until early 2012 when the firms come to my university to do company presentation.
I never quite believed in Linkedin networking, however, through reading other Firmsconsulting posts, I think Linkedin networking might actually yield results. I will start utilizing Linkedin and report my experiences to you.
Max is an aspiring management consultant who is looking to secure an analyst role with one of the top consulting firms for the upcoming recruitment cycle. His interest in management consulting was sparked by a failed McKinsey interview last year. In this series of blogs, he will be sharing his background, case interview preparation process, useful resources, and any breakthroughs or setbacks that he experiences.
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In my earlier posts, I went over some of the resources I discovered for case interview preparation. Now that I was armed with some frameworks and sample cases, it was time to actually set up an action plan. My personal goal was to have twenty to thirty live case interviews under my belt before any first round case interview in the upcoming recruitment cycle. I figured that case interviews, like everything else, has a learning curve associated with it, and I wanted to be extremely comfortable with the mechanics of doing a case by the time real case interviews rolled around.
As I mentioned earlier in my posts, the lack of preparation for my first-round with McKinsey was absolutely embarrassing. The foreign nature of the case interview made me nervous, and that probably amplified the negative effect of my poor case performance. Having done six co-op terms during my undergrad, I am usually extremely comfortable in interview situations. My friends and I had, on average, five to six interviews for every co-op work term so I am no rookie when it comes to communicating my abilities to an interviewer. However, success at normal “fit” or “experience” interviews will not translate into success in the case interview. I designed my preparation around four areas:
1) Doing live case interviews
2) Solving cases by myself
3) Reading business articles to acquire “business acumen”
4) Working on my mental math abilities
When it comes to doing live case interviews, there is no choice but to find an individual who is willing to feed you cases. Ideally, this person will be a high caliber candidate who is also going through the case interview recruitment process.
Four main ways in which the case interview is delivered
While doing research on the firms, I found that there were four main ways in which the case interview is delivered:
Candidate-Led: In this case interview method, the interviewer presents a short problem like “The client’s profits are down, and the CEO wants to know how to proceed”, and basically shuts his or her mouth. It is kind of like a police interrogation where they will only divulge information when asked.
Interviewer-Led: In this case interview method, the case is structured into different sections. The first section will usually involve the description of the case, and the interviewer asking you “What are the important questions?” or “How would you structure your analysis?”. They are basically looking for you to develop an upfront structure, but not dive into a particular branch just yet. They will most likely point you in the direction they want you to analyze if they are satisfied with your upfront structure.
Group Interview: In this case interview method, small groups of candidates are given a case. They must solve the case together while the interviewer silently observes.
Written/Presentation Interview: In this case interview method, all of the data is given to you. The challenge here is to cut through the fluff and get to the important information. At the end, you will present the conclusion and recommendation.
Even though there are lots of variations on the case interview, it is my opinion that practicing the “candidate-led” version will prepare you for all of the variations – but it is useful to mix it up when you are preparing just to get a taste of what the other types are like.
Finding case interview partners and sample cases
I found practice partners through two methods. First, there were other people in the university consulting club who were preparing for case interviews. Since we were in different cities, we had to do the cases over Skype. My plan was to do two cases a week with these individuals. Second, consultingcase101 provides a small forum where people looking for case partners can correspond.
When it comes to doing cases alone, there are far fewer hurdles. All you need are some sample cases, and a bit of free time. Some of the best sample cases I found are listed below:
4) A book called “Crack the Case” which is great because it contains lots of data
5) Sample cases from the consulting clubs of various business schools
Preparing for case interview solo
Of course, it is not possible to simulate the entire case interview when you are by yourself, but you can practice the open and close of the case. By open, I mean reading the case question and structuring your approach. After you structure the analysis, you can go through the case to see if your line of questioning would have led you to the key insight in the case. By close, I mean the conclusion and recommendation to finish off a case.
It is very useful to actually talk out loud when you are doing the opening and closing portions. In addition to the case samples mentioned above, most firms have sample cases on their website. I really liked the BCG ones because it is a step-by-step process that is easy to do alone.
Another great resource for practicing cases solo is Firmsconsulting videos. The thing that I love about this is that you have the ability to play and pause a case, and this allows you to structure your thinking to see if you would have gotten the same answer they did. I previously mentioned that I like to use the frameworks from www.caseinterview.com, but I feel that the www.firmsconsulting.com way is equally good – it just so happens that I came across the caseinterview.com method first. In my opinion, once you are familiar with cases it really becomes a critical thinking exercise and particular frameworks don’t really matter too much. The important thing is to be MECE (mutually exclusive and collectively exhaustive).
Reading business articles
The next part of my process is reading business articles. Coming from a technical background means that my vocabulary doesn’t include a lot of business terms, and I don’t want to get bogged down with terminology during a case interview. Furthermore, I believe that most cases given at the top consulting firms are sanitized versions of something the interviewer actually worked on. By reading about real life business situations, you can populate your mind with ideas and solutions just in case the interviewer wants to see some creativity.
I found the following sources to be fairly helpful:
1) www.ft.com
It may seem odd that I have listed firmsconsulting.com as a good resource for “reading for business acumen” part of my case interview plan, but I feel that the accounts of actual engagements are invaluable in gaining insight about real business situations. In addition, I feel that many of the articles on the site provide useful information with regards to what the interviewers have to deal with on a daily basis. By understanding this, you can gain a greater appreciation for what they are looking for in candidates.
