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Is hypothesis always needed in case interviews?

Yan

Hi, I read from several books that the case interview should always be hypothesis driven, i.e. state the hypothesis early in the interview. However, I feel that for some cases, hypothesis is not really needed. The examples that I encountered so far include: 1. market sizing; 2. what is the distribution channel for a certain product; 3. optimization of few options. For the 2nd situation, I was not able to come up with a hypothesis before almost doing all analysis, i.e. identified what are the potential distrubution channels. for the 3rd situation, I can hypothesis that "the client need to optimize the options" and come up with few criteria for assessing the options, i.e. the structure. But it is very general hypothesis, which does not help at all to identify the structure. I feel that in all three situations mentioned above, hypothesis doesn't seem necessary. Can anyone please help me to understand if hypothesis is really needed in every case interview, including the situations that I mentioned above? If not, what are the potential type of cases where hypothesis is not needed? Thanks.

(edited)

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Mitchell
Expert
replied on 01/04/2018
BCG Consultant |Consulting Case Coach at London Business School

Hi Yan,

There is a method to demonstrate hypothesis-type thinking without explicitly stating a hypothesis. This is very handy if you don't actually have a hypothesis!

After you have set out your structure (e.g. price x volume, to use a simple example), you could say something like, 'I would like to start with volume since you mentioned that competition is fierce and it may be unlikely that we could raise prices in this landscape.'

You might be wrong. But illustrating that you can use hypothesis-based thinking is more important than getting the correct hypothesis.

Good luck!

Francesco replied on 12/31/2017
Ex BCG | MBB Specialist | #1 Expert for coaching sessions (1400+) and recommendation rate (100%)

Hi Yan,

as mentioned by An, hypotheses at the beginning of the case are a way to “force” you to be structured when you have limited options to choose.

In case your structure is strong enough (thus not the Victor Cheng approach which is pretty generic in terms of structure), you would not need to state an hypothesis, as it would be implicit in the structure itself (eg if you list as elements of entering a new market (i) the analysis whether the industry is attractive, (ii) the analysis whether you can meet the specific goal of the company in that market and (iii) the analysis of whether there is a way to enter the market, you are implicitly showing that your hypothesis is to enter if all these elements are positive). You would also not need an explicit hypothesis when you have infinite options, as in a market sizing, since in that case that would make little sense (eg would not be very helpful to state at the beginning that your hypothesis is that the market size is €20M)

In case your structure is not optimized for the case or not particular strong (eg typical Victor Cheng approach for business situations, such as product, customer, competition, company), making a hypothesis could help you to create a better structure identifying the viable options for different results, even when your initial buckets are not particular relevant; thus stating specific initial hypotheses could be useful at the initial stage of preparation when your structures are not particular strong, but will lose value so far that you improve them.

In conclusion, if you have very good, personalize structures or if you have infinite hypothesis within which to choose (eg market sizing) there is no need to mention an explicit hypothesis. In case your structure is generic, hypothesis could help you to deliver a better structure.

Best,

Francesco

An
Expert
replied on 12/30/2017
Uber Strategy Manager | BCG Consultant, Interviewer

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.

(edited)

Yan replied on 01/01/2018

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.