Why Management Consulting Firms Assess Math Skills in Case Interviews
This is the last of three articles in a series that discusses math skills in Management Consulting Case Interviews, and how you can effectively prepare for the quantitative component of Case Interviews.
If you want to work in Management Consulting you should read this series. If you know somebody who wants to work in Management Consulting, you should share this series with them.
First article: Math Skills Required in Case Interviews
Second article: How to Prepare for the Quantitative Component of Case Interviews
Strong Quantitative Skills Are Needed as a Management Consultant
Strong math and quantitative (quant) skills are essential skills for Management Consultants. Clients will often hire Management Consulting firms to develop recommendations that will maximize profitability or valuation for the client. To develop their recommendations, Management Consultants perform comprehensive quantitative analysis and model the financial results of a range of options the client could pursue. Therefore, the ability to perform quantitative analysis on data and develop insights and recommendations based on that quantitative analysis is a critical skill for Management Consultants.
In addition to being able to perform quantitative analysis, effective Management Consultants need several additional quantitative skills. They need the ability to determine what kinds of quantitative analysis are relevant to accomplishing the client’s specific goals. Furthermore, Management Consultants need to be able to identify what specific data and information are relevant to the client’s specific problem, and are required to perform the necessary analysis. Having these skills allows Management Consultants to collect only the data relevant to the problem, and to determine what additional data is needed beyond what is currently available.
Management Consultants are primarily hired for their analytical ability, and not for “creative” or “communications” work, such as developing advertising campaigns or for PR/communications. Companies will usually work with a specialized firm like an advertising agency, PR or communications firm for these needs. Management Consultants have historically not been very involved in the creative aspects of Product Design, although that is changing as McKinsey has acquired several Product Design consulting firms (Lunar and Veryday). Therefore, if you are primarily a creative or communications person, being a Management Consultant is probably not the best role for you. Clients primarily hire Management Consultants for fact-based analytical research and quantitative analysis. Sometimes the quantitative and analytical work that Management Consultants do will influence Product Design by showing that certain consumers’ needs are unmet — hence the recent McKinsey acquisitions of several Product Design consulting firms.
Weight of Quant Skills in Interviews
Quant skills are only one of the skills assessed in Case Interviews. As a candidate, you are evaluated on your overall combination of skills and your perceived potential. Generally, a candidate’s quantitative assessment consists of 20–25% of the overall interview evaluation weight. The goal of Management Consulting firms is to find the set of candidates with what they perceive are the best set of skills overall.
Most firms have a “minimum bar” for quant skills for their candidates, which means you are unlikely to receive an offer if you do not exceed this bar — unless you are otherwise a highly exceptional candidate (such as being a Rhodes Scholar). At some firms, dramatically exceeding this “bar” does not strengthen your candidacy — that is, the quantitative evaluation is binary: you either pass the quant assessment or you don’t. At other firms, such as McKinsey, if you can demonstrate very strong quantitative skills it will differentiate you from other candidates. The quant problems from these firms can be more complex, which allows candidates with strong quant skills to fully demonstrate their ability. The corollary is that, for some very complex quant problems, you don’t need to correctly solve all the components to receive an offer.
The relative importance of quantitative skills in the Case Interview varies by firm, office and the individual interviewer. As an example, if you are interviewing with a Consulting firm partner who has a PhD in a very quantitative field like Applied Mathematics or Physics, they may ask more challenging quant questions and place a greater emphasis on quant skills in their interviews. McKinsey, in particular, places more emphasis on quant skills than other firms, and, as mentioned previously, demonstrating exceptional quant skills can greatly strengthen your candidacy at McKinsey.
Given the large weighting of 20–25% that quant skills have in Consulting interviews — and the quant “minimum bar” at most Consulting firms — you can certainly sink your chances of receiving an offer if you perform poorly in the quant portion of the interview.
No Calculators Allowed in Case Interviews
Be aware that, in Case Interviews, you cannot use calculators or spreadsheets. All your calculations must be done with pen and paper, or mentally.
There are a number of reasons calculations must be done without calculators or spreadsheets. First, the Management Consulting firms want their Consultants to be comfortable with numbers and don’t want employees to rely on calculators for simple calculations. Furthermore, clients pay a significant amount of money to hire Management Consultants, and the Consulting firms would lose credibility if their consultants make mistakes when doing mental or pen-and-paper calculations in meetings.
Why Consulting Firms Evaluate Quantitative Skills
As discussed previously, quantitative skills are required to be an effective Management Consultant, and therefore the Management Consulting firms assess these skills in their interviews. Management Consulting firms also have a surplus of qualified candidates, which would be magnified if the consulting firms did not eliminate people for having sub-par quant skills or did not include quant skills in their overall assessment of a candidate. For these reasons Management Consulting firms use a candidate’s quantitative skill level as an important factor in selecting candidates.
In short, Management Consulting firms evaluate a candidate’s quant skills because quant skills are important — and because they can; top Management Consulting firms can still find enough qualified candidates if they include quantitative skills in their evaluation criteria. Consider it from the Consulting firm’s perspective: given two strong candidates who are otherwise equal — except that one has strong quant skills and the other has poor quant skills and could potentially damage the firm’s credibility with clients — which candidate would you hire?
Quant skills are needed to be an effective Management Consultant; hence, they are assessed in Management Consulting interviews. Quant skills are one of the skills Consulting firms assess in their interviews. At most firms, if you do not exceed a “minimum bar” for quant skills, it is unlikely you will receive an offer. You cannot use calculators or spreadsheets in Management Consulting interviews, and the assessment of your quant skills usually contributes about 20–25% of the overall interview evaluation weight.
If you want to improve your quant skills for Case Interviews, the FastMath Ace the Case online course has a comprehensive set of quantitative Case Interview preparation resources.
Previous article: How to Prepare for the Quantitative Component of Case Interviews