1. A definition of strategy consulting
2. Why companies hire strategy consulting firms
3. An overview of key strategy consulting firms
4. Issues strategy consulting firms tackle

1) A definition of strategy consulting:

At its core, business strategy is all about earning superior profits and beating the competition. Strategy consulting is the industry and practice of assisting businesses with high-level decisions that enable them to do this. Strategy is distinct from operations in that strategy addresses the question "What do we do?", while operations addresses the question "How do we do it?".

A strategic question might be: "What should we do to differentiate ourselves from the competition?", while an operational question might be: "How can we operate this plant most cost-effectively?" Operational questions cover many siloes of the organization, from manufacturing to IT to human resources to finance. Strategic questions operate at a higher level, prioritizing resources among the competing demands to maximize shareholder wealth.

2) Why companies hire strategy consulting firms:

A common question that strategy consultants face is, "Why don't these companies do that themselves?" Indeed, if the questions are so critical and strategic, it might seem that they shouldn't be outsourced. Clearly, executives at client firms do not abdicate their decision-making responsibility to consultants.  Rather, they incorporate the additional input into their decision-making process.

Some questions are so important that they deserve an extra dose of talent and brainpower to ensure that they're answered properly. Getting the answer wrong could devastate the company or mean the company misses great opportunities to their competition, so it's worth spending a couple million dollars ensuring that they get it right.

Executives are often tied-up in the day-to-day decisions of the company and simply can't dedicate the time and mental resources required to get to the right answer. Executives' days are tied up with meetings, operational crises, personnel issues, customer relations, and dozens of other obligations. A strategy consulting team, however, can devote 60 hours (or more) a week focused on answering a single important question.

Another advantage of using strategy consulting firms is that they may have a deep expertise in a given industry or topic area. While a company might close down manufacturing plants a couple times a decade, a strategy consulting firm might have worked with dozens of companies who've been through that process. By having this expertise available, client firms can feel better about getting the job well done.

Sometimes it's simply illegal for a company to work on the questions a strategy consulting team tackles. For example, when two competitors agree to merge, but have not yet completed the transaction, it's illegal to share information between the companies. Sharing information about pricing or other sensitive issues can violate anti-trust legislation. Technically, these companies are still competitors and ought not to be colluding.

Any number of factors could sink the deal, yet the companies want to get a jump on their post-merger integration. So, strategy consultants can come in and operate in a "clean room" environment, where they can receive the data from both parties, identify synergy opportunities, and get a jump on seizing these opportunities when the merger is complete.

The cynic might say that strategy consulting firms are brought in when an executive wants to "wash his hands" of a controversial decision or prove that he's right. (e.g. "It's not my fault the strategy didn't work; the guys at BCG said this would make us a billion dollars!") While certain executives can have an agenda, reputable firms determine what the data suggest is best for the company and artfully navigate the underlying politics. Indeed, sometimes the sensitivity of an issue can be a source of the strategy consulting team's value-addition. Having an outside perspective can be invaluable to cut through  politics and bring the most relevant facts to light.

If all corporations operated perfectly — and all their data clearly led to informed decisions — the strategy consultant's job would be unnecessary.  However in the real world, businesses operate sub-optimally, and their data are often totally messy or not readily usable for certain decisions. Ask any strategy consulting analyst about the quality of their client's data, and you'll get an earful! In many ways corporate underperformance is the seedbed for strategy consulting engagement opportunities.

3) An overview of key strategy consulting firms:

• McKinsey & Company. McKinsey is largely regarded as the godfather of the strategy consulting industry. Headquartered in New York with 17,000 employees spread across nearly 100 offices worldwide, they've got the prestige that makes them the envy of every other firm. The alleged misconduct of its former Chairman, Rajat Gupta, may tarnish the firm's reputation, but their legacy is likely to endure.
• The Boston Consulting Group. BCG has a prestige slightly below McKinsey & Company, and does similar work with senior executives. Headquartered in (you guessed it) Boston, with over 70 offices and 4,500 employees, they're known for having a slightly more academic approach, and emphasize thought leadership.
• Bain & Company. Bain has a prestige comparable to BCG and fights for the same work in boardrooms across the world. Headquartered in Boston, with 5,000 employees, they emphasize client results fanatically. Recently Bain has gotten a lot of press with presidential candidate Mitt Romney, who worked at both Bain & Company and Bain Capital — a completely separate entity that's a private equity, as opposed to consulting, firm.
• Booz & Company. Booz & Company used to be known as Booz Allen Hamilton, but carved out its United States government practices in 2008. The U.S. government consulting firm retains the name Booz Allen Hamilton, while Booz & Co focuses primarily on businesses. Booz is headquartered in New York with 3,300 employees spread across 61 offices.
• Deloitte Consulting. Deloitte consults in three key areas: human capital, strategy & operations, and technology. They're headquartered in New York with 50 offices worldwide.
• Monitor Group. Founded by Michael Porter (of Porter's Five Forces fame) and company in 1983, Monitor has grown its Cambridge, MA-based consultancy to 1,500 employees across 29 offices.
• Oliver Wyman. A part of Marsh & McLennan Companies, Oliver Wyman operates in over 50 cities with 3,000 employees. They draw on the expertise from their sister companies within the Marsh & McLennan portfolio and are known for their financial acumen.
• Roland Berger. Founded in Munich in 1967, Roland Berger is proud of its European heritage. They provide strategy consulting through over 2,000 employees in 46 offices.
• L.E.K. Founded in London in 1983, L.E.K. tackles questions of strategy with 900 employees in 20 offices.

4) Issues strategy consulting firms tackle:

Strategy consulting firms address a wide variety of issues across every industry. Indeed, many firms are loosely organized into matrices. On one  dimension, Partners have deep expertise in a particular type of business question. On the other axis, Partners have a broad understanding of all the key issues facing a particular industry.

For example, on the industry axis, a firm might divide itself by:

• Airlines
• Consumer products
• Financial services
• Healthcare
• Industrial goods
• Media
• Nonprofit
• Oil & gas
• Public Sector
• Retail
• Technology
• Telecommunications
• Utilities & Alternative Energy

While on the issue axis, the firm might divide itself by:

• Corporate finance
• Mergers & acquisitions
• Operations
• Organization
• Performance improvement
• Risk
• Sales & marketing
• Strategy
• Sustainability
• Technology

Pick an intersection (e.g. risk and airlines), and you've got the starting point for forming a consulting team and engagement.

Because of this wide range of issues and industries, "strategy consulting" will likely always sound a bit vague to the uninitiated. What these firms all share is a rigorous, data-driven thought process and a commitment to tackling their client companies' biggest issues.

1) Consulting salaries at the top three firms — McKinsey / Bain / BCG (MBB)

2) Average starting salary for undergraduate business students

3) Offers from another 11 lower-tier consulting firms, as reported by a recent survey of top MBAs

4) Overall salary survey results of top MBA programs

The numbers that follow are based on conversations with individuals plus literature research. Consulting salary fluctuates year by year, location by location, and sometimes individual by individual. Location is a particularly important driver of compensation.

