"Leadership Case" in McKinsey Final Round

Email: I have a McKinsey final round interview in a few days and apparently, in addition to partner cases, I'll also have a "leadership case" to solve.

Here is the description I received:

"It is designed to give you a greater insight into the interpersonal aspects of our work, and to help us gain an additional understanding of your Leadership and Personal Impact abilities.

In this "Leadership Case", you will be presented with some challenging situations involving other individuals or groups, and you will be asked how you would respond to those situations.

No additional preparation is required or expected for the Leadership Case, and we hope you enjoy it and that it reinforces your interest in our firm."

Question: Any tips on how to prepare for this? Any example questions that you can offer? Thank you so much!

My Reply: This is very interesting. I understand why they are using this kind of case, but it's surprising to me because I've never heard of it before.

Let me explain the context of the case and then offer some suggestions for how to handle it.

First, at McKinsey in particular you are hired for your analytical and problem solving skills. You are promoted based on your people skills.

In the firm's "up or out" policy, 25% of the consultants are fired every two years. There are only two reasons this happens.

First, the person's analytical skills were not as good on the job compared to what was seen during the interview process (this is less common). Second, the person doesn't work effectively with clients (more common).

The leadership case is probably designed to assess the latter -- your ability to work with clients.

For what it's worth, this is a big deal especially after you are hired.

For example, when I was one of the top 10 Business Analysts in the world at McKinsey amongst my start class, I was promoted to Associate. The reason I was promoted was not because I was the smartest -- not by a very long shot. There are some very, very smart people at McKinsey.

I got promoted to Associate at the age of 23 or so because of my maturity and people skills.

For example, I had one client that was 68 years old, he just got promoted to President of a new division -- his first President job (previously he had only ever headed up sales).

I had such a good relationship with him that I was his career mentor -- so I coached him on which finance metrics to watch like a hawk (he was not a finance guy), coached him on how to prepared for board-level type reviews, what to focus on, etc..

Keep in mind he had 30 years of experience in that industry.. and he was three times my age!

This same client also insisted that I personally lead all future projects for McKinsey in this particular division and basically said if I wasn't involved, they didn't really want to work with McKinsey.

Being smart does not make this happen. It's necessary, but not sufficient. Being good with clients IS what makes this happen.

So, here's the deal with clients. There is the senior client -- the person paying the McKinsey bill. Then there are the people lower down in the organization. They are clients too.

In general, the person paying the bills likes McKinsey -- it was his/her idea to hire the firm.  But, the people working for the person paying the bills may not like McKinsey at all.

Perhaps your presence inside the company reflects poorly on that person's capabilities. Perhaps they resent you. Perhaps they are afraid of you (e.g., are you there to do layoffs?). Perhaps you create more work for them, with no personal benefit to them. Perhaps all of the above.

For any number of reasons, clients can be difficult and put you at the bottom of their list in terms of doing things you need them to do to help you.  Most often this involves getting data.

Other times the facts you obtain and analyze lead to a conclusion that a lower level client is doing a bad job, or made a very big mistake, or a decision made previously wasn't a good one.

In these situations, factually the client is wrong, but they don't want to believe it... and if you just say, "Hey Mr. Client, you're a bozo, the facts are so obvious..." then they refuse to work with you, and basically your progress in the firm gets hampered.

So it is not good enough that you are analytically correct. The client has to like and respect you too.

So my best guess is the leadership case you get will most likely be either 1) resolving some kind of conflict between you and the client, or 2) you need to deliver some "bad" news to the client and she's not going to be happy about it.

In terms of format, it may be a role play where the interviewer pretends to be the client and you pretend to be the consultant... or perhaps the interviewer just asks you what you would do in this situation.

The key is to never attack a client, never get frustrated at a client even if they are being irrational, illogical or not fact based, never embarrass a client, never make a client feel bad, never have a client lose face, never tell them bad news in front of other people (embarrassment, if unavoidable, should be in private).

That being said, you must be factually accurate at all times... but if you have to deliver bad news, you want to do it in a gently, non-confrontational, non-embarassing way.

Here are a few client handling strategies to use:

1) If a client totally disagrees with you -- rather than disagree back (knowing that you are factually correct), I will say something like,

"You know what I too thought all the profit margin was coming out of the Northeast region -- it's the strongest team, it's the most attractive clients (essentially start by agreeing with the client, so they don't have to defend their point of view -- and you want to argue their point of view more vigorously than they would).

"But, when I actually looked at the numbers (key transition phrase), I found much to my surprise it was actually the Southern region that delivered 60% of net income. I was very puzzled by this at first (you say this because you know the client is puzzled by this).

