Long before the interview…

1) Start case prep NOW. Not tomorrow, not in a week, start it NOW. Remember, the case can be more than 50% of the final “score” that will determine your candidacy. Here’s a general outline of how to prepare:

• Get your hands on as many different cases as you can – both books like Case In Point, websites like www.caseinterview.com, as well as online materials and resources (you’d be amazed at how valuable the websites of university consulting clubs can be)
• Run through them ideally with a consulting-interested friend, but if one isn’t available, practice by yourself. The key to good independent practice is to answer the question first, and THEN look at the real answer. Try to recognize patterns – is your answer always missing an analysis of the company’s internal situation? Do you always forget to discuss strategy in the context of competitors? Then make a mental note NOT to forget that
• Simulate actual case interviews as much as you can. The timing is critical – both how long your answers are, and how much time you should spend asking questions versus providing responses. Ideally, you’d practice then with a consultant who has experience in this area – but if not, a sharp friend will do. I’d even suggest getting a stopwatch, and looking at the length of your responses. If you’re over a minute, for 99% of answers that is too long

I will be uploading some very valuable, and free, case prep resources in the next week that I’ve managed to discover across the internet, and that kind readers have shared with me. Stay tuned!

While some people think that the case can be 100% of the decision – and while this percentage will vary by firm and by office – generally the behavioral component is equally important. Especially because, at the end of the day, the vast majority of people will miss at least SOME part of the case – and when it comes to deciding between all of these people, what do you think the interviewers will base their decision on? Resume. Personality.

2) Setup informational meetings and phone calls with as many current and former consultants as you can. This is invaluable for many reasons:

• It helps with networking. If they’re impressed with you, they will be self-motivated to send a strong recommendation to HR. They may put you in touch with other consultants for more practice and advice. Etc.
• It helps with industry and job familiarization. The more you know about the job, the lingo, the challenges, the pros and cons – the better you will do in the behavioral interview. And the more that you hear about REAL cases and REAL problems, the more you’ll understand about the case interview – and what consultants are truly looking for in responses (hint, it’s all about things that will really move the needle)
• It helps you personally. Many people get into consulting for the wrong reasons, which is a post in and of itself, but meeting consultants will give you a great feel for the types of people you’ll work with, their personalities, and help you make a decision about whether its the right path for you.

Immediately before the interview…

3) Practice in front of a mirror and with friends. Each has its own benefits. The mirror allows you to fix awkward facial expressions, poor body language, etc. The friend gives you live feedback and is closer to the actual interview dynamic. Volume and pace are important – don’t talk too fast (it’s natural when you’re nervous) and don’t compensate by speaking too loudly.

4) DRESS NICELY. Wrinkled shirts = do not think ahead = unable to plan workstreams = poor team member. Misshapen tie-knot = lack of friends able to do you a favor = poor social skills = poor team member. Dress nicely for men typically means a suit with tie and clean dress shoes. Same expectations for women. No cologne for men, very very light perfume for women.

EXTRA CREDIT if you wear brands that are most closely in line with the firm’s popular dress labels. Some of you may think I’m taking this too far, but ignore the jobless naysayers. For consulting, Brooks Brothers is a great bet. Half the consultants wear it. At the very least, you’ll show up looking professional. It can’t hurt

5) Do not OVERDRESS. Had a colleague who went to investment banking interviews in an extra-long European-style suit, with a vest and loud tie. It screamed fashion guru, not banking analyst. Wear standard, muted colors – gray, white, and light shades of blue are your friend. Some may think that standing out is a good thing – but don’t push the envelope too far. Ask me if its appropriate.

6) Scan the news in the morning. Business consultants (read: your target audience) are very well read on the latest business news, and have a more than cursory understanding of politics and international affairs as well. At the very least, know the key issues of the moment. For example, you’ll look idiotic if you go into an interview today without being able to talk about the subprime and financial crisis for a minute or two.

EXTRA CREDIT if you bring up something interesting you read that morning to kickstart the interview or work it into the conversation:

“I’ve lightly traded a personal portfolio for the last couple years, but recently most of my tech stocks haven’t done well…and I just read today that Apple released the iGod 3000, which has helped me recover some losses I suffered in these last few months’ chaos

7) KNOW YOUR RESUME BACK AND FORTH, UP AND DOWN – it is one of the few things that you completely control so know what the heck it says! I remember attending post-interview review sessions where interviewers would recall applicants mixing up the dates for their previous jobs, extracurriculars, and so forth. At best, you look forgetful. At worst, you’re suspected of fabricating your record. So know it well, know what you wrote in it, and be ready to give 30-, 60-, and 2-minute run-throughs of it. Which brings me to my next point…