In some locations (e.g. China and Africa), compensation may be as small as 1/3 of the figures listed below, which are primarily based in the United States. Another key variable is firm performance. Bonuses, profit-sharing, and equity payouts can make a huge difference in compensation — particularly at the higher levels. With these caveats in mind, the consulting salary data below can help frame your expectations.

1) McKinsey / Bain / BCG (MBB) consulting salaries:

McKinsey salaries:

• Business analysts (fresh out of undergrad hire) earn a $75,000 salary + $5,000 signing bonus + $5,000 relocation allowance.
• Associates (fresh MBA hire) earn a $125,000 salary + $20,000 signing bonus + performance bonus of up to $40,000 + 12% of bonus/salary contributed to retirement fund.
• Engagement Managers earn approximately $250,000.
• Associate Principals' earnings vary greatly from $500,000 to $800,000.
• Partners often earn over $1,000,000.

Bain salaries:

• Associate Consultants (fresh out of undergrad hire) earn a salary of $70,000 + signing and year-end bonus totaling $9,000 + profit-sharing vesting three years later of approximately $7,500 (depending on firm performance) + 4.5% of their salary contributed into retirement fund.
• Consultants (fresh MBA hire) earn a salary of $125,000 + signing bonus of $20,000 + performance bonus of up to $40,000 + profit-sharing vesting three years later of approximately $14,000 (depending on firm performance) + 5% of salary contributed into retirement fund.
• Managers earn approximately $350,000.
• Partners often earn over $1,000,000.

BCG salaries:

• Associates (fresh out of undergrad hire) earn a salary of $72,000 + signing bonus of $5,000 + performance bonus of up to $16,000 + profit-sharing of up to $4,400 + 15% of salary and bonus contributed into retirement fund.
• Consultants (fresh MBA hire) earn a salary of $135,000 + signing bonus of $20,000 + performance bonus of up to $40,000 + 5% of salary contributed into retirement fund.
• Project Leaders earn approximately $250,000.
• Principals earn approximately $500,000.
• Partners often earn over $1,000,000.

The consulting salary data above provide a perspective on top-tier firms. Other firms typically pay less, with the disparity increasing as you move down the prestige rankings and you grow more senior within the firm.

2) Average starting salary for undergraduate business students:

These figures may seem eye-popping, particularly to undergraduates who have suffered through minimum compensation in their college years. For freshly-minted Bachelor degrees, the compensation packages above represent roughly an 80% premium over the $48,144 average figure the National Association of Colleges and Employers (NACE) provides for business undergraduates.

Bear in mind, however, that consulting firms tend to concentrate their recruiting efforts on top students at top schools. The premium narrows when you compare the MBB figures to undergraduate business programs whose graduates earn top compensation. (Note: Consulting firms do hire from many majors and not just business programs, but the consulting job is most similar to other jobs accepted by undergraduate business students as compared to other types of students.) These new entrants to the workforce earn salaries as follows:

• University of Pennsylvania (Wharton) undergraduates earn an average of $70,000.
• MIT (Sloan) undergraduates earn an average of $65,000.
• Carnegie Mellon (Tepper) undergraduates earn an average of $64,500.
• Virginia (McIntire) undergraduates earn an average of $60,000.
• Michigan (Ross) undergraduates earn an average of $60,000.
• Georgetown (McDonough) undergraduates earn an average of $60,000.
• NYU (Stern) undergraduates earn an average of $58,000.
• UC Berkeley (Haas) undergraduates earn an average of $58,000.
• Washington University (Olin) undergraduates earn an average of $58,000.
• Alabama (Culverhouse) undergraduates earn an average of $57,000.

3) Offers from another eleven lower-tier consulting firms, as reported by a recent survey of top MBAs:

When top MBAs reported on their first-year offers from lower-tier consulting firms, they shared the following:

• Accenture salaries are $127,000 + $50,000 signing bonus + $23,000 anticipated annual bonus.
• L.E.K. salaries are $128,000 + $29,000 signing bonus + $34,000 anticipated annual bonus.
• A.T. salaries are $110,000 + $36,000 signing bonus + $41,000 anticipated annual bonus.
• Deloitte salaries are $126,000 + $42,000 signing bonus + $16,000 anticipated annual bonus.
• Booz & Company salaries are $109,000 + $37,000 signing bonus + $37,000 anticipated annual bonus.
• ZS Associates salaries are $118,000 + $2,0000 signing bonus + $19,000 anticipated annual bonus.
• Capgemini salaries are $109,000 + $12,000 signing bonus + $33,000 anticipated annual bonus.
• Monitor Group salaries are $109,000 + $23,000 signing bonus + $16,000 anticipated annual bonus.
• PwC salaries are $97,000 + $20,000 signing bonus + $28,000 anticipated annual bonus.
• IBM salaries are $101,000 + $24,000 signing bonus + $16,000 anticipated annual bonus.
• Ernst & Young salaries are $107,000 + $16,000 signing bonus + $18,000 anticipated annual bonus.

4) Overall salary survey results of top MBA programs:

Finally, to round out the comparison, below are the first-year consulting salary figures associated with the top MBA programs:

• Wharton MBA salary + bonus is $132,579
• Stanford MBA salary + bonus is $131,949
• Harvard MBA salary + bonus is $131,759
• Tuck MBA salary + bonus is $128,013
• Booth MBA salary + bonus is $126,779
• MIT MBA salary + bonus is $125,905
• Kellogg MBA salary + bonus is $123,996
• Columbia MBA salary + bonus is $123,486
• NYU MBA salary + bonus is $121,867
• Berkeley MBA salary + bonus is $120,164

So, a management consulting salary is indeed usually significantly more than salaries offered in alternative industry jobs. But do not mistake the large sums to mean that management consulting is a cushy alternative to industry jobs. The hard part is getting in, staying in (amid strict up-or-out policies), and accepting a lifestyle that's significantly more demanding than a stationary 9-to-5.

In most fields being a Harvard grad is the ultimate credential. This is true in medicine, academia, business, law, and politics (just ask President Obama).

BUT, there's one field where a Harvard degree isn't a prestigious credential, in fact it's a total liability… and that profession is playing professional basketball in the NBA.

I'm of course speaking about Jeremy Lin. Ten days ago, Jeremy was a "nobody."  Today, roughly 1 billion people around the world know who he is and what he has done. This morning, President Obama was talking about him on his helicopter and called him "impressive."

His story is all over the newspapers in New York City. He is on all the major news websites across the U.S… and as of a few days ago, across Asia and the rest of the world.

His seemingly unlikely road to insane success from the most unlikely of places has been called "Linsanity." His coaches call him "Linderella" (a play on the childhood story "Cinderella").

So what happened? How did he get here? And what can you learn from him to apply to your life and career?

Let me address these questions.