Doing mental math
The last part of the process is doing mental math. It is a little bit embarrassing to admit that my mental math isn’t as sharp as it should be considering that I come from a technical background. However, most advanced math and engineering courses emphasize conceptual understanding rather than number crunching. Besides, once you get past simple math (addition / subtraction / multiplication / division), it is almost impossible to do calculations in your head. I would be amazed if you can find someone who can do a triple integration to find the volume of a sphere from first principles without writing anything down.
Of course there are those who can do that, but 99% of the population probably can’t. Luckily, it is easy to practice mental math, and I would recommend that you practice things that are likely to come up in a case interview. For example, what is 30% of 70%? Another one would be what is 3 billion divided by 1.2. The point is to keep it practical, and not practice things like what is 7.5 to the power of 6. You can either come up with these questions yourself or find some resources online.
You are now caught up with where I am in my preparation process. I invite you to continue reading my blogs for updates. In these updates, I plan on picking a case I did over Skype with one of my practice partners that week and breaking it down. Furthermore, I will keep you guys updated with any advances or setbacks I have with regards to my case interview application process.
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Max is an aspiring consultant who is looking to secure an analyst role with one of the top firms for the upcoming recruitment cycle in September 2011. His interest in management consulting was sparked by a failed McKinsey interview last year. In this series of blogs, he will be sharing his background, case preparation process, useful resources, and any breakthroughs or setbacks that he experiences.
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For those of you who are also in the recruiting process, I would like to share some of my current case interview worries, and what I’m doing to combat them. Feel free to leave a comment and let me know what’s worrying you! My two biggest fears are:
1) Not having enough academic firepower on my résumé.
2) Preparing for case interviews, and not actually getting a chance to apply my skills in a real interview.
I feel that the caliber of candidates going for BBM jobs is higher than it is for other industries. To give you an idea of where I am in the food chain, I’ll share the following academic stats:
• Top 10% in my engineering program at a premier Canadian university
• 93rd percentile on the GMAT
• Several scholarships during undergrad based on academic merit
The way that I chose to combat this fear is to focus on improving my leadership skills, and other “soft” aspects of my application. My hope is that the extra points I’ll get from my soft skills will allow me to get over the hump, and get a first round interview with all three top firms.
Of course, the firms take a holistic view of your application when considering your candidacy, but it’s kind of difficult to compare various extracurricular activities and leadership positions – and that’s why I have not included mine here. Now I don’t think my academic stats are all that bad, and they’re probably better than most people’s credentials when interviewing for a “normal” job. However, I feel like I’m probably in the bottom half of the candidate pool based purely on academic achievement when it comes to BBM. This worries me somewhat since we always hear that the top firms like to take “the best”, and how can I possibly make it when my academic credentials are not in the top-tier?
The way that I chose to combat this fear is to focus on improving my leadership skills, and other “soft” aspects of my application. My hope is that the extra points I’ll get from my soft skills will allow me to get over the hump, and get a first round interview with all three top firms. As I understand it, candidates are on somewhat of a level playing field once the interview stage hits, and the most important factor is your case interview performance. This leads into my second fear mentioned above.
Of course, I would always use the quick and fast rules on an exam, but understanding something from first principles allows you to see things (sometimes very efficient shortcuts to solving a problem) that you would otherwise miss.
From playing lots of sports in high school, and going through university education I became very familiar with my learning style – I am not a “crammer”, and cannot become good at something at the very last-minute. My preferred method is to take it nice and slow at the beginning, and let everything sink in as I go through the process. I believe this works for me because I like to understand everything at a fundamental level. Take calculus for example. There are many rules on integration and differentiation that you can use to get through most undergrad engineering math courses without ever taking the limit of an expression (which is how the rules are derived). I didn’t like taking the limits of an expression any more than the next guy, but I usually did it at least once for every rule just so I understood how it actually works.
The thing about going for a deep understanding in any subject is that it takes time. From what I understand, there is just not enough time between when you find out you have an interview, and your real interview date to reach this level of understanding.
Of course, I would always use the quick and fast rules on an exam, but understanding something from first principles allows you to see things (sometimes very efficient shortcuts to solving a problem) that you would otherwise miss. I knew that to succeed at case interviews, I needed to understand it from a fundamental level, and be able to do everything from first principles (MECE). Maybe in a real case interview I would come up against a problem where it’s clear that a certain framework would fit perfectly, but I think it’s still useful to understand it from first principles since this allows you to solve ANY case – regardless whether there is a pre-cooked framework.
The thing about going for a deep understanding in any subject is that it takes time. From what I understand, there is just not enough time between when you find out you have an interview, and your real interview date to reach this level of understanding. There are always going to be people who can do it in a couple of days, but unfortunately I am not one of them. This means that I have to start preparing well in advance of even applying for an analyst position. After all the preparation, I will be very discouraged if I don’t even get a chance to interview.
The way that I chose to combat this fear is to look at it from a more positive angle. Even if I don’t get any interviews, I will at least have an enhanced ability to break down problems from doing all these cases. This ability is a desired trait for pretty much any job I can think of.
I am starting to move into the application process, and will keep everyone updated with my progress!
Please leave a comment if you would like to share some of the things you are worried about as you go through the recruitment process.
