Risks as a bucket

Hi there,
 

Great question — this comes up a lot in case prep.

In general, “risks” should not be its own standalone bucket in your initial framework. You’re absolutely right that it can feel non-MECE, since risks usually touch all your other buckets (e.g. pricing risk, operational risk, market risk), making it more of a lens than a discrete category.

Instead, a better practice is to:

• Incorporate risk considerations within each bucket as you work through your analysis (e.g. flag implementation risks when discussing a new market or operational risks under scaling).
• Then, summarize the major risks in your final recommendation — this shows foresight and helps qualify your answer with trade-offs.

The only time you'd treat “risks” as a standalone bucket is if the case explicitly asks you to evaluate risks (e.g. “What are the risks of entering this market?”). In that case, it’s core to the question, not a side consideration.

Hope that helps - let me know if you need further advice.

Best,

Evelina 

hey!

You're totally right to think it depends on the question! MECE should always come first. If you're assessing something like a merger or a major investment, then yes, “risks” can absolutely be its own bucket, since you're expected to look at upsides and downsides. But in most standard cases, it's cleaner to weave risks into the relevant buckets and then call them out again in your final recommendation if needed.

best,
Alessa :)

Hi there,

In line with what Alessa said, it does depend on the context. For instance, let’s say you are supposed to decide on whether or not you should do a certain investment. You’ll have to basically understand if it meets your expectations, if you have means to actually make it work and also consider the risks, evaluating if they exist and if so, if they are manageable. In this situation, risks would be a separate bucket, but just because inside of it you would evaluate all the different factors that may contribute to it (being exhaustive) and because it refers to the investment decision only.

Another scenario where risks can’t be separated would be in a market entry case, where different aspects should be evaluated (differently from the investment case). In this situation, each bucket should have a risk evaluation (if it makes sense, depending on the context and prompt). For example: competition may pose a risk, market behavior too, client’s expertise too, etc. you don’t have to necessarily name it “risks” within the buckets, but you should bring the specific risk that that bucket may have.

As you progress doing more cases, you’ll be able to identify the patterns that leads you to one structure or another. A case coach can accelerate this understanding, happy to help if needed!

Best,

Mari

I broadly agree with what the above coaches have said.

It makes sense to flag any major risks in the other buckets, and also call them out in the final recommendation (in your 'risk' and 'next steps' part).

There are exceptions to this though - M&A cases often benefit from a 'risk' component in the overarching structure, and some questions may ask you to consider risk as a core part of the question, in which case it pays to separate it.

Hey, 

I'll keep it short, I usually add "risks" as a separate bucket only when an investment decision is being assessed, such as in a market entry case, which is a huge corporate investment. 

As for mentioning risks in the recommendation: 

• It is optional but a nice-to-have if you didn't include "risks" in your initial framework (but only do it if you have something meaningful to add)
• It is mandatory if "risks" was part of your initial structure.

Hope this helps, feel free to reach out if you have any Q!

Generally, no, 'Risks' shouldn't be its own bucket. 

Why?

Well, because that's not how it works in the actual job. In practice, you always assess the risk as part of all the other areas you might be studying. 

Having 'Risk' as a self-standing area is more of an invention of case books than a reflection of the expectations from interviews or how consulting work is actually conducted.

Best,

Cristian

Hi there,

I would be happy to share my thoughts on your questions:

• First of all, and contrary to what other coaches have said, it really depends on the consulting firm. At McKinsey, you are usually asked to consider factors/dimensions, and risks are typically included in those. In this case, adding risks as a separate factor/dimension may result in a non-MECE structure. However, with almost all other consulting firms, where you are asked to present an approach, it may be even necessary to add risks as a separate step to create a MECE structure.
• Moreover, while you can certainly mention risks in your final recommendation if you've already assessed them, I don't think it would be meaningful to "sprinkle in" a few risks you made up on the spot for the final recommendation.
• Lastly, I would strongly advise you to consider working with an experienced coach like me on your structuring skills. I developed the "Case Structuring Program" to help exactly such candidates like you who struggle with case study structures.

You can find more on this topic here: How to succeed in the final interview round.

If you would like a more detailed discussion on how to best prepare your application files, for your upcoming pre-interview assessments and/or interviews, please don't hesitate to contact me directly.

Best,

Hagen