In the last 6 games or so, Jeremy has led his team, the New York Knicks, to 6 straight wins from a team that most New Yorkers assumed would just lose the rest of the season. During these 6 games, he has posted a remarkable statistical performance — very close to being the leading scorer in the NBA.

What is remarkable about this success is that these are for all practical purposes his FIRST 6 games of playing in NBA as a starter.

When you compare performance in the first 6 games on a NBA player's career, he has outperformed every other player in the history of the modern NBA – including Michael Jordan, Kobe Bryant and every legend you can think of.

When you look at winning (or "Linning" as the media prefers to say) streaks of any player who has had a 6-game performance streak like this at ANY point in their career, there are only about a dozen players in history who have played at this high a level for 6 games in a row. At the top of the list are "legends" like Michael Jordan.

What makes this story all the more remarkable is the level of adversity he faced in getting here.

First, as his last name suggests, Jeremy is an Asian-American (Chinese-American or Taiwanese-American, depending on whose politics you prefer).

Despite outstanding performance in high school (including a California state championship), he was unable to get a basketball scholarship at ANY university. As a "fallback," he applied to and got into Harvard as a student.

When he graduated from Harvard, he really wanted to play in the NBA. Even though he was statistically the 2nd highest performing player in his position, he was turned down by EVERY NBA team during the draft (where the top new college grads are recruited).

At every step of the way, his success was dismissed as a fluke. At Harvard, he posted good numbers presumably because he didn't play any elite teams. BUT, if you look at the statistical record, his performance metrics actually IMPROVED in the 3 games when played against elite teams. But nobody noticed because it just did not seem possible that a short, slow, Asian kid from Harvard could possibly be that good.

During college, in summer play in front of scouts and the media, he played head to head against the #1 player in college basketball in his position — and beat him. But again, nobody took notice… assumed it was a fluke… after all, a short, slow Asian kid couldn't possibly be that good.

In the NBA, he fought and scrapped his way onto a NBA team — and then got fired. He scrapped his way onto another team… and then got fired again. And finally, he scrapped his way onto the New York Knicks, and was likely a few days away from being fired when something unusual happened.

The Knicks' elite players had been injured, and another had a death in the family. In short, all the "good players" were unable to play, and as the player ranked "last" on the team, the coach got so desperate he decided to (for the first time in his career) let Jeremy play the game of basketball.

… and Lin FINALLY got the opportunity he had spent his ENTIRE life preparing for, and he TOOK ADVANTAGE of it.

Some people in the media are calling the last 10 days possibly the greatest "underdog" success story in sports HISTORY.

So how did he become the seemingly most unlikely of heroes?

As a Chinese-American, I have been following the story for the last few days. I've been reading the many articles about him, his family and his life. And through that, I've pieced together a composite view of his path to success and extracted the key lessons that are widely applicable to you.

Let me elaborate.

Career Lessons from Linderella (aka Jeremy Lin)

1) 10,000 hours – In Malcolm Gladwell's book "Outliers" (which I highly recommend), he demonstrates how exceptional success in a variety of fields is often attributed to a set of circumstances that allows someone to achieve the requisite number of hours of experience to become exceptionally good at something.

Gladwell identified this threshold as 10,000 hours of practice.

And when you look at Lin's life history, he was likely one of the few Asian-Americans who logged not only 10,000 hours, but by my rough estimates quite possibly 20,000 hours of practice.

As a very young child, his father, who had a PhD in engineering, was a huge basketball fan. He taught Jeremy all the major basketball moves of the NBA stars from the 1980s.

As Lin got older, when his friends went out to have fun, he opted to go the gym and practice. His life was to study, go to church and play basketball. And he did.

To be sure, Lin clearly has raw talent (but then again so do a lot of people), one key difference is that even though he is only 24 years old, he has essentially been practicing HARD at the sport of basketball for the last 20 years. Yes, he's a 20-year "veteran," so to speak.

2) Responding to "Market Feedback" – When he initially made it to the NBA, the feedback he got was that while he was good at driving to the basket (scoring from positions close to the basket), his midrange and outside game (shooting from further away) was not nearly as good.

The problem that coaches anticipated was that if a defender knew you could only score from up close, then you became extremely predictable. Defenders could hang back close to the basket, let Lin come to them, and block his shots given his relatively short (by NBA standards) height.

What few people realize is in the most recent offseason, when other players traveled and did fun things, Lin spent hours upon hours in the gym… turning his weakness areas into what are now clearly exceptional strengths.

If you watch his last 6 games of play, what you notice is how multi-faceted his game is. He can shoot from close to the basket, from far away… he can shoot under pressure… and when he doesn't have a good shot, he can see which of his teammates has a better shot and get that player the ball.

If a defender plays close to Lin preventing him from shooting, Lin is quick enough to drive closer to the basket and get a closer shot.

If a defender backs away from Lin to prevent him from getting the shot that's close to the basket, Lin (today) can hit the outside shot remarkably well.

When opposing teams put two defenders on Lin, which by definition means one of Lin's teammates is left unguarded, Lin can get the unguarded teammate the ball and that player can score.

In short, today he has developed what was already a statistically strong set of skills and made them even better. He did this when nobody else thought he could.

3) Never Quit – Through it all, Jeremy Lin never quit. He's been called racial slurs on the court by opposing players and fans. He's been overlooked, ignored, dismissed… and yet he kept showing up for practice each and every day… and every day he kept trying, even though everybody else told him to not bother.

4) Peace of Mind – During his time in the NBA prior to his most recent Linderella run, he had not played well when he had a few brief moments to play. In hindsight, he has implied that he was so stressed out about trying to do well that he was "trying too hard."

Instead of having fun and focusing on playing well, he was in the back of his mind spending too much time and energy "talking to himself" (my words) about what his performance means (such as proving his critics right)… that he got distracted from just playing the game of basketball — something he has 20,000 hours of experience in doing.

At some point, he decided to just let go of that anxiety. He credits his faith in God for helping him to do this.

Regardless of your faith, what's worth noting is how Jeremy Lin reached a point where he was "okay" if he didn't make it in the NBA. He had done his part, accepted that he had done his part, and to some extent, let go of the outcome.

If he didn't make it in the NBA, it would be okay, because he had spent 20 years spending every spare hour in practice doing everything humanly possible to be the best he could be, and if that STILL was not enough, it's okay for two reasons: a) there was nothing else within his control that he could do; and b) he realized he still had the things that were truly important to him (in his case, his family, his friends and his faith).

He finally achieved a mental state that psychologist Mihaly Csikszentmihalyi calls the state of "Flow." Sports fans call this state being "in the zone" — where a player stops thinking, stops any self doubts, and just unconsciously plays… letting all those decades of experience shine through without letting one's self get in the way.

When I watch him play, he looks a) relaxed, and b) like he's having fun. The other night, he took and made the game-winning shot with 0.5 seconds left in the game. It looked like he was just casually practicing at the gym… one of those 20,000 hours… where all young kids imagine themselves hitting the game-winning shot.