Max is an aspiring consultant who is looking to secure an analyst role with one of the top firms for the upcoming recruitment cycle in September 2011. His interest in management consulting was sparked by a failed McKinsey interview last year. In this series of blogs, he will be sharing his background, case preparation process, useful resources, and any breakthroughs or setbacks that he experiences.
***
Last time I shared with you a case I did regarding a bid for the broadcasting rights to the 2010 Winter Olympics – which I performed fairly well on. Today, I would like to share a case where I fell apart near the end. I hope that you find it useful to see where I made my mistakes, and what I could have done differently.
Interviewer: Our client is German Postal Service. Historically, they have been the sole provider of postal service delivery service in Germany. A few months ago, the government passed a bill to deregulate the German postal service delivery industry. The client is forecasting a 20% drop in revenue, and they would like to know how to proceed.
My Response: I just want to make sure that I understand the problem correctly. Our client, German Postal Service, is facing deregulation in its industry. They are anticipating a 20% drop in revenue, and would like our advice on what they should do.
Interviewer: Correct.
My Response: I see. Before I structure my analysis, I would like to ask a few clarifying questions. What does this deregulation mean.
Interviewer: Traditionally, any company other than German Postal Service was legislated by law to charge at least 4 times the price of German Postal Service for delivering mail within Germany. This means that if German Postal Service charged $0.25 per letter, then no competitor is allowed to price their service below $1.00 per letter. This regulation has now been abolished.
My Response: I think I understand. So an insurmountable barrier to entry has now been removed, and the 20% anticipated drop in revenue is going to come as a result of competitors entering the industry.
Interviewer: Yes.
My Response: Great. May I have some time to structure my thoughts?
Interviewer: Of course.
[I would encourage you to do the same, and get some practice with the upfront structuring of cases]
Interviewer: I think I’m ready to begin. In order to understand the problem, I would like to start off by quantifying what the 20% drop in revenue will mean. To do this, I would like to examine the revenues andcosts of German Postal Service. Next, I would like to investigate four key areas to see how our client can respond. To start off, I want to examine the competition. I want to understand who they are, and how they are able to take business away from us. Next, I would like to look at our customers. I want to have a good understanding of who they are, what they look for, and the different segments that are present. Third, I want to take a look at our product offerings, and see if they are in line with what the customers want. In addition, I also would like to see how our offerings compare to our competitors. Finally, I want to investigate thecompany itself, and understand its core competencies, financial situation, and other factors such as organizational structure to see what kind of a response our client is able to conjure.
[The structure of my analysis was basically broken up into two major sections. The first section includes revenues and costs. This section is dedicated to figuring out the quantifiable effects of the revenue drop, and “What is happening” from a quantitative standpoint. The second section includes customers, competition, company, and products. This section is dedicated to figuring out “What to do about declining revenues”, as well as gathering qualitative information.]
Interviewer: Sounds like a reasonable plan. What would you like to know first?
My Response: To start off, I want to quantify the effect of this 20% drop in revenue. Before I dive in, is it our job to verify this revenue forecast?
Interviewer: You can assume that it’s accurate.
My Response: Excellent. May I ask how much revenue our client currently generates?
Interviewer: A billion dollars.
My Response: I would like to take a closer look at the revenue, and break it down into its components. Do we have any information on that?
Interviewer: What do you think are the components?
My Response: There are lots of ways to segment it, but I know that revenue is comprised of the average price per unit times the volume of units sold.
Interviewer: That’s fine. So let’s say that on average, the price per delivery is $1.00
My Response: So if our revenues are a billion dollars, and the price per deliver is one dollar, then our volume must be around a billion deliveries last year. However averages can be deceiving. Is there a big price variation between certain types of deliveries?
Interviewer: Yes, but for this case you can assume all deliveries are made at one dollar.
My Response: You mentioned that our client is anticipating a 20% drop in revenues, and I am interested in know whether this will be due to reduced volumes, or reduced pricing. Do we have any information on that?
Interviewer: They are expecting reduced volumes.
My Response: Interesting. So it seems like the new entrants to the market will most likely be taking business away from us by reducing our volumes. I think I understand enough regarding the revenues. Their revenues will drop from a billion dollars to 800 million dollars due to a drop in volume that is caused by new competitors. I would now like to move over to the cost side of the analysis, and see what’s going on there.
Interviewer: Sure, what would you like to know?
My Response: In the same time period where we generated a billion in revenue, how much were our costs?
Interviewer: 800 million.
My response: Do we have a further breakdown of costs?
Interviewer: How would you like to break them down?
My Response: Let’s go with fixed and variable.
Interviewer: Sure. The fixed costs are 700 million, and the variable costs are 100 million.
My Response: Wow that’s a high fixed cost. Am I right in assuming that the fixed cost will not change at all when our revenue drop 20%? If this is the case, and variable costs drop proportionally with revenues, then it means that our profits will go from 200 million to 20 million – a drop of 90%.
Interviewer: Your math is correct.
My Response: I think I understand everything I need to know about revenues and costs. Our numbers before the deregulation was a billion in revenues, and 800 million in costs. However, due to the extraordinarily high fixed cost, the 20% drop in revenue will actually result in a 90% drop in profits. This is not good at all for the client. In order to see what we can do about this, I would like to move on with the upfront structure I laid out, and examine the competition.
Interviewer: Sure.
