McKinsey & Co. made front page news twice this weekend. While one story is much more serious than the other, they both hold potential consequences for the 750,000 people who apply to the management consulting firm every year.
The first involves a possible new step in its infamously difficult interview process, which results in less than 1% of applicants being hired. In an effort to find out how people think, rather than simply what they know, McKinsey has spent the last four months trying out a computer game that charges applicants with building and maintaining a coral reef and island that can support multiple ecosystems, according to the FT.
As one may imagine, the game doesn’t sound terribly easy. Or particularly fun. “As the minutes ticked by while I tried to calculate the best vaccine microdoses for the stricken birds, all I seemed to be creating was a pile of tiny corpses,” wrote the author, who was given a test drive. She eventually called it an early day before the rising body count proved she wasn’t McKinsey material.
While McKinsey said the game wouldn’t rule out a candidate, the tactic is likely to become more prevalent for companies that are looking for new ways to identify talent in a more competitive landscape. Point72 currently hosts an online competition where candidates manage a simulated portfolio. The hedge fund also has applicants complete an online version of the Wonderlic Test, which assesses a person’s cognitive abilities. And Deutsche Bank recently launched an interactive game where users navigate through hypothetical work scenarios and are scored on how well they react. The days of conversational interviews are numbered it seems.
On a more serious note, the New York Times published a comprehensive report on McKinsey’s long history of working with authoritarian and often corrupt governments across the globe. Past clients include Saudi Arabia’s absolute monarchy, Turkey under the autocratic leadership of President Recep Tayyip Erdogan, and several Kremlin-linked companies that have been placed under sanctions by Western governments, according to the report. McKinsey has also worked for at least 22 of the 100 biggest state-owned companies in China.
It was in China that McKinsey held a curious desert retreat earlier this year. Photographs of the event are redolent of a corporate Burning Man, with tents linked by red carpets, colorful camels projected onto walls and a fire in a pit thronged by attendees. “I can’t keep calm, I work at McKinsey & Company,” said a banner at the entrance to a banquet hall 'resembling a sultan's ornate court.' - Ignoring the fact that China was incarcerating thousands of ethnic Uighurs in an internment camp just four miles away.
While the Times is quick to point out that there is no indication McKinsey has violated any U.S. sanctions, the exhaustive report paints an interesting picture of the consulting firm’s clientele, particularly considering the nationalistic stance taken by the current administration and all the recent news concerning the country’s muddled relationships with Russia and Saudi Arabia.
Elsewhere, the November police raid of Deutsche Bank’s offices in Germany over money laundering allegations “has not helped” the bank when it comes to fourth quarter revenue, Chief Financial Officer James von Moltke told Bloomberg. The CFO also mentioned December’s “weak market environment,” hinting traders may be having a particularly difficult quarter. Rough Q4 numbers could be coming, though CEO Christian Sewing did say recently that the bank is on pace to turn an annual profit for the first time since 2014. The thousands of job cuts have likely helped.
Contrary to weekend reports, Prime Minister Theresa May is not considering a second referendum on whether the U.K. should leave the EU, according to her office. Speculation over a second national vote on Brexit has intensified following the overwhelmingly negative reaction to May’s divorce plan. (Bloomberg)
One of the biggest issues banks are facing as they try to prepare for a possible no-deal Brexit is to convince clients to sign new contracts that would allow banks to continue servicing them in the EU. Clients are pushing back while they wait and see if a hard Brexit actually happens, though the contracts are highly complex and not something that can be put together last minute. Banks have therefore been urging regulators to allow them to temporarily keep the contracts valid should no deal be signed. Regulators aren’t budging. They want banks to start taking more action. (WSJ)
The New York Stock Exchange reportedly hatched a plan in 2016 to try to impress Snap CEO Evan Spiegel, who had mentioned during a visit that the trading floor looked empty. Hoping Spiegel would list Snap on NYSE when it went public, the exchange reportedly ordered dozens of regulatory staffers to leave their offices and fill up the trading floor in case he stopped by again. The Post obtained a video clip of regulators standing around the trading floor chatting. (NY Post)
EU migrants will reportedly need to have a firm job offer and a salary of at least £30,000 before they are allowed to come to the U.K. on full visas under a new Brexit-related crackdown set to be announced this week. (The Telegraph)
Just how tight is the job market for tech companies in the U.S.? Over a five-day window in April, employers submitted petitions for more than 190,000 specialized work visas often used to bring in highly-skilled engineers from overseas. Only 85,000 can be granted annually. (NY Times)
A Harvard investigator has found that star economist Roland Fryer Jr. fostered a hostile work environment for women, including engaging in “unwelcome conduct of a sexual nature” toward four females at a Harvard-affiliated research lab. Fryer has denied the allegations. (NY Times)
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