What is McKinsey looking for?

• Leadership
• Problem Solving
• Personal Impact
• Achieving
 What is McKinsey looking for?
• Leadership
• Leading people and fostering productive teamwork are
critical to success here. You need excellent leadership skills
to bring people together to drive positive change within
organizations.
• Problem Solving:
• McKinsey consultants help leaders solve their toughest
and most urgent problems. You must have superior
intellectual abilities as well as a practical sense of what
works in complex organizations.
 What is McKinsey looking for?
• Personal Impact
– McKinsey consultants work closely with a wide range of
people in their daily jobs. This calls for strong
communication skills—particularly when addressing
conflicting points of view. You have to be adept at building
trusting relationships with clients to enlist their
participation and support.
• Achieving
– Our consultants strive to deliver distinctive and lasting
client impact. This requires tremendous energy,
determination, and judgment, particularly when working
with multiple stakeholders under tight deadlines.
 What is McKinsey looking for?
• Book. Tim Darling.
– Would I want this person on my team?
– If I give them a few facts and point them in the
right direction, can they run with it?
– Are they fun and interesting?
– Will they be a positive force in the team room?
– Will they make me and the team better?
– Articulate a recommendation at a CEO-level
conversation
 Interview questions
• Why McKinsey?
• Why you want to be a Consultant?
• Expect push backs in your answer
• In 30 seconds. Why should we hire you?
 Consultant profile
• High degree of energy
• Social intelligence
• Relax personality
• Smile
• Be positive (do not complain about work, weather, etc.)
• During the interview imagine that the interviewer is a client
and you want to reward the client for the time spend with
you.
• Give the impression you are always in control. Do not let
your frustrations and anxiety show.
• Try to maintain a conversational feel throughout the
interview
 How to analyze a case interview
question?
1. Define and quantify the main objective (If the
objective is not clear…ask)
2. Sometimes is good to ask for the products and/or
services of the company. Leave room to build a table
(margins, market share, price, etc)
3. Ask for a minute or two to collect your thoughts, and
build a MECE tree (mutually exclusive and collectively
exhaustive). The tree will tell you what you need to
investigate and what questions to ask.
4. Try to summarize the key information in half the time
it took the interviewer to explain them.
 How to analyze a case interview
question?
4. Note: find the right balance of structure, creativity and flexibility.
– Creativity: use your own previous experiences in a way that
differentiates you from other candidates.
– Structure: consider all possible elements and attack it in a systematic
and logical manner.
– Flexibility: ability to refocus your approach base on either the
interviewer’s preferences or on new information that becomes
available.
Definition: Drivers are the most influential elements in causing change.
Levers are drivers that you can control. "drivers are the numerical
inputs that could go into a model" and "levers are the unquantifiable
things that you can change, like marketing." In practice, people talk
about "drivers" when explaining a cause and "levers" when
describing actions that can be taken to effect change.
 The one framework that will cover at
least 80% of your cases

Before During After

• Quantify the • Can (should) • What will be

objective we do it? the effects of us
• What are the • How can we do doing it?
firm’s it? (barriers and (competitor’s
products? resources) response and
• Why are we cannibalization)
doing it?
The one framework that will cover at
least 80% of your cases