EXTRA CREDIT if you refer interviewer directly to a line in your resume:

“If you look at my resume under the Company X internship, I increased their billing data accuracy 25% by redesigning their online forms”

Further reading: 10 key consulting interview preparation tips

During the interview…

8) …have your resume handy, and ask if the interviewer would LIKE A COPY. An interview is not the time to be shy – most people bring their resumes but just keep them hidden in their padfolios. Bring it out and offer them one – it shows you’re proactive, and if they say no, you’ll have it in-front of you if you need to refer to it

9) Project great energy. This one is HUGE. I. cannot. underestimate. its. importance. Most interviewees are nervous, shy, and stone-faced. Would you want to spend upwards of 12 hours a day in a tiny room with someone like that? I would think not. You’d want to spend those 12 hours with a person who is upbeat, enthusiastic, cheerful, and has great energy. It’s important not to overdo this, of course – but from my experience that’s not the problem most candidates encounter. How do you do this? Simple – smile a lot. Project when you communicate. Use hand gestures and display great presentation skills. Maintain eye contact, and lean forward just slightly. Laugh a little – at yourself, at a joke – to help you (and the interviewer) relax. Even the most experienced interviewers can be a little tense when asking questions, and realize that they’re in the same boat. Help calm the situation for both of you, and you’ll be way ahead in the game.

10) Prepare and ask smart follow-up questions. 99% of the time, you’ll be allowed 5-10 minutes to ask questions of the interviewers. Have 2-3 good questions ready, and no, “Why did you choose management consulting?” does not count as one. Here are a bunch of great followup questions you can ask:

• What’s been the most difficult client issue that you’ve faced?
• Do you consider post-[insert current job here] options and if so, what are they?
• If I got this job, what advice could you give me to help me get off to a fast start?
• If I were interested in (insert industry, geography, function here), how could I really get experience in that area?
• What would you say are the most common mistakes that new hires make?
• Which project has been the most (challenging/exciting/engaging) for you?

There is a lot more DURING THE INTERVIEW content that I will write about in later posts. All business consulting firms have a FIT INTERVIEW (eg, do you have the right personality traits to be successful at our company) and in consulting, there is also the CASE INTERVIEW (eg, can you solve problems that are Cliffs Notes versions of our actual job)

After the interview…

11) Ask for a business card, ask if you can email them with followup questions, and then ACTUALLY FOLLOW-UP. I’ve found that especially in consulting and corporate (less so in finance), people are eager to talk to you and typically accessible. Ask them for FEEDBACK. Thank them for their TIME. Ask them to point you to others who have more expertise in a particular topic of interest to you (for example, if you’re really interested in non-profit consulting, ask them to point you to someone who could speak to that firm’s non-profit consulting opportunities). This keeps the interviewer engaged with you, and leaves an impression of someone who’s both interested and proactive. Two qualities that definitely HELP in landing a job.

12) Ask your interviewer to give you DETAILED FEEDBACK. Why? Because this feedback – both the pros/cons, strengths/weaknesses – will influence the style and content of your future interviews. If your first interviewer mentions that you had no problems with the fit/personality questions but really struggled with the market sizing calculations, you can bet that the second interviewer will focus on your quantitative chops.

Readers often ask whether you can ask for feedback if you don’t pass the first round. This is typically rare, unless you established a good connection with your first round interviewer. Why? The simple answer is time. There are too many first round interviews, and needing to provide feedback for each would require an enormous undertaking. This is why I highly recommend that you ask for some feedback right after the interview, while you’re still in the same room and the experience is fresh. 9 times out of 10, your interviewer will be happy to help

13) Remember a few INTERESTING FACTS from your interview. Facts like the interviewer’s name, office, background. Facts like the conclusion of your particular case study, or the setup for a tricky brainteaser. Why? Because when you get your second round interview, it’s GREAT to bring up those facts with your interviewer. Not only is there a chance that they’ll know the first round interviewer, but discussing these things make you look sharper and more familiar with the firm. Establishing a connection with your interviewer OUTSIDE OF THE INTERVIEW ITSELF is a KEY DIFFERENTIATOR in helping you land the offer.

Stay connected:

I offer resume editing and interview prep. I’ll help you stand out from 1000’s of other applicants and land consulting jobs

Below is a list of 5 more common resume mistakes we’ve noticed. You can also refer to the previous posts: Top 10 consulting resume mistakes and Top 10 resume tips.

1. Overly small font for your name

Your name at the top of the resume should be 18 pt or 20 pt font; bold font is optional and depends on the font you are using. Your name is the most important part of your resume, since you want recruiters to remember who you are.

