Following up my my post from last Thursday , I'm here today with part two of my interview with Nefarious.
For those of you that need a refresher, Nefarious is a Strategy Associate at a global Fortune 500 aerospace & defense company. Check out part one of my interview with him for some great in-depth information on how he broke into his role, what he does from day to day, and the pros and cons of working in Strategy along with some great follow-up Q&A in the comments.
In today's post, we cover tips on breaking into Strategy roles, potential exit opps for Strategy professionals, and his views on both the defense space and the fiscal cliff.
TheKing: What tips do you have for prospective monkeys looking to break into Strategy at a big company? Anything you wish you knew when you went through the interview process? What does your company look for in prospective hires?
Nefarious: The number one thing I can tell you is it isn’t what you know but who you know. On paper, I am not that impressive. Small tech firm experience, non-target top 50, mediocre GPA. Network and get yourself in front of the right people. Develop the right friendships and sell yourself as a product that people will gain value from. It’s never too late to change directions. Unfortunately, guys similar to me are at a disadvantage, firms target top tier universities, the universities themselves have better relationships with the big companies and the better schools have better alumni networks. Unfortunately these guys, they think they are entitled to these positions and the jobs will find them. Take advantage of their arrogance and strike before them.
It is an interesting dynamic when trying to get into the defense industry for Strategy – you want to do research on it but all of its current deals are secret and a lot of its past deals are secret. Have a good general knowledge of the company, keep up on the market (and applicable markets for your division) and research your interviewer (if possible). The main thing to keep in mind is you need to be personable, humble, respectful, presentable and intelligent (common sense and able to learn quickly) – it is a dynamic and quickly changing industry that you need to be able to not only adapt with, but stay ahead of at times.
TheKing: How about exit opps? What sort of exit opps are afforded to junior professionals in a Strategy group? Any opportunities to work in a management capacity?
Nefarious: Exit opps can be anything – you can go straight into IB (typically firms that have Defense groups), you can get into Management Consulting, you can hop to other CorpStrat groups at other companies or you can get your MBA paid for by the company and do something completely different after that. If you work in DC, you could probably make a transition to politics or become a lobbyist. The opportunities seem to be endless in the DC area. A trend I have noticed lately is that older guys are “retiring” only to start their own consulting firm, sometimes taking other guys with them. If you are interested in getting in on the ground floor of something like that, that seems to be an exit opp right now.
Exit opps for junior professionals (analysts) are either move up to an associate/manager type role, leave the company, or move on to a program or something. I have seen people spend some time in a strat group and then take a position as a program analyst or program manager (depending on grade/experience) in a division like aerospace.
Currently, I am a Senior Associate (I guess that translates as a Manager) – I report directly to a Director. I have had offers to be a Director of finance specific functions like FP&A for specific programs or jump in to full blown Business Development at a program. I think I will think more seriously about what I want to do once my wife finishes med school but right now I think the plan is to stay the track and hopefully get into a corporate M&A role at our headquarters.
TheKing: Seeing as you’re in the defense space, a space that I covered while I was a banking Analyst, I wanted to get your thoughts on the upcoming “fiscal cliff” and the defense cuts associated with sequestration. Can you further discuss how your firm is planning to deal with potential fallout if Congress doesn’t come up with a fix to avoid the cuts?
Nefarious: This will have a different outcome for different divisions. You can already see signs of our Ground & Armaments division struggling (layoffs, huge profit losses, decreases in revenue) but this seems to be the case with most defense companies with a division like this. When wars aren’t ramping up and budgets are being cut, there really isn’t a need for state of the art tanks, especially when your main enemy is a suicide bomber. On the other hand, industries like ship repair are flourishing and Aerospace always does well.
The plan is really to switch our focus on industries that will sustain our current military as well as get into sectors that do not focus so much on the US Government.
