Structure the case conclusion recipient-friendly by applying the Pyramid Principle
Use the pyramid structure to provide syntheses and recommendations at the end or in between your case interviews
The Pyramid Principle is a structure to present your synthesis in an effective and convincing manner. Here, you present your results first and then how you got there. This principle is of crucial importance in a consulting context, where you need to bring across the most important messages as quickly as possible. Remember that due to time constraints, a CEO is primarily interested in the "answer" and not in the process behind the answer.
The Pyramid Principle consists of three parts:
What – Why – How
- What: Theory, hypothesis, recommendation, or conclusion
- Why: The reasons
- How: Elaborate on how you want to implement it
Structure of a recommendation in a pyramid format
Try to have 3 explanations for your recommendation supported by data. First, state the recommendation. Second, provide 3 reasons. Third, provide information on how to implement the recommendation.
Example 1
Question: Our client wants to increase profits, how should they do it? (Assume you have gone through the case and the analysis is complete.)
Conclusion, after analysis in a pyramid format:
What:
Our initial analysis suggests a cost reduction for your supplies.
Why:
- Benchmarking with competition shows lower purchasing costs in the industry.
- For the basic products, cheaper and lower quality supplies are sufficient.
- Market outlook and the current products do not allow higher prices.
How (next steps):
- Benchmarking/sourcing: A detailed analysis of competitors' suppliers and costs should be conducted that would allow finding cheaper suppliers. This information could also allow you to renegotiate with current suppliers. Bulk orders are another option because you have a high storage capacity.
- Supplies: The suppliers’ quality has improved over the last years. Low-cost suppliers have products with sufficient quality to fulfill our needs. Furthermore, customers do not require or expect the longevity provided by the current products.
- Pricing: The current products are not sufficiently differentiated for higher prices. Also, the current brand positioning hinders premium pricing. Therefore, a cost leadership position would make more sense as supported by the analysis.
Example 2
Just as in the above example, assume we have completed the analysis (note that the numbers in the example are hypothetical).
Question: Should the Whole Foods Market enter India?
Conclusion, after analysis in a pyramid format:
What:
Yes (notice that it is extremely important to answer the client’s question which is primarily a YES/NO answer, be direct!).
Our initial analyses show that the Wholefoods Market should enter the Indian market, specifically, they should concentrate on the urban areas of India.
Why:
- Market for organic/healthy food is growing at a rate of 10 % annually, which is faster than most developing countries of the world.
- Increasing disposable incomes of the customers align well with the premium pricing of the company’s products.
- The concept of organic food is getting a lot of influence from the western world, leaving more than ~1.5 billion dollars of untapped opportunity in India.
How (next steps):
- Partnership with locals
- Analysis of governmental regulations
- Pilot study
You can also mention that the next steps would need further analysis to determine the most attractive option.
Key takeaway for the Pyramid Principle
Remember: What – Why – How