[Up to this point, I thought that the case was going fairly well. There was a bit of a trap with the high fixed cost. If I didn’t segment the costs, and just assumed that they would also drop by 20%, then I would’ve missed a big point.]
My Response: The first thing I would like to understand is how these new competitors are going to take market share away from us. Do we have any information on that?
Interviewer: What do you think?
My Response: Since we are an established player, it’s probably going to take some sort of incentive for our customers to switch. My guess would be that the competitors are going to come in with lower pricing.
Interviewer: You’re right.
My Response: That’s very interesting. The reason I say this is because our client has an enormous fixed cost, and I thought this would provide a pretty significant barrier to entry for new competitors. Do we have any information on how they are able to have a lower price?
[At this point, I realized that I probably should have segmented fixed costs further in my previous analysis. This is where the case started to fall apart for me as it took me a very long time to figure out how the new entrants are able to achieve a lower cost.]
Interviewer: What would you need in order to figure that out?
My Response: I think I would need to know what our costs are made up of, and compare those segments to that of the competition.
Interviewer: What do you think the fixed costs are? Talk me through it.
My Response: Intuitively I would say that there are costs associated with collecting the mail from the customers, processing the mail at a facility, and delivering the mail to the recipient.
Interviewer: You are correct. What do you think is the largest cost?
My Response: Processing the mail at a facility because this requires a large building with lots of sorting equipment.
Interviewer: That’s interesting, but incorrect. Let’s think about this on a per letter basis.
My Response: Sure. If we’re looking at a per letter basis, I would say that the delivery cost would be the highest? This is because the mail sorting facility processes so many letters that the cost for each letter is fairly low.
Interviewer: You’re right.
My Response: Ok great. So do we know if the new entrant’s fixed costs are comparable to ours?
Interviewer: They are much lower. In particular, their delivery cost is much lower than ours.
My Response: Do we know how they are able to achieve this?
Interviewer: What do you think?
[I spun my wheels on this one for about 15 minutes. It turns out that the new entrants focused on mail delivery to large urban centers. In doing so, the workers can deliver many more units per hour – thus saving the new entrants significant cost with regards to worker salaries. I will now jump to the next portion.]
My Response: It seems that in order to compete we need to lower our workers salaries. Has management tried this in the past?
Interviewer: The workers are unionized and will not take a salary cut without good reason.
[I ran out of ideas at this point regarding what to do. It turned out that the key was to renegotiate the service level agreement. Instead of delivering mail six days a week, the new agreement will deliver 4 days a week. At this point we ran out of time. When I practice, we usually keep the cases to a maximum of 40 minutes to somewhat simulate a real interview. Since I missed this key insight, the interviewer gave it to me and asked me to conclude.]
My Response: After preliminary analysis, the team has concluded that German Postal Service should renegotiate the service level agreement with the unionized workers in order to respond to the competitive pressure put forth by the new entrants – which is resulting in a 20% drop in revenue. I believe this to be true for two reasons:
1) The new entrant’s competitive advantage is a low fixed cost due to the fact that they only deliver to urban areas where the workers can maximize their productivity. Since we deliver to all of Germany, we must reduce our fixed costs through lower worker salaries.
2) The unionized workers are willing to take a lower salary for a reduced workload. By reducing the working days by 1/3, we will be able to justify the lower salary.
[I believe that I could have cracked this case by doing the following things:
1) Segmenting fixed costs to see what was the largest portion at the beginning. I did this later on, but it would have helped had I done it upfront.
2) Asked some qualitative questions regarding how the company currently operates. This may have uncovered the fact that they currently deliver six days a week.
The feedback from my practice partner was that this case took some business intuition to solve. The options were basically to increase productivity/mailman or decrease salary/mailman. I feel that the biggest problem with my performance was that it took way too long. For those who have maybe heard this case before, it is an actual case that a candidate received in one of the McKinsey Germany offices. Any feedback or general comments would be much appreciated.]
Emerging Leader Career Dialogue
At the campus with muted red bricks and mortar, Firmsconsulting will again provide an opportunity for outstanding young consultants to spend a day with 3 of our partners – former principals and directors of McKinsey & BCG. In an early 20th century Victorian mansion, our partners will candidly unpack the likely challenges for incoming BCG, Bain and McKinsey analysts/associates/consultants as they begin their consulting careers.
We want to share our unique personal experiences on the path to partnership, and discuss the challenges you may encounter in managing cultural differences, finding mentors, leading your first engagement analyses and building client relationships. For female consultants this may include balancing the personal wish to raise a family, with your career ambitions. The event focuses on the first 2 years of your career.
To ensure discussions of substance, we are limiting participation to 6 exceptional students from any school in the US, in any field of study, who will be commencing their consulting careers anywhere in the world after 1 May 2014.
Format
Given the intimate size of the group, participants will be expected to engage in a free-flowing dialogue as we discuss the issues above, or any others raised during the day. To encourage such candid discourse, we do not have a prescribed format for the day. There is a central room with couches where bespoke one-on-one or group discussions can take place around a wood-burning fireplace. There are no fixed times or slots apportioned and we encourage you to spend as much time as you need with an individual partner, or with as many as you would like to.
To foster an environment where you can unpack especially private circumstances which may impact your career development, a private study has been set aside as well as an outdoor path to enjoy the foliage colors and jointly reflect on your choices.
The Chatham house rule will apply throughout the day.