Also, make sure the name you use is exactly the same in all communications, including your cover letter and emails.  This is sometimes a problem for those with both an official name in their mother language and another unofficial name in English.

2. Getting “creative”

Some people feel like they need to express creativity in order to get the job. While this is sometimes true, the risk of looking unprofessional almost always outweighs any potential benefits of looking creative.

Make sure that you do not:

• Use colors or shades of gray. You should use only black and white
• Include pictures or icons
• Use unconventional fonts such as Comic Sans

Don’t worry about not being able to express creativity in your resume. The interview is a better time to prove your creativity.

3. Imperfect date/location alignment

In Microsoft Word, if you need to align part of the text on a line to the right, like the date of a work experience, do not just use a bunch of spaces or tabs. Either use tables or right-aligned tabs. Aligning by just pressing the space bar several times will invariably produce dates that are not aligned correctly; even if it’s off by half a space, it will be noticeable.

4. Using overly technical terms

Did you use a Maxwell-Boltzman distribution to help model the in vitro effects of anti-mitotic drugs on endometrium cells? It doesn’t matter if you understand this; it matters if the recruiter can understand it.  Keep jargon to a minimum unless it’s something that an average consultant can understand (e.g. saying you used CRM software is fine). You should rephrase what you did so that it’s understandable and make sure any reader can see why it was significant.

For example, the above example might be re-written as “Modeled effect of an anti-cancer drug on human cells using advanced statistical methods, resulting in 40% more accurate cancer cell growth predictions and $50,000 additional budget allocation for drug research.”
Speaking using too much technical jargon will mean that you lack the communication skills necessary to interact with a diverse array of people that you would meet in a consulting career. One way to double-check your resume is showing it to a friend outside your current field or industry and seeing if, for each bullet point, they can understand 1. what you did and 2. why what you did was significant.
One caveat to the above: you also don’t want to make your description overly simplified. As an extreme example, “Conducted biology experiments using math” would be almost meaningless.

5. Creating overly long lists (of any kind)

As a consultant, you will definitely need prioritization skills. Making overly long lists of any kind is a big no and shows that you don’t know how to prioritize. Usually, this overwhelms the reader, and it will also be unclear which list items are more important and which are less important.

For example, you should not:

• List out 15 different software packages you know how to use. Instead, you should reduce this list to under 8 items (preferably less) by picking the ones you are best at, or the ones you think are considered valuable skills.
• List out 5 different scholarships you received. Instead, you should highlight the one or two most important scholarships, their selectivity, and how much funds you received in total.
• List out 10 different points under one work experience without sub-bullets. You should delete the less important points and optionally expand on the more important ones, or move some points to be sub-bullets under other related bullet points so that your resume looks more organized.
• List out 8 different student clubs you were involved with. It’s impossible that you were able to contribute significantly to every one of them. Instead, explain more about the clubs where you demonstrated leadership, teamwork, and initiative. It’s OK to list out 2 or 3 clubs in the Additional Information section if you don’t have space for them in the rest of your resume.

Stay tuned for more resume and cover letter tips coming up in future posts!

Breaking into consulting with vs. without an MBA

You’re at a crossroads in your life, and you know you want to take the next step. You know that you’re interested in consulting, but you’re not sure if you can break in with your current credentials, and you think an MBA might help.  What do you do?

For 80% of job-seekers, I would offer the following advice: apply to consulting firms right now. Just as some people mistakenly think consulting/finance is usually necessary for an MBA, some people mistakenly assume that an MBA is usually necessary for consulting. Most people with a few years of work experience can find some way to explain how their past accomplishments relate in some way to business or consulting.

Get started by doing the following things:

• Update and perfect your resume and cover letter.
• Create a list of 20-25 consultancies that you’d love to work for, with notes on each one. You can start with a ranking such as the Vault Top 50 Consulting Firms and researching each firm; but keep in mind that rankings aren’t everything.
• Create a 3-column table in Word or Excel for brainstorming.  In the left column of the table, create a list of traits that make good consultants (e.g. leadership, teamwork, analytical skill) Then, in the middle column, write out in specific detail 1-3 accomplishments or experiences that demonstrate each trait, including results and what you learned. Finally, in the right column, write down a potential situation you might encounter as a consultant where you could leverage the experiences described in the middle column.  This brainstorming session may help you convince yourself and recruiters that you are already suitable for consulting, even without an MBA.

