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# Forming a hypothesis : Case in Point vs Victor Cheng

Hey guys

In Case in Point, Cosentino talks about the 5 steps to start a case : 1- summarize the question, 2- Verify the objectives , 3- Ask clarifying questions, 4- Label the case and lay out the structure, and 5- State your hypothesis. When talking about step 5 he says it's a good plus to do but not necessary

Victor Cheng has a totally different approach. For him the hypothesis is an essential part of the problem solving, and not stating one could cost you the interview. When it comes to timing, he recommends to do it after the clarifying questions but before working on the structure. His reasonning is "the only reason you use a framework or issue tree is to test a hypothesis"

I find that Victor Cheng appraoch makes more sense but i'm surpised it's different than Cosentino. Part of me seeks the consistency and it annoys when i dont find it. What are your thoughts ?

Thanks

Rafic

Hey guys

In Case in Point, Cosentino talks about the 5 steps to start a case : 1- summarize the question, 2- Verify the objectives , 3- Ask clarifying questions, 4- Label the case and lay out the structure, and 5- State your hypothesis. When talking about step 5 he says it's a good plus to do but not necessary

Victor Cheng has a totally different approach. For him the hypothesis is an essential part of the problem solving, and not stating one could cost you the interview. When it comes to timing, he recommends to do it after the clarifying questions but before working on the structure. His reasonning is "the only reason you use a framework or issue tree is to test a hypothesis"

I find that Victor Cheng appraoch makes more sense but i'm surpised it's different than Cosentino. Part of me seeks the consistency and it annoys when i dont find it. What are your thoughts ?

Thanks

Rafic

(edited)

3 answers

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Hi,

Victor Cheng is fundamentally wrong in claiming that the statement of a hypothesis is a requirement at the start of a case. In fact, stating a hypothesis for the overall problem only makes sense if you really have something to ground your hypothesis on! This is very rarely the case, since case prompts tend to be quite vague at the beginning. Just stating a hypothesis for the sake of it serves no purpose! It would just be a shot from the hip - and this is something you should avoid at all cost during an MBB interview!

If the question is about finding the reasons for an observed phenomenen (e.g., fallen profits), then you can rather say “I would like to first identify the numerical driver of the problem, which can sit either on the revenue or on the cost side (or both). Based on this initial assessment, I would build a hypothesis on the underlying reasons for the detrimental development, then verify the hypothesis, and subsequently derive measures to address these reasons in order to reverse the trend.”

If the question is eseentially a go- or no-go-decision (e.g., "Should we enter the Brazilian market?"), then a MUCH better approach than a blank "Yes/No"-Hypothesis (which feels stupid anyway, right?) is to define the criterion according to which the question can be answered. This implicitly comprises hypothesis-thinking, but in a much cleaner way. All you have to do is to

(1) narrow down the question,

(2) define the criterion according to which the question can be answered with "yes",

(3) outline how you can test whether the criterion is met.

That's it! This is how you address strategic questions without shooting out non-substantiated hypotheses (or rather wild guesses!), while still being super top-down and super efficient.

Hypotheses then are used all along the way of performing the actual analyses! But it is not hypotheses on the overall question, but hypotheses on the various sub-aspects which you need to test in order to eventually answer the overall question.

I hope this helps.

Cheers, Sidi

Hi,

Victor Cheng is fundamentally wrong in claiming that the statement of a hypothesis is a requirement at the start of a case. In fact, stating a hypothesis for the overall problem only makes sense if you really have something to ground your hypothesis on! This is very rarely the case, since case prompts tend to be quite vague at the beginning. Just stating a hypothesis for the sake of it serves no purpose! It would just be a shot from the hip - and this is something you should avoid at all cost during an MBB interview!

If the question is about finding the reasons for an observed phenomenen (e.g., fallen profits), then you can rather say “I would like to first identify the numerical driver of the problem, which can sit either on the revenue or on the cost side (or both). Based on this initial assessment, I would build a hypothesis on the underlying reasons for the detrimental development, then verify the hypothesis, and subsequently derive measures to address these reasons in order to reverse the trend.”