Essentials:
– 22 November 2013
– The invite-only event starts at 8am and ends at 8pm
– Breakfast, lunch and dinner will be served.
– A smart-casual dress code.
Application:
– Offer letter from McKinsey, BCG or Bain,
– Resume,
– Cover letter used during your consulting applications.
Please send to [email protected]
Only shortlisted candidates will be contacted approximately 7 days before the event. Please make travel arrangements for you own account.
Preparation before the case training session:
1. Building general knowledge. I read news and business articles (mostly NewYorkTimes, Economist and Washington Post) every day to build my general knowledge (4-5 articles per day, mostly from the business section).
One interesting article I found was “Consulting on the cusp of disruption” from October 2013 issue of Harvard Business Review. The authors argue that the familiar pattern of industry disruption, with new players arriving with new business models which incumbents choose to ignore and ultimately becoming strong enough to compete with incumbents, can be observed in management consulting industry. Companies such as Eden McCallum and Business Talent Group (BTG) offer services at a fraction of the price of prestigious management consulting firms, and while they currently lack the reputation and brand of the top firms, new players slowly gaining ground.
2. I worked through the second chapter of “The mind of the strategist” by Kenichi Ohmae, recommended by Firmsconsulting. Some key learnings include:
Business strategy is all about competitive advantage. The purpose of strategic planning is to allow company to gain sustainable competitive advantage over its competitors. Strategy is about making company stronger relative to its competitors.
I would add to this that what will make company stronger is further divided into what will improve performance and what will improve the health of the company.
The author underlines that the word “strategy” should be reserved for actions that make company stronger vs its competitors, and not used for actions targeted at improving profitability or to improve training.
Strategy is about finding the way to be stronger than competitors at acceptable cost to the company. The author offers 4 basic strategies:
a) Business strategy based on KFS – focusing on key factors for success in the industry and devoting most resources to them.
b) Business strategy based on relative superiority – take advantage of differences in composition of assets of the company vs its competitors.
c) Business strategy based on aggressive initiatives – challenge the accepted assumptions of how business is done in specific industry. Change the rules of the game.
d) Business strategy based on strategic degrees of freedom – focus on innovation. Develop new markets or create new products.
3. I watched/listed to the following Firmsconsulting’s videos/podcasts: speaking advice for cases and invisible presentation techniques.
Some key things to remember:
In the beginning of the management consulting case, make sure you take some time to understand it. Ask yourself, “Is everything clear to me or do I need to ask clarifying questions?”. Clarifying questions are there to help you understand the case, not to solve the case.
Your recommendation at the end of the case should be a list of options and such options should be prioritized and pros/cons of your recommended options should be disclosed.
What was accomplished:
1) LinkedIn – I decided to keep my old photo for now (it is good enough, I just don’t like my hairstyle there) and I sent invites to about 5 consulting partners from second level connection, using “friend” option. 3 partners accepted my invite. To those who accepted I sent an email using a short email draft recommended by Firmsconsulting in one of the networking videos/podcasts thanking them for accepting my invite, informing them that I will be applying to their firm and asking if they had some time to have a discussion with me about the work, culture etc. Most have replied and I have a lunch scheduled with one partner and another lunch being scheduled with another.
2) Felix Session 9 (The Consulting Offer, First Season) – I worked through the case session, which was very a valuable and less intensive session.
Coaching style:
I wonder if Firmsconsulting must have the deficit teaching model to deal with the admission mistakes. It seems that for truly deserving candidates to be admitted to coaching program the aspirational teaching model should work.
Life of an engagement:
I thought the 6 slides recommended at the beginning of engagement approach is very useful for a consulting project. I never seen it in my own consulting experience but I see what a tremendous pulse check this can be at the beginning of the project, while there is still ample time to replace/coach underperforming project team members and adjust direction of the consulting project.
I think the discussion on how to manage your image during the consulting engagement, how to plan your career and how to set yourself up for attractive exit opportunities was very valuable and the type of information that I never had access to before, neither when I was a management consultant or by reading about management consulting.
Score out of 10: N/A (no cases were covered in this session)
Questions to Firmsconsulting:
1. I know that admission for the case coaching service with Firmsconsulting is very competitive. I wonder if Firmsconsulting must have a deficit teaching model? It seems that for truly deserving candidates who are admitted to the coaching program an aspirational teaching model should work.
Do you want to discover how to navigate the up or out policy in management consulting? When I started my journey in consulting, my answer to this question would have been, “Yes, a million times yes!”.
Michael asked me to write about my experiences at consulting firms, how I navigated the up or out policy and managed to get promoted so quickly, well ahead of the normal schedule in both consulting and banking.
Up or out policy in management consulting
As I was embarking on my management consulting journey, I was quite concerned hearing so many stories of my acquaintances getting managed out after less than 2 years in consulting. I was determined to go up, not out. After all, I did my second undegraduate degree just so I could get into consulting. I studied like crazy to get all As, while working multiple jobs, and there were rivers of blood and sweat leading to that very desired consulting offer.
So there was no chance in hell I was going to be one of those people to be labeled a “hiring mistake”. Not on my watch!
If you are not very familiar with consulting jargon you may be wondering, “what is exactly up or out policy?”. It is an HR policy consulting firms have which refers to predetermined time frames within which consultants either get promoted or managed out. You cannot stay at the same level for too long.
