expert
Expert with best answer

Alessandro

100% Recommendation Rate

66 Meetings

812 Q&A Upvotes

USD 149 / Coaching

How to develop business judgement properly?

Vasiliy asked on Dec 04, 2017 - 17 answers
2 years in banking, BA for a Russian Consulting company

Hi there!

So far I've heard several answers to such a question:
1) read business articles
2) practice more cases
3) read business literature

Tried all 3 options, but somehow I'm still stagnating (constantly recieving same feedback while improving in other areas). The only thing that works for me so far is real experience, but it's definetely not the most time/energy-efficient way to develop business judgement for case interviews.

Please elaborate as thorough as possilbe! Especially if you were able to solve such a problem for yourself.

Any specific business books will also be highly appreciated (since most "best-sellers" are.. let's say not really suited for case prep).

Thanks in advance!
Best regards,
Vasiliy

(edited)

17 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Alessandro
Expert
replied on Jul 13, 2018
Bain & Company | University of Cambridge | CV/Resume writing | 770 GMAT
Book a coaching with Alessandro

100% Recommendation Rate

66 Meetings

812 Q&A Upvotes

USD 149 / Coaching

Broadly agree with Jonathan. A couple extra suggestions:

1) Subscribe to Finimize: They will send you daily updates with recent business/finance news, and explain what is happening (and why) in Layman terms. It's an excellent way to both stay up to date with most recent events in a couple of minutes (e.g. on the commute to work) and also improve your business acumen.

2) Read up on some basic business/microeconomics: Any decent first year of University or even advanced highschool economics should do - to get the basics and understand some key terms (e.g. economies of scale, breakeven point, etc.)

3) Also read through cases to further improve if you run out of cases to watch/listen to

Hope this helps!

Vlad
Expert
replied on Dec 05, 2017
McKinsey / Accenture / Got all BIG3 offers / More than 300 real MBB cases / Harvard Business School
Book a coaching with Vlad

97% Recommendation Rate

365 Meetings

5,374 Q&A Upvotes

USD 229 / Coaching

Hi,

Building Business Judgement is actually about building industry and functional knowledge.

Focus on the most common industries in the following priority (sorted by probability of getting a case): 1-retail and CPG; 2-airlines; 3-Telecom; 4-banking; 5-natural resources; 6-tech

There are several sources of info to develop business sense:

1) Cases - you simply solve 50-70 cases and get a broad knowledge of different industries, common pitfalls and questions. The key here - find good partners who already had case interviews with MBB companies

2) Company reports, equity reports, IB roadshow docs - usually have a good overview of company and industries. One of the best sources to prepare

3) HBS cases - quite useful, but not sure if lot's of them available publically. Probably worth buying

4) Books - one good book about airlines with numbers and industry analysis can give you all needed industry knowledge

5) News, Industry blogs

For each industry, you should understand:

  • Revenue streams
  • Cost structure
  • Margins
  • Key performance indicators
  • Key revenue drivers
  • Industry trends

I strongly recommend practice drawing structures for each industry - profitability, value chain, etc

Then I will switch to getting functional knowledge and key concepts in:

  • Marketing (Brand and trade marketing tools, etc)
  • Supply chain (Ops metrics like cycle time and throughput time, distribution and delivery specifics, etc)
  • Finance (Basic Accounting and Valuation)

Good Luck

Francesco
Content Creator
replied on Dec 04, 2017
#1 Expert for Coaching Sessions (2.500+) | 1.100+ Reviews with 100% Recommendation Rate | Ex BCG | 6+ Years Coaching Experience
Book a coaching with Francesco

100% Recommendation Rate

2,587 Meetings

2,824 Q&A Upvotes

USD 319 / Coaching

Hi Vasiliy,

it would be helpful to understand the exact feedback you received, as business judgment could mean different things: are you unable to find potential reasons for a decline in revenues in a specific industry? Or maybe how the business model works in a sector? Or maybe types of potential synergies?

Most of the time people expect that in order to have proper business judgment you should know everything about an industry – eg. that you cannot really solve a financial industry case if you don’t have deep knowledge of the sector. That’s not necessarily true. Although knowledge of the industry of the client helps, you can usually receive from the interviewer the necessary information you are lacking covering better two areas:

  1. Your ability to ask the right questions at the beginning
  2. You knowledge of the right frameworks to use (for right frameworks I don’t mean the standard ones in Case in point or Victor Cheng, which most of the time are too vague)

This is not to say that it is a completely waste of time to read books, blogs or reports on specific industries – such material may be indeed be useful; however that should be complemented with a more universal approach that helps you to identify issues even for unfamiliar sectors.