Moreover, experience in a certain field (e.g. IT or healthcare) means you can try to join the relevant specialized industry practice of a large consulting firm or even a boutique consulting firm specializing in that industry.  If you have a strong academic or analytical background, consider applying for a research analyst position within a consulting firm to get your foot in the door.

Most large consulting firms like McKinsey and Deloitte have dedicated research groups that support client service teams – while this may not be your ideal job, it can be a good transitional role while gaining exposure to how the industry works. Finally, consulting firms hire people mostly for their demonstrated traits and skills, which are more important than past affiliation with any organization. Have you lead teams and demonstrated success in doing so? Have you pursued challenging problems and shown measurable results? You need to be good at telling your story to reflect those traits and skills.

Another key point: many people don’t realize that they can pursue a high-paying and fulfilling job with great training and advancement opportunities outside of McBain Group.  There are great consulting firms out there looking for people with skills and personality traits like yours, especially if you write a great resume and cover letter and ace the interview process.

If you are still obsessed about prestige, consider that 2 years working at a top 50 consulting firm is an excellent springboard for applying to a top 10 consulting firm. This springboard may be even better than an MBA and you will also be over $200,000 richer than if you had gotten an MBA.

Finally, consulting firms often offer MBA-like training.  McKinsey sends many of its non-MBAs to a 3-4 week mini-MBA boot camp to learn the most important tools and concepts. In 1993, 61% of new McKinsey recruits had MBAs, but that number is now down to less than half, which demonstrates that McKinsey believes it quickly train non-MBAs to be consultants. You should research the training opportunities at a firm if that is important for you.

If you are reading this right now, that means you are likely already more motivated and qualified than most to apply to a consulting job.

The conclusion is simple: in most cases, if you are considering a consulting job, it is best to apply now.

The worst thing that could happen is you use up a few dozen hours and end up being much more knowledgeable about consulting firms. The experience can even help you evaluate your true interest in consulting.  Additionally, assuming you didn’t do anything rude or unprofessional, firms will see your commitment if you re-apply later on.

What would be the other 20% of candidates?

In some cases, it actually may be better to get an MBA first if:

1. You have more important long-term goals besides consulting (e.g. starting an international trade company) and your own assessment shows that you need the MBA to serve those long-term goals.  For many people, however, long-term goals are unclear and therefore not factored into consideration much. How to perform such an assessment is outside the scope of this blog.

2. You are extremely passionate about learning the management theory that an MBA has to offer, whether or not you will use it. (i.e. you love learning for learning’s sake even if it’s really expensive) Many MBAs comment that they only apply a portion of what they learned toward their actual consulting jobs.

3. Your previous experience is utterly removed from the corporate world (e.g. you spent 2 years writing a novel about unicorns)

4. You’ve already applied to 15 consulting firms and got rejected from all of them, even after writing a great resume/CL and properly preparing for interviews. (For the vast majority of our readership, I would be surprised if this happened.)

5. You feel that your past experience would qualify you to get into a top 10 business school but not a top 25 consulting firm. (e.g. you spent 2 years successfully fighting AIDS in Africa and you have a 760 GMAT score)

Getting an MBA is really expensive, and real-world experience usually trumps theory, so you should be very sure you need an MBA before you apply.

MBA admissions and consulting

OK, so let’s say you are still set on getting an MBA. Some people think of the relationship between the top business schools and the top consulting firms as a revolving door, i.e. people from McKinsey get into Harvard Business School, and people from HBS get into McKinsey.  Well, that’s true to an extent, but it’s not quite that simple.

Although business schools see consulting as great work experience, schools also try extremely hard to achieve a balanced, diversified student body.  This means that, even if hypothetically a third of a school’s applicants are consultants, there is no way the school is going to let a third of their study body be ex-consultants, which implies a lower acceptance rate than average applicants for consultants in this situation.

INSEAD (which sends roughly one-fifth of its students into McKinsey, BCG, and Bain every year) has once stated “We’re hoping the [number of students from consulting backgrounds] does not increase any further.” That even a consulting talent powerhouse like INSEAD wants to limit their consulting students shows just how much business schools value diversity.  (As a side note, you can see from the placement statistics that INSEAD and other schools may actually be a better choice than Harvard for breaking into consulting.)

This produces the paradoxical situation of consultants wishing they had some “unique work experiences” and non-consultants wishing they had consulting experience when applying to b-school.  What should you do? Easy: stop worrying.  Focus your time on improving your application and telling your life story better instead of spending time worrying about whether or not you have consulting experience.

It is impossible, and also pointless, to estimate just how many consultants are applying to a school on a given year.  If you are a not a consultant, focus on business experiences and explain how an MBA combined with your past experiences can make you a great business leader in the future.   If you are a consultant, focus on why you are more accomplished and more well-rounded than other consultants.

