Why do consulting firms use case interviews and what analytical skills do they test?

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Why do consulting firms use case interviews and what analytical skills do they test?

Why use case interviews?

Consulting firms use case interviews because they do two things extremely well:

  1. Simulate the type of work you'll do on the job very well
  2. Simulate the level of stress that you'll feel on the job

Just as pilots, or aspiring pilots in the photo below, practice for hours in flight simulators before actually flying a real thing, consulting interviews are designed to serve the same function: it's a test run for the job you'll actually do.

The only asset consulting firms have is talent.

Remember, as we discussed above, the only asset a consulting firm really has is its talent. You could fairly argue that it has a brand asset, and that's true, but the brand is only derived from the quality of their talent. If McKinsey started hiring bad talent today, their brand would carry them for maybe another five years but eventually the brand would deteriorate as clients realized the driver of brand value dissipated. So, put on your consulting hat, and if you're a company whose only asset is the quality of talent it attracts, where would you focus your efforts. The answer: recruiting top talent.

Case interviews are the best simulation

Case interviews are the critical result of this thought exercise. If the firm is answering the question, how can we hire the type of people who will most excel at the work we do, the best way to do this is to "try before you buy". Thus, firms attempt to simulate the actual experience. Another less obvious result of the importance of recruiting is the level of investment the firm puts into it. At many other firms, even like great firms, it seems like recruiting can be an afterthought. Time between interviews and offers can lag, communication can be haphazard, etc. But at the consulting firms, especially in their core recruiting areas, from top undergrad programs and top MBAs, the process runs like clockwork. Additionally, while there are dedicated recruiting teams to handle logistics and coordination, senior partners personally oversee the process - something that rarely happens anywhere else.

Key analytical case skills

In the case interview portion itself, the firms are looking at a variety of skills that can be bucketed into two groups of skillsets: analytical (eg hard) and soft skills. Both skillsets are important, although many candidates tend to fixate on the analytical aspects. Let's dive into both of them.

Let's start with the analytical case skills first.

Structured problem solving

Structured problem solving is a critical part of the consulting toolkit and thus, a critical part of the interview as well. One of the superpowers of consultants is the ability to take a big, hairy messy problem and break it down into manageable chunks. Once you decompose a problem into manageable chunks, resolving it becomes an order of magnitude easier.

Are all structures created equal? No. Essentially, you want to aim for a structure which will allow you to account for all potential issues and investigate independently. This is what McKinsey et all have collectively coined as MECE: mutually exclusive, completely exhaustive. What does that mean exactly? It means that the structure to explore the problem space "exhausts" all potential avenues to explore and each bucket is independent and "exclusive" of all other buckets, which allows for a clean analysis. For a deeper dive on the principle of MECE and live examples, see our post here.

Why is structured thinking so critical? It's used at all levels of the consulting career path. As an Associate or Consultant, you'll need to structure how you approach the problems assigned to you. You'll need to make sure you're exhaustive in your analysis and you'll want to make sure each can problem can be investigated independently, because it allow you to cleanly fit the puzzle back together. As a Project Leader or Engagement Manager, you'll apply the same skill at a different level: you'll be assigning about bigger chunks of the problem to your team. Say, you've got a small team with two people: Sarah and Steve. When assigning work streams to them, you'll want to make sure that you've covered the full problem space (be exhaustive) so you don't finish the case and realize X could be the key issue but you never looked at it. In addition, you'll want to make sure they're exclusive, otherwise poor Sarah and Steve will be tripping over each other trying to do overlapping work. This will be inefficient at best and could have even worse consequences. Imagine the client coming to you and asking why both Sarah and Steve were asking their team members for the same piece of data and causing inefficiencies on their side too.

Mental math

This is another critical skillset. The firms will want to size up your quantitative abilities and they'll do this by asking various math questions throughout the case. For example, you might have to size a market, or do a breakeven calculation, etc. Often candidates will wonder why it's important to test for this. Afterall, on the job won't you be using excel or have a computer or phone nearby that you can quickly do any calculation on? Yes. But that's not the point.

"What I've seen is you need to be good and quick with numbers. Whatever you've got to do to get over that hump, it's worth it. It's almost binary, if you can't do the math, you don't get to move on to the more interesting stuff." - Rob Reiling, former Engagement Manager at McKinsey & Co.

The core reason firms test for this skillset is because of what it indicates: people who are good at mental math tend to be excellent at quickly debunking, proving and/or sanity checking hypotheses. This is incredibly valuable in the consulting field because over the course of the case there may be literally 1,000 of hypotheses, large and small, that team members and clients have over the course of the engagement. No team will be able to explore them all. Thus, quickly debunking which to throw out and which to dig into is valuableā€¦ and alacrity with mental math is a good indicator of that.

Does that mean that your mental math skills have to be perfect? Will making a single mistake tank your interview? The good news is not necessarily. But it does depend on how you handle the error and bounce back from it. You can find some great tips here from our Founder here.

Data analysis

Charts and data are the lingua franca of the consulting industry. Furthermore, given the explosion of data in the last decade, an increasingly critical skill is your ability to both dissect massive quantities of data and be able to clearly present insights driven off significant amounts of data with high impact charts and data displays. To get a quick sense of what type of charts and data analysis we're talking about, take a look at any recent consulting firm's public research:

In case interviews, firms will test your ability to quickly parse complicated data displays and take away the key insights. As a consultant, you'll be producing a seemingly endless quantities of bubble charts, combination bar and line graphs, merrimekkos and complicated combinations of all the above. The best way for the firms to understand whether you'll be able to produce these type of charts is by understanding if you know how to read and interpret them.

The fundamental building blocks

The aforementioned skills, structuring problems, mental math, charts and data analysis, will be the fundamental building block skills you'll use in your first years on the job as consultants. Just think about a single exercise you might do as a first year Associate at McKinsey: building a revenue forecast model for a new product launch on your first case. To successfully build the model, you'll need to structure the problem, break it down into inputs, outputs, figure out key variables that should have sensitivity analysis, etc. You'll want to check your math and assumptions and make sure there aren't any calculation errors before turning it over to your manager... quickly doing mental math sanity checks on key cells will help you there. Finally, you'll need to compile the key insights into charts and ultimately slides so you can sell the story to your manager and ultimately, the client.

You got the answer, now what?
When candidates first start ramping up in the consulting industry, a lot of emphasis is placed on the analytics and getting to the right answer. That makes obvious sense. Getting the right answer to the client's question is an important job, and there is no doubt that first round interviews will dig especially deep on making sure you've got the analytical chops to do it. But once you've got the answer, a whole other avenue of the job opens up: selling the answer. This is where the soft skills come into play. Let's dive in!

Go to next section: soft skills