Thus in your case, this is what I would do:

  1. Ask for detailed feedback on what “lack of business judgment” means – such terms could hide several different things
  2. Understand what you could have asked at the beginning or added to your structure to unlock the missing element - posting a new comment on the PrepLounge blog could help to receive feedback on that particular area
  3. If you identify a specific lack of knowledge in a certain sector that you are unable to unlock with questions at the beginning or a proper structure, move to read cases from MBA handbooks related to such a sector – the INSEAD one has for example a good list of cases for that. Then, add the missing element to your structure/initial questions toolkit.

Hope this helps,

Francesco

Thanks! By business judgement my last interviewer meant not being able to assume the right things fast in a certain industry, e.g. in case of selling \ not selling a steel plant, I've found out that the plant's profit is near 0, and the right course of action was to actually not sell it since "the profits can only go up" — Vasiliy on Dec 22, 2017 (edited)

So working through a case via structuring works just fine, but there's not enough time to question every possible assumption, and it seemed that "good business judgement" means quickly making the right ones — Vasiliy on Dec 22, 2017 (edited)

Carlos
Expert
replied on Jul 09, 2017
(On a break) Deloitte S&O BA l Certified by Cornell University for Interview Prep l First timers get 50% off second case
Book a coaching with Carlos

100% Recommendation Rate

23 Meetings

68 Q&A Upvotes

USD 109 / Coaching

Hi,

It's difficult to narrow the list since there exist many resources to choose from.

From my experience, reading articles from WSJ, Bloomberg, Reuters, Forbes, etc. have helped gain an understanding of some general business terms / jargon. At the same time, it helps to read different books that cover topics across various sectors - for your convenience, I've attached a list of recommended readings by Management Consulted below (I would also add Case In Point and Case Interview Secrets as recommended readings).

For any particulary industry coverage, IBISWorld and Hoover's are great resources to use.

Lastly, I think slideshare is a great resource where you can search for any business topics you'd be interested in learning about (slideshare.net).

https://managementconsulted.com/recommended-reading/

Hopefully this helps!

Best,

Carlos

Anonymous B updated his answer on Dec 04, 2017

When you read a news article, try reading the headline only and think of the drivers/reasons for why that might be happening. And then read the rest of the article

E.g. WSJ article 'Company A buys company B for 70B USD'.

Ask yourself: why would company A buy company B?

1. Economics: Synergies (cost/revenue)

2. Data/patents

3. Assets/labor.

4. New markets / existing relationships with buyers/sellers.

5. Etc..

You won't be able to replicate this with 100% of the articles, just get in the habit of applying this technique to most articles and see which reasons you may have missed out on. That's how you learn.

(edited)

Jonathan
Expert
replied on Jul 12, 2018
McKinsey & Company | University of Cambridge | 50+ cases in various settings
Book a coaching with Jonathan

100% Recommendation Rate

11 Meetings

11 Q&A Upvotes

USD 289 / Coaching

Hi Serdar,

Coming from a politics / philosophy background, I can very much relate to your question. Next to case books etc. these are the things I would recommend:

  • listen to or watch case interviews: there are videos of case interviews on Youtube, and also Victor Cheng audio recordings of cases, which can help you understand how other people act in terms of qualitative aspects during case interviews specfically
  • get involved in startup events: there's this old selling juice on the street thing, but I think startups are a very good option to develop business acumen esp. with your computer science background - maybe try to apply for business plan competitions at your university etc.
  • watch pitches or interview of CEOs and founders: oftentimes founders or CEOs are tasked with presenting an audience of the appeal of their business (model) and they will often do so qualitatively (via eliciting emotions, using metaphors, "proving" with anecdotes etc.)

Hope this helps!

Best wishes,

Jonathan

Anonymous replied on Jul 07, 2017

Sorry to hear that, but don't take it personally - Everytime someone says "no", it brings you one step closer to a "yes" :)

Regarding your question, first, you have to think about the case and determine what exactly has caused them to state your business acumen wasn't enough - I think 1 of 2 things may have happened:

1) They asked a specific brainstorming question and you failed to give enough input (i.e. what ways can you see of decreasing variable cost for this particular problem?)

2) You showed lack of overall business sense when moving the case forward (i.e. perhaps you focused on small stuff and forgot about the big picture)

Obviously, it is very hard to pinpoint without any detail from the case. So I would like to focus on 2 pieces of advice moving forward:

1) Some people will recommend you reading business journals and similar - I think that is great dont get me wrong - but to develop a better business acumen you should keep practicing cases in different industries facing different problems; studying also the major drivers of the main industries would help; but overall, as everything, it takes time and the harder you work the better you will become.

