First of all, here are the general ways to provide the recommendation:
- Always take 30 seconds to structure your recommendation. Never give a recommendation without taking time for preparation
- After taking the time - check the objective. The worst thing you can do is answering the wrong question
- Spend 30 seconds on structuring the recommendation and collecting the numbers supporting your arguments from your case notes
The typical structure is the following:
- What was the objective
- Your recommendation
- Arguments why the recommendation is valid (2-4 arguments) with the supporting numbers
- Additional things you would like to explore. In the order of priority:
- Things you still need to explore / data you need to get in order to provide a valid recommendation (Very typical for McKinsey cases where the interviewer guides you and interrupts in the middle of the case to provide a conclusion
- Things you've slightly covered during the case but have not come to a particular measurable solution or were not the part of the original objective (e.g. alternative growth options or some questions on creativity)
- Next steps
- Our objectives were to understand why the profit is declining by X and how to bring the profit back within one year (Don't forget that your objective should be measurable in terms of money / other metric and time)
- According to the analysis we've done so far, my recommendation is to shut down the division A and to concentrate on the divisions b/c if we want to increase the profit, and there is a number of reasons for that.. (Remember that your arguments should include numbers).
- You provide the arguments a) First of all, problems in Division A are the major driver of the decline in profits - 90% of the decline in profits refer to Division A. b) Secondly, the decline is driven by the contracting market size that is shrinking at xx percent and is not expected to improve in the near future. c) Finally....
- Additionally, I would like to check the following... (In the last bullet, you simply provide a list of other things you have discussed, but they were not the part of the original objective / the things you slightly discussed but haven't come to any conclusion, like the questions on creativity)
The problem is that In many cases, you can't provide a definite answer since you don't have enough information
Consultants may be testing several things:
- Are you comfortable enough with providing preliminary recommendations based on limited data? (Imagine a CEO whom you met in the elevator and who wants to know the preliminary findings)
- Will you make a mistake of providing a recommendation with a high level of certainty without having a proper supporting data?
Imagine a case when you have to make a decision whether a PE fund should acquire a company. You make a proper structure (Market, Competitors, Company, Feasibility of Exit) and in 25 min of a case, you've managed only to go through the Market and Competitors branches of the analysis. What will be your recommendation?
In this case, you have to provide a Soft Recommendation:
- You start with an objective ("Our objective was to understand whether we should buy this company")
- You provide a preliminary recommendation highlighting the uncertainty("According to the limited data we have so far, our preliminary recommendation is to buy this company and there are three reasons for that..." or "Purely based on the data we have about the market it looks like it's a good idea for a number of reasons..")
- You provide the reasons ("First of all the market is big at X and growing at Y, Secondly the competition is fragmented with the target company having x% of the market. Thirdly...")
- You Mention the pieces of data that you need to provide a full recommendation ("But to come up with a final recommendation I would like to look at the company financials, key capabilities and..." or "But to be 100% sure in our recommendation we need to check...)