And all he did was ignore the fact that 20,000 people were watching him live — standing while screaming their heads off, forget that much of New York City was on pins and needles waiting to see if his team would win, and forget that 1+ billion people in China who have been waiting for a Chinese sports hero to emerge wanted him to win… he ignored ALL of that, and it looked like he was just hitting a shot that in over 20,000 hours of practice he has probably attempted 250,000 times… and he just did it again for the 250,001st time.

So what are the key takeaways for you?

1) 10,000 hours — extreme success requires a certain level of practice. This is true both in the case interview as well as managing your career over the long term. Ten thousand hours is a LOT of hours (it's full time for 5 years). It is very much worth deliberately CHOOSING what you're passionate about, because otherwise there's a very high likelihood you'll quit well short of the 10,000-hour mark.

I see too many people go down career paths that were easily accessible, socially acceptable to them, but quite often these were not necessarily paths that got them very excited.

If you're not excited, it is very hard to make the extra effort that gets you to and beyond the 10,000-hour mark.

What I find interesting about Jeremy Lin is that out of every Asian-American basketball player in the world, it's entirely possible that he's logged more hours of practice than anyone else.

Incidentally, Michael Jordan — arguable the greatest basketball player in history — was ALSO a player who logged more hours of practice than any of his teammates at every level of play. Jordan showed up first for practice and was the last to leave.

Hmmm…. interesting (but not surprising), isn't it?

2) Adapting to "Market Feedback" – I always tell my clients and students, be stubborn on your goals, but be FLEXIBLE on how you get there. If you continually learn from mistakes and adapt based on new information, you continually get better.

In your own career, you should be paying attention to market feedback. What are people saying? What are your legitimate areas for improvement? What are the strengths you possess that people unanimously agree are your exceptional strengths?

This is especially critical when you combine this with the next key lesson.

3) Never Quit — If you work like a dog (for 10,000+ hours), continually improve, and never quit, EVENTUALLY you will succeed. It might not be a fast success, but it is with that level of dedication a likely success (eventually).

4) Peace of Mind – A little stress heightens the senses and accelerates brain activity. TOO MUCH anxiety backfires. Here is a BIG SECRET about this topic that's worth writing down.

STRESS = FEAR

Why does one stress out about trying to catch an airplane?  Because one is AFRAID of the consequences and hassle of missing it.

Why does one stress out about getting fired from a job?  Because one is AFRAID of what others would say, what it would mean about one's worth, how one would pay ones bills, etc…

When you ACCEPT your worst case scenario, it REMOVES the fear… and the stress disappears as well.

In Laurence Gonzalez's book "Deep Survival: Who Lives, Who Dies and Why" (also highly recommended), he analyzes why some people survive falling out of an airplane at 20,000 feet without a parachute and live, fall down an ice canyon with a broken leg, no supplies and crawl out alive a week later, and why others don't.

What is absolutely FASCINATING about the mindset of the extreme survivors profiled in this book is how within 5 minutes of the major incident, every person who would eventually survive immediately acknowledged that most likely they would die, AND (this is the important part) decided it was OKAY if they did.

Once they got that out of the way, they were no longer afraid to die, no longer stressed out about it, and (this part's important too) could devote ALL of their resources towards figuring out how to survive.

THE key to having peace of mind / being "in the zone" of performance is to in advance accept your potential worst case scenario, and then stop being afraid of it.

For Lin, quite ironically, he played his best when finally — at some level — he cared the least. I don't think this is an accident.

It's also evident in how Lin has responded to the enormous media frenzy and attention surrounding him. For a new player, he's largely unfazed by it all. If his "Linning" streak ends in a few days, he's okay with it. If he becomes one of the greatest legends in basketball history, he's okay with it. Once he stopped being afraid, he could actually play for the love of the game called basketball.

In addition to these four lessons, let me add one more that's my observation.

5) You Can Not Control When the "Market" Rewards You for Your Hard Work – One of my business mentors once said to me,

"In business, you must focus on doing the right things day-in, day-out. You can not control when the market will reward you for this work, but if you do the right things every day, you will eventually be rewarded."

Lin spent 20,000 hours doing the right thing, and eventually the "market" rewarded him for it (about 10 days ago!).

In your case, you must focus on the career path YOU want (not what your spouse, friends, family members, peers want) and then do what is necessary to be successful in that path. If you stick to that formula, learn from your mistakes, and never quit, you will be eventually be rewarded. And it sure helps if you really like what you do because THAT's what gets you through the inevitable rough patches.

And what makes Jeremy Lin SO exciting to both watch and follow is that he did EXACTLY everything that needed to be done over the last 20 years, and FINALLY the success he spent 20 years earning is being recognized.

And for anyone who has every felt slighted, overlooked, dismissed, not believed in by others (which is basically me and everyone I know), it is so easy for us to identify with him in some way and rewarding to see him get the public recognition he spent a lifetime earning.

The client organizations are typically businesses, but management consultants also advise governmental agencies and nonprofit organizations. A basic understanding of the commonalities and different types of management consulting firms will help job seekers navigate through the milieu of management consulting career options.

Management consulting firms – also called "management consultancies" – have a few similarities that unite them. Generally, most reputable firms hire bright people who can think well on their feet, solve problems, communicate in teams, and exhibit professionalism with clients. The workaday experience of the consultant is all about gathering information, synthesizing insights, and communicating solutions.

These consultants tend to spend much of their days in team meetings, client meetings, data analysis, and slide creation. Sometimes management consultants are criticized for "stealing your watch to tell you what time it is," but consulting engagements often provide practical insights and solutions that lead to substantial improvements for client organizations.

Though the categorizations of the management consulting universe are imprecise, nearly everyone practicing management consulting could be classified into one of them. The categories are:

1. Strategy consulting
2. Accounting firms
3. IT specialists
4. Boutique consulting
5. Internal consultants
6. Independent consultants

1) Strategy consulting

Strategy management consulting firms receive the majority of this website's attention. These firms advise senior management across all industries on broad questions related to major strategic questions. The major management consulting firms focused on strategy consulting include McKinsey & Company, Bain & Company, the Boston Consulting Group, Booz & Co, and Monitor Group.

These firms tend to recruit at elite undergraduate universities and business schools, so they rank highest in the prestige pecking order. Strategy consulting firms must tackle high-dollar questions at a CEO- or senior executive-level in order to make the hefty strategy consulting price tag (often over $500,000 a month for a team of five) a reasonable investment. Questions a strategy consulting firm might tackle include:

• How do we respond to a new competitive threat?
• Which manufacturing plants should we shut down?
• How can we increase our profit margin?
• How can we increase our market share?
• How do we go about launching this new product?

If you were to read a typical consulting resume at a strategy consulting firm, it might say "Facilitated redesign of a Fortune 100 retailer's merchandising and planning functions by collaborating with client VPs, estimating savings under differing scenarios, and crafting new job descriptions. Client has since realized over $50 Million in annual savings."