2) Sometimes HR will give you BS points why you didnt move to the next round (not saying that in this particular case it was) just because they had to - So I woulnt dwell on this particular point.

my 2cents for what is worth

Lorenzo
Expert
replied on Jul 24, 2018
BCG|Accenture|Consulting boutiques|750 GMAT|Got full MBA scholarship
Book a coaching with Lorenzo

0 Meetings

10 Q&A Upvotes

USD 109 / Coaching

Hi Kay,

I think that the most effective way to improve business judgement is to be curious. When I say "be curious" I do not mean just reading newspapers and listen to the latest FT podcast, but really try to understand what is behind macroeconomic trends. Just to give you an example: don't just read that interesting article about blockchain implementation in banking, but also ask yourself "how does blockchain work? why does it work? are the alternatives? will it have really a future?" and search for answers to these question. You may want to start this process with a topic that is interesting to you, so that at the beginning will be easier to do that. In this way you will build a knowledge and a forma mentis that will help you to rapidly put the "puzzle pieces" together and create your own point of view. Of course, even if you have not formal studies on this topic, reading some books about the main principle of macro and microeconomic is fundamental (i.e. you can't have real business acumen if you have not idea of what price elasticity is).

Best

Lorenzo

Hi Lorenzo! Thanks for your answer. Do you have any recommendations for books on basic macro and microeconomics as a starting point? — Anonymous on Jul 24, 2018

Anonymous C replied on Jul 25, 2018
  • Just do as many cases as you can across various industries....and across various business issues eg operations, profit, comp responses.
  • Read the news, watch the news, read annual reports. Listen to CEOS speak on youtube.

I think rather than picking up on acumen, it's more important to understand the value chain and operations of organisations. When you walk around in daily life, think about the places you visit, what is their purpose, what can be improved, whos working in this store, what behind the scenes operations are occurring? For example, when you visit the supermarket, walk around and observe the staff, the customers, try to think about what matters to the company and customers. Come up with some ideas of how you may improve this supermarket, is their a bottle kneck at cashiers, are the isles crowded? Then go home, read a supermarket case, read a supermarket annual report etc, compare your knowledge...make it a game if you can!

Also, im guessing you have friends who work in business...pick their brains...i would meet a person at a party who worked in a random industry, id ask him what exactly he did, what was the industry looking like atm, what are the challenges, blah blah blah.

BE CURIOUS...BE OBSERVANT...BE OBSESSIVE.

THEERTHA HARIHARAN replied on Jul 24, 2018
Management Student at BIM

The following are the best ways to increase business acumen...

1. Reading more and more case studies.

2. Taking part in more management competitions.

3. Enhance the skills by playing more business stimulation games.

4. Keeping up to date with advancements in technology and news.

Related BootCamp article(s)

Getting Up to Speed

In order to repeatedly demonstrate prerequisite skills under the pressure of a real case interview, you need to learn the basics and practice cases.

Related case(s)

Bain case: Asian lubricants producer

Solved 103.4k times
4.7 5 27481
| Rating: (4.7 / 5.0)

LubricantsCo, a very successful Asian premium producer of lubricants in their native region, would like to further increase their revenue and profit. The product range ranges from lubricants in the automotive sector (e.g. motor and gear oil) to industrial applications (e.g. fats, heavy-duty oils). ... Open whole case

Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise ... Open whole case

Deloitte Consulting case: Footloose

Solved 57.2k times
4.5 5 12712
| Rating: (4.5 / 5.0)

Duraflex is a German footwear company with annual men’s footwear sales of approximately €1 b. They have always relied on the boot market for the majority of their volume. In this market they compete with three other major competitors. In the fall of 2013, Badger – one of Duraflex’s competitiors – ... Open whole case

Roland Berger case: Light on!

Solved 53.9k times
4.6 5 13747
| Rating: (4.6 / 5.0)

LumCO, a company producing injection-molded components for lighting applications, has operated successfully in its native European market. The company wants to open up one production facility each in China and the United States and establish their own distribution network in both countries to serve ... Open whole case

DHL Consulting case: Books & Codes

Solved 45.2k times
4.6 5 4002
| Rating: (4.6 / 5.0)

A friend of yours recently got promoted to the position of director of a university library. Yesterday, your friend received a call from the Ministry of Education, who offered him to be part of a national RFID pilot with his library. As your friend is unsure if he should pursue this option, he asks ... Open whole case