I’m currently a student with little or no work experience, and I’m interested in consulting.  Is it too early to apply to MBA programs?

The short answer is yes.  It will be extremely hard to get into an MBA program with little work experience (except for the unique Harvard 2+2 program) and you may not have the experience necessary to judge if you really need an MBA. In almost all cases it’s better to get some actual work experience first, whether it’s consulting or not.  If your grades, major, or school reputation makes it hard to enter consulting, try to accumulate specialized knowledge in another field while taking on business responsibilities (like team leadership).

How much of what you learn in business school actually helps in consulting?

This depends a lot on the school/curriculum you choose. Each firm will train you anyway with the management frameworks and tools that you will need, and that training will be more directly relevant.  That being said, if you choose your school and curriculum well, you could develop new perspectives to approaching business problems, and you can also improve your general teamwork/leadership skills, which always helps.  More on this in the next post.

I’m already a consultant. Do I still need an MBA?

If you want to return to your current firm, this answer depends on the firm.  For many firms, no.  How can sitting in a classroom and talking about business problems teach you more than working on those problems directly?  For other firms, an MBA is recommended for most consultants aspiring to more senior positions, since they will benefit from an expanded network and enhanced perspectives on business problems. You should observe the system of promotions in your firm and talk to your colleagues who have done an MBA before. As an example, CapGemini and Booz & Co. promote non-MBAs more readily than Bain and BCG. The answer also varies by region; for example, the Japan and Germany offices of global consultancies tend to have less MBAs among the top ranks.

If you want to change to another consulting firm, an MBA may make sense if you are targeting a firm that is much more selective than your current firm or a firm that places heavy emphasis on MBAs.  Given your previous consulting background, an MBA is usually unnecessary unless you are dead-set on a small number of certain firms.

In our next post, we’ll address how to choose the most suitable MBA program for a consulting career, as well as provide advice for current MBAs to maximize their educational experience and chances of landing the ideal management or strategy consulting job.

For an interesting educational opportunity, learn what studies will suit your skills at the Thomas More College.

About the Author:

The author of this article is a long-time team member of Management Consulted and has extensive experience in consulting and at bulge-bracket investment banks, including interviewing MBA applicants. He has requested anonymity to protect his employer.

As good coders code and great coders reuse, I came across an excellent post from a fellow blogger, Benjamin Tseng (who currently works at a Big 3). It’s reproduced in near entirety below (see original post), with two tweaks:

#1 I’ve split the terms between those that are “good-to-know” for potential applicants (with my rationale in yellow boxes) and the rest, which are useful only “if-you-have-too-much-time-on-your-hands”

#2 I’ve added links if there are any terms/concepts that relate to previously written posts

As an interesting aside, I once assumed that while consulting lingo existed at every firm, each firm had unique phrases for many of the concept. Thus after reviewing the terms below, I automatically thought Ben was a fellow McKinsey consultant. This was not the case, and it goes to show the degree of commonality in day-to-day that you will encounter regardless of firm. Remember that, prospective consultants!

The “good-to-know”:

boil the ocean: to embark on an apparently impossible, wasteful or fruitless task, usually preceded by an exhortation not to, as in: “Let’s not boil the ocean here, an 80/20 should be enough”; this term suggests that the amount of effort to be expended is not worth the potential payoff

Interviewers may bring this up to suggest that you reduce/focus your analyses – take hint that you’re either thinking about way too many things, or thinking way too broadly about the problem at hand

development opportunity: a weakness, flaw or shortcoming that should be rectified, usually by the subsequent suggestion

Pay close attention when interviewers/recruiters/anyone mentions this phrase and work to correct the problem (eg, “I think one development opportunity for you is to develop more succinct responses to questions about past work experience”)

directionally correct: essentially wrong

Don’t feel encouraged. You’ve got a long way to go in getting the right answer

on the beach (term not included in Ben’s post but added here): a consultant with no dedicated project(s). being “on the beach” rarely indicates free time (much less beach time); rather, being “on the beach” will indicate that for an undetermined period, you will worry constantly about your next long-term project while you’re shuttled from one short-term assignment to the next

Just know what it means. Integrate into comments casually if you want brownie points (eg, “I’ve heard from consulting friends that many have been on the beach recently”)

view from 30,000 feet: a very high-level, preliminary or cursory look at a particular situation, often used to suggest that pertinent details are inappropriately glossed over; however, one never speaks of the view from, say five or six feet, which might be more appropriate given the average height of a human being

