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CHAPTER 1: INTRODUCTION
• Popular profession
CHAPTER 2: THE SCOOP
• Industry history and trends • Strategy consulting • Operations consulting • Information technology/systems • Human resources consulting • Finding a firm that fits
CHAPTER 3: ON THE JOB
• Analysts and associates • Types of consulting projects • The project life cycle • One typical presentation • A day in the life of an associate • Career progression in consulting • Up-or-out... sounds painful • Lifestyle in the industry
CHAPTER 4: GETTING HIRED
• Get your foot in the door • Is consulting for you? • Resumes and interviewing • The resume/behavioral interview • Behavioral questions
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• The case interview • Case tips • Sample case #1 • Sample case #2 • Sample case #3 • More sample cases • Guesstimates • Sample guesstimate • More practice guesstimates • Brainteasers • Practice brainteasers
CHAPTER 5: OUR SURVEY SAYS
• Cutthroat camaraderie • Pay: Awesome • Food, sabbaticals, and travel... too much travel • Social life: Out on the town • Long (and odd) hours • Management: Flat or pyramidal • Dress: Well-rested suits • Diversity: The changing face of consulting? • Offices: Looks like money • Support staff: Uneven • Training: Keeping up-to-date • The few, the proud, the consultants
CHAPTER 6: APPENDIX
• Industry buzzwords • Recommended reading • About the author
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Chapter 1: INTRODUCTION Popular profession Consulting continues to rank among the most popular professions for emerging MBAs and college graduates, and for good reason. The consulting industry has seen revenues grow about 16 percent per year. Consulting is one of the best-paid professions for recent grads, offering new graduates lucrative salary packages and the chance to rub shoulders with top management of Fortune 500 companies, while working on some of the most interesting issues that these managers face. At first glance it looks like a no-brainer. But don't be hasty. Consulting careers have much to recommend it, but it's no walk in the park. Pressures are high, travel is onerous, and the interview process can be painful. Before setting off down the consulting route, you should develop a good understanding of where the industry is going, what your role will be, and how closely it fits with your needs and personality.
CHAPTER 2: THE SCOOP
Industry history and trends A brief history of consulting Life before consultants, like life before computers, is a peculiarly difficult state of affairs to imagine. In fact, the term and the business was only invented near the start of the 20th century. The first consultants drew from their engineering background to conduct time- and motion-type projects for their clients. When James "Mac" McKinsey, a professor at the University of Chicago, set up his firm of "accounting and engineering advisors," he began by offering a similar consulting proposition. However he soon developed a unique, integrated approach for his clients which he called his General Survey. Instead of the traditional engineers, he began to recruit experienced executives and trained them in a framework of analysis that considered goals, strategies, policies, organization, facilities, procedures, and personnel. In the late 1950s, a number of other consulting firms emerged with focused strategies and novel frameworks. The most notable innovator was The Boston Consulting Group, which, following work with a semiconductor manufacturer client, developed the experience curve – the idea that in most industries, declines in cost are a function of cumulative experience. BCG later extended their original concept by developing the growth share matrix, a tool used to assess the attractiveness of a company within a particular industry. The present day Consultants and their clients have both changed. The typical company that decides to hire consultants nowadays is likely to be a lot more sophisticated in its own in-house skill set and
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IT changes and globalization). and are expected to top $100 billion by 2000. At the same time. consulting revenues have been growing 16 percent annually. IT. making sure their advice is successfully put into place. It's no wonder they've turned an eye toward consulting itself. Though global recessions bring many issues consultants can address. companies tend to cut outside costs (including consultants) when budgets are lean. The project mix changes as well. systems consultants are trying to get more strategy assignments. Cyclical nature Consultants are good at estimating future revenues for present-day industries. A 1990-91 downturn reduced new hiring to a trickle. That strategy is changing. Hard-hit areas include strategic advisory. Consulting. Clients increasingly demand that consultants come in with prior knowledge of their industry. it's not as prone to extreme boom and bust cycles as other industries. Growth has been fueled by aggressive penetration of emerging markets by corporations (who need consultants to assess the new markets) and rapid changes in client industries (privatization. the conventional wisdom at McKinsey and its ilk was that more was to be gained by developing a stable of generalists who could apply their learning across industries and geographies. In recent years. In downturns. However. Consulting companies are vulnerable to layoffs and recessionary cost-cutting. This means more competition for all consulting firms. they are requiring consultants to specialize sooner. Until fairly recently. value-based management and HR projects tend to rise. and are hiring area experts as consultants who may follow a different (and possibly accelerated) career track from the typical MBA. Specialization The big trend in consulting leads to specialization. such as investment banking. There are still differences – the strategy consultants don't yet have powerhouse computer and systems skills. and will have a fairly clear idea of what they think their business is all about. While most of the larger firms still hire at a generalist level. requiring consultants to sort things out. and marketing/sales engagements. as the ultimate service industry. prospective consultants should note that while the industry is cyclical. This increased sophistication has led to a number of developments.more demanding in its requirements from a consulting project. Clients may have their own strategy group. depends heavily on the prospects of large corporations. That's why strategic consulting firms are moving into implementation. though the number of re-engineering. which will affect you as you make your decision to enter the industry. Implementation Many clients are no longer willing to pay for mere strategic musing. and the systems players are having a hard time convincing clients that they can really think "out of the box. Page 5 of 44 . and caused some consulting firms to fire consultants and close offices." But the success of strategy/systems hybrids like Booz-Allen & Hamilton suggests convergence is only a matter of time.
one consulting firm may formulate an overall strategy for a client.S. Venture capitalists are rushing to fund business to business e-commerce plays – and companies are increasingly turning to consultants to determine key e-commerce strategies. This may be changing. (What's next. For example.-based consulting business up for an IPO or sale to a private investor. savvy industry players know that the real killer app for business – and consulting work – will be in business to business e-commerce. But while Andersen Consulting and Arthur Andersen have been not-so-fondly waving goodbye. already has gone public. Price Waterhouse and Coopers & Lybrand merged their operations. operations. other firms have been saying hello. KPMG is considering putting a 30 percent share of its U. that has been raging since January 1998. though Y2K consulting work is slowing as the year 2000 approaches. consulting firms continue to expand and divide. Future trendspotting While investment banks have gone public for some time. Rumors persist that Andersen Consulting is considering going public. The sale would bring in hundreds of millions of dollars in capital. under the Frankenstein-like moniker of "PricewaterhouseCoopers. information technology." The IT consulting boom: Thanks to Y2K? Consulting firms with information technology competencies are seeing business boom. While most might still see e-commerce as a means for consumers to buy books and knickknacks online (just ask Amazon and eBay). consulting firms have traditionally shunned the idea of going public. The major growth area IT consultants are now banking on is e-commerce (a field so new it hasn't quite been decided whether it has a hyphen or not). Perhaps the most celebrated divorce has been that of Andersen Consulting and Arthur Andersen. Diamond Technology. especially as companies and governments around the world scurry to catch up with the looming millennium bug (Year 2000. Strategy consulting Consulting Categories The types of consulting that firms offer can be divided into four general categories: strategy. a painful saga more extended and convoluted than Gone With the Wind.consulting firms frequently attract distressed clients who need advice to cope with the economic situation. including their consulting units. Consultants at IT consulting firm Cambridge Technology Partners also profited when that firm went public. or "Y2K" within the industry). A smaller firm. look closely at the Page 6 of 44 . and human resources. publicly traded law firms?) Merging and separating Like outsized amoebae. These categories often overlap. and most of the time a consulting firm will offer two or three different areas of consulting.
and how the theaters can reposition themselves to capitalize on new markets. Strategy consultants typically work with the client's most senior management. Page 7 of 44 . investigate resource allocation. Understanding why Broadway theaters have been losing money. the CEO and board of directors) understand and face the strategic challenges of running their company or organization. which are more likely to hand-off their findings to the client and leave. determining what kind of snacks the Chinese will want. While strategy consulting firms have historically made their recommendations. since those at the top normally set a company's strategy and long-term plans. heighten product quality or restructure entire departments and organizations (a specialty of the "re-engineering" craze in consulting in the early 1990s).efficiency of its operations. operations consultants ensure that a client can reach these goals. Examples of typical strategy consulting engagements: • • • • Figuring out why a clothing retailer has lower sales per square foot than its competitors. order fulfillment. and customer service. cut operating or inventory backlog costs. improve distribution." Major consulting firms now offer both strategic and operations services. distribution. operations consultants are more likely to assist in making sure their suggestions are "implemented. increasingly their clients are expecting the strategists to stick around and implement their suggestions. Strategy Consulting Strategy consulting is aimed at helping a client's senior executives (for instance. such as production processes. Unlike strategic consultants. and suggesting potential acquirers. Operations consultants may investigate customer service response times. and implement the appropriate information technology solutions to improve operations. and walked away. and how much they will pay for snacks. Helping a computer and peripherals manufacturer to divest non-core businesses. That's why more and more consulting firms now tout their "implementation" capabilities. determining the value of the businesses on a stand-alone basis. Bain & Company Boston Consulting Group McKinsey & Company Monitor Company Leading strategy consulting firms include: • • • • Operations consulting Operations consultants examine a client's internal workings. presented a "deck" (a report detailing the issues and recommendations). While strategy consultants set the firm's goals. Positioning a snack manufacturer to enter China.