TheKing: What are your long-term views on the defense space? Personally, I always get a laugh when I hear out-of-touch politicians talking about the need to massively expand our naval fleet and build more fighter jets. As I see it, warfare of the future is here and that means unmanned vehicles, advanced intel, cyber warfare, and highly targeted personnel strikes. What’s your view?
Nefarious: You’re exactly right. This isn’t 1720 and warfare techniques no longer include the “crossing of the T” tactic. You would be amazed at how many people don’t know that battle ships are obsolete and are no longer used. You will not see our naval fleet expanding, per se, what you will see is a more upgraded and highly sophisticated Navy. The Navy is important for a few reasons:
1 – It helps protect our coasts
2 – It helps patrol our seas
3 – It can provide a “floating city” on another country’s coast – essentially allowing us to be at that country without really being in that country.
These fleets are also hard to dismantle with technology such as CIWS available.
Although, none of that seems to matter if you are an oil tanker.
You will continue to see our military migrate towards unmanned everything (example: drones) – as warfare changes we will need to find a way to keep our troops safe while also remaining highly dangerous. Drones provide that opportunity.
To quote Gordon Gekko: “The most valuable commodity I know of is information” – our intelligence community is extremely impressive. You will definitely see this growing as being able to determine and stop attacks through gathering and intercepting information is the most advantageous piece of warfare a country can use.
TheKing: Are there any stocks in the space that you’re bullish on?
Nefarious: I am not a huge stock guy. I think L-3 Communications is a solid, stable company. General Dynamics and Northrop seem to be staying the course as well. I also like Lockheed and UTX. Boeing is always a safe bet as well.
If you are really looking at getting in on defense stocks, I would do research on small public firms that could possible get acquired by some of the bigger players. Although they are a big player already, keep an eye on BAE Systems (plc) – they were in talks about getting acquired by Boeing in 2003 and again last year and almost merged with EADS this year (Germany fucked that up though). It seems like their big goal for the past ten years has been sell or merge.
TheKing: Do you have anything else you’d like to share with the community?
Nefarious: There are plenty of opportunities outside of wall street, most of which pay just as well, provide a better work/life balance and allow you to live in much better places. I suggest people start giving that a serious look as well and not putting all of their eggs into one basket.
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That's all, folks. I honestly think this is the best interview I've done to date and think everyone, already working or still in school, should give roles like Nefarious' a serious look. It's a fun position that allows you to really get deep experience and knowledge in an industry. And thanks again to Nefarious for taking the time to do the interview.
If you've got any additional questions, leave them in the comments. And don't forget to check out part one of the interview.
Again, I'll be around to answer any questions or PMs you guys might have.
Thanks for doing the interview King, it was great.
Solid interview once again
Great interview! Thanks to both of you. I had a question about interviewing for strategy positions. Were they mostly technical? Mostly behavioral/fit? If you had to prepare for one knowing what you do now, how would you go about it or what would you do differently from before?
Depends on the group and person doing the interview. There really isn't a set standard across the board. For us, we mainly care about you being able to interact with internal and external customers intelligently, on both a professional and personal level. Technicals can be taught, being "street smart" and business savvy cannot.
Well if I had to prepare for one today, I would prepare the same way I prepared before I went into the position, by being myself and bringing the knowledge and background that I have to the table. Don't try to prepare and over prepare. Know your resume, know yourself and know your skills.
^I am curious about this as well.
Also, if someone was already working in corp fin / a BB's finance division (since you said this provided a good set of skills for a position like yours), how would they make the jump to a F500 company? Aside from university recruitment, is there a formal process for this, do you just apply online, or do you pretty much have to know someone on the inside already?
On another note, thanks for the interview. Really interesting to read about some alternative paths to banking.
I have said this a few times. You need to know someone. Applying online will get you no where. Literally no where. No one has ever applied online and gotten a job from it. Most public companies have the online req because it is a requirement. Even when you know someone on the inside, they will tell you to apply online to help move the process along, but you will never get your resume moved from point A to point B on the online application form without having an in.
