Do I have to explicitly mention a hypothesis during an interviewer-led case interview such as the one with McKinsey? I read a lot of resources online telling that it is crucial to have a hypothesis, to the extend of failing the interview if I don't have one. I somehow feel that the hypothesis is more suitable to be used for an interviewee-led case because the issue tree / framework develops gradually. For interviewer led, how does one state a hypothesis but then come up with a broad & comprehensive issue tree / framework for the case? I don't see how a hypothesis could be relevant in this regard. Hope someone can enlighten me on this. Thanks.
Hypothesis in McKinsey Interviewer Led Interview
Overview of answers
Upvotes
Best answer
I see a lot of confusion amongst candidates on this topic of hypothesis: when to have one, what it should sound like, is it fixed, etc.
Let's think through this logically. First, what is a hypothesis testing in an interview? It is essentially checking if you have the right "gut feel" about ambiguous business problems. Why is that important? To save time in a consulting engagement. A large company with falling sales might have 100 reasons causing that problem and if you try to "carpet-bomb" for an answer it'll take you years. A good consultant would ask some key high-level questions and narrow the causes to top 4-5 investigations. That's basically it.
Second: when to state a hypothesis? Never at the beginning. Why? Because at that point you are just guessing and guessing will get you out. Once you get a case, ask some clarifying questions first, and try to get a good sense for the "environment" this case is built in. Only then try to frame a structure and a hypothesis.
Thirs, HOW to state the hypothesis? This is best illustrated by an example. For example, say you were given a case about a MFG firm losing margins. It could be because (1) prices are falling (2) volumes are falling so per-unit economics become bad (3) costs are rising or (4) none of the above, we are just selling a lot more of the lower margin products. So, to have a hypothesis here you could ask a few questions around: has anything changed in terms of the overall economy (if not, demand might have stayed same); have competitors suddenly become more aggressive (if yes, prices wars are likely); is it a commodity product (again, price war); has anything shifted in suppliers (cost issue), etc. Based on your line of Qs, you might realize that it COULD be a price/vol/cost issue and you may say "My thinking right now is that it's a COST issue because the economy is healthy and we are still the leading firm in the industry but there has been some shuffling around in the labor market which may have impacted our variable/fixed costs".
Hope this helps.
Hemant
Was this answer helpful?
From what I understand speaking with those most knowledgeable of McKinsey, you can present your structure in a manner framed as a hypothesis. I think you are correct in your asusmption that the hypothesis is more suitable for interviewee led cases, however there is a way you can share your structure to let the interviewer know what you want to explore and why...i.e. "In order to explore entering the chinese market, we should focus on these things.....(explain structure)...." I'm not an expert but it seems to be sound advice.
Was this answer helpful?
I agree with Jeff, as it sounds like sound advice ;) What is also quite common in my experience is that the interviewer gives you a hypothesis that you have to evaluate
Was this answer helpful?
Related Cases
Company case by Bain & Company
Style:
You have inherited the “Old Winery” from your grandfather, a winery that has been family-owned for five generations and can be dated back to the 16th century.Half of the eleven hectares are used to grow white grapes, the other half to grow red grapes. They are grown in a conventional way, i.e. they
...
You have inherited the “Old Winery” from your grandfather, a winery that has been family-owned for five generations and can be dated back to the 16th century.Half of the eleven hectares are
...
(Open whole case)
112.5k
Times solved
Intermediate
Difficulty
Expert case by Francesco
Our client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US.The mission of SmartBridge is to help as many students as possible to complete studies and prevent that they drop from the school system, in particular in disadv
...
Our client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US.The mission of SmartBridge is to help as many stude
...
(Open whole case)
30.7k
Times solved
Advanced
Difficulty
Expert case by Luca
Espresso Whatelse is an Italian company that produces coffee and espresso machines since 1908. It is the Italian market leader and has a strong presence overall in Europe. In 2019, Espresso Whatelse has increased its revenues but it has seen declining profit margin.Your client wants to understa
...
Espresso Whatelse is an Italian company that produces coffee and espresso machines since 1908. It is the Italian market leader and has a strong presence overall in Europe. In 2019, Espr
...
(Open whole case)
17.0k
Times solved
Advanced
Difficulty
Expert case by Francesco
Style:
Our client is a BlissOttica, an Eyewear Manufacturer that is looking to reach a 10% increase in profits. How would you help our client?
Our client is a BlissOttica, an Eyewear Manufacturer that is looking to reach a 10% increase in profits. How would you help our client?
(Open whole case)
13.1k
Times solved
Intermediate
Difficulty
Expert case by Ian
[PLEASE NOTE: This is a technically difficult case and should only be completed by those coming in as a Technology specialist, i.e. recruiting for McKinsey Digital, BCG Platinion, etc.]Our client is a multinational oil and gas company. While they are vertically integrated and have upstream, midstrea
...
[PLEASE NOTE: This is a technically difficult case and should only be completed by those coming in as a Technology specialist, i.e. recruiting for McKinsey Digital, BCG Platinion, etc.]Our c
...
(Open whole case)
12.9k
Times solved
Advanced
Difficulty
Related Products
McKinsey Solve Game Simulation Package by Francesco
Premium Membership (1 week)
Break Into Consulting - Strategy Consulting Firm's All-In-One by Alexandre
Break Into Consulting - Industry Overviews by Alexandre
Break Into Consulting - Frameworks I wish I knew by Alexandre
Imbellus Solve Combo: Guide + Videos by Francesco
Imbellus Test at McKinsey – Guide by Luca
McKinsey Imbellus Solve Game Secrets by Francesco
The Secret McKinsey PEI Cheat Sheet by Robert
Prep Guide for McKinsey PST by PrepLounge
McKinsey PST #3 by Riccardo
McKinsey PST #2 by Gaurav
McKinsey PST #1 by PrepLounge
Great explanation. Thank you.