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Sidi

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4

Is structuring just a task of listing out all categories that could possibly matter?

Hi!

I have practiced about 20 cases with different partners, and it seems like most of them are trying to come up with as many as possible topics and sub topics to analyze - no matter what the question is. And the feedback I always get is something like: "Oh, you didn't mention this point, and this point, etc." Isn't this a very ineffective way to approach problems? After all, it feels to me like case solving is like the Olympic Games in memorizing bullet point lists. :-P How can I identify which topics really matter and which are less important? Isn't my ability to proiritize also a strength to show in a consulting interview?

Hi!

I have practiced about 20 cases with different partners, and it seems like most of them are trying to come up with as many as possible topics and sub topics to analyze - no matter what the question is. And the feedback I always get is something like: "Oh, you didn't mention this point, and this point, etc." Isn't this a very ineffective way to approach problems? After all, it feels to me like case solving is like the Olympic Games in memorizing bullet point lists. :-P How can I identify which topics really matter and which are less important? Isn't my ability to proiritize also a strength to show in a consulting interview?

4 answers

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Hi!

You are completely right! The approach that is often recommended in case books and interview guides (and which is adopted by most candidates) is extremely inefficient and indeed the very definition of "boiling the ocean"!

The approach of starting with mapping out qualitative buckets (understanding market, competitive situation etc.) corresponds to what is outlined in the usual case preparation books (mostly written by authors who have either been very junior when they left consulting or did not even work full-time in consulting...). But unfortuantely this approach is not how a real consultant at one of the top strategy firms should tackle such questions.

Before delving into rather qualitative and contextual analysis (such as understanding industry phenomena), you should ALWAYS first isolate the numerical driver of the problem. So this means that you have to turn around your approach!

Imagine you want to find out the reasons for the decine in a specific KPI (e.g., profits). First you do a numerical analysis to understand what is MATHEMATICALLY driving the observed phenomenon (here: the profit decline), and once you have isolated this problem driver, then you do a qualitative analysis to understand the UNDERLYING REASONS for this negative development of this specific driver. If you don't do it like this and stick to the books (i.e., start with asking questions on the market etc.), you will always be extremely inefficient in your analysis, since this approach is essentially the definition of "boiling the ocean". First narrow down what area you have to understand, and only then try to understand it!

For example, in a profit-decline case, knowing whether it's and industry problem or not is more or less useless at the start! First you have to understand what is numerically causing the problem. Only once you have found out the problem driver, then investigating on whether competitors have the same problem (and other relevant "buckets") is effective!

Generalized approach:

  1. Firstly you need to identify the numerical driver of the below-benchmark profits of the company (the WHAT? question). --> Identify the different income streams of the company; then for each income stream, draw a driver tree to find and isolate the core of the problem (compared to industry average: less customers? less revenue per customer? lower margin products sold? lower pricing? higher operational costs? etc.) If you find a below-benchmark driver, you need to dig deeper to isolate the sub-driver who is responsible for this negative performance --> the numerical problem dirver!
  2. Once the numerical problem driver is isolated, you need to understand the WHY? question. For this, the analysis depends on what the actual problem is. If it is a cost problem, you may want to go through the entire value chain to diagnose where the difference/disadvantage lies. If it is a revenue or sales mix problem, you may want to scrutinize underlying trends and developments, competing offers, substitutes etc. (THIS is where the "buckets" come into play, but not at the start!)
  3. Based on your quantitative (WHAT?) and qualitative (WHY?) analysis, you can develop strategic measures to address the qualitative reasons.
  4. Do not forget to outline potential risks of your strategic recommendation

This is how such problems are typically structured and tackled in top strategy consulting. Never start with qualitative questions - it is the most inefficient approach thinkable! First narrow down the (sub-)area that mathematically causes the problem (quantitative analysis) and THEN start asking qualitative questions to understand the underlying reasons.

Cheers, Sidi

Hi!

You are completely right! The approach that is often recommended in case books and interview guides (and which is adopted by most candidates) is extremely inefficient and indeed the very definition of "boiling the ocean"!

The approach of starting with mapping out qualitative buckets (understanding market, competitive situation etc.) corresponds to what is outlined in the usual case preparation books (mostly written by authors who have either been very junior when they left consulting or did not even work full-time in consulting...). But unfortuantely this approach is not how a real consultant at one of the top strategy firms should tackle such questions.

Before delving into rather qualitative and contextual analysis (such as understanding industry phenomena), you should ALWAYS first isolate the numerical driver of the problem. So this means that you have to turn around your approach!

Imagine you want to find out the reasons for the decine in a specific KPI (e.g., profits). First you do a numerical analysis to understand what is MATHEMATICALLY driving the observed phenomenon (here: the profit decline), and once you have isolated this problem driver, then you do a qualitative analysis to understand the UNDERLYING REASONS for this negative development of this specific driver. If you don't do it like this and stick to the books (i.e., start with asking questions on the market etc.), you will always be extremely inefficient in your analysis, since this approach is essentially the definition of "boiling the ocean". First narrow down what area you have to understand, and only then try to understand it!

For example, in a profit-decline case, knowing whether it's and industry problem or not is more or less useless at the start! First you have to understand what is numerically causing the problem. Only once you have found out the problem driver, then investigating on whether competitors have the same problem (and other relevant "buckets") is effective!