The implementation of the up or out policy is simple. If you are perceived as good enough to one day make partner, you will progress to the next level. If you are not perceived as good enough, they will ask you to leave.
I actually found the consulting environment to be similar to that of my MBA program. Although, in consulting people pretend to be a little less competitive, since everyone is required to act in a collegial way toward their coworkers.
You have to be friendly and helpful towards peer consultants on your engagement team. However, at the end of each engagement and at the end of each year you will be ranked against them to see who is more valuable to the consulting firm.
People compete with their colleagues in many other jobs outside of management consulting, of course. However, in most other jobs there is no up or out policy, so people are less competitive.
For example, in manufacturing there is generally no up or out policy in place. In fact, people rarely get managed out. You typically work with 5-6 people on a daily basis and none of them will be at your level. So there is less competition.
Comparatively, in management consulting you are often staffed on an engagement with another 2-3 people at your level. During the engagement you will need to be a good team player, helping each of them to succeed. At the end of the engagement and at the end of the year, you and your peers will be ranked to see who is more valuable to the firm.
You may even be counseled to leave. It happens very often.
Navigating up or out policy: 6 insights
My determination to figure out how to manage the up or out policy paid off. Although, to be frank, I almost killed myself in the process of figuring out what it took to stand out in the consulting environment.
I was promoted repeatedly, each time well ahead of schedule. The same happened when I did my stint in banking, so the ideas I am about to share with you are applicable beyond management consulting.
Implementing these ideas does not guarantee a promotion, of course. But it certainly will take you a step closer to it.
As promised, below are 6 insights which helped me the most in navigating the up or out policy:
1. Craft your personal brand by actively managing what you say and do
I leaned that you have to really filter what you say. Don’t say things that can hurt your profile if repeated by others. For example, don’t say that you realized consulting is not for you or that a particular partner is incompetent, even if those things are true beyond any reasonable doubt. Instead, say things that will raise your profile and worth to the firm.
You have to present to the world a very smart, organized, healthy, credible, committed and collegial person. A strong personal brand really matters in management consulting. If you are a disorganized, unprepared, uncommitted and sloppy mess people will not want to be associated with you.
Management consulting career is a unique beast. While in other jobs people are forced to work with you, in consulting you have to prove your worth every day to stay wanted for projects, and to keep your job at the next performance evaluation when up or out decisions will be made.
The trick I used to train myself to say things that helped me progress in my management consulting career was to pretend everything I say will be published on the cover of the New York Times, and everyone will read it. My friend recommended it to me when I was just a business analyst and it worked very well when I made an effort to apply it. It puts you in the right mindset as you engage with your colleagues.
Also, as much as you can, ensure your actions don’t leave room for any negative interpretation. Always observe yourself from the third person perspective. Consider what negative assumptions people may make about your behavior and adjust accordingly.
For example, lets say you are attending a weekend getaway, one of the perks of management consulting career. You are expected to play games and bond with your colleagues. Instead, you have to vigilantly work on unexpected deliverable a client requested that morning, out of the blue. Your first impulse may be to go and work in the dining hall so you can at least be close to all the fun and games. Don’t do it.
You obviously cannot announce to all leaders at the getaway event why you are not participating in team activities. Therefore, to avoid people making assumptions that you are not a team player, get permission to prioritize client work from the most senior person at the event or from your project leader, and go work in your room far away from anyone else.
By working while everyone else is bonding you are doing something against the group norm. If you have to do this, make sure as few people as possible have an opportunity to notice it.
This is important because, unfortunately, some people will make negative assumptions about why you are not participating in team activities. I am actually describing to you a real life example from my own career.
I was almost rejected to be a part of an important engagement because a principal leading the project was convinced I was not a team player. I asked why he thought I was not a team player, given we never worked together. His reply was, “Well, yes we never worked together but I observed you during our getaway weekend few months ago and you were the only person checking emails while everyone else were involved in team activities”.
This is an example of how you have to really protect your reputation at all times because by the time you can correct someone’s incorrect perception of you, if you are lucky enough to get a chance to correct it at all, they may already take away some opportunities from you.
It is important to remember that everything we say to the client and to the team members, and every action we take, enhances or damages our personal brand and can be used to evaluate us during formal or informal performance evaluations and in other situations. I know that managing your personal brand is a lot of work, but it is what it takes to get promoted.
2. Consulting is harsh for friendships
It is important to give some thought to how you will manage relationship with your colleagues. In consulting, more so than in most other careers, you are directly compared to your peers. The same peers you work with on a daily basis. So becoming friends with your colleagues may make your work life quite challenging and distracting since, during performance evaluations, you and your friends will be competing for the same promotion spot.
If you ever have been an MBA student, you will be better prepared for what you are getting yourself into with management consulting. MBA schools expect people to work in teams and build relationship with classmates and yet, while there is no up or out policy, you are ranked on a curve for each course.
For you to succeed and be above average, many of your classmates will have to “fail” by ranking below average. Given the importance of grades for recruitment and options after your first job post-MBA, it is not surprising it is hard to be too helpful to your classmates since aiding their success will mean taking away from yours.
In management consulting we have to deal with a similar situation. Helping our peers to succeed will often mean taking away from our own success. Not only in a direct sense in terms of an opportunity cost of time and effort, but also in an indirect sense. If your colleagues will be rated higher, you, quite possibly, will be rated lower. And those that are rated lower are often casualties of the up or out policy.
