Management consulting recruiting is an interesting beast. It’s the kind of recruiting that, on the one hand, your background matters very little – worked in IT? Ok. I don’t care. Worked in Strategy? So be it next. On the one hand, that’s great; on the other hand, if you have relevant experience and you don’t get the offer, but the guy who spent the last three years saving dolphins in Thailand or something does, you’ll wonder what happened. To be fair, this is kind of true for all recruiting – there will be people who get jobs who you can’t imagine how in the bleeding !@(# they got it – and then there will be people who don’t get the job who you would have easily put a big dollar bet on. The point, I guess, is simple: If you want to do MC, you can. If you want to do MC at BCG, Bain or McKinsey, you might get the chance. You just as easily might not.
The goods news is that most of these firms come and interview a lot of candidates, so you’ll get the opportunity to interview. Of course, if past experience is so heavily discounted, what does matter?
In effect it boils down to three things:
1. The Case
2. The Fit portion (McKinsey calls this the PEI, the Personal Experience Interview if memory serves me right)
3. and to a much lesser extent, you prior work experience, GMAT scores, particular school you attend, etc.
I’ll go into detail about those in a minute, but first its worth mentioning something about the recruiting timeline. It’s a good idea to have a backup plan – but that backup plan has to work. Banking as a backup to Consulting might work, but odds are it won’t (excluding the obvious fact that the interviews would be very very different anyway) – and the reason is timelines.
At the GSB it goes something like this:IB / Sales and Trading:
1st two weeks of recruitingConsulting:
Next 3 to 4 weeks, with the big 3 coming to campus, literally immediately thereafter.Corporate Strategy:
Some overlap with consulting, many don’t. Will run 4-8 weeks in length, with some scattered firms coming very late in the game. IM:
Scattered all about, some early, some latePE/VC:
Last in the line – often as far out as 2 to 3 months after IB. (Eg, April not Jan)
Having Banking as a backup to Consulting probably wont work because you might well have to make a decision on your banking offer before you ever get your consulting offer. Consulting as a backup to say PE/VC also doesn’t really work because the PE/VC recruiting is so far away. So, its just something to consider. It might vary at different schools, but keep in mind that although you truly can recruit for anything coming out of an MBA, you still have to pick “smart”.
But lets take a step back… before the interview… before the closed list. What happens?
There are dozens of events. The rule for getting on the closed list is, mostly, straight forward. If you have consulting experience, you’ll almost certainly get it (this is the only part where your background actually matters). If you don’t, you just do what you do for every other industry – you go to events. 1. Coffee Chats:
Informal get together with firms where you can just sit around and ask questions in a (supposedly) risk free environment. 2. L&L:
Similar panel like discussions where you get to hear about BCG’s latest foray into X or Y. There are a lot of these and while attendance isn’t necessary, it’s a good way to meet a partner or two.3. Meet and Greet:
Formal networking event. Put on suit and tie, name tag, go to a room and hover around trying to get in conversations with people without being awkward.4. Office Visits:
Sometimes invitation only, sometimes not. Usually a half-day at the office, walk around, meet people, say hello. These can often be self-sourced – meaning, if you want to work in Dallas and you plan on being home for winter quarter in Dallas, reach out to the Dallas office and plan something. 5. Office Specific Drink Nights:
Eg, I think one of the big three had a Dallas bowling night. Again, just more recruiting events.6. Function Specific dinners:
Eg Deloitte’s human capital practice might have a dinner separately from Deloitte’s strategy practice. Or McKinsey Strat vs McK BTO.7. Dinners / Drinks in general:
I guess it doesn’t need its own section, but its so common that you get used to it.8. Women only events:
Eg One firm had a “martini’s and manicures” event this year. Apparently it was a big hit. 9. Minority Target Events:
Special events held particularly intended for women, Hispanic American, etc etc. These are so unbelievably frequent that if you can join a minority group you should. 10. Practice Case Sessions:
Typically invitational only. Supposedly non-evaluative. Take that as you will. If I see someone and they strike me as retarded, non-evaluative or not, I’m going to remember that they seemed retarded. So, my advice is to speak up when you have good points, but otherwise keep your mouth shut. I have a few funny stories about these. 11. Day before the interview dinners:
Invitation only. This can be make or break. Typically the purpose here is to get to know the interviewers before the interview so that you are a bit more relaxed the next day when you meet them. You’ve already broken the ice, and, at least theoretically, the interview should go more smoothly.
So those are the events. In general, the more you go to, the more likely you are to make the closed list. So, now you’ve made the closed list. Congratulations, your life sucks.
