McKinsey

The McKinsey Problem Solving Test (PST): How to ace it.

In this post we will delve deeper into McKinsey and it’s recruitment process. Today we will discuss the McKinsey Problem Solving Test or PST. We already explored the history of McKinsey and later this week we will dive into the specifics of their case interviewing methods. But today it’s all about the McKinsey Problem Solving Test: a multiple choice test that is really a pen-and-paper case interview in sixty minutes (70 minutes for non-native speakers as the test is in English only).

Originally developed to help streamline the application process and reduce the burden on actual consultants (read: billable hours) giving case interviews to hopeless candidates. Since there are thousands of McKinsey applicants worldwide in any given year, the PST has evolved as a thoroughly tested selection tool with high predictive capabilities. If a candidate passes the McKinsey Problem Solving Test, his or her chances to ace the case interview are also considerably higher. On the other hand, if you fail the PST you will have a hard time convincing McKinsey that you should be allowed to pass to the next round: the McKinsey Problem Solving Test features a true cut-off score: if you don’t make it, you’re out.

The McKinsey PST

So, what is the PST all about? It consists of about 25 questions based on five or six cases. Every case starts with a short description of the company, some data on revenues or number of employees. Maybe a chart on how profit has evolved through the years. At the end, there’s often a quote of the CEO or manager that has hired you with the question they want you to solve. Then there are about 5 questions about the case, either based on the info in the introduction or some new piece of data (a table, a chart) followed by a question. When I took the McKinsey Problem Solving Test for example, there was a case about a fish restaurant who served three kinds of fresh fish. The first question was about some piece of information hidden in the introduction. After the fourth question, a new problem was introduced, as the chef wanted to buy an automatic shrimp peeler and wondered whether it was worth the investment. The final two questions were on that new problem.

What do you need to do to pass the McKinsey Problem Solving Test? First of all, you need to read both quickly and carefully. Secondly, you need to polish up your math: the PST will always feature some quantitative questions. And finally: practice, practice, practice!

Reading

Skim the introduction and underline important data or observations. Read the question very carefully. For example, the first question in the fish restaurant case was (along the lines of):

“What is the objective of the restaurant owner?”

You then go back to the introduction, in which the owner is quoted (a piece of info you should have underlined), saying: “I want to reduce the amount of fresh fish per plate so I can reduce prices and attract more customers”. Now pick the best answer:

The owner’s goal is to reduce prices.
The owner’s goal is to reduce cost.
The owner’s goal is to increase profit.
The owner’s goal is to increase the amount of sales.

All of the above are right, or a logical result of the actions of the owner. The best answer however, is D: as the goal of the owner is to increase the amount of customers. Maybe the answer surprises you, but take this piece of advice: during your interviewing process and while taking the PST you’ll have to think as a consultant. Often the client requests a certain analysis or asks for a certain problem to be solved that is not really the problem. Many times you’ll have to rephrase the client’s question and drive down to the real problem they face. Consulting firms look for this skill in candidates, and it’s no surprise these questions also turn up in the PST. Another thing you could do is to read the questions first so you know what is important, before you read the ‘real’ info. Since you only have a limited amount of time, you don’t want to waste time while trying to figure out the exact meaning of a graph or table.

Math

While you are not allowed to bring a calculator, the McKinsey Problem Solving Test features some quantitative questions as well. It’s designed to give candidates with all backgrounds (non-business ones as well) an even chance, so don’t expect NPV calculations or the like. But the calculations are both tough and time-consuming: remember that you have only 60 or 70 minutes to finish the test. It does help to brush up your math, so check this post on case interview math. Being able to calculate out of your head quickly and accurately is beneficial both during your McKinsey Problem Solving Test and your real case interviews and is one of those things you can get really good at with daily practice. It’s like training a muscle: it needs patience and practice, so get started as soon as possible.

Practice!

Practice makes perfect, but there is very little material online that compares to the real McKinsey Problem Solving Test. You can use the previous McKinsey PST from their website, use PST-like tests from firms started by McKinsey alumni or practice by making the storyline questions in GRE-books.

All of them are either not very much like the ‘real’ PST or give you very little insight into the tactics you can employ to maximize your score on the PST. Every bit of practice helps, which is why you can download these practice materials for free below. But if you want to learn how to ace the Problem Solving Test with confidence, with a full practice PST to put your skills to the test, I suggest taking a look at “The Key to the PST”, which includes inside info on how to prepare and a full Practice PST with a detailed answer guide to learn from your mistakes.