After much consideration and many disappointing experiences, I decided to stay away from friendships at work. Of course, there is no right or wrong way to manage this. You will have to make this decision for yourself.
In my opinion, the management consulting environment is not very different from boxing. You engage in a contest of mental strength, speed, endurance and creativity. The goal is to get one of the coveted promotion spots, which will mean knocking down the opponents (getting you promoted which means getting some of your peers managed out of the firm). If you befriend your opponents, it will make it harder for you to compete with them since you will have conflicting incentives. The friend in you will want them to succeed while the ambitious up and coming professional in you will want you to knock them down (get the promotion spot).
Also, if your colleague does something that takes credit away from you or deliberately makes you look bad, you need to stop trusting this person and never give this person a second chance. Good people tend to expect the best from people around them, and that is a wonderful quality to have. However, if someone signals to you that they are a jerk, believe them the first time. They are once and for all in a “don’t trust” category. You, of course, have to continue to play a role of a great team member but watch your back and don’t let this person hurt you again.
I usually have given people too many chances. That is my weakness. Someone will do something bad towards me, and then will become very nice towards me and I would give him or her a 2nd, 3rd or even 4th chance, only to be used and disappointed again. Learn from my mistakes, not from yours.
There are a lot more people on this earth than we will ever meet. Over 7 Billion of them! Why invest in relationships with people who already showed us that they likely not worth the effort? There are so many other people out there who are considerably more worthy of our time and friendship.
I must stress that I am a great team member. I have been consistently cited for this. I always help team members, even late at night. I merely aware of what can go wrong and strive to avoid be taken advantage of.
3. Strategically select key deliverables
It is important to exercise control over which pieces of work you will take responsibility for, when you can. This gives you a greater chance to develop a reputation for doing high quality work and obtain a higher performance rating on engagements.
In the beginning of each consulting engagement I look through the project plan and decide in advance which deliverables or work streams I want to volunteer for. I pick work items which are important and which I know I can do well. I wait for the opportunity to volunteer and, more often than not, I am able to get the piece of work I want to take responsibility for.
One of the key criteria I use when I pick the deliverables or work streams I want to be responsible for is whether I am able to find exceptional examples of similar work that I could learn from. Within consulting firms we have access to prior deliverables. We cannot use the content, of course. However, we often can use design, use prior work to brainstorm for ideas and model the structure of past deliverables. This saves a considerable amount of time and helps you stay on the right path.
In other words, I use past work as a template to determine the benchmark for “excellent”. If I did not have this benchmark, I would be flying blind and not sure how well I was doing.
Another important criteria I always use is selecting deliverables or work streams which are most crucial for success of the engagement. Firstly, this ensures that my effort is worthwhile since the work really matters to the team. Secondly, this makes certain that senior leaders will be spending a lot of time reviewing my work and, therefore, will be familiar with the tremendous effort, creativity and attention to detail I tend to display in my work.
4. Ensure you are perceived as a great team player
It is important to always be on the look out for opportunities to help your engagement team to excel. However, try to ensure that what you do in this regard is noticeable to your superiors. This is not about making others look bad or showing off. It is about transparency and fairness.
Also, try to get on engagements with good leaders who are known for giving credit where it is due. This will allow you to focus 100% on your work and not on ensuring that your work will be recognized.
We also need to remember that anything we do has an opportunity cost. As you probably know, the opportunity cost is the best alternative thing we could use our time and other resources for, instead of what we are doing. Therefore, we just cannot afford to do things for which we will not get credit.
5. Perform at the next level
I think it is important to try to play a role of one level up as well as your own role. For example, if you are an engagement manager, try to play a role of a senior engagement manager but also of an associate principal.
Obviously, it is important to do so in a respectful manner. Don’t step on toes of your colleagues who are one level up. However, you need to display qualities that show that you are ready for a promotion, so when your performance is discussed and an up or out decision is made, you are concluded to be the “up” material.
6. Use information to your advantage
Some information is not required to be shared and should be kept for one’s own advantage. We all dealt different cards in life. Those cards are assets that we need to leverage to achieve what we want. Some people have good looks, others parents’ with good connections and family money, or extraordinary intelligence. Information you become aware of is part of your cards in life, so keep it close to your chest.
There are only few promotion spots available for each level and all your peers want your spot. It’s a competition for talent and not a game where everyone gets a medal for participation.
Why the up or out policy is good news
Don’t be disappointed that the environment is so competitive in management consulting. There are more pluses than minuses in this situation.
You get to work with ambitious, strong and like-minded individuals. Some say, you are an average of 5 people you spend the most time with. You spend a lot of time with your colleagues so it is great you get to work with people who will challenge you so you will develop further and faster.
Moreover, because of the up or out policy, if you play your cards right you will be promoted within, on average, 2 years after joining the firm. If you are very good, it can happen in 6 months. Whereas in many other careers it is easy to get stuck in certain level for several years, in consulting the options are up or out. So if you are good, the up or out policy is actually good news.
Final remarks
In conclusion, even though management consulting firms have an up or out policy, I think overall we should be friendly to peer consultants, be good team members and bring to the team as much value as we can. After all, we have to always try to be our best self – the most amazing person we can be. Most my advice about being careful applies if you have a weak team. If you have a great team, you can simply focus on the work and that is the best part.