IT consultants (also called "systems consultants") work with corporations and other clients to understand how technology can work for the organization. Examples of typical IT consulting engagements: • • • • • Advising a mutual fund company on how to provide its clients with access to account information online. Andersen Consulting Deloitte Consulting Gemini Consulting PricewaterhouseCoopers Consulting Leading operations consulting firms include: Information technology/systems Information Technology (or "IT") consultants tap into the world of technology to help clients achieve their business goals. Determining how a restaurant chain can save on ingredient costs without changing its menu. Troubleshooting on a major SAP software installation. though this work is slowly evaporating as the year 2000 approaches. Creating a new logistical database for a tire manufacturer. Leading information technology consulting firms include: Page 8 of 44 . and the rush to upgrade computer systems before the millennium bug hits (many computers are unable to process years that do not begin with 19) have boosted the fortunes of IT consulting in recent years. Working with a newly-merged commercial bank to increase its customer response efficiency. design custom software or networking solutions. Upgrading a major law firm from WordPerfect to Windows. ensure that all systems and programs are compatible. Consulting companies who once courted Y2K specialists and ERP (enterprise resource specialists) to handle problems associated with the millennium are now confidently turning to what they believe will be the next big thing: solving problems connected with electronic commerce and electronic retailing (or e-tailing) on a widespread basis.Examples of typical operations consulting engagements: • • • • • • • • Streamlining the equipment purchasing process of a major manufacturer. and see to it that the new system is properly implemented. Working with a telecommunications company to avoid the "Year 2000" (aka the Y2K) bug. The changeover from mainframes to networked PCs.
like BCG. Human resources consultants are called upon to maximize the value of employees while placing the right people with the right competencies in roles that are value-added. This may involve so-called "change navigation. Page 9 of 44 . companies have determined that investing in their human capital pays off. and fostering employee creativity through "process innovation. or rolling your sleeves up and digging into the operational details of a company? It's well worth asking questions that yield useful information about the working style and culture of the different consulting firms. the most up-to-date tech and the most streamlined operations don't mean anything if the right people aren't there to put them into place." developing or altering work cultures. This results in a number of differences in working style. is counseling and processing laid-off employees. while others. now that downsizing is a way of life. but the best business strategies. Do analysts/associates work on more than one project (also known as an engagement or study) simultaneously? Some companies. you'll have to become adept very quickly at managing expectations and making complex prioritization and trade-offs as to what you can get done in the time available. like McKinsey and Booz-Allen & Hamilton.• • • • American Management Systems Andersen Consulting Cambridge Technology Partners Diamond Technology Partners Human resources consulting It helps to have a good plan. "managing relationships" to ensure focus on customers and open communication. building "competencies" through better and more efficient training programs. Increasingly. prefer to staff consultants on up to five engagements at once. assign their associates and analysts to a single project at any given time. That's why the field of human resources consulting is on the upswing. • When on a number of studies at once. Leading human resources consulting firms include: • • • • Buck Consultants Hewitt Associates Towers Perrin Watson Wyatt Worldwide Finding a firm that fits Are you more interested in working on high-level strategy issues." Another growing area of human resources consulting.
For some consultants. or are they focused in a small number of key sites? How does this compare with their client distribution? This inquiry will tell you something about how much traveling consultants at a firm do. The number of offices is one way of determining frequency of travel. the answer to your query will tell you a lot about the style of work that you'll be doing: • On the one hand. Bain. while for others the prospect of another airport lounge might be enough to send them running from the profession. or use this time to get the maximum exposure to the range of experiences possible? Working on multiple projects normally means that you'll spend more time in the office versus out at the client – after all. It's also worth asking about the firm's policy on staffing between offices. due to the smaller number of local offices. Page 10 of 44 . requiring you to spend time schooling them in your consulting methodologies.• If you're only planning to stay in consulting for a couple of years. It allows you to cut your teeth in developing management skills (something in which consultants are sadly lacking). Consulting firms with strong specializations are also more prone to sending consultants on extended trips – because a specialized assignment requires the best consultants. you can't really sit at Client A's office discussing Client B's distribution problems on the telephone. while Gemini and Monitor are well known for sending their consultants to faraway destinations for extended periods. or day-to-day interactions with lower-level client staff who are full-time members of the project team? Again. Would you prefer to dig into fewer areas in more detail. you may be concerned about the trade-off in breadth versus depth of industries and study types that you'll be working on. • Does the consulting firm have offices worldwide. it could be argued that working with client team members is the most valuable thing that an associate or analyst can do. no matter where they may be based. especially in European and Asian offices. This means that even if you're assigned to the London office. On the other hand. client team members can be a real pain. Some consultancies are taking a more pan-regional approach to staffing projects. McKinsey and Andersen Consulting have offices in most major locations around the world. • Does the project team include both consultant and full-time client members? While almost all consulting firms will mention "considerable client contact" as one of their attributes. Moreover. it will give you a better insight into the industry and company that you're working with (especially valuable if you are considering jumping ship to a client at some point in the future). it's worth examining further – does this mean weekly update meetings with senior client managers. and adjust your schedule to their other commitments. extensive travelling and the accompanying airmiles are a turn-on. BCG. and what proportion of their studies tend to be out of town. pull them through the "wallow phase" (when there's just too much information). you may be instantly shipped off to Hungary – or Chiang Mai.
the associate may find that his role is little different to the analyst role described above. although the differences between a second-year analyst and a new associate are less pronounced. you may be using consulting as a means of remaining industry-neutral in the short term while you assess your options. once you're in a firm and have done a couple of successful projects in a particular area. or geographic expertise? As you enter the consulting fold. quantitative aptitude. The analyst (college grads) and associate (post-MBA) roles will involve different skill sets. an analyst may have responsibility in working with these client team members. Where client members are involved in the team. At the onset. Most consulting firms have training programs. function. a year or so later. Analysts will frequently be in charge of gathering and analyzing data.. he will be effectively managing the work of the Page 11 of 44 . That's why you should consider consulting firms based on their attitudes to specialization. and pulling this into "the story" that the team will present to the client. rather than any specific industry or functional experience. Almost every consultancy encourages its consultants to gain an area of expertise as they increase in tenure – the question is. specialization. The analyst role Analysts are selected for their bright. The individual experience of a consultant varies along a spectrum of firm styles.At what level do consultants begin to specialize by industry. and to a certain extent managing their work on the team.. Chapter 3: ON THE JOB SUB-CHAPTERS: < Analysts and associates > Types of consulting projects • The project life cycle • One typical presentation • A day in the life of an associate • Career progression in consulting • Up-or-out. you may have a clear idea of an industry or functional areas in which you wish to specialize. Analysts play more important roles as they gain experience. geographic differences. The associate role The associate role evolves rapidly as the consultant gets up to speed and gains the confidence of more senior consultants. sounds painful • Lifestyle in the industry Analysts and associates Trying to define and describe the role of a consultant is far from easy. you'll often be asked to do other assignments in the area. On the other hand. how quickly does this happen? Most of the big strategy firms prefer their new hires to follow a generalist track for a couple of years before beginning to specialize. and willingness to learn. but the main learning occurs on the job. That said. and the huge range of roles that a consultant can take within a particular project. drawing conclusions from the analysis. inquiring minds.
their traditional organization structure may become unwieldy. they are a political minefield – which is why the consultants were hired in the first place! Cost-cutting (or re-engineering) projects Consultants are also called in when the company needs to self-prescribe a bitter pill and would prefer to call in an outsider to take the blame. The consultant team examines whether the company is competing in attractive sectors of the market. and structuring (and increasingly delivering) presentations at client review meetings. whether there are likely to be fundamental shocks to the market. and is very data-intensive. The team may be asked to recommend whether one channel of distribution is preferable to another. or evaluate how the sales force functions within the company. shifts in emphasis on reinvestment in the business. or both. This typically happens after a change in leadership or following disappointing results. A cost-cutting project looks at all areas of cost. analysis phase. propose more effective marketing strategies. normally requires a significant period of time at the client site. assess whether distribution via parallel channels is viable. particularly in this era of growing technology impact on distribution. The team may recommend acquisitions or divestments. Its satisfaction lies in the concrete nature of its recommendations – and the immediate impact of saving the client money. Consultants are often called in to advise the company on an optimal organization – centralization versus decentralization? Product versus geography? Line versus matrix? Because these projects often involve reallocation of power or territory. a client will ask a consultancy to review and evaluate their overall strategic direction. He will become responsible for much of the hypothesis generation. though it may also be occasioned by pressure from the board of directors. Can the company reduce raw materials costs? Is there excess inventory? Are marketing funds being spent effectively? Are central costs being duplicated in the divisions? This type of engagement is very hands-on. Types of consulting projects Characterizing the typical role of consultants is complicated by the diversity of project types they are exposed to during their careers. Sales/marketing/distribution projects Consultants are increasingly being asked to assess marketing and distribution strategy.team (client team members and analysts) and managing the day-to-day relationship with the client. or changes in organization or personnel. Reorganization projects As more companies expand globally and make more acquisitions. The project life cycle Page 12 of 44 . Cost-cutting does not just mean the identification of job redundancies. These can be categorized into a number of broad headings: Strategy projects In strategy engagements.
it's worthwhile trying to get involved in the engagement at this early stage for two reasons. What data is required? How can it be gathered? Which team member will take responsibility for each part of the analysis? Data gathering and analysis The meat of the engagement is in the data gathering and analyzing phase.These are the typical stages of a strategic consulting engagement. It may or may not touch upon the vulgar topic of remuneration! Although the letter itself is a little dry and boring. and other reference materials. Although the task is focused by the hypothesis generation. Pitching/Letter of Proposal In comparison to investment banks. The LOP lays out what the consulting team will focus their efforts on in the engagement. Page 13 of 44 . brokers' and annual reports. Your initial port of call is the consulting in-house library. and how long the engagement is expected to take. data gathering can be fairly overwhelming. and sometimes client members. management consultants spend comparatively little time in a formal pitching process. Ideas will be tossed about without any data backing them up. it gives a new consultant a firsthand opportunity to see how more senior members of the team tackle the problem set before them. and narrow these down to a number of hypotheses that they can go and test. is intended to limit the data gathering and analysis stage so the consultants are not "boiling the ocean. You then leverage the intellectual capital of your consulting firm to identify firm experts or consultants who have worked on similar but non-conflicting projects. The final part of the brainstorming stage is to take each of the emerging hypotheses and determine how they can be proved or disproved in the analysis stage. either by responding to the initial approach of a current or potential client. the engagement starts. On the other hand. generate the spectrum of options that their analysis could follow. Secondly. closely followed by that of the client – both of which tend to result in large stacks of text-lines. On the one hand. The idea is for the team to get down into the details of the problem. and you'll wonder how on earth you're going to make any progress. it provides a good chance to get up to speed on the client and industry before the study starts in earnest. there's some chance you might be able to mitigate the partner's (frequently) overly optimistic estimates of how quickly the team will be able to complete the engagement! Brainstorming/hypothesis generation With the LOP signed. The ultimate aim of this is the drafting of a Letter of Proposal or Letter of Intent (LOP/LOI) – the nearest a consultant gets to a contract with the client. Where associates may get involved is in some initial non-chargeable work to support the partner's conversation with the client. used by most of the major consulting firms. Firstly. This hypothesis-driven approach. what the results will be. Partners carry out the main pitch process. the team may not seem to be making much headway. This brainstorming stage is at once the most exciting and the most frustrating stage of the project. or by identifying a new or follow-up study with past clients. what consulting and client resources will be required. The first few days are normally spent in an intensive round of brainstorming involving the whole consulting team." or considering an overly broad range of data.
