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Can somebody explain me what 80-20 is exactly and what does it mean in the context of an interview/consulting?

Bain BCG McKinsey
New answer on Mar 23, 2020
5 Answers
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Anonymous A asked on Mar 21, 2020

(edited)

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Daniel
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replied on Mar 21, 2020
McKinsey / ex-Interviewer at McKinsey / I will coach you to rock those interviews

As a general rule it's good to demonstrate that you are able to do things in 80/20 way during your personal fit interview.

What is 80/20? It’s a rule which basically states that 80% of the results come just from 20% of your efforts. So, in practice it means that you need to be able to prioritise and make trade-offs to complete more work in a given time vs striving for perfection in one specific task.

The 80/20 principle is very important in consulting industry, because in most cases you don’t have time to do things perfectly (there are literally not enough hours in a day).

So, when preparing for your personal fit interviews make sure you think about situations where you had to make sacrifices along the way (meaning applying 80/20) and make sure to bring those situations up during the interview.

A few generic examples of 80/20:

  • you wanted to do your internship but at the same time you were completing two degrees, so you persuaded the company to take you in for less hours than what they usually offer their interns;
  • you were working on the project with your team and wanted to complete everything on time but then encountered a major problem – instead of killing the team and making them work night shifts, you pivoted the project and achieved some results (maybe not the results you wanted, but some results);
  • you were training for a marathon, which was very important to you, but then your team member got sick and you needed to take over his workload – instead of killing yourself by overtraining and overworking, you chose to do a marathon in another city 3 months later, which was a mentally difficult decision but in the end the right one, because you managed to succeed in both;

So, once during your interview you get a question about challenges on the way, unexpected problems and issues, think about 80/20 :)

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Mo on Mar 21, 2020

thanks a lot, Daniel, this is helpful!

Francesco
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replied on Mar 22, 2020
#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success (➡ interviewoffers.com) | Ex BCG | 10Y+ Coaching

Hi there,

the standard definition of 80-20 is that 80% of the effects come from 20% of the causes. For example, 80% of the revenues come from 20% of customers and 80% of the results come from 20% of the effort. This rule, named to the economist Pareto, applies to many businesses and even daily usage of own time.

The main application to the consulting world is related to prioritization. In consulting you have a limited amount of time for projects, which means that in order to reach the majority of the results (the 80%) you have first to identify what is the minority of things you should do/analyze (the 20%) – and then do them. Only as a second step you should concentrate, if time allows and makes sense for the project, on the remaining 80% of activities, as this would generate diminishing results.

The same logic applies to the interview process: as a candidate you may have many ways to provide a solution for a case study. For example, you may have multiple ways to generate an increase in revenues (marketing campaigns, new distribution channels, changing price..). To be 80/20 in the context of an interview means being able to prioritize the most relevant analysis/solution (the 20%) that would help to reach the majority of the objective (the 80%).

The opposite of being 80/20 is what is called “boiling the ocean”, that is, trying to cover everything to be perfect, which doesn’t work well in a time-pressured environment like consulting.

Hope this helps!

Francesco

PS. The Pareto Principle can be compound, which means that if you apply it twice, you obtain that 64% of the results come from 4% of the effort – the so-called 64/4 rule - which is even more striking if you think about it.

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Clara
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replied on Mar 21, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

It´s super improtant in consulting, and you see it applied every day!

  • Official definition: The Pareto principle (also known as the 80/20 rule, the law of the vital few, or the principle of factor sparsity)states thatroughly 80% of the effects come from 20% of the causes.
  • Unofficial definition: prioritizing is f** important !! We tend to overkill ourselves working on little details that consume most of the time, when the delta of usefulness that they are adding is actually very little

An example: When preparing an end-product, what matters is the content. Sometimes, lots of time is lost doing little things none cares about (e.g., visually enhancing slides, adding back-ups none asked for, etc.)

Hope it helps!

Clara

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Antonello
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replied on Mar 23, 2020
McKinsey | NASA | top 10 FT MBA professor for consulting interviews | 6+ years of coaching

Hi,
it's the basic principle projects in consulting are based on and you should show its application during your interview structuring.

E.g. in a P&L case it's crucial to segment the profits among some dimensions (product mix, customers, distribution channels, geographies, ...) to focus your analysis on the most important segments. Very often indeed - assuming to talk about product mix:
- 80% of the profits are made by 20% of the products in the portfolio -> focus your effort (marketing, salesforce, ...) in this segment;
- 80% of the losses are made by 20% of the products -> develop a dedicated strategy for each of them (divest? increase prices? ...)

Hope it helps,
Antonello

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Adam
Expert
updated an answer on Mar 21, 2020
Ex Bain/ A.T. Kearney: Principal with >10 years global consulting and recruiting experience and >150 interviews

80:20 is nothing more than being able to see the wood from the trees.

A critical consultant capability is 'speed to insight' through having a laser focus on getting to the answer.

In a case study interview, this means being able to quickly identify the most critical issues and focusing on these. It necessarily requires you to have hypotheses or an "A1" (Answer first) in Bain speak, and displaying commercial judgment to get to an answer.

You would demonstrate this ability in the interview by describing a MECE framework as normal, but then taking a further step to highlight the areas you want to prioirtise.

Hope that this is helpful!

Best

Adam

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Daniel

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