Now you have to learn what a case interview is like. I’m going to go ahead and include one that I wrote later on. But before I do a few words on the case interview itself.
1. What is the case interview?
2. Why use the case interview?
3. Why will I hate the case interview?
4. Do I need frameworks?
So lets tackle 1 first.
The case interview is simply that – a case. A question posed with no obvious answer. These can involve simple questions like:
A European bank specializing in M&A has been losing share and experiencing declining profitability. What’s going on?
You are consulting for a manufacturer of hair products. You have launched a new shampoo product with projected sales of 10,000 units, but sales have now reached a plateau at 5,000 units. The company has experience in this business and believes its model to be very accurate. Further, it believes that its advertising campaign was very effective. What now?
A heavy truck manufacturer with operations in Europe and the U.S. has experienced growing market share combined with declining profitability. An expert has declared that outsourcing is the wave of the future while a business professor has claimed that it’s not the panacea some make it out to be. Your client wants to know what they should do. What issues would you need to consider in order to make a recommendation?
Your client is a small holding company that owns three cable television companies in the Northeast: Rochester, NY, Philadelphia and Stamford,. Each of these three companies is profitable, and each has been experiencing steadily growing sales over the past few years. However, the management feels that the Northeast is not the fastest growing area of the country, and, therefore, acquired another cable television company in Tucson, Arizona a little over a year ago. Despite every effort of management, the Tucson company’s sales have been stagnant, and the company has been losing money. How would you analyze this situation, and what could be the cause of the poor performance of the Tucson cable company?
Pizza Hut wants to enter the home pizza delivery business in Paris. The market for home delivery is currently dominated by Spizza Pizza. Pizza Hut has asked your consulting firm to determine whether or not they should. Ok, go.
How would you determine whether a location in New York City holds enough banking demand to warrant opening a branch?
A Baby Bell company is interested in diversifying into other areas besides telecommunications. They are considering entering the market for electronic home security systems. Would you recommend that they do so?
The CEO of the largest domestic manufacturer of photo film wants to enter the film developing business. He needs your advice on how to go about evaluation this idea. What now?
A large health care company has decided it is interested in substantially increasing the size of its operations. Its goal is to double total sales and profits in less than two years. What do you do?
Get the picture yet? Sometimes these will include mini math problems hidden in the case. You need to be comfortable estimating 12% of 25,000 quickly, or figuring out what 2% of 20% of 15,000 is, or working with large numbers. Eg: 500 million units for $12 each but they cost $6 to make and the first 200 million also cost $2 to ship, but the next 300 million only cost $1.25 each to ship. If the firm manufactures 650 million units and sells the first 500 for $12 and the next 100 for $11.50…. Things like that. Get accustomed to having numbers thrown at you quickly. Learn to decifer the important from the unimportant.
Some cases will include the estimation of market demand – testing your ability to do “back of the envelope math” – for instance, lets say that the client wanted to open up a car tire manufacturer in the US despite there being another 7 players in the market and you had been asked to estimate the potential for the business. You’d have to somehow estimate how many car tires you can sell in a year right? So you need to be able to quickly come up with a REASONABLE figure.
So I might say something like:
“Ok, well there are 300 M people in the US at the moment. I’d say 2/3 own a car, so lets say 200M cars at the moment. For the sake of simplicity, lets assume that I only sell car tires and not truck tires (they’ll correct me if I’m wrong) so we can forget about long haul trucks and the like, lets forget about SUVs with spares, etc. Of course, there are also regular cars for business use, so lets say roughly 100M business cars (not trucks), so we have a total of 300M cars for personal and business use. The issue here is what is the replacement rate? The average tire lasts, I don’t know, maybe 60,000 miles? The average person maybe travels about 12,000 miles a year, so tires last 5 years. So, lets say that roughly speaking of the 300M cars out there, every year about 60M need to have new tires. Cars have four tires last time I checked, so that’s about 240M tires. Of course, new cars are made each year as well, on the click of about 17M a year, so we could say about 320M new tires a year – that’s said, presumably approx 17M cars also go out of commission each year, so lets just go with 240M. The next question is how much of that total annual market I can capture. You had mentioned we have 7 competitors, so one possible metric is simply what my “fair share” would be – and then we can adjust from there. Based on that, I’d expect that I could theoretically capture up to 30M tires a year. Now, I might capture more if I have a better product, or a lower cost product or some other competitive advantage. Why don’t we explore our product a bit more – are there any obvious advantages to our product vs that of our competitors?”