I've gotta rebut that. I'm in Corp Dev now and got multiple Corp Dev interviews with F500 and other large companies applying online without having a single connection at the company.
You are at the mercy of an HR person or some kind of keyword screener, but it can be done. Obviously, it is much much more advantageous to know someone, but saying "literally no where" is not right.
I didn't even see this - "No one has ever applied online and gotten a job from it" - I had absolutely 0 connections at the company I am at now prior to interviewing and applied online (albeit from linkedin)...
I am sorry, but what is your point as this really isn't adding value to the topic at hand. I am glad that you applying online happened to work out for you but I can assure you that is never the case, especially not at my company.
Why would we ever actively seek someone out that just throws their hat in the ring and hopes someone follows up with them? That right there is the exact type of person we are not looking for. If and when we have ever recruited outside the company it has come from someone seeing a req and finding some way to contact someone in the group. We have never even interviewed someone that simply applied online.
I'm not trying to hijack your discussion but you stated something as fact that simply wasn't true, which I can directly rebut.
Let's just leave it that it is much better to have connections at a company when you're applying.
Generally, unless you've got a serious Prime Time resume with all the right experience and brand names on it, it'll be tough to get a strategy type of role using only the online application system.
I've also had some minor luck getting interviews via company online apps, but way more when going through a service like LinkedIn or Doostang or something like that. I've also been dinged without even so much as a phone call and I've got pretty solid MM banking and MM PE on my resume. It's a rough world out there, folks.
Shit, I have put my resume into online apps without even so much as the courtesy of the computer generated ding email.
It is part of the reason I stress networking so much.
Thanks for the interview. I happen to have a solid contact in Aerospace and Defense who would be willing to help me break in. I've asked about strategy before and he says that I need to get into an entry level finance position in the company and work hard and then make the switch to strategy. What do you think is the best entry level job to transition over or would it be best to go through a FLDP program?
I would say the FLDP program because you get exposure to so many different facets of the company and finance. Beware, most FLDP kids that I have run into are massive douche bags that are full of themselves and do not talk to anyone outside of the FLDP. They find it hard to move up after they have left the FLDP because of bridges they have burned. This has been my experience, might be different at other companies.
Outside of FLDP, aim for FP&A.
Are there preferred majors? Majors that will get you an auto-ding or at least hurt your chances a lot?
Not really. Like I have said, we look more at the person and what they can offer. I would say the most common degrees for UG would be Econ then Finance.
Nefarious- I am joining a F50 FLDP this summer. Is the FLDP really a sort of "fast track" within the Finance division? Do they eventually reach Sr Manager~VP roles given that they perform well, and network/socialize well?
In my experience, the FLDP people tend to stick to finance because most of them are introverted and terrible at networking outside of finance (especially outside of the FLDP). Because of this, we see most of these people plateau at a Director level.
That being said, it is hard for me to answer that because I cannot think of one person at my company that was in the FLDP that is higher than a Director II. Is it possible? Sure. Has it been done where I am? No - and the reason being the people that tend to get into the FLDP do not have the social skills to climb higher.
Are there ex-consultants (especially from top firms) in your peer group, and do they do well in terms of progression?
I am sure there are, but I have not come across any at my company. My company is big on hiring people with corporate experience, especially people with A&D experience or that are used to working with governments.
Also, Nefarious, interesting to hear your viewpoint on the service side of the business. It seems the real growth areas in the industry are in things like intelligence services instead of actual products. Do you think that the industry as a whole is going to move permanently more towards the service sectors instead of actual product lines?
I think with budget cuts the focus has been switched to maintaining and updating what the military already has as well as getting into sectors that do not rely on the US Government.
As far as new product lines go, we are going to see a big switch from items like tanks to more unmanned vehicles.
I also believe the aerospace divisions will, for the most part, remain unaffected.
Great interview Nefarious. Are you based in DC or somewhere else?