However, we should remember that we need to do visible and important pieces of work, don’t say things that can take us down if repeated, always think how can we make an engagement more successful, and ensure our actions and efforts are well known to the directors.
Most importantly, we should not allow our job to define our identity.
You know you are one of a kind and have a lot to offer to the world, and if as a result of some very unfortunate chain of events you will be pushed out of the firm, don’t let it take you down.
You were born to matter, to make a huge difference and make this world a better place. I know this because you are part of the Firmsconsulting community – a community of people who are hungry and bold, and strive for more. And if the firm could not recognize it, it is their loss and your gain. It means you were knocking on the wrong door, in which case it is best to leave the firm before you invested years of your life. It will allow you to find the right path while you still have plenty of time on this earth. Find something that brings you joy and where you can make a real difference.
As Steve Jobs once said, “We don’t get a chance to do that many things and every one should be excellent. Life is brief and then you die… And we have all chosen to do this with our lives. So it better be damn good. It better be worth it”.
QUESTION(S) OF THE DAY: What is your advice on navigating up or out policy in management consulting firms? Please share in the comments.
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Consulting vs Banking: 4 Key Differences
Many FC members, especially those currently completing an MBA, are considering consulting vs banking. I had a privilege to work in both fields so I can compare the pros and cons of both based on my own experience. Below are some key differences I noticed in being exposed to both environments.
Four key differences when comparing consulting vs banking
Asset vs resource:
The number one difference for me when comparing consulting vs banking is what I call asset vs resource. In consulting a lot is invested in your development and you are treated as a valuable asset to the company. People are the most important asset for consulting firms and while there is the up or out policy pressure, you do have to compete with only top performers on a daily basis, you do feel very clearly that YOU are important and your development as a professional is important for the firm.
In banking, you are a resource. Your development is, to a large degree, not important. If you deliver results they will promote you. If you don’t they will push you out, or to the side. I have seen VPs being demoted, senior business development person pushed to a lateral but less important role or made feel so uncomfortable they leave to join a competitor.
People are escorted out of the building the moment they say they are joining another bank. My friend went through this. He had to leave all his belongings, including his jacket and photos of his baby daughter as security walked him out of the building, the moment he said he was leaving to join another bank.
The culture shock for someone from consulting was huge, at least in my case. You get this clear feeling that you are just NOT valued, you are used. This contrast was shocking to me and I hated this about banking.
Cream of the crop vs politically savvy long-timers:
The next thing that was very different when comparing consulting vs banking is the type of people you get to work with. While you will be working with competent people in consulting and in banking, in consulting the caliber of your colleagues will generally be much higher.
In banking, most bosses are in their high seats because they served the bank for decades and know how to navigate the political landscape and be in good graces with important decision-makers. In consulting people at the top are generally more than politically savvy long-timers.
They are highly competent people who made tremendous sacrifices in serving their clients.
Tiring but exciting travel vs. missing out on seeing new places but sleeping in your own bed:
And the last biggest difference I noticed when comparing consulting vs banking is, of course, the travel schedule. During my years in banking, I only had to travel out of city one time on business and several times for training. While I missed not visiting amazing cities that I otherwise may never get a chance to visit, I also really enjoyed being able to plan my weekly meals, not having to pack all the time and live out of a suitcase and sleep in my own bed.
And nothing is really worth to be away from those you love.
Life is too short for this. I would say that overall, not traveling for work turned out to be a benefit, even taking into account the downsides of not seeing amazing parts of the world. So I would say this point is a pro for banking and con against consulting.
Clear and guided career path vs confusing maze with mostly lateral moves:
And the last key difference I found when comparing consulting vs banking is in navigating and figuring out a career path. In consulting the career path forward is crystal clear. You join as an analyst, you move to associate, you become engagement manager, junior partner and then senior partner.
In banking, my experience was a complete opposite. No coaching or guidance. It was not clear what was the career path. There is a maze and you can take various turns and hope to get somewhere at the end of the road.
The bank is huge. There are plenty of options available for your next role, but most of them are lateral. You could stay in investment banking and follow a set path, or do a lateral move to fixed income. Or you could go into wealth management. While all have their own set promotion path it is not clear where to do and what they really do.
My verdict when comparing consulting vs banking
So what is my verdict when comparing consulting vs banking? I would say, by far, consulting was, and is, a much better fit for me. I love learning. I put a lot into my work and I expect to be viewed as an asset to be invested in vs. a resource to be used and squeezed.
Also, during my years in banking, I met maybe a maximum of 4 people who were somewhat happy. All of them NEVER worked outside of financial services so I think they were happy because they never seen the world outside of financial services. Everyone else was at various levels of misery. In consulting most people I worked with were happy or at least content with their jobs, careers and future prospects.
So based on my experience, if you are anything like me, my advice is to choose consulting or something else, but don’t go into banking.
This is, of course, based on my experience only. I am sure there are a lot of very happy bankers and maybe the issue was the organization I worked in vs the entire banking industry. But I thought to share this so you can avoid some disappointments that I experienced when I picked banking over consulting after MBA.
Looking at FC clients, there has also been a big shift away from banking. Ten years ago banking and consulting dominated our client choices. Today, even when clients receive McKinsey offers, most end up at tech firms, consulting is second, PE/VC is third and investment banking and wealth management are in the lower top ten list.
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