Capacity Questions in an interview

Capacity questions seek to answer the question, “Can you do the work?” As a
general rule, recruiters ask fewer of these questions of associate candidates
who have already excelled in investment banking analyst programs before
business school. If this describes your background, interviewers will typically
assume that there is little need to probe your ability to do the job, and they’ll
instead focus on the areas of demonstrated strength (as well as opportunities
for professional development) that characterized your analyst performance
reviews.
If you don’t offer prior banking experience, however (and this is the case for
the vast majority of analyst candidates), be prepared to convince every prospective
employer that your achievements outside the world of investment banking
will translate into success within it.
Examples
The following are examples of capacity questions:
• Tell me about a time when you worked on a highly quantitative or analytical
project. Describe the context, the project, and the outcome.
• What is the greatest challenge you’ve faced to date? How did you overcome it?
• Describe a typical day for you.
• Describe a time when you achieved a goal that required significant personal
sacrifice. How did you stay motivated to achieve the goal, despite the
hardships that it involved?
• Judging from your resume, you must be extraordinarily busy. What do you
think is the key to successfully juggling so many different activities, all while
maintaining your high GPA?
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• I’m looking at your transcript, and I’m noticing that your two lowest grades
were in introductory accounting and intermediate economics. Why should I
be comfortable with your quantitative aptitude given your relatively low
grades in these classes?
• I noticed that you haven’t taken a single class involving numbers during your
first 3 years of college. How can you convince me that you’re good with
numbers?
• Give me an example of a project (either academic or work-related) that
required significant attention to detail. Do you consider yourself a detailoriented
person?
What They Tell Your Interviewer
With enough preparation and forethought, your answers will convince your
interviewers that you’re a good corporate athlete who can consistently produce
a quality work product regardless of the level of complexity or time pressure
involved. Whether you focus on the hundreds of statistical analyses you performed
while working at the Federal Reserve, or whether you spend more time
discussing your experience on your university’s rowing team, recruiters will
hone in on the extent to which you have demonstrated the following:
• Exceptionally high performance standards
• Considerable intellectual curiosity, quantitative aptitude, and analytical ability
• Willingness to work extraordinarily long (and often unpredictable) hours
• Willingness to do unglamorous and tedious grunt work
• Ability to learn quickly and work efficiently
• Consistent attention to details, even under significant time constraints
• Ability to stay calm and productive under pressure
• Capacity for juggling several complex projects (at various stages of
development) simultaneously
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Why They Matter
When we asked insiders what attributes make a successful banker, one phrase
came up again and again: a willingness to “run through walls.” There’s a reason
that this expression arises so frequently; it’s the sensation that most closely
approximates investment banking at its worst—unnecessarily harsh, physically
painful, seemingly impossible, and simply not worth it. Unfortunately for
recruiters (and fortunately for job-seekers), there is still no reliable way to
simulate the challenges that a junior banker faces in the context of a 30-minute
interview. There’s no good proxy for determining whether a prospective analyst
can consistently crunch perfect numbers regardless of the number of consecutive
sleepless nights he endured the previous week. To make recruiters’ jobs
especially difficult, relatively few candidates (particularly at the analyst level)
have extensive prior experience in investment banking when they apply.
With relatively few data points available to accurately predict your on-the-job
success, recruiters are left to infer your tolerance for hard work based on your
other endeavors. As a candidate, your job is to convince your interviewer that
you’ve demonstrated the same skills before—either in an investment banking
context or in other pursuits. Former athletes are particularly effective at
positioning themselves in this way, since they can credibly say that they’ve
devoted a considerable amount of time to a single endeavor, made significant
personal sacrifices to succeed, and endured substantial physical discomfort
along the way. Further, former athletes typically possess a competitive spirit and
a determination to excel, both of which translate well into investment banking.
Capacity questions test not only your willingness to work hard, but also your
ability to learn quickly. Although investment banks devote substantial resources
to training their incoming analysts and associates, training programs cover a
considerable amount of material in a relatively short period. Deal teams are
lean relative to the volume of work to be done, time frames are often tight, and
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there is little tolerance for missing deadlines. To add value to the transaction
team, junior bankers must learn quickly and work efficiently, often with little
supervision. Since senior bankers’ time is both valuable and limited, they
appreciate analysts and associates who only need things explained once.
Rules of the Road
Rule 1: Be prepared for confrontation.
Because your interviewers are assessing your fundamental ability to do the
work, questions in this category (along with commitment questions) tend to be
the most confrontational. Be prepared to discuss your C-plus in macroeconomics
or accounting, the curious absence of anything financial or quantitative
on your resume, or the three consecutive summers you spent lounging in the
Caribbean. (Even if you don’t have any low grades or low-key summers to
worry about, don’t be complacent: One of our insiders was asked about the
single A-minus among the sea of straight A’s on her transcript). Regardless of
your background, you may encounter a series of rapid-fire multiplication
questions or a wacky brainteaser designed to rattle your cage and test for an
allergic reaction to numbers. Come prepared and stay calm—the wrong answers
won’t disqualify you, but tears most certainly will.
Rule 2: Imply—but don’t state directly—that your previous achievements
prove that you’re highly capable of doing the work.
Recall our discussion above: The more directly comparable experience you
have, the more comfortable recruiters will be in your ability to do the analytical
heavy lifting on each of your teams. As you prepare for your interviews, keep
the profile of an analyst or associate’s responsibilities in mind. If you’ve worked
as a summer analyst for an investment bank, written highly analytical papers in
college, crunched numbers for a government agency during a high-profile
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internship, or excelled in athletic endeavors, be sure to discuss these topics
(enthusiastically) during your interview.
Conversely, don’t belabor the point for less relevant pursuits. Trying to convince
your interviewer—through excruciating detail—that the summer you spent
working on a Montana dude ranch is highly applicable to investment banking
may not achieve the desired outcome. Particularly in the case of seemingly
unrelated pursuits, it’s best to let your interviewer draw conclusions about your
capability (unless, of course, you’re asked). If you make this leap yourself, it’s
likely to come across as forced, canned, and presumptuous.
Rule 3: Remember that “capacity” refers to more
than just raw intellectual horsepower.
Particularly at the junior levels, a “can-do” attitude counts for as much as
analytical aptitude. Regardless of your academic training or work experience,
don’t forget to highlight experiences that suggest you can learn quickly (perhaps
you taught yourself Italian in your spare time and are now fully conversational),
work well under pressure (don’t forget the summer you worked as a short order
cook in Cape Cod), and have a healthy attitude toward grunt work. One insider
describes her interview with a senior VP and business unit manager at a leading
Wall Street firm: “This guy had the final say as to who was hired into the group,
and he had this thing about hiring people who had waited tables. He’d ask
everyone he interviewed —analysts, MBAs, lateral hires—whether they had ever
waited tables. If you hadn’t (and I hadn’t), you’d better be able to describe
something you had done that proved you weren’t opposed to doing tedious,
unglamorous work.” Investment banking may be a white-shoe kind of
profession, but as a group, bankers like people who aren’t afraid to get their
hands a little bit dirty.