Formal presentations are presented as a landscape of exhibits. but none that exactly proves or disproves your point. there is always last-minute intensive work. notes how it alters the rest of the story. Where the client is involved on a day-to-day basis. Pulling out conclusions and building the story Developing a story is an evolving process throughout the project – it starts at hypothesis generation. This is where a consultant's ingenuity comes to bear – to find a way of re-cutting the data. If most of the analysis is taking place back at the office. that person will often delegate part of the presentation to the manager. As a forcing mechanism. Each page illustrates a message that comes together to form a structured storyline addressing our conclusions to client issues. held together by a storyline. the likelihood is there will be plenty of it. Therefore. The presentation itself is normally a PowerPoint book that we will walk through with the client. you're also likely to tap further internal sources of information at the client. As a rule of thumb. It's an elaborate process. of course. While the partner or the director with the senior client relationship tends to run the meeting. communication may be more frequent and informal. combining different data sources. updates with the client project manager may be scheduled on a fortnightly or monthly basis. Consultants present each finished phase of a project and their major findings to the board of directors. One typical presentation What actually happens in a presentation depends on the consulting firm and the client? One strategy consulting analyst describes a typical presentation: "However early in the project planning we start planning for the final presentation. and making judicious assumptions in order to end up with data that definitively supports or negates the hypothesis you are trying to test. the team is forced to helicopter back up to the top level on a regular basis and check that their analysis directly answers the client's key questions. Stories abound about the lengths analysts resort to in order to gather data – including sitting outside a competitor's factory counting trucks going in and out for a few days! However the data is collected. I block out the week before a major presentation – there's little hope of maintaining a semblance of a social life during that period! The last few days are concentrated in obtaining and analyzing the final pieces of data to tell the full story to the client. the team tries to place it in the overall puzzle. By developing the storyboard up front. Page 14 of 44 . Sources of external information are more varied. Some studies may require you to consult industry experts for their experience. based on their emerging hypotheses. Presentation to client How frequently and in what format the team makes update reports to the client varies widely depending on the engagement. others may necessitate more hands-on measures. many consulting teams will draft the final presentation at that stage. and revises the further analysis to take that into account. subject to change. from systems and databases and via interviews with client personnel. even to an associate who has taken ownership for that part of the work. and.During this stage. as each new piece of analysis emerges.
" A day in the life of an associate Greig Schneider is an associate at McKinsey's Boston office. as we will have been updating the various constituents on a regular informal basis. and begin the debate on the content. Today's meeting concerns what kind of presentation would be most effective. and wants to meet to discuss the progress review. but everyone recognizes how important it is to get the message into a clear and coherent form that can easily be digested by the client. A headhunter looking for a divisional VP. Sometimes the associate will take part in the presentation too. 7:15 Check voice mail. 9:00 Meeting with the client team. before handing over to the engagement manager to talk through the findings and conclusions in a more detailed manner. "The conclusions that we've come up with should not be too much of a surprise to the client. Everyone is on hand to answer clients' questions about their area of analysis/expertise within the project. The meeting concludes with an agreement on the next steps to be undertaken – either by the client or the consulting team. The discussion is complicated by the fact that some key data is not yet available. At least it's warm out – another advantage of having a project in Miami. 6:15 Alarm goes off. small hours of the night. The presentation is normally to the main board of the company or to the CEO and his top executive. Almost as much importance is devoted to how we tell the story as to what we are saying. I wake up asking myself why I put "run three times per week" into the team charter. and a morning meeting we have with the client team (not necessarily in that order). with a last-minute briefing of the partner as we sit in the cab on the ride over. We're helping the client to assess the market potential of an emerging technology. 7:30 Breakfast with the team. so there's a lot going on. We've got an important progress review with the CEO next week. Someone in London wants a copy of my knowledge building document on managing hypergrowth. The office is looking for an interviewer for Harvard Business School hell weekend. My wife reminding me to mail off the insurance forms. noting that no day at McKinsey or any consulting firm can be called typical. 10:53 Check voice mail. although we have trouble staying off tangents about the various analyses that we've all been working on. "On the day of the preparation – after a last flurry of photocopying and binding books – the team heads over to the client offices. In the wee. Page 15 of 44 . depending on who has commissioned the study. there is normally agreement and support for the final presentation."The book is developed in draft while we work to add the supporting data. Letterman. A co-worker is looking for information about what the partner from my last team is like to work with. We elect to go with a computer-based slide show. The partner often takes the lead to review the objectives of the project and explain the top-level conclusions. The partner will be arriving in time for dinner.com. I meet another member of the team and we hobble out for a jog. We then head out to the client. We discuss sports. He kindly agreed to share a "typical" workday at McKinsey with Vault. Therefore. this may seem like word-smithing.
what's going on with the client team. He wanted to discuss an analysis he'd given me some information for. who she's known for years. 6:00 Team meeting. I probably wouldn't have watched SportsCenter. 10:10 Pre-sleep voice mail check. 2:04 Begin to work through new data. Confirm plans for weekend trip to Vermont. The woman is amazing – we luck out and get some data we need. since he lost his copy. I successfully avoid taking on any additional responsibility. The bad news is. As this is the last interview we plan to do. and other areas of interest. and in particular what the prospects are for the type of technology we're looking at. check the Red Sox score. 12:28 As I walk back in to the client. 3:00 Short call with someone from legal to get an update on the patent search. I get a couple "a-ha's" – always a good feeling. A client from a previous study is looking for one of the appendices. as I know I probably should. 9:15 Return to hotel. She suggests some additional uses for the new data. 1:30 I jump on a quick conference call about an internal knowledge building project I'm working on for the marketing practice. Apologize for forgetting to mail the insurance forms. 6:35 Call home and check in with the family. and see how the client's stock did. I download two documents I need from the company database. She takes a copy of our draft presentation to read after dinner. We meet the partner at the restaurant. a division head I've been working with grabs me and we head to lunch. Plug in computer and check e-mail. we are able to check many of our hypotheses. and how much it could cost. and agrees to raise a couple issues with the CFO. now we have to figure out what it means.11:00 Depart with teammate for an interview. and we'd have substituted a conference call for the dinner meeting so we could go home instead. 7:15 The team packs up and heads out to dinner. I dive in. the new data. While I'm logged in. and have a productive (and calorific) meal working through our plans for the progress review. but the data is great. 10:30 Watch SportsCenter instead of going right to sleep. After discussing the plan of attack with the engagement manager. It's a very busy afternoon. Career progression in consulting Page 16 of 44 . adds her take on our debates. and in the process I get some interesting perspectives about the difficulties in moving the technology into full production. Also. the following things would have been different: I wouldn't have run with another member of my team. The server will be down for an hour tomorrow night. We meet with an industry expert (a professor from a local university) to discuss industry trends. since I hadn't had a chance all day. The engagement manager pulls the team together to check progress on various fronts and debate some issues prior to heading to dinner with the partner. Note: Had this been an in-town study. A quick poll determines that Italian food wins – we leave a voice mail with the details.
teamwork. Booz-Allen). as directors begin to participate directly in the firm's profits.) After one-and-a-half to three years as an associate. Your performance will be measured along similar dimensions to the criteria first used to hire you – analytical and quantitative. Thus. Along with checking whether your perceptions of your performance and deficiencies match those of your managers. At this stage. comes a senior manager position which allows the consultant to begin to develop more off-engagement relationships with clients and begin prospecting for new business. As we've discussed. performance reviews tend to be more regular and more structured at consulting firms then at other companies. Performance assessment Performance assessment is a key for consulting firms. As most consultancies are still partnerships. Analysts typically spend two to three years at consulting firms before returning to get their MBA or abandoning the field of consulting altogether. The ultimate aspiration of a career consultant is to achieve the partnership/director position. Office politics Consulting is not especially political when compared to corporate America. "Up-or-out" tends to be Page 17 of 44 . In rare cases. for instance) the typical path for analysts includes business school and an MBA before a promotion to associate. BCG and McKinsey. promotion to director normally involves a hefty increase in compensation. the levels and promotion path across firms is remarkably similar. Some consulting firms will now promote top analysts directly to the associate level. In other firms (e. Gemini. the next promotion is to manager. the emphasis shifts towards evaluation of your people management and client relationship capabilities. and leadership skills.g. consulting firm value is derived from the development of their consultants. the senior manager is also given a broader range of projects to oversee at a somewhat higher level. enter at an associate (also called consultant) level. At most top consulting firms (Bain. As you progress. Following manager. This lack of backstabbing and calculation by the relatively flat management structure and objective performance assessment is observable in most consulting firms. analysts routinely win promotions to associate after two to three years. This level is about do with building and maintaining client relationships and developing the intellectual capital of the firm. and significantly more people management skills. reviews are carried out at the end of a project (or phase) to allow the people you have worked with closely to assess your progress and any development needs you might have. you should use the performance review to organize training and experiences to address your development needs.Promotion profile While there are differences in job titles between consulting firms. a sterling analyst may be given the option for promotion without business school. students graduating from undergraduate institutions come into a firm at an analyst stage while those with an MBA or similar degree. Consultants at this level have a day-to-day relationship with the client and responsibility for managing the activities of the team. (At Booz-Allen. Usually. recent grads of undergraduate programs are called consultants. After all. The key difference in this role is the need to step back from the details more often.
You may also develop a more informal mentor network among senior consultants you have worked with or who specialize in an area of interest to you. your mentor will act as an informal channel of communication with the other directors to tell you how you're performing and how you're perceived within the firm. In addition to developing your understanding of the industry. These can often be even more useful than assigned mentors – both because you may have a better personal rapport and because they are genuinely interested in your progression within the firm. the firm wants associates and analysts to get a broad exposure to different industries and project types. Your mentor will be a senior consultant or partner who is responsible for your success within the firm. Then when a relevant study comes up. And you. the associate or analyst. Use mentors wisely! First. you can expect to lose out to partners more often in your wishes. you'll be remembered as an enthusiastic team member.dependent on the merits of the individual rather than a quota for promotion in each cohort.. Another way of getting involved in a particular industry or functional specialty is to volunteer to help with some knowledge development work that is being done in the firm. (At more junior levels. both the clients and the partners tend to prefer projects staffed with people who have some experience in the project area. That said. may have your own specific requests for future assignments. directors may request to work with consultants that they have found to be reliable on prior engagements. On the one hand. Recognize from the start what a useful asset your mentor can be. As this tends to be a part-time (and non-billable) effort. and development needs. practice development leaders are always in search of additional help and will jump at the chance to get you involved.. First remember that project staffing tries to address conflicting needs from various constituencies. It's worth understanding the unofficial process from the start and playing the game with the best of them – after all. On the other hand. Consulting firms tend to have an official project assignment process and a parallel black market. at least until the partnership level.) So what can the humble associate do to stack the assignment cards in his favor and participate in the black market of staffing that never reaches the staffers' agendas? Tap into the unofficial sources of information about projects which are on the horizon. assignment preferences. particularly if you don't get what you want first time around. the mentor is responsible for your development and so is a great person to talk to about your aspirations. the projects you're staffed on and the directors that you work with will make or break your consulting experience. some degree of political savvy is important in the engagement assignment process. you will also gain exposure to the senior consultants who focus on this field. The best sources of that information are the partners/directors (either on your current or previous studies) or your mentor. This often results in elaborate compromises. Talk to these senior people to learn about projects that you might like to work on and express an interest up front. Second. Up-or-out. He will certainly have influence over the staffing process. sounds painful Page 18 of 44 . You should tell as many people as you can about your areas of interest. Additionally. Mentors – top-level backing You'll probably get allocated or given the choice of mentors fairly soon after joining your consulting firm.