"I mean, 70% of sales are out of the northeast. Gross margins in the Northeast are excellent. I did verify that and it is true.  Sure sales volume fell somewhat, but not by that much. So I was wondering what could possibly cause profits to be down so much?

"Turns out its the overhead costs. That new lease we signed (use the pronoun "we" with clients to show you are on the same side.. don't say 'you'.. because it sounds confrontational... as in "What were 'you' thinking?") assumed a 20% increase in staffing, but we're actually down 10%. So the overhead is way too high given the revenue, so the region was actually profitable, until the lease expense ate up all the profits."

2) If you need the client to do something for you, like get some product sales data out of the ERP system for you to dump into Excel and analyze via segmentation analysis, but they don't actually want to do it... are procrastinating -- what you need to do here is convince the person why it is in their best interest to help you and help you now.

Instead of saying, "Hey give me the data today or I'm going to tell your boss and get you fired" (that's like being a bosshole) -

You have to ask really nicely, and tell them why it's in their selfish interest to do so, and do so now... use a positive reason, or avoid a negative reason.. but if you do the latter, make sure it does not sound like a threat.

Here's an example.

"Hi Jim, I know you are very busy this week. I'm working a regional product sales analysis for Mary (his boss), and I could really use your help in getting it -- ideally today."

Jim: "Oh that's just a waste of time, everyone knows that Northeast sales are where the profits are, I don't think we really need to run that report since we already know the answer.

"Jim, you know what, you are probably right. But I thought it would be the smart thing to do, just to double check, after all we have a few days before the board meeting on Monday.

"Can you imagine what would happen if we found on Friday afternoon that we were actually wrong about the Northeast profits?

"You know how Mary hates looking bad in front of the board. Knowing Mary, she will probably have us both re-run all the numbers starting Friday night and ask us to come in on Saturday.  I don't know how you would feel about that, but I'd rather just double check now and get it right up front.  Any chance you can pull those numbers for me right now?"  (said with a smile)

The other general strategy in a conflict / awkward situation is to shut your mouth, and just listen. Listen to what the other person is saying and more importantly why they are saying it.

If you do not take the time to truly understand them, they will not bother trying to understand or help you.  If you don't care about them, they will not care about you.

Now, as I was writing this answer, I received another email question regarding a McKinsey interview with respect to leadership skills.

The person indicated that McKinsey asked about his leadership skills, but rather than doing it in a case format (which feels to me more like a simulation or role play), they asked him for leadership (people skills) examples from his work history.

Keep in mind the information provided by the second person who emailed me on this topic I think was an experienced hire with years of work experience.  Here were the questions the interviewer asked in the "leadership" portion of the case:

"Please give an example of a problem that you have had with your project team (under my management), and how have you resolved it?"

"Please tell me about a complex situation that you have experienced during project case and how have you resolved it?"

Here's my suspicion of what is going on. McKinsey seems to be looking to evaluate leadership skills more. If you have no working experience, it looks like in some offices they may be giving a "case" to you... so hypothetically - in this situation, how would you handle it?

If you do have job experience, rather than asking you hypothetically what would you do in this scenario, they would ask you what did you actually do in this kind of scenario.

The rules of thumb I outlined previously also apply to how to best answer more direct questions about leadership experience.

Obviously, you don't want to make things up - (never do that), but if you're debating which examples to share in answering those questions, you want to find the most screwed up interpersonal disastrous situation that you can think of that you resolved successfully... especially if how you resolved it showed a kind of people savvy and empathy.

That word empathy is really important. It means understanding and appreciating how someone else feels.

Yes folks, you thought consulting was an analytical business. It is not... it is a people business. And where there are people, there are feelings... it feels odd explaining that but it is very much true.

Here are two big tips.

1) You want to demonstrate that you understand the other person's feelings. You want to somehow say or demonstrate that you were concerned about how the other person might be feeling embarrassed, humiliated, look bad, lose face... basically use words like those to convey you noticed or were concerned about the other person's feelings.

Despite the interview process being so analytical, the consulting business itself is not an analysis business. It is first and foremost a relationship business.  McKinsey is often considered #1 in the field (though I'm sure my friends from BCG and Bain will argue that point) not because it has the smartest people, it's because the firm has the people with the strongest relationships with clients.

This is due in part to McKinsey's policy of doing all work at the client site 80%+ of the time.  When you spend that much time with clients, you get to know them. They get to trust you.

Fast forward 15 years later, you're a partner and they run a $500 million division of a Fortune 500 client. They've known you for 15 years, ever since you were a 1st year consultant.  That relationship prevents other firms from getting in there and taking that business away from you.  It is a severe barrier to entry in many cases.

2) The case interview is in large part an IQ test - how "smart" are you.  The leadership questions and case is an EQ test -- how good is your emotional intelligence.

Click here for more on McKinsey Leadership Cases.

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