Depending on context, interviewer either a) doesn’t have additional details, b) wants you to provide additional details, or c) wants you to provide a summary/high-level answer

The “if-you-have-too-much-time-on-your-hands”:

at the end of the day: a phrase used to attempt summarization, introduce an air of finality and perhaps close off certain avenues of discussion; since most consultants’ days do not end with the setting of the sun, at the end of the day most of them are still working

bandwidth: capacity, free time, ability to do (additional) work; generally used to indicate that speaker cannot or would not prefer to do additional work, as in: “I don’t think I’ll have any bandwidth this Friday”

buckets: categories; this is the extent of this word’s definition, so it remains a mystery why people choose to employ the former term; also used as a transitive verb to mean “categorize”

buttoned-up: to indicate that a particular piece of work or analysis is comprehensive, accurate and capable of withstanding close scrutiny; this is an example of opposite terms with identical meanings

buttoned-down: see buttoned-up

buy-in: agreement, support; it is unclear why “buy-in” has come to supplant these terms, as no actual purchasing occurs

circle back: to follow up with indicated individuals at a later point in time, usually to review progress on the current topic of discussion; this phrase is somewhat redundant, as it is impossible to trace a circle that does not connect back with itself

crisp: an adjective indicating that the referenced work or analysis is thorough and complete, perhaps by gastronomical allusion to food that is fully prepared; it is duly noted that crisp objects, while ostensibly finished, are also far more brittle and prone to shattering

granular: a detailed level of abstraction; often used in the context of increasing the fineness of the analysis, as in: “We need to get more granular here”

hands: often prefaced with “client,” indicates the interpersonal skills of an individual in relation to a particular group of people, as in, “That manager sure has great client hands”

hard stop: used to indicate that after the time indicated, the listeners are on their own, because the person stating that they have a hard stop sure isn’t going to be around to help after then

hope you’re doing well: a generally well-intended but insincere interpolation used at the beginning of most voicemails to replace the standard pleasantries that would be present in verbal communications; use of this phrase does not indicate actual interest in the well-being of the recipient; also found with alarming frequency in electronic mail

key: critical, essential, required, important, central; the key analysis is generally the linchpin; often used as a noun, and with such frequency that its significance has been diluted, since everything is now “key”

let me play this back: said when the listener wants to refract and color the conversation through his or her own perspective, under the pretense of reviewing the transcript of what’s been said; in this manner the listener can pretend he or she is a tape recorder

low-hanging fruit: the initial opportunities, areas of exploration, etc. that are easiest to cover; intended to evoke visual imagery of fruit-laden trees, suggesting that much remains beyond the lowest boughs; syn. quick win

provide color: a directive that translates roughly to “This is perhaps the most boring thing I have ever read, with the possible exception of certain lengthier legal disclaimers, and even then it’s pretty close”; this bit of jargon is nevertheless somewhat of an advance, since, back in the early days of consulting, people were encouraged to provide black and white

push back (verb form) or pushback (noun): formerly the sole domain of airplanes leaving their gates, this term is now used to indicate resistance and/or disagreement, without actually using those terms; this phrase attempts to avoid any negative connotations of controversy

quick question: the answer will be anything but; bizarre since the adjective “quick” is intended, by implication, to be transferred to the answer to said question and does not necessarily have any bearing on the length of the question

rock star: an individual whose performance in a given area or success at specific endeavors is highly impressive, unique and/or admirable; this appellation is generally used sparingly; although the term is sometimes used frivolously to express purportedly extreme gratitude, as in: “Thanks for picking up my mail for me, you’re a rock star”

sea change: in between lake change and ocean change

sniff test: as in evaluating food for rancidity, this term is used when gauging the viability or reasonableness of a particular analysis; var. smell test

space: a market, arena, field of endeavor, or general area, not to be confused with the area beyond Earth’s atmosphere; use of this term usually adds nothing in the way of descriptive value, as in “I don’t think there will be many opportunities in the technology space”

straw man: a humanoid comprised entirely of the dried above-ground stalks of any of a variety of grasses; also, a construct presented purely for the sake of argument, with the implication that it is not designed to withstand repeated attacks

take the lead on: a clever phrase often used by more experienced consultants when they wish to delegate a menial task, as in: “Why don’t you take the lead on putting together this document,” which may translate to, “I’m lazy and probably not smart or energetic enough to work on this, so go do it”; often appears in utterly irrelevant settings, as in, “Why don’t you take the lead on making dinner reservations for the team,” a manifestly silly request, since one is asked to “take the lead on” something which doesn’t require leadership of anyone and on which they will certainly be working solo

takeaway: in other settings a British term referring to carry-out food, here this word has been transmogrified to indicate the salient point that should be retained upon the conclusion of the discussion, often prefaced with key

to be transparent: in indication that what follows will be particularly revelatory, although it often is not especially so; the troubling implication of this usage is that the speaker has heretofore been opaque

value-add: quite simply, that value is added, mashed into a hyphenated noun form

wordsmith: to make trivial or generally unnecessary edits to text that may only subtly change the meaning, if at all; incorrectly implies that one is a craftsman on the order of a blacksmith or goldsmith; sadly, wordsmithing rarely involves the deletion of jargon

I’m sure there are many more – feel free to leave comments below!