However. tied to the performance of the consultant as well as the firm's overall performance.000 to $50. Just looking at the organization structure of consulting firms provides the evidence for this. hours can shoot up to 100 hours towards the end of assignments. Lifestyle in the industry Salary and benefits Consulting salaries are high – for college graduates they start at $40.000. in a lull between assignments. the majority of associates and managers who leave consulting do so on a purely voluntary basis – they have never wanted to be a career consultant and when the right position in the "real world" comes along. consultants are said to be "on the beach" – and normally spend this time writing assignment proposals. Consultancies tend to be quite collegial in atmosphere.000 and go up – up to $140. For MBAs. though figures of 20 to 30 percent of base salary are more common. Typical workweeks are 50 to 80 hours per week – though. not to mention the library facilities. Moreover. exclusive of signing bonuses. not including bonuses. indeed anything you need to carry out a structured job search? Consulting firms are careful to appreciate the fact that you may one day be a potential client. consulting firms tend to be very good at helping in the job search process. so they want you to leave with fond memories of your alma mater. learn more gradually through their performance reviews that they're not going to make the grade. due to the long hours and the intensity of personal interaction that this job involves.000 salary. Some consulting firms offer performance bonuses of up to 100 percent of annual salary. due to the cyclical nature of consulting. So what does this annual culling of the ranks looks like? Actually it's (normally) not nearly as brutal as it sounds. who want to stay in consulting. they will jump the consulting ship to pursue it. Others.The "up-or-out" promotion model exists in many consulting firms. Many firms pay year-end bonuses. the average MBA consulting employee earned a $88. leaving work early and scheduling all those doctor's appointments and haircuts they haven't previously had time for. In 1998. For starters. In essence. including bonuses. Culture and social The culture of a firm will have a profound effect on your career and personal life. Work hours and travel Consultants aren't paid this money for nothing – they work hard and long hours. this means that consultants who do not make the criteria for promotion to the next level within a specified time are exited from the firm.000. A glance at the steep pyramid between associates and senior managers indicates mathematically that not all associates are going to make the partnership. And you don't see many gray-haired associates clinging to their positions after a dozen years. it's small wonder that firms often end up with a rather homogenous group of Page 19 of 44 . Where else will you be surrounded by a group of people with so many contacts in the business world. salaries start at $75. Since consultants tend to base their hiring decisions on fit and character. support services.
This similarity can be an advantage. Page 20 of 44 . Consulting firms are known for frequent and often uproarious social events among project teams and offices. One characteristic all consulting firms share is a "work hard. Additionally. but can become claustrophobic after a while. some firms will organize an annual retreat or office gathering with a joint training and social function. both to discuss strategic thinking. Consulting firms are renowned for hosting lavish Christmas and summer parties to repay their consultants for all their hard work. as you get to spend time with like-minded individuals. This gives consultants the chance to take breath from the hectic office environment. play hard" ethic.professionals.
In the event that companies don't come to your campus. This makes it easier to get on the radar screen if you're off the main consulting recruitment track. even for initial interviews. Talent-hungry consulting firms now realize that they might be missing out on talent elsewhere. First off. You'll come across several contacts who can obviate a cold call to your target companies. and there are a number of things that you can do to increase your chances of being selected for an interview. expressing your interest in the company and asking for an invite. While a lot of them are open house. give a call to the event administrator at the company. if you're not on the guest list. That said. is high. consulting firms may be coming to your campus prior to the interview process for a series of cocktails and dinners. competition. Nine times out of 10. Recruiters tend to favor job candidates who are endorsed by someone who is already working in the firm. consulting firms have focused on a relatively small number of undergraduate and graduate institutions when recruiting for associates and analysts. the greater your chances of success. you may come across some invitation-only functions. Under increasing competition from Internet startups for smart candidates. The best plan is to find a contact within the firms you are targeting. The role of the contact is twofold – to get you an "in" to the recruiting process and to tell you more about the company so that you are better informed prior to interviews. the company will be delighted to extend an invitation to someone who shows genuine interest. While it might sound a little impolite. Schmoozing Good networking skills are important once you're inside the consulting firm – but they will also help you immensely in getting a foot in the door with your favorite firms.Chapter 4: GETTING HIRED SUB-CHAPTERS: < Get your foot in the door > Is consulting for you? • Resumes and interviewing • The resume/behavioral interview • Behavioral questions • The case interview • Case tips • Sample case #1 • Sample case #2 • Sample case #3 • More sample cases • Guesstimates • Sample guesstimate • More practice guesstimates • Brainteasers • Practice brainteasers Get your foot in the door Until recently. This might be an alumnus of your college. a fellow student who has worked there prior to business school. so the more people you know in a particular organization. the schmoozing path becomes somewhat less clear. Is consulting for you? Page 21 of 44 . consulting firms are beginning to take a more openminded approach to recruiting.
cocky consultant. so considerable ingenuity is required to combine data sources." he says. while continuously checking the results. data won't be in the right format to test the hypothesis. Is a willing team player Consulting. A helicopter approach of moving up and down between the top-level hypotheses and the details is critical to ensure that the team remains focused on what needs to be done in the limited time available. but in the next breath can flash back to the overall strategy of the client. It is easy to get drawn into the heaps of data accumulated at the start of the study and to head off down the wrong track of analysis. have the ability to think on your feet. manipulating. share offices or work in communal project rooms at the client. a consultant needs to be in his element gathering. "So. Good with clients "Would you put him in front of the client?" is a key question the recruiters will ask themselves of you. who may have biases against consultants. Handling this interpersonal challenge takes practice. Nine times out of 10. Commonly. and Page 22 of 44 . you need to apprise him. the executive summary. in a concise and coherent fashion. you will be interacting with clients who are older and more experienced than yourself. fleshing out the original numbers. more than most other jobs. While a good working knowledge of Excel and other spreadsheet programs is a must (and a degree of aptitude in pivot tables. Consultants brainstorm together. Related to this concept is the "elevator test. company. and problems by a young. "What's the message?" is a question managers commonly throw at associates. the key skill is to be able to take a mass of data and draw conclusions. and the like is the icing on the cake). and certainly will not take kindly to being told about their industry. is a team sport. "what are your conclusions so far in the four weeks since you began the project. Monte Carlo simulations.Based on the description of the consulting role earlier. There are some general characteristics that successful consultants share. travel together. Their answer will be influenced not only by your good grooming. Enjoying teamwork is key to enjoying the consulting life. This scenario is designed to test the consultant's ability at all times to have a handle on the bottom line – in effect. You should relish interacting with people. How well do you fit the template? Profile of the "ideal" consultant Loves data and figures Particularly at the analyst and associate stage. socialize together – they're just not solitary animals. you might already have gleaned a fairly good impression of whether consulting is for you. may feel threatened." This is based on the following scenario: You get into the elevator at the client office and at the very next floor the client CEO hops in. rather than "boiling the ocean" of all possible analyses. but above all requires sensitivity to the client's concerns. Does the helicopter thing well A good consultant is a master of detail and can tell you where each number and each assumption came from. and interpreting numbers. and have strong oral communication skills. and what are you going to do next?" In the 30 seconds it takes you to reach the executive suite on the top floor. of the key messages emerging from the project. but your poise and speaking skills.
you don't need a detailed psychoanalysis to figure out if you're a team player. designed to measure whether you have the intellectual horsepower needed for the job. consulting firms are looking for smart. Consulting interviews tend to fall into two main types – the resume/behavioral interview and the case/problem interview. and analytical people who are pleasant to work with. While the interviewer may use your resume as a structure for the interview. The latter tests your problem solving skills and allows the interviewer to see how your mind works and. and equally importantly into the culture of the company. your resume will be an important tool in selecting you for the initial interview. Consulting interviews are intense and lengthy.) Does it exhibit a propensity for leadership/taking responsibility? Does it illustrate team player characteristics? In some cases recruiters will be looking for relevant functional expertise (e. language skills and overseas experience are big pluses. to an extent. Consulting insiders say interviewers first want to determine that you have the "mental horsepower" (brains) and "quantitative and analytical ability" (math and logic skills) to be an asset to their firm. Interviewers also want to make sure you have the work ethic to work long hours and the kind of personality that will make you a good team player. hardworking. As most firms derive an increasing percentage of their business from international clients and engagements. Consultants tend to be quite tolerant of career changers – as long as you can back up your reasons for wanting to change professions in your interview. are very exacting on this front. Page 23 of 44 . Generally. how you deal with stressful real-time challenges. The resume/behavioral interview These interviews are meant to ascertain whether you have the right personal qualities to be a good consultant. like McKinsey. dedicated. The interview process The wealth of consulting firms comes from their human capital – their consultants.g. You may find that you need to tailor it specifically to consulting positions. or for specific industry experience. engineering or finance). The former aims to determine whether you fit into the consultant mold. Consulting recruiters look for the following on resumes: • • Does it show evidence of academic strength? (Some firms. be assured that he wants a lot more out of you than a regurgitation of the key points on it. Do you like team sports or would you prefer to go off jogging in solitude? Do you like group brainstorming exercises or do you prefer to come up with the answer on your own? Resumes and interviewing Tailoring your resume for consulting As consulting firms are often inundated with applications. and to fit into the prevailing culture of the consultancy.
as consultants must lead small teams and promote their ideas Teamwork. saying you don't enjoy travel or implying that it would be difficult for you to leave home for long stretches will seriously hurt your chances of receiving an offer. Never say or show that you might be difficult to get along with. focus on highlighting examples from your resume that emphasize your leadership and team skills.During the interview. Some specific skills that interviewers look for in the interview: • • • • • • • Leadership skills. "What kinds of people do you have trouble getting along with?" in the hopes that you'll reveal your own shortcomings. (Consulting firms will often ask. Do not go off on tangents or trail off midway through a sentence. pay attention to how you say it. Discuss times when you have played a key leadership role. because consultants must present their findings to fellow consultants and clients alike Creativity. Give relevant examples. As consultants are constantly on the road.) There are a few specific points you should remember during the interviews: • During your interview. and be as specific as possible. silently. because solving problems often means "thinking out of the box" You should never express any uncertainty or insecurity about your math or logic skills. In addition to what you say. Behavioral interview questions ask the interviewee to reveal how he or she has behaved in particular situations in the past. there is a strong culture of cooperation at consulting firms. the interviewee." This means that they will probably be imagining themselves sitting next to you on an eight-hour flight across the Atlantic. You should make your answers as logical and structured as possible. and with a wide variety of clients. or even to crack a (tasteful and amusing) joke. along with assessing your potential as a consultant. Would they be able to maintain a conversation with you for more than 30 seconds? Or will they have to fake sleep throughout the whole flight? What this means to you. as consultants work with both other consultants and customers toward solutions Analytical skills. Firms that use behavioral interviewing believe that candidates' responses to these questions reveal a lot about their personalities and skills. is that you shouldn't be afraid to show genuine interest in something outside the realm of business. Page 24 of 44 . Because consultants work in teams. both work situations and personal situations. your interviewer will likely. be administering the "airport test. Behavioral questions Consulting firms love to use "behavioral interview questions" to measure "softer" attributes. to crunch numbers and work through information in a logical manner Presentation skills.