The interviewer might reply something like:
(A) “That’s ok, assume we get 30M a year. Whats our profit?”
or he might say
(B) “Actually yes, our tire lasts forever. It never wears out”…
Before I go on think about the two possible responses above. I actually got a case like this about light bulbs once. Don’t read on, just think about it. If he said (A) what would you want to know? If he said (B) what you be worried about? What does (B) imply about (A)?
When you’ve thought about it go on.. I’ll show you two paths to the same answer.
With (A) You might go down the path: “Well, that depends on price and cost. There are three ways we can determine price, price based costing, cost based pricing, or comparables. Can you tell me the cost of making this product?” The interviewer responds: “Yes, it costs us about 20x as much to make a tire as anyone else.” You say “What?? Why? Whats special about our tire?” He says “It never wears out”. … and you move to B… the point here is that getting to B is critical to solving this question – if you don’t get there you never solve it. You have to get used to digging and finding the right answer
With (B) You might say “It never wears out? So it’s a one time sale? Well, in that case, I imagine we could capture a LOT of the market, but it’s a one time sale, so once we’ve sold the tires what do we do next? How much does it cost us to manufacture the tire? ” He replies, just like in A “20x as much”. At this point, I’ll spare you the rest of the case, but essentially what you find is that if the tire costs 20x as much then I need to price my tires at, at least, 20x that of my competitors, so a tire costs something like $2500. Each. Yes it lasts forever, but does that matter? The question becomes whether or not consumers care. You’ll notice this case has gone from a market estimation problem to a pricing and costing problem to finally a market and customer analysis problem.
Some other examples of these kind of estimates include:
• How much paint would it take to paint a 767 airplane?
• How many parking meters are there in Philadelphia?
• How many cows are there in Montana?
• How many packages of sugar does Starbucks use each day?
• How much coffee is there in Chicago?
• How many golfers tee off each day in California?
• How many light bulbs does your office use in a year?
• How many births are there in the US each year?
• How many seats are there in Air Canada’s airline fleet?
• What is the revenue of McDonalds on any given weekday?
And just about everything in between.
This is actually what the job is. If you find the questions boring, odds are, you’ll find the work boring. If you can’t think through the problem, odds are, you wont be able to think through the actual work either.
It’s a long and painful process to learn how to do these. I practiced a fair amount but didn’t get a big 3 offer (although I did get second rounds), there’s always an element of luck, but preparation helps.
Yes and no… there is a lot to say about this so I’ll leave it for now. There are a LOT of resources out there, and you should familiarize yourself with some basic frameworks.
So, heres a full sample case I wrote up that I think is a bit fun. Its untraditional and probably not the most representative example of what you might see, but I like giving it to people when they start because it’s the kind of case that you should be able to think about without having done any prior preparation. For what its worth, most cases wont be so “oddball” – most tend ot focus on marketing, pricing, cost issues, etc.
For new case takers: This case presents an interesting challenge but does not require the case taker to have memorized any particular framework. It can thus be used as a very early case in someone’s case prep regardless of their level. It combines critical thought, analysis and some rudimentary mathematics.
For experience case takers: The case is intended to be somewhat frustrating – forcing the candidate to think through a rather exhaustive list of possibilities. Candidates looking to practice the MECE concept (similar to a McKinsey interview of “What else?”) will find this challenging. It is also a challenging case because no framework is likely to fit well. 1. Situation:
Our client, the Guggenheim museum, is looking for help understanding why they are experiencing big problems with visitor congestion in their museum. You have been hired to resolve the issue. You need to identify the cause of the problem and recommend a solution. 2. Additional Information:
When the candidate asks about the layout of the museum should you provide the below. If the candidate doesn’t ask, let them probe around a bit and then provide.
Here is the Guggenheim:
The exhibits are held in the circular dome like shape. The layout of the exhibits is in a pie like format as follows:
There are a total of 6 Exhibit rooms per floor. There is a hallway that goes around the room and through the center (in gray). Each exhibit has a door leading into the exhibit room. There is one elevator that leads to the entrance at the front. People exit the elevator and move to their desired exhibit room. What next?3. Framework:
The beauty of this case is that there is no single appropriate framework. Let the candidate attempt to build one, but they are likely to find themselves stuck quickly. 4. Data and Solution:
Ask the candidate: What should we look at?
Often the candidate will list off many obvious things. The point is to drive them to a very specific solution. Give them the chance to exhaust ideas. In general, the answer is “no that’s not it”. Some common questions are below:
• Can we add more doors to the exhibit rooms? No.
• Can we stagger the flow somehow? No.
• Is it always busy? Yes.
