Stockpiling "Dry Powder" For Your McKinsey Boss

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McKinsey consultants already work a ton of hours, but if they left it up to their clients and Partners, they'd work even more.  One way teams and individual consultants can keep their workloads reasonable is by stockpiling "dry powder".  In this post, I'll discuss what that means and how it can help you manage the workload you're assigned by the McKinsey consultant in your life...

What is dry powder?

The term "dry powder" comes from the days when battles were fought using cannons and muskets and it was important to keep a plentiful supply of gunpowder on hand - and for it to be useful, it had to be nice and dry.  In finance, investors might refer to cash reserves or other liquid assets that can be put to use to do battle in the marketplace as dry powder.  The consulting team's equivalent is information, data, analyses, and insights that are already or nearly client-ready.

During the course of a consulting engagement, teams will generate a lot of material including PowerPoint pages and decks and Excel models.  On most days, the goal is to push and improve this material until it is ready to move the project closer to the answer and be presented to clients and/or team leadership.  Occasionally, it makes sense to set aside some complete or nearly-completed work and save it for another day - that is what McKinsey teams refer to as "dry powder". 

Why keep dry powder in reserve?

There are a few good reasons - besides a desire to save themselves from extra work down the road - for a consulting team to stockpile dry powder.  The more proactively you can recognize, leverage, and/or point out these situations to McKinsey leadership, the more dry powder you and your team can stockpile, freeing up time down the road.  Some reasons for setting aside dry powder are....

1.  Client needs other information first

Often, a consulting engagement requires the team to bring the client along through a series of insights that build on each other.  The client might not be ready to accept Insight C until they've bought into Insight A and Insight B.  If the clients needs to see and/or accept other facts prior to appreciating the work in question, it makes sense to hold this work back until a more appropriate phase of the engagement.  But since the analysis has already been done, when the client is ready to see it, much of the heavy lifting will have already been done.

2.  Clients need to be prepared

Sometimes the team's findings are helpful to the client but potentially unflattering to some stakeholders or parts of the client organization.  In such cases, it's important to take into account how those stakeholders will react to the findings.  Delaying the presentation of these findings gives the team (or more likely, McKinsey leadership) time to "pre-wire" the stakeholders who might react negatively to the news.  In the best cases, the team can work with those stakeholders to understand mitigating factors and/or incorporate their response into the storyline.

3.  Raises more questions than it answers

Good client work is often effective because it causes people to ask or consider the right questions.  But if this is done before people are prepared to deal with those questions, it might cause more problems than the team is prepared to solve.  In those cases, it's better to sit on some great analysis and wait until you're ready to deal with the inevitable questions that will follow.

4.  There's already have plenty of material

Occasionally, the team might receive more data or get more work done than anticipated.  In those cases, it might make sense to focus on fewer things, fully flesh out and present them, saving the rest for later.  Not only will it save the team time (now and later) but it will also free up capacity and do a better, more thorough job on the prioritized items.

5.  Team needs to flex capacity

Even McKinsey consultants have lives outside of client service.  Paid time off (PTO aka vacation), training, recruiting, and other commitments can leave a team short-handed.  Since most of these absences can be known in advance, a team might start building up stockpiles of dry powder in anticipation of those periods.

McKinsey and APD (Advanced Professional Degree) Candidates

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Many management consulting firms hire non-MBAs.  However, few, if any, hire them to the extent that McKinsey does.  This post will cover a few of the basics of APD recruiting at McKinsey...

What is an APD?

Most McKinsey Associates are hired out of top MBA programs from around the world.  However, non-MBAs are also a significant proportion of McKinsey Associates.  At McKinsey, APDs are defined as JDs, MDs, and PhDs and typically comprise more than 1/3 of each incoming McKinsey Associate class.  Unfortunately for Dr. Stephen Colbert, DFA, honorary degrees do not qualify!

Why does McKinsey hire APDs?

Each year, McKinsey has to hire an army of new consultants to fuel the Firm's growth and to backfill for consultants who have left the Firm.  With thousands of consultants worldwide and an average tenure of ~2.5 years, it doesn't take a PhD in Math to realize McKinsey needs to recruit many people each year.  MBA programs supply lots of qualified candidates, but the Firm is always looking for more and top APD programs are rich sources for other, great candidates who exhibit the traits McKinsey looks for in candidates...

What does McKinsey look for in APD candidates?

McKinsey wants to hire people with intellectual horsepower and distinctive problem-solving abilities.  MBA programs do not have a monopoly on those traits - top JD, MD, and PhD programs also have incredibly bright, capable candidates.  Furthermore, the Firm values the intellectual curiosity that is often found in people pursuing advance degrees.  Finally, your APD might align with specific knowledge or expertise that McKinsey and their clients value.  For example, clients in healthcare, pharmaceutical, and biotech might assume consultants with MDs are more credible than their fellow MBA consultants.

Does the type of APD matter?

This question is asked more frequently by PhD candidates but, from what I've, the type of APD itself does not matter - I've had McKinsey PhD colleagues whose thesis topics ranged from astrophysics to spiders.  All MBA and APD candidates are held to the same interview assessment standards - even those APD candidates with specific expertise that might be highly relevant to clients (e.g., MDs) have to perform as well as those pursuing PhDs in less client-applicable fields.  That said, MBA programs tend to have more focus on networking, teamwork, and professionalism that tend to help candidates come across well during interviews and while serving clients.

What if I don't know anything about business?

Then McKinsey's Mini-MBA is for you!

Many APD candidates are concerned about applying to McKinsey or going to work for clients despite having no business background.  In particular, this concern is voiced by PhD candidates who mistakenly think McKinsey only values PhDs in business-related topics like Economics or Finance.  McKinsey's belief is that the Firm can teach you about business and management consulting if you have the right traits - distinctive intellectual horsepower, problem-solving abilities, leadership, and intellectual curiosity.

To teach APDs about business, McKinsey runs month-long immersions in business topics called "Mini-MBA" that are required for all APD hires.  Topics at Mini-MBA include Economics, Finance, and Strategy.  There are several Mini-MBA sessions held throughout the year to accommodate APDs joining the Firm at different times.

That said, you'll need to understand some basics of business to do well in the interview process.  So, prior to recruiting season, you'll want to familiarize yourself with basic business concepts, levers, and frameworks commonly used in case interviews.  Good resources to learn about them include:

• The career office and Consulting Club of the MBA program at your school
• Case prep websites of consulting firms, including McKinsey, Bain, and BCG
• Countless books and online articles about cracking case interviews

In addition, you might want to start reading the Wall Street Journal and visiting other business news sites and blogs.  Not only will it 1) give you a chance to demonstrate your intellectual curiosity, but it will also 2) help you put your case interviews in the context of current events in business - not critical for cracking the case, but helpful for thinking about relevant implications and caveats for your answers.

How do APDs get interviews?

Unfortunately for APDs, their recruiting process is not as clear or straightforward as the MBA recruiting process.  APDs often have to be more proactive and opportunistic during recruiting season than MBAs.

If your APD program has been identified as a "core" program, McKinsey will be more active on campus, sometimes giving presentations and reaching out to candidates.  Even then, the outreach will not be as robust or consistent as it is at MBA programs.  So, your best bet is to use McKinsey's website for APD applications.  In parallel, you should seek out and participate in as many McKinsey APD recruiting events that you can find.