New recruits into strategy consulting firms tend to enjoy the wide variety of business questions and industries, as this array of experiences can provide a nice survey of the business world. From there, most candidates leave consulting with 2-5 years to start or advance their chosen career path. The consulting interview for strategy consulting firms usually contains a case interview question, whereupon a candidate has a conversation working through a business problem that may resemble an interviewer's previous engagements. A consulting interview question might sound like, "Our client is a $2 Billion manufacturer of household appliances. Recently sales have been flat, but margin has declined. They need you to identify how to increase the margin."

2) Accounting firms

The major audit firms also often provide consulting work to their clients. These major players include PriceWaterhouseCoopers (PWC), KPMG, Ernst & Young, and Deloitte Touche Tohmatsu. These firms tend to recruit sharp accounting and business talent from a wider pool of universities than the elite strategy management consulting firms.

The similarities between accounting and consulting can be significant (e.g. both advise senior management, both require a familiarity with business mathematics), and the potential for conflicts of interest is sizable. In the aftermath of the Enron / Arthur Andersen scandal, new legislation such as Sarbanes-Oxley provides clear rules on how the audit and consulting functions need to have clear separations. Questions consultants within accounting firms might address include:

• What financial tracking and reporting processes are inefficient?
• How can we improve our compliance rates?
• How might we improve cash flow by optimizing our billing or payment processes and policies?

While the questions above seem close to accounting-related queries, these firms can also have deep expertise in other segments. For example, Deloitte's Human Capital Advisory practice deals primarily with questions of human resources and change management. A consultant resume within an accounting firm might say, "Conducted thorough review of the invoice-to-cash cycle to identify bottlenecks slowing payments. Client has since improved their days receivable metrics by over 20%." A consulting interview within an accounting firm will likely ask a suite of behavioral questions and may quiz you on points of accounting knowledge.

3) IT specialists

The complexity of IT consulting, combined with the sheer market size of the key players, warrants giving the IT specialists their own category. Key players in this category include Accenture, IBM, Hitachi Consulting, Computer Sciences Corp, CGI Group, and iGATE Patni. (Note again, however, that these categorizations are not too rigid. Accenture also has a smaller strategy consulting arm. Meanwhile, though IBM has an estimated 100,000 IT consultants, they also make much of their money on products.)

IT firms recruit even more broadly than accounting firms, often valuing particular coding knowledge above GPA or class rank. These firms often serve the CTO of a corporation or his direct reports. IT specialists would tackle questions such as:

• How can we automate this antiquated paper system?
• How should we go about fine-tuning and articulating our specific requirements to receive bids from different IT vendors?
• How should we go about implementing a company-wide ERP (Enterprise Resource Planning) software system or CRM (Customer Relationship Management) system? (Examples of such platforms include SAP, Oracle, or Salesforce.)
• What new system should we update our old "green screens" to?
• How can we ensure our important data is encrypted, backed up, accessible, and secure?

A typical consultant resume from someone working in the IT space might read: "Expedited online sales process via selecting, adapting, and testing a CRM solution which streamlined most manual processes, improving shipping times by 20%." A consulting interview for an IT specialist might ask a candidate to walk them through the process he'd use for implementing a given IT upgrade.

4) Boutique consulting firms

The Boutique consulting firm category is a bit of a catch-all. Generally, these firms tend to have a clear specialization on a given industry or practice area — or both. There are hundreds of different ways boutique firms can specialize. For example, the bread-and-butter of ZS Associates is sales and marketing consulting to pharmaceutical companies. Hewitt, Mercer, Towers Watson, and the Hay Group all focus on human resources issues. Sometimes boutique firms might specialize even further from human resources to compensations benefits alone.

IDEO and Kuczmarksi & Associates are two boutique firms that operate in the creative niche of "innovation consulting." The list could go on and on. But don't let the "boutique" name fool you. Many of these firms have thousands of employees and operate worldwide. The questions they tackle and their recruiting processes vary widely. The prestige, selectivity, and name recognition of boutique firms also varies quite a bit.

5) Internal consultants

Many management consultants have one client and one client alone: their employers. It's quite common for many corporations to have an internal group that operates as a consulting team, tackling valuable potential improvement opportunities within the corporation. Often a company's "strategy group" could also be called an internal consulting team. Corporations enjoy several benefits in having an internal consulting team present. Internal consultants are already familiar with the business, cost less than external consultants, and can often advance into other key leadership roles in the company.

Many corporations recruit the very best undergraduate talent they can get into these internal consulting or rotational roles — but stars often choose strategy management consulting firms over industry picks. Questions internal consultants might tackle include:

• Why do we have such variation in cost in different parts of our business? What opportunities exist for us to identify best practices and disseminate them worldwide?
• What businesses would make appealing acquisition targets for us?
• What's the competition doing with regard to this particular issue?
• How would we continue our business if the union organized a strike at a key plant?

The variety of questions they tackle may be very diverse like the list above, or more specialized into a particular area such as purchasing. Employees who operate in internal consulting teams are often hired from traditional consulting firms. Indeed, management consultants at strategy consulting firms frequently receive headhunter phone calls telling them about opportunities for strategy departments in different corporations. An internal consultant resume would highlight numerous projects that saved or generated large sums of money for their employer.

6) Independent consultants

Even more scattered than the boutique consulting firms and the internal consultants are the independent consultants. These consultants don't even operate under the banner of a major company. These entrepreneurial souls often work by themselves or in a very small team of 2-6 people total. Frequently independent consultants have gained a deep expertise from having spent years tackling a particular type of business challenge (e.g. waste reduction in manufacturing plants).

These people may be semi-retired veterans who keep getting pulled back into new projects, new parents who want a reduced total weekly workload, or young people who desire more freedom and flexibility in their lifestyle. Independent consultants often augment their incomes with executive coaching, speaking engagements, or other one-off projects.

These broad categorizations can provide a useful starting point in exploring management consulting career options. Which one is best? That completely depends on your background and goals.

If you're a hard-charger with stellar academic credentials and want to become a Fortune 500 CEO one day, shoot for a strategy management consulting firm. If you're working toward a CPA, the accounting firms will value it the most. If you have a fascination with computers, coding, and process improvement — IT consulting may be the most stimulating environment. If you have a specific area of knowledge that you'd like to develop day after day, choose a boutique firm focused on that area. If you want the long-term stability of an established corporation, look to internal management consulting roles.

Cosentino's book has a brief but thoughtful section on international students which centers around communication skills. I'm an American citizen but grew up in a South American country. I immigrated to the U.S. when I was 17 and still have an accent, though mild, after 10 years. My English grammar and vocab is well above average otherwise (by average, I mean most people who grew up speaking English).

Consentino's advice is to try to get the same job with the same firms but in your native country since you'll have a competitive advantage (an American college degree has prestige abroad, etc). This advice makes more sense for international students than for me (this is my country, after all). However, I see his point and would consider working in the Latin American office of a Top 5 firm for, say, two years and then transfer to the U.S. or simply leave it at that and then move onto something else. From your experience interviewing candidates and working as a consultant in the U.S., would you echo Consentino's advice? More precisely, would you put in front of a client a perfectly competent consultant who has a mild accent?

