There are a few caveats, however. If your school is not graded as number one, the stronger your academic and extracurricular record must be in order to win an investment banking or management consulting interview (except in the areas of sales and trading). In particular, academic performance standards are higher for students from schools that a firm does not actively target in its recruiting process. At the MBA level, name brand is even more important; investment banking divisions and consulting firms typically do not hire associates from business schools outside the top tier. Also, if you have absolutely no quantitative courses on your transcript, expect to be grilled more heavily on your quantitative abilities or business interest during an interview. You should emphasize any business summer experience you've had.
Critical Skills
When asked about the candidates they hire, bankers and consultants at any firm will mention a few characteristics again and again. I call these "critical skills" because they are the fundamental qualities you need to demonstrate to get banking or consulting job. Do you think you have these qualities? What examples would you use to show that you do? Here's what recuiters mean when they say they're looking for . . .
"Analytical Skills" Intelligent; able to find patterns and causal relationships in what appears to be unrelated data; creates hypotheses to drive research; uses clear and logical thinking; draws on past experience to solve problems; applies a creative approach to come up with solutions.
"Business Sense" Entrepreneurial; stays current on major business developments; intuitively understands basic business dynamics; converses easily about business issues.
"Capacity for Continuous Development" Or "Quick Learner" Solicits and is open to feedback; humble; wants to improve himself; learns from mistakes.
"Communications Skills" Listens carefully to understand others; uses tactful phrasing and timing when communicating; has a good sense for what people mean; understands how he is being perceived.
"Integrity" does not waver on ethical issues; has basic respect for other individuals; is able to maintain confidentiality; follows through on commitments; has high ethical standards.
"Interpersonal Skills" Mature; avoids turning business issues into personal issues; genuinely interested in other people; can get along with people from a range of backgrounds; positive in attitude; keeps cool under pressure; thinks before leaping; open-minded; able to put things in perspective.
"Leadership Skills" has influence; can make decisions quickly; provides leadership in situations where there's none; understands individuals' positions on issues and how to influence them; able to take risks; takes action when necessary; sets clear goals; rallies people around a shared objective; believes that every problem is surmountable.
"Motivation and Energy" Enthusiastic; has a "can-do" attitude; has high performance standards; motivates others; willing to work long hours; organizes work effectively; detail-oriented; willing to do grunt work, or unglamorous work.
"Quantitative Skills" Can apply quantitative thinking to analysis of issues; understands quantitative relationships in business; comfortable performing simple math mentally; some academic training in math.
"Team Player" Likes to work in teams; sensitive and willing to help others; knows when to be a leader and when to be a follower; puts group's priorities before own; shares credit for joint work.
Don't worry if it seems at first that you don't meet these criteria. Most successful candidates don't really possess all these characteristics-many of these skills and characteristics are learned once you've actually started working. But packaging yourself as someone who has these characteristics or the potential to develop them is the difference between receiving a job offer or not.
Specific Skills: Associates
The fundamental difference between associates (hired from graduate school) and analysts (hired from university) is time horizon. Associates are expected to have the same critical skills as analysts yet also have qualities that will allow them to be successful in a long-term career at the firm. They should be able to be future leaders of the firm.
- Managerial ability: Associates will need to manage teams of analysts almost immediately. It helps if a candidate is able to show some previous management experience and teamwork or a strong potential to be a good manager.
- Sales ability: Good salesmanship is important in both banking and consulting, because in a few years associates are expected to start bringing in business. A corollary to this is that prior industry experience helps in consulting-potential clients are more impressed by someone who actually understands their industry or who has had years of general management experience.
- Leadership: The firm has to be able to see you as a future managing director, someone who can inspire and influence at the firm. Evidence of unusually rapid career advancements prior to business school will help your candidacy.
- Commitment: Since they will invest money and time into training a new associate, firms prefer associates who say they will stick around for the long run.
If you're applying to an investment bank, you should demonstrate:
- A cultural fit with investment banking: In addition to the critical skills, banks seek people who will get along with clients and colleagues- people who are extroverted, sociable, well rounded, and not eccentric. Bankers perform more work alongside their colleagues than consultants, who can spend days working alone on their own separate piece of work. Banks hire many former athletes because they view team sports as good training for the type of teamwork and leadership that banking entails.
- Enthusiasm for investment banking and the thrill of the transaction: Investment bankers like to hear that you really want to be an investment banker. The hours are brutal and an interest in the job is what keeps you going.
- Thick skin: Certain areas of the bank, particularly the trading floor, are harsh environments where there is little time to think about how to say things. Communication tends to be blunter and less "touchy-feely" than in consulting.
- Some understanding of finance: Investment banking focuses on financial issues in which deep, specialized knowledge is important. On the other hand, banks provide less training than consultancies throughout an employee's career because it is harder to pull bankers away from the office for dedicated training time. Therefore, the more you can demonstrate previous knowledge of business and finance, the better off you'll be.