• Are some floors worse than others? No, they are all bad.
• Can we add a second elevator? No.
• Are certain parts of each floor worse? No.
• Has congestion always been this bad? Yes.
• Has volume increased over time? No.
• Has the kind of people visiting changed? No.
• Do people stay longer than they used to? No.
• How long do people stay at the museum? Doesn’t matter, congestion is always bad.
• Are certain exhibits more popular? Yes, but it doesn’t matter. And no, we can’t move them anyway.
• Can we expand museum hours? No we cannot.
• Can we move exhibits? No.
• Can we do anything at all with the layout? Nothing substantial no.
• Are there stairs somewhere? No, and you can’t add them.
• Can we put in timers in the rooms that limit amount of time? Yes, but customers would backlash, so no.
• Can we raise ticket prices to reduce volume and ease traffic? A good idea, but no, we cannot.
• Is the problem seasonal in any way? No it isn’t.
The case is now about optimization. Guide the candidate to think about how people flow when they get off the elevator. Eventually the candidate should realize that someone has to decide whether to go east or west when walking out of the elevator. If they don’t get there (many don’t), you can ask them to think about how people get to the exhibits they want. The next question they should ask is whether or not there are signs or maps that are handed out to the visitors.
Once the candidate identifies that the problem deals with flow, and specifically, signage or maps – provide the candidate with the following statement.
As it happens, we do provide individuals with maps. We do not however, have signage on each floor. Do you think we should put it there?
All candidates will say yes. Unless they elaborate, you should push them to state what the signs should say. Force them to be explicit. The candidate should realize that given 6 “slices” the question becomes when does it make sense to go east instead of going west and when does it make sense to go through the middle? If the candidate does not realize this, help them by asking:
Ok so we put signs up near the elevator and exhibit rooms and in the middle. Pretty much everywhere. But what should they say?
A typical candidate response is usually “the signs should say the right for 1,2,3, to the left for 4,5,6”. If they forget the middle ask:
When should you go down the middle?
They will typically reply “when it’s shorter”. Insufficient! If you receive this response, ask the candidate to demonstrate when it is shorter to go down the middle.
In general, the answer is as follows (A detailed complete solution follows later in the text): The individual should go right to get to rooms 1 and 2. The individual should go down the middle to get to rooms 3 and 4, and the individual should go left to get to 6 and 5. If a candidate says this, ask them to explain why that is. They should, again, be explicit and provide the solution similar to that below. Simply stating “cause that’s the shortest path” is insufficient! Push the candidate to demonstrate why that is.
Here are the explicit steps required to solve the last part of this problem. If the candidate needs help, you can push them along with these questions. Only use if the candidate cannot solve on their own.
1. How far is it from the elevator to the other side? Given a circle with radius “r”, the distance down the middle to the other side is: 2r.
2. What is the circumference of a circle? The circumference of the entire circle is 2πr.
3. So how far is it to room #1? The degrees to one room away (in either direction), moving along the edge is 60/360. Thus, the circumference of that distance is 1/6 * 2πr = (1/3)πr. This can be approximated as roughly 1r.
4. So how far is it to room #2? The distance two rooms away moving along the edge is 120/360 * 2πr = 1/3 * 2πr = (2/3)πr. This can be approximated as roughly 2r.
5. So how far is it to room #3? If you were to go along the outside of the ring to get to room #3, you’d travel 180/360 * 2πr = ½ * 2πr = πr. This could be approximated as 3r.
6. Therefore, should you go down the middle for room #4? As identified in part #5 Since, π > 2, then by definition πr must be greater than 2r. Therefore the distance to get to room #3 via the outer ring is 3r. The distance via the middle is 2r. Therefore: going along the outside to get to rooms #3 or #4, rather than down the middle, is inefficient.
7. The solution can be generalized for N rooms. If the arc length of the outer passage is less than 2r, the visitor should go along the outside, if not, they should go along the middle.
The client has asked us for our recommendation. What would you tell the client?
A good response would be crisp and simple:
“The problem may be that people are not finding what they need or are getting to their locations in an efficient manner. We need to optimize how an individual gets to an exhibit once they get off on a given floor. Based on our current configuration, I would recommend that we optimize movement by directing flow down the middle of the rooms for rooms 3 and 4, to the left for 5 and 6, and to the right for 1 and 2. We should add appropriate signage when you get off the elevator to direct individuals.”
Ok that’s it for now – its 10:00am and I have to study.
The first round interview what to expect
The second round interview and whats different
More on cases
Whatever else you ask for
If this helped, kudos it, took a long time to type it up!