Also, you mentioned that most companies will target the guys from better universities, better alumni networks, etc. What does the background of a typical junior guy look like at your firm (or others)? You mentioned exit opps from your job and I was curious as to what kinds of jobs most people are coming from when they get to your company.
I am not located in DC. I spend a lot of time in FL, CA and VA with the occasional trip to DC.
The backgrounds tend to range. I am not saying we are a group of non-targets with a chip on our shoulder that shun ivy league guys. What I am saying is having Harvard on your resume doesn't get you any further with our group than having UGA on your resume. An education is an education and while some educations are not created equally, we like to put all undergrads and junior level prospects on the same level when it comes to your University because at the end of the day, you don't know shit and there isn't any brand name, overpriced diploma in the world that can change that.
I think this is a sentiment that seems to be shared across the industry and this might be because we employ a lot of veterans, most of which secured their education through the military or whatever local or small university they could attend while not being deployed - that being said, the "prestige" of an ivy league degree doesn't really hold a lot of weight in the industry. It is acknowledged, but it isn't the end all be all.
We get a lot of people with finance/contracts/BD backgrounds. These backgrounds provide a mix of technical, market insights and negotiations. People typically climb up within the strat group, exit back into the above mentioned roles in a more senior position, or leave for other opportunities elsewhere.
Great stuff, Nefarious. Thanks for sharing.
Glad you enjoyed it!
Thanks for taking time out to do this guys. Helpful read.
Glad you enjoyed it!
nefarious,
great threads. not sure if youre still taking more questions. i just started in a similar role (but with some fp&a involved with the strategy component) at a company in a different industry. have noticed this and wanted to see if you have experienced this as well:
how do you deal with other strategy teams (you said you're currently in a division) as well as finance teams? they all have their ideas and have their own goals they want to achieve but at the same time you do want to work together with them since you're under the same big umbrella. secondly, how often do you deal with the corporate group? they tend to have the final say, or at least have more weight on matters.
very informative and wish this Q&A was around when I was interviewing :)
also, serving as an additional datapoint: I got some interviews for strategy roles cold emailing / submitting online and what not, but accepted the job where I had a warm intro to a recruiter
I am glad you enjoyed it.
Typically, the chain of command goes HQ CorpStrat > Division CorpStrat > Finance
Finance is there to do program reporting and division reporting, set rates and do other back office bullshit. While we do have an open and friendly relationship, their top priorities are overwritten by our needs.
HQ CorpStrat sets the pace and dictates the global goal. The division has autonomy to come up with its own ideas and pursue certain projects, but we do keep an open (weekly) dialogue with the HQ team.
Let me know if I can answer anything else!
thanks! my role is half finance half strategy at the corporate level (focusing on the international segments) whereas there's another corp strat group that sits separately from us (weird structure). I have another Q:
how do you see yourself moving up? and do you have any tips on how to network within the company? I feel like at my company people network very aggressively inward and almost cult-ish. definitely different from what I was used to before in banking.
What would you recommend somebody like me to do to get into something like this (stuff like internships, how to network)? I'm a second year CS major at UMich... Would most of the recruiting for this go on at Ross?
hey nefarious - thanks for doing this, I enjoyed reading through it all. I have a few questions:
What is the salary progression like in your firm? I've read harvardgrad08's thread, though he is in corp. dev. in a west coast tech firm, so i'm looking to see what the differences are. He lists the progression as below:
Structure (from top to bottom): - C-Level Executives (top 20 or so people at the company): total comp $5M+/year - VPs: total comp ~$2-5M/year - General Managers: ~$500K-$2M/year - Sr. Director/Director: ~$300-500K/year - Sr. Manager/Manager: $150-300K/year - Sr. Analyst/Analyst: $100-150K/year
Is this similar to what you've experienced? Also how long at each position?
Furthermore, how are MBA's looked at within your group? Is there a lot of hiring from top 10 programs? I know you said prestige doesn't seem to be a factor, but I figured i'd ask anyway.
thanks!
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