If the question is eseentially a go- or no-go-decision (e.g., "Should we enter the Brazilian market?"), then a MUCH better approach than a blank "Yes/No"-Hypothesis (which feels stupid anyway, right?) is to define the criterion according to which the question can be answered. This implicitly comprises hypothesis-thinking, but in a much cleaner way. All you have to do is to

(1) narrow down the question,

(2) define the criterion according to which the question can be answered with "yes",

(3) outline how you can test whether the criterion is met.

That's it! This is how you address strategic questions without shooting out non-substantiated hypotheses (or rather wild guesses!), while still being super top-down and super efficient.

Hypotheses then are used all along the way of performing the actual analyses! But it is not hypotheses on the overall question, but hypotheses on the various sub-aspects which you need to test in order to eventually answer the overall question.

I hope this helps.

Cheers, Sidi

Hi Rafic,

Excellent question.

Even though Victor Cheng offers a lot of excellent advice, including a strong focus on the hypothesis-driven approach (which really helps many candidates sharpening and focusing their thinking along the case!), stating a hypothesis at the very beginning of the case usually turns out to be more counterproductive than helpful.

Unless you are an experienced hire with a strong focus on exactly that one case question to discuss, stating a hypothesis right at the beginning of the case interview is essentially nothing else than poaching with a stick in the dark and guessing around. And here you are: you are perfectly set for a highly unstructured and confusing start into your case! (Please note that even as experienced hire, you might be completely wrong with your hypothesis, especially in the slightly artificial case interview world - so I would not even strongly recommend the early hypothesis there)

However, at the same time it's also a matter of defining 'hypothesis'. If you look at your structure at the beginning of the case interview, it is basically the connection between the current client situation and a specific goal you want to achieve. In other words, this initial structure is also a kind of hypothesis which elements you need to consider and analyze in order to clearly understand the root cause and develop a solution for that. So essentially you can also consider your structure as some kind of hypothesis.

Apart from that technicality, the correct time to explicitly state a hypothesis during your analysis phase is when you have collected some initial data and you start 'connecting the dots'. Once some distinct pieces of your analysis guide you into one specific direction, then it's the correct time to explicitly state your hypothesis and focus in on 'verifying' (in the non-scientific way) your hypothesis!

Hope that helps - if so, please be so kind to give it a thumbs-up with the green upvote button below!

Robert

Hi Rafic,

Excellent question.

Even though Victor Cheng offers a lot of excellent advice, including a strong focus on the hypothesis-driven approach (which really helps many candidates sharpening and focusing their thinking along the case!), stating a hypothesis at the very beginning of the case usually turns out to be more counterproductive than helpful.

Unless you are an experienced hire with a strong focus on exactly that one case question to discuss, stating a hypothesis right at the beginning of the case interview is essentially nothing else than poaching with a stick in the dark and guessing around. And here you are: you are perfectly set for a highly unstructured and confusing start into your case! (Please note that even as experienced hire, you might be completely wrong with your hypothesis, especially in the slightly artificial case interview world - so I would not even strongly recommend the early hypothesis there)

However, at the same time it's also a matter of defining 'hypothesis'. If you look at your structure at the beginning of the case interview, it is basically the connection between the current client situation and a specific goal you want to achieve. In other words, this initial structure is also a kind of hypothesis which elements you need to consider and analyze in order to clearly understand the root cause and develop a solution for that. So essentially you can also consider your structure as some kind of hypothesis.

Apart from that technicality, the correct time to explicitly state a hypothesis during your analysis phase is when you have collected some initial data and you start 'connecting the dots'. Once some distinct pieces of your analysis guide you into one specific direction, then it's the correct time to explicitly state your hypothesis and focus in on 'verifying' (in the non-scientific way) your hypothesis!

Hope that helps - if so, please be so kind to give it a thumbs-up with the green upvote button below!

Robert

Hi Rafic,

Just to add to the excellent existing answers:

1) I personally prefer the Cosentino approach

2) You need to pick the approach/book/coach/material that fits you i.e. wha thelps you understand what to do. Ther eare many right answers!

Hi Rafic,

Just to add to the excellent existing answers:

1) I personally prefer the Cosentino approach

2) You need to pick the approach/book/coach/material that fits you i.e. wha thelps you understand what to do. Ther eare many right answers!

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