I wrote the book because a friend of mine who had to take the PST really liked the section on PST-preparation in my other book, “Cracking the Case“. He asked me to write a full sample test and I walked him through the test and his answers. After he successfully took his PST, he urged me to put the sample test I wrote online so others could practice with it as well. I decided to add the full PST-preparation section from “Cracking the Case” to the sample test, as well as a detailed answer guide (I can’t walk you through your answers personally, unfortunately). Since putting it online in June 2012, hundreds have downloaded “The Key to the PST” to help prepare for their test.

Not sure why you would need to practice? One of the readers of my book experienced first hand why practice helps:

I recently used your book to prepare for the cases. It was really helpful. I have just gotten news that I passed the test and the wonderful thing is I managed to finish with some 10 minutes to spare and revise the bits I was unsure of. Your guide really helped. Thanks again.

You can get it now for just $17, just click to buy it now or click here for more info. Don’t want to spend any money yet? You can also use the material I gathered below: it’s free. Everything I’ve gathered over the years is free to download and to use as you like:

– McKinsey Problem Solving Test 2011 Practice

– McKinsey Problem Solving Test 2011 Coaching Guide

– McKinsey Problem Solving Test Practice: 2001 Problem Solving Test

– McKinsey Problem Solving Test Practice: Monitor Test

– McKinsey Problem Solving Test Practice: 2020 Test

But if you want inside information on how to ace the PST, including a complete practice PST with detailed answer guide, I advise you to take a look at my book on the subject. “The Key to the PST” is available now for just $17! Click for more info.

Good luck with your PST!

– Stephan

Update: A reader pointed me to some other great resources:

Another good way to practice is using GRE training materials, especially the story-line questions. Below are links to three GRE books:

Kaplan GRE Exam Math Workbook (Kaplan GRE Math Workbook)

GRE Math Prep Course (Nova’s GRE Prep Course)

CliffsNotes Math Review for Standardized Tests (CliffsTestPrep)

And also some free practice online:

Sample GRE questions from ets.com

Sparknotes on Data Interpretation

Five (easy) Data Interpretation tests on IndiaBix

Good luck!

– Stephan

Rating: 8.6/10 (31 votes cast)

The McKinsey Case Interview

by Stephan Spijkers 5 Comments

The final post in our McKinsey Week series: the McKinsey Case Interview. In this special week, we’ve focused on the most well-known strategic consultant we all love (and hate): McKinsey & Company. We’ve explored the long history of McKinsey, both the company’s roots and more recent developments. This weekend, we featured a post on the McKinsey PST: the first ‘hurdle’ every aspiring McKinsey consultant or intern will face.

Today we will focus on the steps that come after the resume selection and the Problem Solving Test. For if you were lucky, smart or prepared enough to make it to the interviews, you’d better get ready for the case interview. The case interview is the selection method of choice in the strategic consulting industry and has recently found its way to the other (more general) management consulting firms as well.

In this article you can find information on the specific way McKinsey handles the case interview, but the basics are similar across firms. You will face a (senior) consultant or engagement leader in the first rounds and a principals and partners in the final rounds in a one-on-one conversation. They might start with some general questions on your background and resume, but quickly move on to the case. The business cases you’ll be asked to solve will be as varied as consulting life itself, as they are often taken from the personal experience of the interviewer. Click if you would like to learn how to confidently solve a case interview.

McKinsey case interviews require the same approach as any case interview, but they differ on some specific parts. The first difference is not even in the way the case is handled, but during what is often called the ‘experience interview’ or ‘airport test’ part of the interview: the first minutes in which the interviewer will ask questions about your background. McKinsey is a leading company looking for future leaders. A question you’re sure to be asked, especially during the first rounds, is:

Tell me about a time you exhibited real leadership”

Be prepared for these kind of questions! It’s something I also elaborate on in my book: consulting firms such as McKinsey are not just looking for the smartest people, they want the smartest guys and gals with people skills. You can expect this question during interviews at any other firm as well, but McKinsey focuses more on leadership than other firms, so be prepared.

Another difference is that the McKinsey case interview is more often interviewer-led than other firms. What does this mean? An interviewer-led case interview will be structured by the interviewer, who will ask you to solve a specific part of the case (on a qualitative or quantitative way) and after you present a solution, he or she will walk you to the next specific issue. For example:

What would influence the demand of replacement car tires in the USA?”

[you think of the four to six most important factors and answer the question]

Very well, given those factors, what would be the yearly market for replacement car tires in the state of New York?

[you structure the question using the factors you mentioned and calculate the market size]

Ok, so the CEO of a national car maintenance chain has asked you to investigate whether it’ll be a good idea to acquire a local car tire manufacturer, what would be the advantages and disadvantages, you think?”