Emphasize that everyone has something to contribute." It's better to describe a valuable lesson you learned (and one that preferably occurred some time ago). "I can understand that you would potentially be put off by my lack of economics and business coursework. Case interview questions fall into three broad categories: cases. or whatever). 5. It's wise to choose something that both conveys the qualities consulting firms are looking for (see above) and gives you the chance to explain or elucidate something that might not be obvious to the interviewer. It makes sense to practice an answer to some of the most frequently asked behavioral questions. What is the worst mistake you've ever made? This mistake should not involve an egregious lapse in judgment along the lines of: "It was really stupid of me to violate parole. What position do you normally take on a team? Neither a follower nor a dictator be. How do you deal with someone in your group who isn't pulling his or her weight. so you can answer them smoothly. and knowledge of business concepts. and I ended up buying a car that looked good but cost me thousands in repairs. motivate. Tell me what you're most proud of on your resume. Practice behavioral interview questions 1. Show that you've done yours." 6. "I remember when I didn't fully research buying a car. Why have you chosen our firm to interview at? Consulting involves a lot of research. explain why something that looks like a weakness isn't. and get their points across without either passively receiving information or commandeering the entire case team. Explain why you're interested in a strategy firm (or a change management consulting position. reasoning skills. 3.Some consulting firms use behavioral questions almost to the exclusion of more traditional consulting case questions. Why should we not hire you? Don't point out an actual flaw unknown by your interviewer. confidence. Try to think of a time when you encouraged someone to do his best. Business cases Many of your consulting firm interviews will be case interviews. If you're interviewing with a strategy consulting firm. Consulting firms want people (especially newcomers) who can ask questions. (Because so many consulting firms have many overseas branches. or won someone over to your side. Team sports examples are especially valid. guesstimates. I'll never fail to do my homework again." The case interview Consulting interviewers use interview questions designed to test your analytical ability. Instead. 2. and brainteasers. discussing a study abroad program or an international position may win you triple points. make a contribution. But I think my sales experience and my score of 770 on the math portion of the SAT should alleviate those concerns. or disagrees with your goals? Don't criticize.) 4. you can count on receiving plenty of cases as you go through the Page 25 of 44 .
this is very important in the case interview. • • • • After you have finished giving recommendations. wouldn't you?) Your interviewer will answer these questions with pieces of information that should help you formulate new questions and. But most of the time. It might be John Deere. the Porter's Five Forces model might help you to analyze a market situation and identify all of the areas of potential threat in order to come up with recommendations for a company's market strategy. The interviewer is more interested in checking out your thought process. Some cases are presented to the interviewee as a written document for them to read and prepare (Monitor is prone to do this). point out possible flaws and assumptions in your thinking.interview process. follow the tips below to improve your chances of cracking it without too much difficulty. While some interviewers may draw on their recent real-world experience in posing the case. you can start to formulate your recommendations. The case will probably consist of a question about a business scenario. your case recommendations. Ask lots of questions before beginning to offer recommendations! One recent interviewee correctly cautions: "Consulting firms are looking for people who will think carefully before answering. you need to ask the interviewer a number of questions to gather vital information that you'll need to solve it. In a nutshell. Having gathered all the information you think you need. and poise. Since your thought process is much more important than your ultimate conclusions. It might be helpful to use a framework in your mind in order to ensure that you are not forgetting a vital area of analysis. even if you're certain about it. Certainly. you would ask the client plenty of questions before attempting to provide advice. If you're trying to choose between appearing to be slow and appearing to be a cocky idiot. Case tips • Before jumping into an attempt at answering the question. You should speak and reason aloud during your case interview. For example: "A foreign company with extra cash on hand wants to enter the American fast food market. case interviews are problem-solving exercises. which should impress your interviewer. the interviewer will describe the key facts and issues of the case in a few minutes before asking the candidate for her analysis. Don't say the first thing that comes to your mind. What are other companies in this industry doing that are facing the same issue? Don't make assumptions without checking them out with the interviewer – or at the very least stating that you are making an assumption. creativity. If your case concerns a vehicle manufacturer." It is especially useful to ask your interview about best practices in the industry. ultimately. choose the former. (You should imagine your interviewer as a corporate client presenting this case to you. and assessing your analytical ability. What would you tell them?" While every case is different. One consulting firm (Monitor again) actually asks you to solve a case as part of a team of other job applicants. For instance. your interviewer must hear your reasoning and the logical steps you are Page 26 of 44 . don't assume it's General Motors. you will not be expected to have advanced industry knowledge.
what functional areas do they represent? After establishing some basic facts. the company does have enough current staff to handle setting up its own network. Now the question is – should the company stay with their current distributor. it's time to get more detailed. Let's say that. never show any signs of being flustered in a case interview. etc. yes. do most distribute through their own proprietary supply chain or through third parties? What is the client's current cost of distribution through its contractual partner(s)? Has the client considered building its own distribution network before retaining us? If so. They want to know whether they should build their own distribution network or continue to contract with third parties. there's no call to delve deeper into the ramifications of reassigning personnel. you need to ask your interviewer some basic questions: It makes sense to ask your interviewer about best practices – that is. No matter what. always bring a pad of paper and a reliable pen with you to any consulting interview. or shut down others. Asking your interviewer for paper and a pen during the interview will give the impression that you are disorganized and unprepared. Your interviewer may allude to certain avenues to discuss. valuable. Always. First of all. or choose a new one? • • Who are possible alternative partners? Who uses them? Could you characterize the relationship between the client's distribution partner and the client? Is there a possibility of retaliation on the part of the distribution partner if the client severs its ties to this party? How many weeks of supply are currently in the distribution partner's pipeline? How receptive are the client's accounts to changing distribution partners? Has a value proposition been created to show the client's accounts that a client-owned supply chain would be more efficient.taking to reach your conclusions. what are other entertainment companies doing? What are the current costs? Does the company have the staff and resources to create its own distribution network? • • • • Of the major entertainment companies that produce videos. You may want to take notes during the case interview (and almost certainly for any guesstimates or quantitative brainteasers your interviewer may throw at you). to the accounts? Page 27 of 44 • • . Remember to breathe! Sample case #1 Sample case We have been engaged by a major film entertainment company to assist them in building a distribution network for home video. through questioning. you've come to decide that staying with a third-party distributor makes the most sense. If the interviewer confirms that. what were its findings? Does the client have a dedicated functional staff assigned to the project? If so.
many sub-$1.) Consulting insiders say the point of a qualitative business case is to see whether you can discuss a company intelligently and analytically. Why is Intel successful? Will they retain their advantage in the future? This is a common type of case question used in consulting interviews. ensuring they buy only Intel products. Intel's competitors. You might point out that Intel's heavy investment in R&D has enabled the company to consistently produce faster microprocessors that its competitors – and its headstart allows it to retain that R&D edge. have managed to copy most of Intel's products (though the most sophisticated chips remain beyond the reach of most competitors). Sample case #3 Page 28 of 44 . With 80 percent of the market. less-powerful chips . Sample case #2 You may be asked a more qualitative case question as well. Well. like AMD and Cyrix.000 computers rely on AMD and Cyrix chips. In a rapidly evolving market like the computer industry." the major source of growth in the microchip market has been in lower-end. (It is unusual for a high-tech firm to brand itself so successfully. an essential component of computers. or McDonald's).a market in which Intel's competitors are well-equipped to compete in price-sensitive markets. Intel's commanding lead in the market also allows the company to leverage its might to partner with its customers. Microsoft. CocaCola. Clearly. Already.• Does the client have any financial interest in the distribution partner that might have to be severed? After answering these questions. but what? Intel is a technology company. and whether you are able to use business concepts and terminology naturally in conversation.) Intel currently has about 80 percent of the microprocessor market. the interviewer will choose a company that almost anyone would have a basic knowledge of (for example. Any business knowledge that you have will come in handy. And as such a high-volume producer. make a recommendation. however. staying abreast of changes in technology is vital. what do you know about Intel? You should know that Intel is a producer of microprocessors (or chips). cost advantages and operating efficiencies its competitors can only dream of. This is an example of one such actual case: 2. She wants you to explore what the company does right and the challenges that it faces in the future. Intel has economies of scale. The interviewer is not expecting you to quote the latest stock price of Intel or know how much CEO Craig Barrett got paid last year. (Recruiting insiders tell us undergraduates and graduate candidates without MBAs are more likely to get these sorts of cases. Now you might point out Intel's weaknesses. the Pentium chips. for the time being. (That's about the level of knowledge you need. that as society becomes more "wired. Intel has quite a bit of weight to throw around. they're doing something right. Typically. has succeeded by being first to market with its products. so that customers know them by name and associate them with high quality. You might point out.) Remember all those "Intel Inside" logos? Intel partners with its customers in order to cross-promote its products. Intel has also successfully branded its products. Intel.