By the way, the first thing I did after becoming a citizen recently wasn't getting a passport or registering to vote. I instead got enrolled in a one-on-one intensive accent training program with a speech therapist (work in progress). I guess I take this accent issue very seriously! (My next investment is in the LOMS!)

I thank you profusely in advance for your thoughts and guidance on this. Feel free to share this question via your daily emails since, I think, I'm not the only one troubled by this concern.

My Reply:

The main value of applying in one's native country is that the resume reader is more familiar with the local education system, grading systems and other forms of academic recognition. I don't know what your native country is, but let's say for argument's sake, it is Argentina.

Let's say you went to the #1 most prestigious high school in Argentina and won an award for being the top 10 graduates in the entire country… an award everyone in Argentina is familiar with… and you sent your resume to me, an American, I would most likely reject it because I don't have the background to consider it.

Now if you were the child of a McKinsey client, then I might take the enormous effort to send your resume to a colleague in Argentina to ask them to evaluate your resume for me, but it's an incredible hassle to do so.

Now if your academic and career accomplishments in the United States are strong enough to stand on their own, then it's irrelevant what you did before you were 17. So for argument's sake, it you have a Harvard degree and interned for say Coca-Cola as a summer financial analyst, by all means, work in the U.S.

Consulting firms in the U.S. are very multinational.  I have no problems putting a consultant with an accent in front of a client. The only concern I have is would a client ever have to ask the consultant to repeat what he or she was saying. So is the accent mild, as in someone would ask, "Oh, where are you from?"… or is the accent so strong that someone says, "I'm sorry, I didn't understand what you said, could you repeat that?"

The former is acceptable, the latter forces the interviewer to think twice — and often lean towards rejecting someone.

Also in general, I tend to think one should live your life the way you want to and not overly complicate things. If you want to move back to your native country, that's one thing. But if your only reason for possibly going back to your native country is to work the system, so to speak, I'd be slightly inclined to spend that same energy in just making things work the best you can in the country you prefer to call home.

It applies not only to how you serve clients as a consultant, but also how you manage your own career.

My thoughts on this topic are widely applicable to CIBs (Case Interview Beginners), FFYs (Future first years), and CIFMs (Consulting Isn't for Me).

The concept of competitive advantage is quite simple. It is something you, your company, or your client possess that provides you with some kind of edge over your competition. Sometimes the advantage is a physical asset (we have factories in 30 countries), other times it is a skill (Apple), or a culture.

As it applies to you and your career, it is a particular skill that you possess that is unusually strong (relative to others) and uncommon.

Now this common sense definition seems pretty straightforward and even obvious. Yet, the vast majority of working professionals ignore their own personal competitive advantage…. and many CEOs ignore their company's competitive advantages in making strategic decisions.

A strategic decision is a decision of what to focus on…. which game to play.

A tactical decision is a decision on how to win the game.

For example, growing up as a kid, I watched Michael Jordan play basketball. He was by far the best in the world, and by an extremely wide margin.

But I'm willing to bet you that I could beat Michael Jordan in a one-on-one match up.

It's true.

Even in his prime, I'm sure I could beat him in one-on-one competition.

TIME OUT….

Now be honest, in reading those last few sentences, did you assume that I meant I'd beat him in playing basketball?

If you read carefully, nowhere did I say I could beat him in a one-on-one match of basketball. You may have assumed that (because that's the natural inclination of most people), but I never said that.

No, I'm pretty sure I could beat him in a case interview competition!

Strategy is about harnessing your competitive advantage to exploit a competitor's weakness. It would be very foolish of me to try to beat Michael Jordan in a one-on-one game of basketball. By attempting to do so, I would provide him the opportunity to use his advantage to exploit my weakness (5'8" – or 174 cm – height and I can't jump, shoot or run!)

But, I'm half decent at this case interview thing… and in playing that "game," I have the advantage.

So how does this apply to your clients and your career?

There is enormous temptation to take the path that is most popular, most visible, and often most prestigious.  (It is far more prestigious to be a NBA Basketball champion than say a case interview champion.)

You see, CEOs do this all the time. They favor the seemingly "safe" choice (safe defined as the choice that everyone else is pursuing). It takes a very strategic CEO to take the path that competitors won't take — but quite often, that is the better choice in the long run.

Amongst aspiring management consultants, I see many, many people who attempt to pursue this career path that really shouldn't.

If math is difficult for you, if you don't naturally "see" the insights that factually exist but aren't obvious, if you're a creative lateral thinker (but not a step-by-step linear thinker), these are competitive disadvantages in consulting. (But one industry's disadvantage is another's advantage).

Now it is hard to know which category you fall into early in the process, but at some point in the process, you need to take a hard, critical, unemotional, unbiased, objective assessment of yourself to see how you stack up.

Your career will be much more productive and successful if you can find a "game" (a profession) that plays to your strengths and competitive advantages, instead of one that constantly exposes your weaknesses.

A big part of being strategic about your career is to know yourself.  This is a hard thing to do, and it has taken me well over a decade to understand myself.  It didn't even occur to me to try to do this early in my career, but it would have been much more efficient if I had been more thoughtful about this.

Let me explain why being strategic is useful.

Life is easier.

Promotions come easier when you're able to harness your competitive advantage. Income growth is easier too (both for your clients and for yourself). Stress levels go down when your daily work requires you to do things that are nearly effortless.

I recognize that I've become a role model of sorts to many readers of my blog and emails. To the extent this is true, it is my hope that people emulate the guiding principles behind the decisions I've made in my career and not copy thedecisions I made in my career, given my specific talents, strengths and competitive advantages.

As I approach 40 years of age (geez… that is such a scary number for me), I have seen the difference between people who focused on what they were exceptionally good at doing, versus those who followed what conventional wisdom suggested was the more prestigious choice (even if they had no competitive advantage in that profession).

For example, I have two acquaintances who in high school both had an eye for fashion and design. One attended a Top 200 U.S. university and studied accounting — corporate audit in particular. The rationale was that being a CPA was the safer choice — never mind this person had no real interest, passion, or competitive advantage in the field.

The other (who was not nearly as academically talented) decided to pursue a career in fashion. She attended a community college (a Top 20,000 U.S. education institution).

Ten years later, the second person has a thriving career. She works for one of the major fashion labels. She earns more than most engagement managers at McKinsey… because she is just that good at fashion. Her income is in the top 1.5% of all Americans.

Meanwhile, the first person dropped out of the accounting profession (she wasn't good at it, she hated it, she didn't put in the effort to excel) and today earns an income that is probably only 20% of what the fashion expert earns today.

When both of these individuals were in high school, their raw talents in creativity and fashion were identical. The difference many years later is as a direct result of the strategic choices they made early in their careers.

