Being hypothesis driven and solving case effectively

Question

I am exploring how to adopt a hypothesis driven approach to make my structure more streamlined, logical, direct, and easy to understand. For instance, in a cost cutting case, my case partner advised me to directly mention “To cut cost, there are 3 alternatives to reduce cost. Let's test each hypothesis one by one”.

I had some confusion when I was doing another profitability case today. Most people would solve the case like: “the price has dropped 5% last year, let's look at internal (company / product) and external (client / competition) factors. Should I solve any case using the ”hypothesis led" method I mentioned in the first paragraph? (For instance in this case, “ revenue drop might be due to X,Y, or Z. Let's test the hypothesis one by one.”

In a nutshell, I am still not clear how to effectively incorporate a hypothesis led approach to solve any kind of case. Should I always use this method to solve ANY type of case? Or, in some cases, I should use the traditional “framework / bucket approach”? Appreciate your response!

Answer 1

Honestly, the hypothesis-led approach is outdated.

Rather, you need to have a hypothesES-driven or, rather, and objective-driven approach. Your entire framework is a set of hypotheses and views as to how to solve a problem.

In my view, the more natural the better. I tend to say things like "My thinking here is x". or "Based on what I know about x and y, I think this'll likely happen" or "My inclination is x".

Please get away from saying any generic, i.e. hypothesis, framework, buckets, clarifying questions, etc.!

This Q&A Describes Better Hypothesis Thinking

https://www.preplounge.com/en/consulting-forum/at-what-point-in-the-case-does-the-interviewee-state-hypothesis-9356

Remember that your framework is essentially a set of hypotheses. That's why I prefer to call this "hypotheses-drive approach" or "objective-driven approach"

You don't need to state it explicitly, but remember that 1) You need to always be thinking about one and 2) You need to be demonstrating your drive towards one.

Also, remember that a hypothesis isn't necessarily "I believe x is the cause". Be better hypothesis is "If we can see what's happening with A, and A is going up, and then we look into B and B is big, then x is likely the case".

A hypothesis is much more about what questions do I need to ask/answer and how, in order to see what's happening.

Another way of viewing it:

Your framework is your structure for approaching the problem. It consits of a few main areas you'd like to look at. Inherent in your framework is a view that "If I answer A, B, and C, then we have an answer"

So, for market entry:

1) If the market is big, and it's growing, then we still want to considering entering

2) If #1 = yes, then let's see if it's attractive...can we win there? Is our product good/better than our competition's? Etc. If yes, let's definitely consider entering.

3) If #1 and #2 = yes, then, when we do enter, are we sure we can win? I.e. do we have the right plans. Will implementation actually pan out? Do we have the expertise, capital, etc.? In other words, if #2 is the thearectical, #3 is the reality.

Then, your summary becomes "I believe we should enter the market, if we can prove it's a good market, the it's attractive to us specifically, and that we will win it".

^Now this is a hypothesis :)

Read these 2 Q&As for some great context + discussion:

https://www.preplounge.com/en/consulting-forum/interviewer-led-case-interview-hyposthesis-and-ideas-7390

https://www.preplounge.com/en/consulting-forum/forming-a-hypothesis-case-in-point-vs-victor-cheng-7311

Hope this helps! This is a tricky topic that's difficult to properly answer in writting...if you want a more thorough explanation, and training in the mindset shift required here, don't hesitate

Answer 2

Hypothesis driven approach was a buzzword sometime back. However, the approach is a bit dated - especially for the new style of cases these days that don't perfectly fit into traditional frameworks.

Once you ask the client's objective, and the client's success KPI - then the structure and hypothesis should generally flow very organically.

Happy to look through some of your examples that you have gone through with case partners and help you in resolving your doubts - feel free to shoot me a message.

Answer 3

Hello,

I know that different structures and frameworks can be confusing while doing cases, but honestly as long as your approach is clear and logical, it doesn't really matter whether you frame it as a hypothesis or not. In your example of the profitability case, the common approach you outlined involves an implicit hypothesis (i.e. the revenue drop might be due to internal or external factors, etc.), so the two approaches you give there aren't really that different.

I tend not to recommend candidates to use the hypothesis-driven approach from the get-go, and rather opt for what you term the “framework-bucket” approach. I find that it can be awkward to assume some hypotheses (i.e. what the answer will be) from the onset of the case when you really have no way of knowing how it is going to go. That being said, the approach you should use depends on what you prefer and find more comfortable to follow stylistically. As long as you are clear, logical, and structured, it doesn't matter too much.

Answer 4

Hi there,

It's always preferrable to use an hypothesis (plural) based approach.

In the example you give, on the internal/external, the “issue” is that it is being phrased as “buckets” and not as hypothesis.

One thing is “looking” internally and externally… another is to understand whether it is a market issue (market going down), a competitive issue (your client doing worse than the competition) or even a internal efficiency issue. So the underlying “buckets” may be similar (first two hypothesis are external, the third one is internal) - but the communication of those “buckets” is completely different.

This is a simple example, at it is very obvious what you are trying to do when looking internally vs. externally. But in many instances, candidates put a lot of “buckets” out there which are not necessarily wrong, but it is not clear at all which questions will they try to answer when looking into those buckets…

Hope this helps!

Answer 5

It's a good idea to state a hypothesis (or hypotheses) IF you have one in mind. But please don't force one out for the sake of making a hypothesis.

When you have a hypothesis, the top part of the issue tree (i.e., the first layer of questions or topics) should directly help validate/ reject the hypothesis.

Let me know if you need help with hypothesis formulation and drawing robust issue trees to test hypotheses. I specialize in this