Structures | When to go formulaic vs. conceptual?

Hi there, 

Both structures work, high level. 

Don't assume that only one type of answer is correct and all others are wrong. What matters rather is how broad, deep and insightful your answer is. You can do that with both a formulaic and conceptual structure, but you need to choose which one works best for that particular case, then calibrate it further. 

If I were to choose, I would go with the conceptual as well. The issue with the formulaic one in this case is that it can leave you open to blind spots. For instance, revenue issues could also have to do with the competition and this fits better as a topic of study within the conceptual framework, whereas it's more difficult to introduce in a MECE way in the formulaic structure. 

Best,

Cristian

Hi Henk Baarsjes,

I think this is an interesting question that may be relevant for many people. I would be happy to share my thoughts on it:

• Generally speaking, both approaches can be useful, but on their own, they may not be enough to fully address the question at hand. If I had to choose, I would go with your proposal and further elaborate on it by adding more detail, as the latter structure does not seem to be MECE.
• Given that the question is not about what caused the decline in revenues, there is no need to extensively diagnose the root cause of the problem. Instead, the focus should be on how to increase revenues. However, as I mentioned before, it would be helpful to further elaborate on your structure by outlining general options for increasing ticket and other prices and increasing volumes.
• Additionally, it might be useful to consider the associated risks of your recommendation and how they can be mitigated.

If you would like a more detailed discussion on how to structure any case study, please don't hesitate to contact me directly.

Best,

Hagen

Hey Henk,

Here are my thoughts:

1) I'm sure you are aware of MECE. Thus, in order to be ‘Exhaustive’, it is important that your initial structure tackles all possible reasons why revenues are low. 

2) While mathematically your algebraic equation is correct, it shows no business acumen.

3) Thus, I would start off my structure considering Competitors, Customer's needs, Market Size, Strategic factors, Operational factors, Risks, Capabilities - organised into appropriate bucks.

4) Then, later in the interview when the interviewer hints at focussing on the numbers, then you can use your mathematical equation.

Hope this helps!

Feel free to contact me directly if you have any further questions.

Best,

Rushabh

Hi Henk,

“Formulas” aren't really frameworks. That said, you can use formulaic thinking when creating on.

For example, if we have to increase the output of a workshop, we can have a bucket that's about increasing # of workers and a bucket about increasing output per worker.

However, we shouldn't say this. We should can the bucket “Workforce/labor” and “Productivity/Efficiency”.

Make sense?

Additionally, it's really important that you understand there will almost never be an answer to your question “when to use what kind of framework”.

Hard and fast rules and memorization is not frameworking. You need to learn how to think and breakdown problems in an objective-driven, structured way. With practice, reading, learning, coaching, etc. you can get there, but you can't take a rules-based approach here.

How to Framework

I'm going to take a step back and answer the question you're really asking: How do I use frameworks in a case?

If there's anything to remember in this process, is that cases don't exist just because. They have come about because of a real need to simulate the world you will be in when you are hopefully hired. As such, remember that they are a simplified version of what we do, and they test you in those areas.

As such, remember that a framework is a guide, not a mandate. In the real-world, we do not go into a client and say "right, we have a framework that says we need to look at x, y, and z and that's exactly what we're going to do". Rather, we come in with a view, a hypothesis, a plan of attack. The moment this view is created, it's wrong! Same with your framework. The point is that it gives us and you a starting point. We can say "right, part 1 of framework is around this. Let's dig around and see if it helps us get to the answer". If it does, great, we go further (but specific elements of it will certainly be wrong). If it doesn't, we move on.

So, in summary, learn your frameworks, use the ones you like, add/remove to them if the specific case calls for it, and always be prepared to be wrong. Focus rather on having a view, refering back to the initial view to see what is still there and where you need to dive into next to solve the problem.

Hi there,

In my estimation, your question about formulaic vs. conceptual frameworks isn't the most important one. A more profound question you should ask yourself is whether you'll go for a hypothesis-driven approach vs. analytical discovery. Let me explain:

• Hypothesis-driven: You hypothesize as to what the drivers might be that are holding back top-line growth to subsequently define levers. In the absence of further data/info, this is necessary to put some meat on the bone and create yourself a case out of thin air. Leave it to the interviewer to interject with additional info/data and guide you where needed. This approach is representative of Q1 in every McKinsey interview. However, the hypothesis driven approach also works for other firms. The key here is indeed to be very MECE and conceptual as you develop your ideas. Formulaic doesn't work well here even though it seems MECE but it's the worst kind that won't let your creativity shine.
• Analytical discovery: With this approach, you refrain from hypothesizing too much and instead, set yourself up for a series of questions to the interviewer and trying to uncover any helpful data/info that might guide you. This may be conceptual or formulaic and you will be perceived as systematically working down a list of targeted questions, but your creativity won't necessarily come through as much. If you go for this approach, I will still recommend conceptual over formulaic since the latter isn't really a framework, as already pointed out.

Hope this helps a bit. Best of luck!

Hello!

To add on top of what has been said:  both structures work, high level, and many more could too. There is not one recipe for this, just take every case as a business problem you are trying to solve with all your toolkit. 

Cheers, 

Clara