Making wise (but not always obvious and not always popular) strategic choices early in one's career has enormous implications many years later.

When you pick a profession where your strengths give you a competitive edge, it has a cumulative effect over the years.

You tend to do well in your early years, get more opportunities for more challenging work, which further enhances your skills, which further improves your competitive advantage (differentiating you from your competition by an even wider margin)… the whole process is a self-reinforcing upward spiral.

If you choose poorly, the cumulative effect can also work against you just as easily.

If you pick a profession that continually exposes your weaknesses, you tend to stumble and fail at a much higher rate early in your career. You get more discouraged, more stressed out… you tend to avoid putting in extra time and effort into a work experience that is unpleasant. You don't get the opportunities for more challenging work, and the shortfall gap between your skills and your strategically-focused competitors gets wider and wider… and you get left further and further behind.

Perhaps even more than this negative spiral on one's career is the toll it can take on one's self esteem. You can erroneously come to the conclusion that you just aren't that good at your career (not realizing you might have been exceptional at a different one).

When I compare notes with my friends and colleagues similar in age to me, the one conclusion all of have reached independently is that it takes about 7-10 years to become exceptionally good at a profession. (If you're interested in this topic, see the book Outliers by Malcolm Gladwell, which is excellent.)

The problem with picking a profession that isn't a good fit for you is one of opportunity cost. If you spend 10 years in the wrong profession, many people are unwilling to start all over in a new career — which involves resetting the experience clock and starting the 7 – 10 year countdown all over again.

If you add in having children, greater financial responsibility, you end up seeing many people "trapped" in a career where their skill level, performance, and income is merely "adequate." You see a lot of people in this world who fit this description.

If you back trace the root cause of this unsatisfying outcome, quite often it goes back to choices made early in one's career. Picking a profession you are not exceptional at, one that is not interesting to you, and one where you have no competitive advantage.

Often these decisions are made due to parental expectations, peer group expectations, or spousal expectations.

CEOs make analagous decisions based on Wall Street expectations, CEO peers' expectations, etc… The structure of why poor strategic decisions are made is the same, even if the context is different.

My advice is to choose wisely and strategically as early as possible in your career.

If you find yourself in a profession with a poor fit, I can tell you this: If you do decide to make a shift, it is much easier to make a switch early in your career. The "switching costs" only go up with each passing year.

The key to make such a transition, even if it is not conventional, prestigious, accepted, or popular, is to have a very clear understanding of yourself and your strengths.  If you are very early in your career and don't know your own strengths yet, I suggest building a high self awareness of this, and pay attention to what is easy/hard for you in the first few years of your career.

Once you have some sense of your competitive advantage, you want to take a fresh look at your opportunities and determine which opportunities harness your competitive advantage, as opposed to continually exposing your weaknesses.

Choose strategically and at some point, your career becomes as easy as riding a bicycle downhill. If you choose without this strategic consideration in mind, don't be surprised if you spend your entire career riding a bicycle uphill — an extraordinary amount of work without much progress.

Your website is truly fantastic and helpful for anyone wishing to join the Top 3 management consultancies.

I just received my candidature rejected for an interview with Bain because according to them, I don't have the right degrees.

I have a Master's in Public Administration degree from [major U.S. State University] and a Bachelor's degree in business administration (from a university in my home country). I am currently a strategy consultant with [technology and consulting corporation] in [European country] and have 6+ years of experience in the consulting field in Europe.

In academic fields – I've always been the top of my class – both in undergrad and graduate school. I have done a ton of extracurricular activities throughout my studies and demonstrated leadership skills in anything I do. I thought I was the perfect "type" of profile for MBB.

Now, you are the guru in this field, so I would really appreciate you telling me (and many of those in similar situations) – do you really need to have an MBA from the top schools to get an interview with MBB?

Many thanks for your reply and for keeping your wonderful website running!

P.S. Maybe this detail is important in my case – I did not apply directly with Bain but went via a headhunter who is currently screening potential profiles for Bain. The interview with the headhunter went fantastic and I was very optimistic about finally meeting Bain for interviews.

My Reply:

Your background doesn't disqualify you from consulting, but it is a less common background. You have two weak spots in your background, first is the [major U.S. State University] – not a target school, not an Ivy League school. In addition, you have a non-traditional degree.

Again these factors alone don't disqualify you, but they don't make you an obvious "safe" choice for a headhunter to present to Bain. Headhunters do not want to look bad in front of their clients. They are biased towards presenting "safe" choices to their clients.

You are not a "safe" / obvious choice. My guess is the headhunter did not want to risk being criticized for "wasting their time" with a non-obvious choice. I have my doubts as to whether or not any Bain employee even saw your application. You might have been kicked out in the prescreen.

So given these downsides, what you need to offset them is to apply to Bain directly and via networking. Online applications are heavily favored towards traditional candidates with easily recognizeable keywords on their resume (Ivy League schools, GMAT/GRE scores above a certain number, specific business degrees).

Since your background doesn't fit the standard mold, you need someone who already works within Bain (typically not in the recruiting department) to get to know you, realize you have the skills needed, and to endorse your candidacy with Bain's recruiting team.

You can read more about this in another article I wrote regarding applying to the top firms from a non-target school.

http://www.caseinterview.com/mckinsey-offer-top-200

Firstly, I would like to sincerely thank you for the all the great material you've published to help with case study interviews.

I have recently purchased the LOMS programme and I would personally recommend it to people who are serious about entering consulting. However I just have a few questions.

I understand that the interviewee should approach the case trying to form a hypothesis and go about capturing data which will help either prove (dig deeper) or disprove (move logically onto another branch) the hypothesis. But I'm currently struggling with forming hypotheses and figuring out what data I need to determine whether the hypothesis is true. Do you have any advice on methods to sharpen this skill?

I have memorised your case frameworks, but when I enter a framework, I continually ask myself, "What's my hypothesis?" I obtain a hypothesis but nowhere near as crisply and quickly as the candidates featured on the LOMS programme, I'm much slower.

But I find it more difficult once forming that hypothesis; what data do I need to prove or disprove it? Are there any ways you can help this thought process?

I completed my PhD a few years ago and have some industrial experience in Operational Improvement. I currently have an Interview with the [specialized division] team in Mckinsey [European city]. I'm spending as much time as I can polishing my maths and case interview practice (your maths drills are great!!!!!!!).

Do all Mckinsey offices give cases (strategy case interviews that I'm currently preparing for) or do the cases for specialist hires tend to be more specific for specialist offices and for experienced hires?

I'm nearly through this audio programme once already. Only 10 more times to run through this programme.

Really admire your commitment to helping potential consultants and if there's anyway I could help please don't hesitate to ask! Thanks again, Victor.

My Reply:

At this stage, I think you need to practice the process of setting a hypothesis and devising an issue tree that would test it.  It is okay that you're slow at the process now… as long as you understand the process. For better proficiency and speed, you just need to practice.

You can force yourself to use the process every day for everyday decisions. Should I eat in tonight or go out to dinner? What's your hypothesis and how would you test it?