And so on, and so on. The interviewee-led case interview will put your problem structuring skills more to the test, as you’ll have to structure the whole case on your own, making sure your structure is completely MECE. You will be the one forming hypotheses and then gathering data to prove or disprove them, with help of assumptions or information from the interviewer. These structures should follow the Minto Pyramid Principle, if possible. We will delve deeper into how to solve case interview questions in my book.

Don’t forget that regional differences also influence the kind of questions you will get, since cases are often based on real consultant work. So you can expect more financial cases when applying to the New York office, more oil/energy when applying to the Houston office and more tech/IT oriented questions when applying to the Chennai (India) office of McKinsey.

Standing out above the rest of the candidates is all about preparation. All applicants are smart. All applicants come from top schools. All applicants have good grades. But not all candidates are as prepared as you can be. So know everything there is to know, read up on news in the sectors you can expect questions from. And above all: practice cases with a friend, read all the info available on the web and this website, read my book.

If you have comments, questions or stories to share: comment below and I’ll share my thoughts or improve this article. Trouble practicing for the McKinsey PST? Also applying to other firms? Check out our Company Profiles page! If not, good luck with your McKinsey Case Interviews!

Rating: 8.9/10 (16 votes cast)

Everyone’s Trusted Advisor: The History of McKinsey & Co.

by Stephan Spijkers Leave a Comment

How did the company which insiders affectionately call ‘The Firm’ and outsiders know as ‘McKnife ‘ come to be? This week we will explore McKinsey’s history and firm-specific application process (which include case interviews and the “PST“). Today, we start with its history.

McKinsey & Company was founded in Chicago in 1926 by James McKinsey as “James O. McKinsey and Company”. Previously, McKinsey served as an accounting professor. The firm had both an accounting practice and a management engineering practice. One of the first firms to provide executive management with strategic advice, which it called management engineering, it focused not only on inefficiencies and badly run companies but also helped healthy companies position themselves wisely.

In 1937 James O. McKinsey died unexpectedly of pneumonia, leaving the remaining partners in disagreement over how to run the firm. The management engineering practice was split into two affiliated firms: McKinsey & Company and McKinsey, Kearney & Company. McKinsey, Kearney & Company continued the Chicago office under guidance from Andrew Thomas Kearney, while Martin Bower continued McKinsey & Company from New York.

Under the guidance of Martin Bower, the first pillars of modern management consulting and ‘The Firm’ as we know it today became clear. Bower, now regarded as the ‘father’ of modern consulting, served as McKinsey’s managing director for 17 years, from 1950 until 1967, and continued to advise the firm long afterwards. In 1952, he bought the rights to the name McKinsey & Company and Kearney continued his firm as ATKearney & Associates, as it is known today.

McKinsey still sets the industry standard, even though it now faces competition from both The Boston Consulting Group and Bain & Company (the three of them collectively referred to as MBB). As the consulting giant, it has faced controversy as of late: it was held partly responsible for the collapse of Enron and two of its alumni now face charges on insider trading.

McKinsey is the largest strategic management consultant today, with 100+ offices in more than 45 countries and a staff of over 9000 consultants. Constantly looking for the best performers, it’s a top employer of MBA’s and grad students, but few survive the selection process. Want to be really well prepared for the case interview? Keep in touch for the articles on McKinsey’s PST and case interview methods due later this week.

Rating: 8.9/10 (9 votes cast)

Announcement: Mckinsey PST practice book coming up!

by Stephan Spijkers 1 Comment

I’m sorry for the lack of activity surrounding CaseInterviewHQ.com lately: I have been very very busy and took a vacation to relax a little. That being said: I’m back and have a big announcement to make!

McKinsey Problem Solving Test (PST) : Practice Book

Many of my visitors (maybe even you) struggle with the PST and I get a lot of questions about it, from the very basic (“How long does it take? How many questions do I have to make per minute?”) to the more complicated (“What is the best way to tackle the PST? How should I prepare?”. In my book on case interviews, and my post on the McKinsey PST I answer many of these questions and if you haven’t: check them out.

My problem with the PST

When I practiced for the PST, I had one big issue: practice material. There is one case from McKinsey and some from other consulting firms, but that’s it. Some people are offering practice PSTs at ridiculous prices and/or without sufficient information on how to prepare for the McKinsey Problem Solving Test in general. ‘Cracking the Case’ features detailed practice instructions and a practice case with 7 questions, but that’s only one third of the full PST.

My solution: The Key to the PST

So I’ve set out to fix this and help you prepare for the PST with both detailed instructions and a full practice PST. This new practice book will be launched in the coming months, so keep an eye out on this site…

Rating: 8.7/10 (3 votes cast)