Exhibit 6-6
 Common case scenarios
1. Profitability, revenue and cost cases
2. Pricing cases
3. New product and market entry cases
4. Merges and acquisitions (M&A)
5. Volume
6. Fixed and variable costs
 1. Profitability, revenue and costs
• After the case. Think about the consequences of
your proposals. Cannibalization, legal issues,
cultural barriers, etc.
• Example: Company X is considering building an oil
rig? why? Should they do it?
• Ask for the product or service. Should we break
the problem by product and concentrate your
solution only on product A or should you break
the problem into regions (USA vs Europe), etc.
 2. Pricing Cases
• How to determine the optimal price?
– Set prices that maximize profits
• Price could be a lever that a company can influence to manipulate
profits
1. Clarify the problem
1. For whom we are setting the price? (end users or retailers) Do we
have a target profit level.
2. …set a base line…
1. Start.. Industry as a whole (competitors or substitutes)
2. Find the breakeven point..cost-based price
3. …make price/value adjustments (per market segment)
1. Once we have a baseline… adjust vs competitors
2. Do not start a price war! Can we charge a premium in a given
segment.
 3. New product & market entry cases
• Before, during and after the case questions are specially important! Start
the case by articulating that you want to step through each of the three in
turn.
• The project is feasible if the profits (future benefits) are greater than the
investment
• NPI cases.. Product matches customer needs? (market segmentation),
pricing, volume and profits .. 5 forces to analyze futures risk in terms of
price, volume, profits. For market entry use 5 forces in the current market.
Why a market entry project failed? Look at 5 forces to diagnose.
• These types of cases mainly revolved around 2 elements: setting an
expected price point and estimating (or determining how to maximize) the
volume of the key products that the company will sell.
– For price… look 2. Pricing cases
– For Volume
• Identify the breakeven volume then if you identify higher volumes calculate ROI and end
with the Porter’s 5 forces analysis.
• The key in many 3… cases is to calculate breakeven volume
 3. New product & market entry cases
• Notes
• Price*volume–(vc*volume+fc)=initial capital
investment
• Breakeven volume=ICI/(price-vc) no additional
fc beyond the capital investment.
• ROI=value of product (profits)/ICI (ignore the
fc entry in case interviews)
• Volume also involve how to segment the
market
4. Mergers & acquisitions cases (M&A)
• Will we create significance value by making the
acquisition?
– Value created=standalone value of the target-purchase
price+the additional value we can add through synergies
or similar
• Will the government legally allow us to proceed?
– The main legal issue is anti-trust legislation
– For two companies to work together effectively towards a
common goal, they have to share similar behavioral norms
and comparable cultures
Synergies are the most interesting aspect of M&A cases.
Synergies can be + or – specially in terms of volume and
fixed cost.
 5. Volume
• Segment the market to determine if the product is meeting the
customer needs and the value drivers at each segment.
• What are the top segments in terms of volume? Why?... Any levers?
Three ways to structure sales volume:
1. 4Ps
1. Price (too low or high, etc) 2. Product (meet customer needs vs
competitors or vs industry) 3. Placement (and packaging…
distribution channels in terms of quantity and quality or sales team)
4. Promotion (quantity or quality of advertising)
2. Short term/long term
1. Lever without changing costs (change price, bundle, license, etc)
2. Lever changing cost (advertising, packaging, dist channels)
3. Mathematical approach: structuring numbers
1. Volume=market size*market share
 6. Fixed and variable costs
• Use the value chain approach
• Or profits -> revenue & cost -> price*volume /
vc + fc
• Talk to the interviewer to define and quantify
the objective.
• Go layer by layer on your tree definition so the
interviewer can guide you.
 Summary for the CEO
• Do not ask for a minute to collect your thoughts here.
Do it in 30 to 60 seconds
1. Start by stating the objective in one sentence
2. Give the specific answer or solution that you are
recommending. If you are not sure of your answer…
stay confident on you proposal and stay the risks.
3. Follow with 2 or 3 reasons why you are suggesting the
given solution. To do this, you can go to your tree and
follow the path you choose.
4. Finally, say “we believe we can achieve this goal in…
years but still need to check that all the data supports
it”
5 mistakes that interviewees make
• Do not clarify and quantify the objective
• They do not start attacking a problem with a
structure or they use a structure that does not
help to illuminate the drivers of the case’s
objective
• They create and share the structure but they
do not follow it
 Talk to German G.
• The interviewer wants you to do well
• Se quedan todos lo que hacen una buena
entrevista
• Selecciona tus historias en un formato PAR.
• Entrevista en NY ingles y espanol.
• Hacer al menos 20 casos.
 Notes
• Use the 80/20 approach. 80% of our profits come from 20% of our
customers.
• Be specifically careful if you are familiar with the industry in the case.
• Use multiple sheet of papers to stay organize.
• Consulting firms adapt to industry trends; they sometimes have lead.
Think about the firm as a dynamic organization that will change during
your time working there. Ask the representative of the firm questions that
will help you visualize what those changes are likely to be. For example:
what is the rate of change of industry mix in the firm overall in the last
three years? Has the firm entered new industries or left others?
• Financial ratios
• Porter’s 5 forces can help you structure all of the possible external
changes that may affect future values for price, volume, and costs in the
profit tree.
• http://www.mckinsey.com/careers/how_do_i_apply/how_to_do_well_in_
the_interview/case_interview/techniques_and_tricks.aspx