- Strong quantitative skills: Banking work tends to be fairly quantitative, and you'll hear that you're supposed to "be comfortable with numbers" in order to do the work. Your grades in quantitative classes will be scru tinized more carefully.
If you're applying to a consulting firm, you should demonstrate:
- Outstanding analytical skills: Firms are hired by clients for ideas and analysis that the client can't come up with him. Consulting firms therefore need people who are intellectual powerhouses. Average GPAs are much higher than in investment banking, and the range of GPAs is narrower.
- Individualism: Although interpersonal skills are valued, there is more room in consulting for slightly more eclectic intellectuals than in banking.
- Interpersonal skills: Consulting has the reputation of being kinder and gentler than banking. Treating colleagues with respect and sensitivity is of utmost importance. In addition, you'll need the poise and confidence to work with older clients from day one. One analyst reported that she was sent to interview a client during her first week on the job, whereupon the client asked her, "How the hell old are you, anyway?"
- Intellectual curiosity: Unlike bankers, consultants do not necessarily have a completed transaction to look back on when they're finished working with the client. Often, the client does not implement the consultants' recommendations. Consultants need to be satisfied with the intellectual challenge of their work and be comfortable with the knowledge that their client may not follow their advice.
Specific Skills: Traders and Salespeople
Investment banking and trading are not just physically separate worlds. Fast-paced, market-driven, and execution-oriented, sales and trading work demands qualities that are different from those valued in investment banking.
- Strong quantitative skills: Important particularly in more technical product areas, such as bonds or derivatives.
- Effort: Brightness is not measured primarily through GPA or prestige of school, as it is in investment banking. Instead, intellect is judged through the types of questions you ask and your quickness in understanding markets and products.
- Interpersonal skills: An even more important predictor of success than analytical skills in sales and trading. The trading floor is relationship-driven, and those who are able to build the broadest base of support among senior people are most likely to be given good opportunities. Making friends is important from the very beginning: When a new trainee rotates among several different desks, he is trying to win support and a permanent offer from one desk. Insiders report that extremely smart people with no personalities have foiled miserably. Recruiters look for outgoing, enthusiastic, confident people who will assert themselves and influence others. In addition, successful traders are thick-skinned enough to be able to deal with egos and a sink-or-swim mentality.
- Flexibility and speed: Traders and salespeople are confronted with more change, at a more rapid pace, than investment bankers. You'll hear recruiters say they are looking for "flexible" people who can adjust and react quickly to market changes. In fact, salespeople and traders need to move faster physically than most: They talk, act, move, and even eat more rapidly. Sentences become reduced to bullet-point phrases.
- Thick skin: As mentioned before, the trading floor can be a blunt, harsh environment. Salespeople and traders need to be able to deal with enormous pressure that arises both from the knowledge that large sums of money could be lost instantaneously if a mistake is made and from the demanding and extreme behavior (i.e., screaming and yelling) of the people around them. As one trader at Merrill Lynch described it, "Take the pressure of investment banking, and multiply it by ten."
- Risk taking: Because trading is more market-driven and uncertain than investment banking, people need to be able to take calculated risks and be more aggressive. They must seize an opportunity before anyone else does.
I've described the difference between consultants and bankers, but there are differences even among people who work in different types of consulting.
Strategy Consulting: Sheer brainpower can compensate for lack of experience or knowledge, because strategy consulting depends less on detailed knowledge of each industry and more on transferring the same analytical tools from one industry to another. Grades, GMAT scores, performance during the analytical "case" question, quality of school, academic honors, and other evidence of intellect factor heavily into evaluation of candidates. Characteristics sought: experience in a complex industry or task, talent for intellectual problem-solving, sound analytical skills and lateral thinking, evidence of business sense, superb business judgment.
Operations Consulting: An operations group of a consulting firm addresses the operational or process problems of a company. Working on these issues often requires knowledge that is unique to the company's industry. Therefore, a firm will look for industry experience in hiring operations consultants, hiring people who have worked in a line, staff, or senior management role. Finally, since operations gurus often implement changes in process or structure, recruiters look for those who have had experience in implementing corporate change and interacting with clients. Characteristics sought: functional or industry content experience, experience implementing change, experience in more than one function or industry, indication of innovation, management experience with bottom-line responsibility.
Information Technology Consulting: Information technology recruiters look for coursework in computer science. Specific experience managing an information technology project within Corporate America is valued, as is previous experience in information technology consulting. Characteristics sought: ability to analyze and explain technology as a business issue; previous experience as a consultant or in sales in a service-oriented business; experience in technology project management, in implementing information systems in software development; management experience with bottom-line responsibility.
Industry or Functional Specialization: If a firm focuses on a particular industry or function, it will look for people who have had experience in this specialty. A consulting firm that provides advice solely to financial institutions, for example, will favor recruits who have worked in a financial institution before. If a firm's focus is providing advice on litigation (lawsuits), then it will seek consultants experienced in legal issues. Characteristics sought: specific functional or industry content experience, line management experience with bottom-line responsibility, previous experience as a consultant or in sales.
