Explaining Concepts

We often talk about recruiting and interview Qs etc. and why one person gets a job vs. another. I thought I'd offer up a perspective on the forum...

Recently my team has been interviewing lateral candidates. It's amazing how many well qualified people there are out there that simply don't interview well.

The perfect example I can share with you guys fresh off the press is from this morning. Managers and staff got together in a huddle to talk about various candidates and their perceptions of each.

One candidate in particular had all the right credentials, all the right work experience on paper. Interestingly, this candidate happened to also have a CFA. A CFA wasn't giving him the edge, but since he posted it on his resume, it was fair game to probe him more so than others on technical skills.

For example, when asked to explain the concept of beta, this candidate couldn't do it. When asked how an input would impact a DCF model (e.g. working capital, debt), the candidate struggled through it and said 'well the model just figures it out' etc.

Just a perfect example that one has to be able not just to work a model but also be ready to defend at any moment the criteria used to select various inputs (e.g. multiples), explain results and general concepts. Remember, financial models are only going to be as good as the user who controls them.

Interestingly, candidates that get the job offer may have less modeling skills, but if they're able to understand/explain concepts it's going to be easier to develop them further professionally and hence will win a job offer over someone who may have had better credentials.