If you use toweling rolls. Paper towels cost 5 cents each and the number of paper towels that you will need varies directly with number of customers. paper towels will be cheaper than dryers. First of all.000 customers per month or every other day if there are less than 2. it's obvious that from an economic standpoint. an additional $1. • • At this point. the rolls would cost $10 every other day or $10 x 15 days = $150 per month.000 that you should depreciate over their lifetime (i. Secondly. at a cost of $0.in which case the interviewer will give you some more information: In the initial research. look at the paper towels option. These vary directly with number of customers in the restaurant. or cheap? How many customers does he expect? How many tables? Is it open during the day? In the evening? Has he done any customer research to see what customers would prefer? Fairly soon in the process.000 customers per month.000 customers per month. He is today making a decision on the facilities to place in the restrooms for customers to dry their hands.05 per customer. roller towels. and hot air dryers. such as the one below: 3. Is this break-even affected by the rolls option? At less than 2. What should he consider in his decision making process? In the initial analysis.05 = 2. So if you expect 50 customers a night. Therefore their total cost is approximately $120 per month – and this does not vary with the number of customers coming into the restaurant. This in itself is more costly Page 29 of 44 . which will influence your decision. Therefore. the restaurant owner has found out the following information from the suppliers of the drying facilities: • Dryers have an initial cost of $500 each (but you'll need two – one for each restroom) and a monthly service charge of $100 per month. Therefore.400 customers per month. you might ask a number of questions. They cost $100 per month. they will use 50 towels. take the dryers. assuming few customers per month. the option you select will vary with the number of customers. you should start asking questions about the economics of the three options . it makes sense to look at a break-even calculation.e. plus an upfront charge of $1. The supplier estimates that the lifetime of a drier is four years. moderate. The rolls will be changed daily if the restaurant has more than 2. How many customers would have to come to the restaurant each month to make the dryers more cost effective? The cost of towels would have to exceed $120 per month. • • • What type of restaurant is it going to be – luxury. they will cost $5 per roll (and again you'll need two – one for each restroom).000/(4 x 12) per month = $21 per month). Initial research suggests that he has three options – paper towels. A restaurant owner is setting up a new restaurant and making some basic decisions on how to fit it out. equating to $120/$0.Some cases combine an explicit test of your quantitative skills with some broad strategic precepts.
than both the dryer and the towels option. number of customers per month along the x-axis versus cost of drying option along the y-axis). Guesstimate cracking tips • • You won't be given any real data (though you won't need to know much more beyond basic population figures for the United States). When you're jotting down numbers. In break-even cases. The company hopes to reach its goal in three years. What could be accounting for these differences? How could you identify the main drivers of these differences? 5. What factors would you consider? 6. The key is not to get the right answer. Once the number of customers increases above this. a sensible approach to assumptions.400/30 = 80 customers per night) you would prefer the towels. There are three women's clothing chains with approximately the same merchandise. but very different results in terms of sales per square foot. (You might even round up to 300 million. You must decide which country to build the plant in. Generally.000 customers. What would you advise? Guesstimates Guesstimates are commonly asked in consulting interviews. your interviewer asks you to estimate the size of the market for a particular product or service. you might mention a few more non-economic points that might sway the balance: • • Are there additional staff costs of cleaning up paper towel waste? How many suppliers of each option are there? If there is a single supplier. you can assume that the United States has 270 million people and 25 million businesses. and with more than 2. so when you pull together your recommendations at the end of the analysis. You are head of a large corporation. but to show a logical way of tackling the problem. Following the economic analysis. Your company must build a new paper plant. you can make comparisons between the options. At less than 2. and the ability to do simple calculations quickly without a calculator. it is sometimes effective to draw a graph to illustrate the break-even decision (in this case.400 customers per month (or 2. and observes your reasoning process. A big health care company has hired you to determine a strategy for improving profitability through growth.) Page 30 of 44 . make sure you keep a track of what is what. it will only look more unfavorable. might he have the power to raise prices in the future? Make the numbers easy – round up or down when possible to make further calculations easier. In your analysis. Hints on quantitative cases: • • • More sample cases 4. Therefore the real economic decision is between towels and dryers. you'd switch to dryers.
So 100 million gallons of paint are sold per year (5 million houses x 20 gallons). each year? THE "START BIG" APPROACH: If you're not sure where to begin our analysis on a guesstimate. then each house needs 20 gallons – and so 10. If each house has 2. (or 25 million businesses. like the population of Brazil or the circumference of the globe. perhaps half of them live in houses (or 135 million people). and that the average house has 2. Multiply by 10.000 houses to worry about. If you use the same assumption that half the town lives in houses in groups of three. Page 31 of 44 . then there are 4. 500 houses are being painted in any given year. like cases. it's much better to ask than to stumble your way through an answer based on inaccurate assumptions. start with the basic assumption that there are 270 million people in the U. Painted every 10 years.000 square feet of wall. when posed the question "How much change would you find on the floor of a mall?" you might want to ask "Is there a fountain in the mall?" • • Sample guesstimate How many gallons of white housepaint are sold in the U. The average family size is about three. Your interviewer may then ask you how you would actually get that number as a consultant. Use your creativity – contacting major paint producers would be smart. If there are 270 million people in the United States.500 houses.S.000 – you have 80 million gallons. then each house needs 20 gallons of paint. (Don't forget that last step!) THE "START SMALL" APPROACH: You could also start small. Assuming that one gallon of paint covers 100 square feet of wall. easy-to-work-with numbers (difficult numbers may throw off your calculations) and go from there.000 of those are white. (Note: If you want to be fancy. putting in a call to HUD's statistics arm could help. Let's add another 10 percent or so to that for second houses and houses used for other purposes besides residential. plus another 10 percent. with rounded. and each gallon of paint covers 100 square feet.• • • Make reasonable assumptions.000 (about one ten thousandth of the population). Remember that you're expected to use a pen and notepad to work through your calculations. For example.000 gallons of housepaint are sold each year in your typical town. Remember that guesstimates.S. and take a town of 27. may also involve elements of creativity and problem solving.000 square feet of wall to cover. Perhaps 8. So there are about 50 million houses. then there are really 5. you can ask your interviewer whether you should include inner walls as well!) If 80 percent of all houses are white. If houses are painted every 10 years on average (notice how we deftly make that number easy to work with). so there would be 45 million houses in the United States. then 80 million gallons of white housepaint are sold each year. then there are 5 million houses painted every year. depending on the question). or even conducting a small sample of the second calculation in a few representative towns is possible. Talk through your steps out loud as you go through your calculations. If you don't know an elementary figure.
You must figure out which switch controls which bulb. There's one elegant solution. You and a neighbor are planning garage sales for the same day. making solving the puzzle easy. Then go into the room. How many barbers are there in Chicago? 5. You are both selling the same used TV. you'll be constantly on the spot – your interviewer wants to ensure that you can keep your cool. but your neighbor insists on selling his TV for $40. Their main function may be to test your courage under fire. But in the land of business. One applicant suggested that the switches might be dimmer switches – each light bulb could be set to a certain level of illumination. There are four men who must cross a bridge in 17 minutes. Practice brainteasers 1. buy your neighbor's TV for $40 and then sell each TV for $100. What is the annual size of the golf ball market in the United States? What factors drive demand? 7. Do not get flustered! Do not tell your interviewer that the brainteaser cannot be solved or is unreasonable. . Turn one light bulb on for 10 minutes. As a consultant. "mindsplitters") are the genre of questions along the line of "Why are manhole covers round?" Some brainteasers are more like logic problems. Some suggest drilling a hole in the wall or calling a friend for assistance. In this case. Each controls one of three light bulbs in the next room. Now feel the bulbs. The hot one has been on recently. Be forewarned – some of these questions are very tricky and it is entirely possible that you may not be able to solve them in a short amount of time. You plan on selling the TV for $100. while others require more mathematics. The bridge is very narrow and only two men can cross at once. 3. The light bulb that is on clearly goes with the switch that is turned on. What should you do? It's easy to think that the right answer hinges on compromise so that you ultimately sell your TV for more than $40 but something less than $100. the right answer requires taking an underutilized asset and turning it around for profit maximization. How many pay phones are there on the island of Manhattan? Brainteasers Brainteasers (or. Turn another bulb on. It is nighttime and whoever is crossing a bridge Page 32 of 44 2.More practice guesstimates 2. How much beer is consumed in the United States each year? 4. How many 747s are above Kansas right now? 3. however. then turn it off. You're in a room with three light switches. Consultants love "out-of-the-box" thinking. You have some limitations – you can flick only two switches and you may enter the room only once. as one disgruntled interviewee referred to them. How many gas stations are there in Los Angeles? 6.
which takes two minutes. a round manhole cover will not fall into a hole.must carry a flashlight. First. First of all. for a total time elapsed of 17 minutes. and will not cut anyone. 4. Alan and Bert cross together with the flashlight. this chestnut is still making the rounds among consulting firms and high-tech firms alike. Bert returns with the flashlight. and Bert and Alan go back across the bridge.) There are many answers to this puzzler. Alan returns with the flashlight. taking two minutes. Round covers also do not need to be rotated to fit over a hole. Cedric in five minutes. Cedric and Don then cross with the flashlight. At the 13-minute mark. which takes one minute. A manhole cover that is round can be rolled on its edge. Three minutes have elapsed. The men crossing the bridge go at the pace of the slowest individual. Bert in two. The classic brainteaser: why is a manhole cover round? (Originally asked by Microsoft. Alan can cross in one minute. making it safer. and Don in 10 minutes. Page 33 of 44 . which takes 10 minutes.
and I don't know how much teamwork that culture can really support. It's survival of the fittest.Chapter 5: OUR SURVEY SAYS SUB-CHAPTERS: < Cutthroat camaraderie > Pay: Awesome • Food. "People in Australia will get on a plane and fly to your client in the middle of the night to help you out with a project." While consulting firms generally have entering classes that are about half women and half men. as you can tell by all the blue and gray ugly suits walking around here." say insiders. The company values leadership and integrity. and so it's no surprise that one consultant thinks his firm "attracts very aggressive business people who are well-rounded and down to earth. and people are still a little nervous and still look over their shoulders. Page 34 of 44 . all consulting firms emphasize and value teamwork. "My firm had some problems two years ago. even though the consulting side of the firm is increasingly profitable." and the firm's "go-and-get-it attitude" was "quite repulsive" to women for many years. "My firm will spend to create a friendly work environment. the proud. However." But despite these separate traditions and quirks. employees note that the company has made a "genuine effort" in recent years to recruit and retain more women in its corporate structure. because this industry is somewhat cutthroat and it's good to have that human touch. "The culture is very collaborative." Firm culture can be affected by outside forces as well. and that "this effort is showing results. too much travel • Social life: Out on the town • Long (and odd) hours • Management: Flat or pyramidal • Dress: Well-rested suits • Diversity: The changing face of consulting? • Offices: Looks like money • Support staff: Uneven • Training: Keeping up-to-date • The few.. "you're either promoted or told to leave after two years." Some consulting firms are defined by their socialization. consulting firms have their own cultures. sabbaticals. My new consulting firm doesn't have that policy and that makes it a nicer place to work. the consultants Cutthroat camaraderie Like separate countries. Another insider reports that his firm's atmosphere is "totally convivial – like an elite fraternity or sorority." says another consultant. and travel. Most firms look "for extraordinarily smart people who have the ambition." gushes one insider. One insider says his firm has a "notoriously macho and male culture." says one consultant. others are still influenced by the residue of their former male majority." Consultants are generally bright overachievers." Part of that competition is engendered by the "up-or-out" promotion policy.. That creates a lot of insecurity. while another Big Five consultant says: "The culture is still pretty much dominated by the accounting side. "At my former firm" says one consultant. They are mavericks and builders and it is a true joy to work with them. the ability and the self discipline to give 200 percent where only 100 percent would suffice." says one insider. Consultants are experts in fields you've never heard of. One associate at a consulting firm finds "the camaraderie here very appealing.
