Is hypothesis always needed in case interviews?

Stating a hypothesis is useful but not mandatory. Consultants speak like this (I still remember a senior principal doing this during a brain storming session with our partner), so you are encouraged to. Stating a hypothesis also helps you be structured and always remember what you are currently working to prove.

Also - stating your intention (presenting your initial framework) is not a hypothesis, but merely a plan of action. A hypothesis is what you want to prove; a structure is how you plan to prove it.

To your question: no it is not mandatory, no I would not write someone off, yes I would still encourage you to do it

Hi Yan,

In general, hypothesis driven thinking is a way to limit the amount of analysis you need to do before arriving at the answer - so it is a way of prioritizing areas of investigation and applying 80/20.

In a case interview, it is most needed when you need to arrive at a solution / recommendation for a whole business problem. Hence, it may not seem to apply as strongly to market sizing or questions about listing out distribution channels (although it also depends on the context). However, if the question asks you to go deeper into finding the priority market or channel, that may be an opportunity to lay out your hypothesis and proposed analysis.

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The major mistake of the candidates is that they start using the hypothesis and neglect having a proper structure.

Moreover, if you perfectly solve the case without ever stating a hypothesis - you'll pass the interview. So most probably you had some other issues with the case as well and they used it as a standard feedback.

There are two ways to use the hypothesis:

First - presenting a structure using the hypothesis. For example, if you are having a PE (private equity) case, you should do the following:

1) Make classic structure (market, company, competitors, feasibility of exit)

2) Make subpoints (e.g. in market: size, growth rates, profitability, segmentation, etc)

3) Present your 1st level Hypothesis:

• - "In order to understand whether we should invest in Company A, I would like to check a number of the hypotheses - that the Market is Attractive, the Company is Attractive, the competition is favorable and we have good opportunities for of exit"

4) Present the main 2nd level Hypothesis:

• "In the market, I would like to make sure that the market is big enough and growing;
• In the company I would like to find additional opportunities for growth;
• In competition I would like to check that the market is fragmented enough;
• Finally, I would like to check if we have potential buyers and can achieve desired exit multiples"

Another way to use hypothesis is using the hypothesis to prioritize your analysis:

1) Make a structure: "Problem in sales may be related to Sales Motivation, Sales Strategy, Sales Coverage, and Sales Process:

2) Prioritize a part of the structure based on your knowledge / common sense / available data: "Taking into account that motivation is the core problem of the sales organization, I would like to prioritize this part of the analysis".

Good luck!

Hi Francesco and An,

Thanks for your answers. It is very helpful. In sum, hypothesis is not necessarily needed in every single case. It is needed when I have to limit my analysis to a certain aspects. If the question itself is somehow MECE, like market sizing problem, hypothesis is not needed.