Thanks for reading! For more background info and if you’re just starting to read my blog, here are some recommended posts: Management Consulting and the Consulting Industry 101; Investment Banking vs Management Consulting; Day in the life of a Management Consultant

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]]> http://managementconsulted.com/consulting-lingo/management-consulting-lingo-words-and-phrases-that-applicants-and-interviewees-should-read-and-know/feed/ 4 http://managementconsulted.com/consulting-jobs/question-of-the-day-management-consulting-versus-investment-banking/ http://managementconsulted.com/consulting-jobs/question-of-the-day-management-consulting-versus-investment-banking/#comments Wed, 17 Dec 2008 01:56:59 +0000 Kevin http://managementconsulted.com/?p=212 This is an important question for prospective applicants (in particular, undergrad/MBA students) looking for summer internships and fulltime jobs alike.

The decision was easier for me than for most people. The cons of investment banking – the long hours, the repetitive and unengaging nature of the work, the lack of non-finance exit opportunities – mattered far more to me than a 6-figure salary. I seriously considered sales & trading (in fact, I spent a summer at Credit Suisse First Boston in NY), and was tempted to continue in that line of work post-graduation.

Instead of defining the basic characteristics of each job (there are plenty of resources out there for that, including the Vault and Wetfeet Guides), I will address a laundry list of defining differences between the two professions.

Let me caveat by saying THESE ARE NOT YOUR ONLY OPTIONS. People get carried away into thinking that’s all there is.

#1 SALARY

This is the biggest superficial difference. That’s not to imply that salary doesn’t matter. Banking salaries average 50-100% higher than consulting salaries, with the difference increasingly significant as your seniority increases. Consulting compensates with perks that banking does not offer – from better travel allowances to more generous health and retirement packages.

Consultants always like to say this:

“I know investment bankers make more money. But from a cashflow perspective, it’s exactly the same!”

This simply means that consultants and bankers make comparable base salaries, and at the end of the year, bankers are awarded a bonus which can comprise more than 50% of their total annual compensation. Cashflow or not, the extra money is substantial and a defining driver of why many people do investment banking. This is also a difficult issue for consulting firms with respect to employee retention. In my time at McKinsey, easily half the people who left the firm went into the financial world (from hedge funds to PE), and salary was undoubtedly a major factor in the decision.

My advice is this – if after considering all 5 factors I’ve listed here, you still think the pay difference (for 1st yr analysts, averaging between $30-60K/year) would mean a substantial difference in your personal and professional job satisfaction, choose banking.

Further reading: Consulting salaries from analyst to partner

#2 LIFESTYLE

The key differences here are:

-Hours. Bankers work brutal hours, no surprise. They can average 14-16 hours/day but it can get FAR WORSE.

My roommates in New York (both investment bankers at Goldman Sachs) would sometimes go several weeks before we’d even exchange a word. Which meant not only were they getting in after I went to sleep (around 2am), but going back to the office before I woke up (around 7am).

Your second year as an investment banker gets better – in the 10-14 hours/day range but also with unpredictably tough periods.

Consultants average 12 hours/day, with the typical variations depending on client, team goals, etc

-Travel. Bankers do some for roadshows, due diligence, etc but spend 90% of their time in one office until you’re partner-level (this is investment banking; you can expect more travel in private equity and investment management). Consultants – depending on firm – travel anywhere from 25-75% of their time. At the Big 3 (Bain, Boston Consulting Group, McKinsey), you can expect travel 50-75% of the time. I’ve heard of boutiques

-Relationship with coworkers, managers, and firm. This is less discussed but equally important. Consulting firms have a very collegial atmosphere, where the focus is on getting the work done but also ensuring your professional success. This attitude permeates all interactions. Managers rarely yell, coworkers try to help each other out whenever possible, and companies are organized to provide consultants support with training, expertise, etc. Finally, networking is important at consulting firms, and social events are focused on helping consultants build contacts and relationships throughout the firm.