good stuff like that. and once in a while." However. had dinner in the Eiffel Tower." At one firm. and one of her colleagues is directing a film part-time." says one West Coast-based consultant. in general starting salaries at the top consultancies are very similar. consultants receive impressive compensation. lots of free baseball and football tickets. 100 percent. went to Lillehammer for the Winter Olympics. Travel can be a perk or an albatross." says one consultant. up to 20 percent on top of base pay." It's also worth remembering that travel does not always equate to glamour. as many as you want. The list goes on. "because my pay is about the industry average for management consulting – which is to say. Clients tend to choose their headquarter locations for the tax breaks or the cheap land rather than for the weather or quality of restaurants. of your base pay." Social life: Out on the town Page 35 of 44 . "I have no complaints. Several consultants feel that the "travel stops being a perk after the first three or six months. "I didn't have a huge social life because staying weekends in all of these places was too good to pass up – not bad if you're just out of college. took a cruise from Miami to the Bahamas." while another firm lavishes its consultants with "big. too much travel Consultants work hard. gambled in Monte Carlo. there are another 10 to Duluth or Newark. your team will have dinner at one of the fanciest restaurants in town. One associate at a notable bluechip firm tells of her plans to take time off to write a book next year." Don't expect radical differences in pay among firms. it's awesome. Case teams usually have an event or two during the engagement to break up all the hard work. but difficult if you have a girlfriend. I just spent a month backpacking through Australia and New Zealand. but the bonus makes the pay package even more attractive. we have fully catered TGIF parties. "while sometimes firms will raid each other to get personnel. Napa Valley wine tours. bonuses "can be substantial." One upside to all the travel: "frequent flyer miles. sabbaticals. or worse if you're married and have kids." It gets better – "The pay in itself is good. somewhat. so a good and bad thing is that how much you get depends on yourself. For every trip to Miami or Milan. and their firms want to keep them happy." Even the more traditional consulting firms are getting in on the act. the consultant also admits. saw an opera at Covent Garden. Basically. you got 'em." Food. Some consulting firms offer leaves and sabbaticals to prevent burnout.Pay: Awesome By their own admission. they all do. If one major firm raises its initial salary. It depends on the client's budget and the team. One insider raves: "Things I did because of my job here: flew the Concord. and travel." But these bonuses aren't handed out just for showing up – "they are performance bonuses. big bonuses that can be up to 60 percent. if you're not in the middle of an assignment.. One consultant tells us he is thrilled that "the leave-of-absence policy [at my firm] is pretty incredible." Perks can be even more extensive. One consultant reports that "halfway through the case study. spent a summer afternoon at a topless beach in Nice. you can take an (unpaid) leave of absence for whatever reason you want. "In San Francisco.. and then becomes a royal pain.
some offices generally tend to have shorter hours than others do." Not all fun is run through the office. The travel is the worst. but those people usually find that in the long run they don't survive. by most reports. One former analyst tells Vault." However. consulting hours can be very long indeed. however." One California consultant says: "We try to clear out of here on Fridays by 6:30. otherwise I'd be doing company stuff seven days a week. even partners will come out and party. some offices are a little more social than others. another insider notes that "most people are down-to-earth. "It depends on the team you're working with. yet satisfying. concur that it is impossible to predict just how long those hours will be. we go out almost every night for dinner together when we're on the road. I mean." Another consultant tells us that "actually. but a lot of off-the-job interaction is encouraged." Other things can lengthen the consulting workweek. every day to work with farmers. back to back." One consulting firm likes to help grease the social wheels. I pick the ones I want to go to and don't go to the rest. I worked on a few projects at 70 to 80 hours a week." Still." reminisces one analyst." Long (and odd) hours While not as long as investment banking hours. An insider says: "Most people I know here have time to pursue outside interests. But you're expected to come in only one day a weekend at my firm." At another firm. There is some flexibility to when you schedule your work. Others were more relaxed at 50 to 60 hours a week. and "sponsors several intramural sports teams and charity "fun runs. encourage a healthy social life among their employees. everyone is always social. In fact. however." One consultant bitches that "the hours are already 60 hours plus. and then there is all the damn airplane time. "Once I had to get up at 4 a. "It was insane." "The worst I've heard. We would rent a room in a sports bar. and we have a lot of events scheduled for us on the weekends." Management: Flat or pyramidal Page 36 of 44 . they may have to occasionally work odd hours. "on case teams. an associate reports: "It's hard to define work hours in that situation. over 60 hours a week." On travel." says one consultant. Consultants say "the hours can be long. And besides that. One good friend of mine is writing a novel. with "New York and Boston working longer hours than Los Angeles. Generally weekends are free if you want them to be – but not always. we play golf together on a weekly basis.com: "The hours fluctuated a lot. We have opera singers and rock climbers. which you have the option to go to or not. we always got together one night a week. although some are very elitist. just the worst. we have a social dinner once a week.m. On the research analyst level." Another insiders cautions prospective consultants to "expect to clock about 70 hours a week. or maybe have a nice dinner together." One exhausted insider reports: "There are a lot of extracurricular activities. insiders tell us that "there are always e-mails going around the firm inviting people to parties.Consulting firms. When you visit a client you can't come off as uppity. and travel can take up to 80 percent of your time. but in some offices. like DC. All consultants. "is a guy who worked 120 hours a week for two weeks." As for prevailing attitudes." Because consultants have to perform all sorts of research.
" Other consultancies require "business dress every day. which is awesome." In addition. At one youthful firm. In the office." The Big Five consultancies – traditionally wedded to their number-crunching brethren . from all over Russia and Asia and South America. since the hours are so crazy and there is the whiff of machismo in the air. not who's saying it." The firm "is a salad bowl. they often have many non-American consultants in important positions. At many firms. even the partners. and this is reflected in our open management structure. it's suit day every day. though nothing grungy." At one major consulting firm." At another firm. but in general. It's healthy and not stifling." says one consultant. insiders tell Vault. When you're working for a bank. that's important. these companies are very open to talent in whatever form it takes. A representative consultant says: "Although the breakdown of men to women is 70/30.Consultancies don't thrive on grinding fresh ideas and vibrancy into dust. some consultants feel that "consulting by its very nature is not too friendly to women." says one consultant. forget it." Otherwise." Dress: Well-rested suits Dress codes vary at consulting firms. no exceptions.com that "job titles and pecking order are less important around here than what you bring to the party. I feel women are well-accepted in the organization." says a consultant at a casual-dress firm." This lack of structure isn't always a boon – "if you need someone to hold your hand. "We have people from India. We also have minority-specific recruiting seminars." though some offices slip in "a casual Friday. "the office tends to be a tad more formal – khakis instead of jeans. especially women with families. "the dress code is casual." At one consulting firm." "At headquarters. There is zero prejudice. "All persons are deeply respected. insiders say. except when you meet with clients. or teach you something. the older and larger the consultancy. a consultant says: "There is definitely a pyramid here. "We are a very diverse firm internationally. "you dress for the client. As for minorities. However. but it's rigid." At other firms. since consulting firms are invariably international in outlook." Diversity: The changing face of consulting? Most consulting firms still have majority white male leadership. insiders say they're happy that "everyone in the firm shows up to parties. but I think that is the way it is with all Big Five consulting firms." However. "the CEO is a woman." say other insiders. "the offices are generally casual but on the dressy side of casual." Offices: Looks like money Page 37 of 44 . If they get casual Fridays. so do you. "It helps set a laidback mood." One firm is so flat that "there isn't a whole lot of difference between what an analyst does and what an associate or even a VP does – we're all in this together. you can give the suits a rest unless you're doing a presentation. the more established the hierarchy." Another employee adds: "Vice presidents don't necessarily have greater clout than principals – it's what you say.are in this vein as well. they are treated as equals. One such consultant says: "This consultancy is a bit more bureaucratic than I think it should be. from Africa.
It's mostly the microwave that gets the workout there." At other firms. which varies in length. "the view from the bullpen is breathtaking – with a window view that goes all the way from Midtown to the Statue of Liberty." and "breathtaking views." Insiders at one consultancy say that the firm "recently downsized our research staff. which handles the administrative details of each team." Some firms have a cafeteria for their employees. There is a reason you're taught to use Excel and Access as soon as you get here." Views apparently are important to consultants – at another consultancy. and when you are working out of an office. Some consultants say: "We don't really have any help. though. The rest of us do our own typing. but these valuable allies are not ubiquitous at consulting firms." Some consultancies put entry-level analysts into "bays. You have a voice mail number. At one consultancy. One firm "practices something called the virtual office." Another insider says: "They don't send all of the new hires to initial training at once. as one consultant puts it. rows of desks. which will make up slides after you write them out.S." A recent training attendee says: "We study subjects like strategy." Other consulting firms help out their teams in the field." "costly paintings on the wall. Only directors have secretaries. though everyone below the senior level has to share an office. so about 100 of the people come in at any given time. "everyone has a window office with a nice view. which means you fly to your client site Monday through Thursday. at which point you don't Page 38 of 44 . analysts usually share them. "Every team has a team assistant.Offices vary. support staff "takes care of things like helping expatriate consultants comply with U. and then you telecommute from your home on Fridays. tax laws. intensity and timing. where you drop stuff out after you write it out. but in general the staffing is pretty lean. Training: Keeping up-to-date Most firms have some kind of training program." while at another firm "there's no cafeteria." Another firm has "maybe two weeks of very basic training when you start. "you do it after you've been working at the firm for a few months. and even "lots o' free Snapple. the whole bit. It's continuous and rolling." say insiders." Other consultants "have a production staff. We kept one guy to take care of the copy machines and stuff like that. it has laserdiscs and CD-ROMs. and organizations and some of the tools that have been developed over time. Usually I spend Fridays doing administrative work and returning calls." where "you just call up ahead to get assigned a desk. however. Everyone has an office." One consulting firm has "wondrous" research resources – "The library is very modern. That is a big perk." Insiders say their offices often sport "plush carpet." Other firms practice something called "hoteling. employees are lightly tied to the office indeed. It was held in London in my year." while at other firms "there's no analyst ghetto." Another consultant remarks dryly: "We have support staff." At other consulting firms." At one New York office. There's also a word processing bay. what they call the pen in investment banking. your phone will ring via that number. but there is a kitchen. and another two six months later. "everywhere they look like money. as well as weird framed abstract art prints that I hope weren't costly. operations." Support staff: Uneven A helpful secretary or researcher can be a lifesaver. on the theory that consultants should be able to do their own research more efficiently.