You don't actually need to go through the data gathering steps, but instead just practice structuring the problem or "setting up" the structure.

Try to do it three or four times a day.

Should you take the highway or the local roads to your destination?

Should you eat vanilla ice cream or chocolate?

Should you bring an umbrella or leave it at home?

Have your friends or family ask you these kinds of questions and force you to set it up. Do it until you're completely sick of it, and if you were woken up in your sleep at 3am, you could form a hypothesis, structure it, and go back to sleep without even fully waking up to do it (not literally… but you get the idea).

As for the specialist cases, I'm less familiar with them. My best guess is they will be on a wider range of topics — not necessarily strategy. So the most common strategy frameworks of mine that you're most familiar with are less likely to apply. More likely would be the underlying ability to create a hypothesis and custom issue tree needed to test that specific hypothesis.

Practicing your problem structuring for everyday life decisions will help you immensely in this regard… as obviously there is no standard framework for whether or not you should choose vanilla ice cream versus chocolate.

First of all, thank you so much for your amazing material.  It's clearer and certainly more concise than Case in Point, and the fact that I can hear you explain it out loud like a professor is really crucial.

Anyway, I recently won a "case competition" for [MBB firm], in which teams developed growth strategy presentations and defended them in front of consultants.  Well, now I'm apparently invited to a "High Potential Dinner" prior to info sessions for summer associate positions.  I've been told by insiders that this is equivalent to a "pre-rush" event like a fraternity, at which I'll be expected to "perform" to a certain extent.  If they like me, I'll have a leg up for an easier path to the final round.  Obviously, I'm going to ratchet up my case prep even further, because I want to wow them as much as possible.

My primary question is: do you have any experience with or at least secondhand knowledge of these kinds of "High Potential" invite-only dinners/events at MBB?  What should I expect?  How much of an edge does this give me?

And secondarily: how can I best leverage my success with [this MBB firm] into internship offers at [the other two MBB firms], as well? My networks aren't as strong with the other two, but I figured there must be some way for them to identify and take into account that I'm already being heavily pursued by [this MBB firm].
Thanks in advance, and keep up the good work!

P.S If possible, I'd prefer if you didn't send out my question to your email listserv to answer publicly.  Am I too paranoid for thinking that I might come off as unprofessional in some way if a guy [from the MBB firm] happens to read it?  If you think it's no big deal, I don't mind you posting it, haha.

My Reply:

These high potential dinners definitely provide you an edge because they provide you an opportunity to make an impression that other candidates do not.

It will be a social occasion — so it will be highly unlikely that you'd do a case or estimation question during the dinner.

The people attending the dinner from [MBB firm] will be consultants and some of them will also be interviewers.

The dinner is a chance for the firm to jump start building a relationship with the people they see as high potential candidates. It is also an opportunity for them to informally evaluate your interpersonal skills.

For this latter part, they will informally be wondering if you are "client safe". You can refer to my Case Interview Secrets video tutorials that explain this topic in more detail.

In addition, they are looking to see if you are actually interested in the firm, or are just there for the free food.

At the end of the evening, the recruiting coordinator at [this MBB firm] will ask all the people from the firm for any feedback on any specific individuals.

Sometimes all of the invitees already have invitations to first round. Other times that hasn't yet been decided. In either case, the value of the dinner to you (the candidate) is to establish a positive "reputation" that will help give you the benefit of the doubt in any borderline decision later in the interview process.

So if you and another candidate perform equally well (say a B+ level) on a round 1… and they only want to pass on one person, if you have this early "halo effect" reputation, you're more likely to move on to the next round than the other person.

In terms of leveraging this early edge with this MBB firm with the other firms, you want to do so very, very delicately. If you rub it in the other two firms' faces, it will totally backfire.

The way to do it appropriately is during a networking event, information session, or early round interview at one of these firms, when it's time for casual conversation, you should strategically "mention" or let it be known that you attended the [other firm's] "high potential dinner."

You say something like, "Oh that's good point. That thought crossed my mind at a [other MBB firm] dinner I attended the other night." (Okay, so that's a little obvious.. but something along those lines.)

The key is to avoid making [other MBB firm] the object of the conversation, and more as an "adjective" used to elaborate on a different point. I call this "strategic hinting."

Now they will definitely notice. And they will also suspect you did it on purpose. (Because guess what? They strategically hint to their clients too!) But if you did it smoothly, they will give you points for making a point very diplomatically — a useful skill in consulting.

PS. As to your other concern, you're not the first person to ask me this question, and I wouldn't worry about the firm figuring out your identity. With that in mind, I hope you won't mind if I post my reply on my blog with a more anonymized version of your question.  I keep getting asked about this, and I realize I don't have anything on my blog that addresses this frequently asked question.

I will end up posting my response in my blog.

Thank you for your emails and all the wonderful tips you have archived on your website. It has been a tremendous help. I recently was invited to interview at McKinsey and [sub-company of Bain] in the [Mediterranean city] offices. Unfortunately, I did not make it past either PST. The recruiter at McKinsey said I was close/borderline, but not close enough to meet their bar. I do feel comfortable that once I get past the PSTs, I will perform better in case situations and a personal interview, but unfortunately that is not the reality of the situation. I did see on your archives various tips concerning the PSTs, I practiced multiple tests and GRE-type questions, but when it came to the actual test, my performance was not as good.

Do you know why they place such an importance on the PSTs and not give a candidate the chance to prove himself in actual interviews ? Also, I do have another interview in a boutique management consulting firm, do you know how the interview process may differ from the bigger companies? How else can I improve my chance in future PSTs? Since I have another interview lined up, I want to be the best prepared.

Thank you again for all your guidance.

My Reply:

The Top 3 firms are pickier around PST scores. If you are borderline, if you end up recruiting at the Top 4 – 10 firms, it probably will not be an issue.

In terms of PST scores, the scores (or standardized math scores in general) are highly correlated to how first year consultants are perceived internally analytically.

Stated differently, my guess is at some point they looked at the annual review of all first year consultants, found all the ones they rated "exceptional" in terms of analytical skills, and discovered they all had very high PST-type scores.

Keep in mind, all the people who were not rated exceptional in on-the-job problem-solving skills had all passed all of the cases.

In terms of improving your PST score, it depends on why the score was low / lower than you were expecting. In general, there are only two ways to improve one's PST score — work faster, work more accurately.

In terms of preparing, you have to do a self assessment regarding why you think your score was low. Do you think you got any wrong answers? Did you not finish the test?

One of the skills implicitly tested in the PST is "processing speed" — how fast you can do the math and solve the problems. For the computation-oriented problems, you can use my www.caseinterviewmath.com practice tool to work on computational speed and accuracy.

For data interpretation, get a lot more practice tests for the GRE, and focus specifically on the subset of GRE math problems that are similar to the PST — generally the problems involving "word problems" and "data interpretation" and "reading graphs/charts."

Good luck with the rest of your recruiting.