Investment banks, on the other hand, have a more competitive, hierarchical setup. You can expect more tense relationships with your bosses, you’ll probably be yelled at from time to time for mistakes, and coworkers are much less willing to help each other out (they’ve got enough on their plates, and your success means theres more competition for the biggest bonuses). In addition, you’ll have limited exposure across the company to other groups, departments, etc – less ability to network across the company.

Further reading: Consulting travel; Day in the life of a consultant

#3 SKILL DEVELOPMENT

Call me biased, but I received the best years of business training possible in my time at McKinsey. Thorough and at times intense exposure to textbook business principles and practices. In addition, the project team model leads to mentorship opportunities with managers, partners, and coworkers. Finally, you have constant client interaction which develops “client skills” – from managing client teams to running meetings to learning how to navigate different corporate environments.

That being said, here’s a quick list of what you can expect to learn in both fields:

By “hard skills”, I mostly mean software (ie Microsoft Office Suite), analytics (ie financial valuation). By “soft skills”, I mean the interpersonal, qualitative interactions that you have with coworkers, the broader firm, clients, etc

CONSULTING

Hard skills:
1) Microsoft Powerpoint – you will (and have to) become a master at this, and will eventually have the ability to produce presentations quickly, concisely, and meaningfully
2) Microsoft Excel – less exposure than investment banking. Still, “modeling” is a meaningful component of a consultant’s work, and something every consultant is expected to have significant exposure to. Note -firmsodeling” done in case work may not be directly comparable to the financial modeling more common at investment banks
3) Business knowledge – typically broad exposure across different topics like strategy, operations, organization and several areas where you’ll have expertise. This expertise may be as broad as “operations turnaround” and as specific as “benchmarking for insurance companies”.

Soft skills:
1) Client interaction (explained above)
2) Heavy team interaction
3) Presentation skills – this is a cornerstone of consulting work. After all, findings don’t mean anything if you can’t convince the client to believe in and adopt them
4) Project/workflow planning and execution – this is subtle but important. Much of the time at investment banks, you are given incremental work – eg, add these updated numbers to the model, bind these presentations, insert a graph on chart 11. Consulting is focused on you OWNING a piece of the entire project, setting your own deliverables and timeline, and executing against that framework. This helps you develop the ability to be “standalone” in consulting lingo.

INVESTMENT BANKING

Hard skills:
1) Microsoft Excel – clearly you will become a master at this, and is a mandatory for success. You’ll know the ins-and-outs, every keyboard shortcut known to man (and then some), and so forth
2) Microsoft Powerpoint – much less exposure here depending on the focus of your work (for instance, more in Corporate Finance, less in Mergers & Acquisitions). Very little experience in building a presentation from scratch.
3) Financial valuation – self-explanatory. Differs based on group/focus, but at the very least you’ll understand financial statements inside and out, and have strong knowledge of how companies are financed

Soft skills:
1) Work endurance – this is the upside to those 100+ hour weeks, which is the ability to work incredibly long and incredibly hard. Basically, every job you take post investment banking will feel somewhat like a vacation. It’s a great trait to have
2) Seeing deals get done – investment bankers have, at times, better access to the leading business leaders of the day. As a junior banker, you may not have direct interaction but will be exposed through countless meetings, conference calls, etc to these people and see how deals are done and groundbreaking changes in business emerge day-to-day.

Further reading: 5 big mistakes that will get you fired

The last 2 points in this post are shorter, because I plan to write separate entries on each of them in the future

#4 NETWORKING

Less discussed but important. Consultants move on to a vast array of fields – from industry to academia, government to non-profit. Investment bankers do so less – most continue within the financial world. Your professional network and future career opportunities will be heavily influenced by your colleagues and your firm alumni.

In addition – my perspective is that consulting firms (similar to point #2) facilitate more interactions between alumni and current employees as well as future networking between alumni than investment banks. However, bulge-bracket investment banks have a much larger alumni base, and it certainly isn’t impossible for you to build strong connections provided you are proactive and innovative enough.

Further reading: How to get a consulting job in a tough economy; Networking 101

#5 EXIT OPPORTUNITIES

Corollary to point #4, this is influenced by your firm’s alumni and also the following:

-the different recruiters/headhunters that reach out to you
-the different paths your “hiring class” takes and the knowledge and opportunities you share with each other
-the relationships you’ve built with more senior colleagues and the doors they can open for you

When it comes down to it, the conclusion is similar: if you want maximum career flexibility, consulting provides that in spades. If you want maximum career flexibility WITHIN finance (and corporate financial roles), investment banking provides that.

Further reading: Management consulting exit options part 1 and part 2

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