incredibly steep learning curve. "the formal part is done a couple of times a week during a study. That's just how the industry is structured. At least 50 percent of your promotional chances depend on your feedback. "They give you feedback along the way. "continual training is very much emphasized and you always have access to education if your manager allows it." Feedback is "both written and verbal feedback." Similarly.need it." At one firm." says one consultant." Page 39 of 44 . "training is an excuse for a vacation in Paris. and lots of money" that a consulting career brings. mind." the firm is "vigilant about pushing out those who don't meet its exacting standards. where you review your superiors and they review you. temperament. Working with such talented co-workers. employees report. But all in all." Even though one consultant thinks "job satisfaction is high at [this firm]. gives them "a chance to do very high-level work with big companies surrounded by a group of extremely smart. it's a good experience. the consultants Despite the rewards of consulting. A lot of people have second thoughts about being consultants for life." At one firm." Since "only one out of five new associates is still at the firm five years later.com "we have 360-degree reviews. insiders tell Vault. Written performance reviews of junior consultants can be comprised of page upon page of blunt criticism. resourceful people." while at another." Insiders at consulting firms say. the proud. that satisfaction is relative to this industry." At another firm. while another says to prospective consultants: "Your body. The informal feedback can be weekly." So what are the rewards of consulting? Employees cite the "super-intelligent and slightly eccentric" group of colleagues. which doesn't have too many happy people on the whole." Others love the "significant responsibility. "The work is intellectually challenging and personally satisfying. spirit. and willpower will be challenged in ways that you cannot now imagine. consultants would like you to know that "consulting is not a job for just anybody. firms want to ensure their consultants keep abreast of their progress." The few. "feedback is given in both formal and informal channels.
downsizing or restructuring). thus further panicking those who were unaware that they possessed something called a "skill set" (for what it's worth." Following is a basic list that can raise your level of familiarity with consulting terms. Benchmarking: Measuring a value or practice or other business measure (such as costs) against other companies in the industry. and then implementing the leaner. Consultancy: A typically European name for what we call a "consulting firm" in the U. Here is a short rundown of some of those worlds that consultants like to fling about in case interviews: Bananagram: A graph showing profitability (the typical measure of profitability for this graph is return on capital employed. Consultants often lapse into their own lingo while conversing with civilians. Some of these tasks are related to maintenance of the process or Page 40 of 44 . Business Process Re-engineering (BPR): BPR is the process of reviewing a client's business processes. Blank slide: Initial sketch on paper for a slide to be used in a consulting case presentation (called blank because it does not include data until analysts put it in). more efficient process. the higher the profitability. relative market share. Case team: Team that works on a consulting project for a client. Also called a growth/share matrix. Change management: One of the services provided by consulting firms. Consultants believe a company should enter only those businesses which are part of its core competencies. eliminating unneeded or "non-value-added" tasks.S. BCG matrix: A portfolio assessment tool developed by BCG. one consultant and two or more analysts. in which the firm helps a company cope with a period of significant change (such as a merger.S. Core competencies: The areas in which a company excels..Chapter 6: APPENDIX SUB-CHAPTERS: < Industry buzzwords > Recommended reading • About the author Industry buzzwords The consulting industry uses many "buzzwords. The graph shows that the higher market share. Critical path: This term comes from Operations Management theory. or "ROCE" [pronounced roachy]) vs. Every business process is made up of a series of tasks. Brainteaser: A type of consulting interview questions in which the job seeker is asked to solve a logic problem. though the term has picked up currency in the U. Usually composed of one partner (or director). the things that you're good at).
Taken away. High-level view: This is also referred to as a "50. a company's 200th unit of a product costs 75 percent of the 100th unit's cost). Imagine a handful of sand. Page 41 of 44 . it is used to refer to only those work tasks which are the most important at the time. The other 80 percent of your time may not be worth it. In general. Each week. The present value of a future cash flow. The sum of a series of discounted cash flows. if the return on an investment exceeds this "hurdle rate." Hurdle rate: A company's cost of capital. otherwise. Consultants are not usually this poetic.." the company should make the investment. At a high level it's simply a handful of sand.administrative and bookkeeping issues. Granularity: This simply refers to the basic elements that make up a business problem.g. Hoteling: Consultants move around so much that in some firms they are not assigned permanent offices. A "steep" curve is a good thing." It refers to describing a situation in general terms or as an overview of a situation. This is the critical path. Implementation: The process by which a consulting firm ensures that the advice it gives to a client company is enacted.000-foot view. One assumption used by consultants if that a company's costs decline by roughly 25 percent for every doubling in production (e. you are left with the core set of tasks that must occur in order for the process to produce the desired result. the company should not. just a voice mail extension. If you eliminate these non-meaningful tasks. they do not directly impact the end result of the business process. Used to assess the profitability for a client of making an investment or undertaking a project. Also called a "case" or "project. Guesstimates require job seekers to make an educated estimate of something (often the size of the market for a particular product or service) using basic calculations. Helicoptering: See high-level view. they must call up the office nearest them to request a desk. Engagement: A consulting assignment received by a consulting firm." Experience curve: The principle that a company's cost declines as its production increases. 80/20 rule: Getting 80 percent of the answer first will take 20 percent of your time. At a granular level it is bits of many different kinds of rock and shell matter reduced to fine granules over time by the action of the ocean. usually from a high-level (big picture) view. NPV: Net present value. DCF: Discounted Cash Flow. Learning curve: The rate at which a consultant acquires background information or industry knowledge needed for a case. Drilldown: Asking questions to gather more detail about a situation. This is called "hoteling. Guesstimate: A type of consulting interview question. In everyday consulting language.
and document processing. would I have fun? On the beach: For consultants. friendlier term for restructuring the elements of a company. licensing an existing brand or technology. and office locations. White space opportunity: An opportunity for a company to make money in an area in which they are currently generating zero revenue (for example. financial elements. Most commonly.O'Hare test: A test consultants use to assess personality "fit" in interviews. 1994. when their work hours decline drastically. O'Shea. Recommended reading • • • Hammer. New York: Harper Business. Outsourcing is a growing trend among corporations. which advocates a complete overhaul (and usually downsizing) of a company's strategies. New York: Times Business. processes. Consultants between assignments are said to be "on the beach" (not literally). Rightsize: Also "downsize. McTaggart. Page 42 of 44 . Examples of processes that are commonly outsourced include: payroll. New York: Free Press. with zero tolerance for defects. Re-engineering: A largely discredited fad of the early 1990s. the stakeholders in a case are the shareholders. a launching a new product line. or entering a new geographic market). data processing. Writing a deck: Preparing slides for presentations to clients. James and Chales Madigan. Value-added: Used to define a service or product in a marketplace that adds value to a preexisting product or way of doing things. recruitment. or employees. more effective designs. The Value Imperative: Managing for Superior Shareholder Returns. and practices. The primary goal of consultants in undertaking any engagement is to maximize shareholder value. 1997. creditors. Shareholder value: The total net wealth of a company's stockholders. Total Quality Management: Also known as TQM. Michael and James Champy. operations. Reengineering the Corporation." this is just a kinder. 1993. technology. This expression originated at McKinsey. Value migration: The flow of economic and shareholder value away from obsolete business models to new. the spare time between assignments. Outsourcing: Taking a process normally performed within a company and hiring an outside vendor to perform the task. Out-of-the-box thinking: Creativity. Work plan: A schedule for completing a consulting engagement. This is most often used in reference to headcount reductions. Management with the purpose or intent of producing a product or offering a service of the highest quality. often at a lower cost and with better results. If I was stuck overnight with this person at O'Hare airport. James. but can apply to plants. Stakeholder: A critical person who has a stake in the outcome of a particular situation. Dangerous Company: Management Consultants and the Companies They Save and Ruin.
New York: John Wiley & Sons. C. (1990). Jr. where she headed the development of the bank's new investment business. 1980. Micheal. Boston: Harvard Business School Press. graduating with a Masters of Business Adminstration. Perspectives on Strategy: from the Boston Consulting Group. Carl and George Stalk. Nici attended Harvard Business School. (ed). Stern. Post business school. Page 43 of 44 . Harvard Business Review. Value Migration. New York: Free Press. 1998 About the author Nici Audhlam-Gardiner was a consultant in the London office of McKinsey and Company from 1993 – 1995. Nici intends to return to consulting. Competitive Strategy. and Gary Hamel. From 1997-1999. Adrian. and a project manager in the international division of the Royal Bank of Scotland from 1995 – 1997.K. 1996. Schlotsky. Prahalad.• • • • Porter. The Core Competence of the Firm.
E. • Stone & Webster • Talus Solutions • Towers Perrin • Vertex Partners • Watson Wyatt Worldwide • William Kent International • William M.K. Mercer • Yankelovich Partners • ZS Associates Page 44 of 44 .LEADING EMPLOYERS • A.T. Wyman & Company • Parthenon Group • Pittiglio Rabin Todd & McGrath • PricewaterhouseCoopers • PricewaterhouseCoopers Consulting • Roland Berger & Partners • SCA Consulting • Stern Stewart & Co. Little • Bain & Company • Booz-Allen & Hamilton • Boston Consulting Group • Braxton Associates • Buck Consultants • Cap Gemini Ernst & Young • Charles River Associates • Computer Sciences Corporation • Cornerstone Research • Corporate Executive Board • Dean & Company • Deloitte & Touche • Deloitte Consulting • Diamond Technology Partners • Edgar. Dunn & Company • Ernst & Young • First Manhattan Consulting Group • GartnerGroup • Gemini Consulting • Grant Thornton LLP • Greenwich Associates • Zentropy Partners • Hay Group • Hewitt Associates • Integral • KPMG • KPMG Consulting • Kurt Salmon Associates • L. Kearney • Advisory Board Company • American Express Strategic Planning Group • American Management Systems • American Practice Management • Andersen Consulting • Arthur Andersen • Arthur Andersen Business Consulting • Arthur D. Consulting • Marakon Associates • Mars & Co • McKinsey & Company • Mercer Management Consulting • Mitchell Madison Group • Monitor Company • Navigant Consulting/SDG • Oliver.
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