Generalized approach:

  1. Firstly you need to identify the numerical driver of the below-benchmark profits of the company (the WHAT? question). --> Identify the different income streams of the company; then for each income stream, draw a driver tree to find and isolate the core of the problem (compared to industry average: less customers? less revenue per customer? lower margin products sold? lower pricing? higher operational costs? etc.) If you find a below-benchmark driver, you need to dig deeper to isolate the sub-driver who is responsible for this negative performance --> the numerical problem dirver!
  2. Once the numerical problem driver is isolated, you need to understand the WHY? question. For this, the analysis depends on what the actual problem is. If it is a cost problem, you may want to go through the entire value chain to diagnose where the difference/disadvantage lies. If it is a revenue or sales mix problem, you may want to scrutinize underlying trends and developments, competing offers, substitutes etc. (THIS is where the "buckets" come into play, but not at the start!)
  3. Based on your quantitative (WHAT?) and qualitative (WHY?) analysis, you can develop strategic measures to address the qualitative reasons.
  4. Do not forget to outline potential risks of your strategic recommendation

This is how such problems are typically structured and tackled in top strategy consulting. Never start with qualitative questions - it is the most inefficient approach thinkable! First narrow down the (sub-)area that mathematically causes the problem (quantitative analysis) and THEN start asking qualitative questions to understand the underlying reasons.

Cheers, Sidi

Book a coaching with Ian

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Hi,

You're totally right! This is not about just brainstorming a million things and throwing them together into categories!

Rather, it's about identifying the real problem/opportunity, the situation in which it's in, and actually coming up with a clear, concrete, actionable approach to solving the problem. If you couldn't setup a project/team according to your structure/framework and you couldn't tell a client your approach, then it's not a good structure!

Frameworks should not be random buckets of ideas. Rather, they should fundamentally look and feel more like a project plan than anything.

The case books are artificial because it's really hard to communicate this concept/mindset shift in casing by text....hence why case practice and coaching is so important!

Fundamentally, your framework and "buckets" should be about the major areas you want to investigate, how you want to investigate them, why, and in what order.

For example, if we're talking market entry

  1. First - is the market good? Is it big and is it growing? Objectively, regardless of player, is it a space we want to me in?
  2. Second - would we do well in it? If we like the market as a whole, can we actually win? Is our product/company better than the competition? Will we be able to sell our products at a good margin and make profits?
  3. Finally - in practice, can we actually do this? Theorectically we can win, but will we actually? Have we entered a market before (and to what result)? Do we have the $ and know-how? Will the government allow us? How will competition react?

So, you see, we're not just doing a bucket called "Market", "Company", and "Competition" here. We need to talk about what a sound analytical approach over x period of time would look like!

Hi,

You're totally right! This is not about just brainstorming a million things and throwing them together into categories!

Rather, it's about identifying the real problem/opportunity, the situation in which it's in, and actually coming up with a clear, concrete, actionable approach to solving the problem. If you couldn't setup a project/team according to your structure/framework and you couldn't tell a client your approach, then it's not a good structure!

Frameworks should not be random buckets of ideas. Rather, they should fundamentally look and feel more like a project plan than anything.

The case books are artificial because it's really hard to communicate this concept/mindset shift in casing by text....hence why case practice and coaching is so important!

Fundamentally, your framework and "buckets" should be about the major areas you want to investigate, how you want to investigate them, why, and in what order.

For example, if we're talking market entry

  1. First - is the market good? Is it big and is it growing? Objectively, regardless of player, is it a space we want to me in?
  2. Second - would we do well in it? If we like the market as a whole, can we actually win? Is our product/company better than the competition? Will we be able to sell our products at a good margin and make profits?
  3. Finally - in practice, can we actually do this? Theorectically we can win, but will we actually? Have we entered a market before (and to what result)? Do we have the $ and know-how? Will the government allow us? How will competition react?

So, you see, we're not just doing a bucket called "Market", "Company", and "Competition" here. We need to talk about what a sound analytical approach over x period of time would look like!

Book a coaching with Robert

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Hi Anonmyous,

On top of the answers given already, it's not only about the content.

It's also about the communication, which is oftenly overlooked, especially by inexperienced candidates. The point is not to collect or remember as many categories as possible, but also bringing them into a cohesive "plan" which brings the client from the current situation to the targeted situation (goal). You can say content-wise more or less the same things, but it will come across and be perceived completely different.

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

Robert

Hi Anonmyous,

On top of the answers given already, it's not only about the content.

It's also about the communication, which is oftenly overlooked, especially by inexperienced candidates. The point is not to collect or remember as many categories as possible, but also bringing them into a cohesive "plan" which brings the client from the current situation to the targeted situation (goal). You can say content-wise more or less the same things, but it will come across and be perceived completely different.

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

Robert

It's a fine balance. Typically the first level structure is 4-5 bullet points and you should definitely aim to get all of them

Now as far as sub points go - yes you should definitely prioritise and not obsess about including each one. This is why just practicing with other candidates can be frustrating sometimes. They are giving you feedback based on a textbook answer regardless of whether that is what you need to convey in your interview

Do supplement candidate practice with coaching. An experienced coach will be able to give you concrete feedback around which areas you need to be comprehensive in and where you should prioritize

Best

It's a fine balance. Typically the first level structure is 4-5 bullet points and you should definitely aim to get all of them

Now as far as sub points go - yes you should definitely prioritise and not obsess about including each one. This is why just practicing with other candidates can be frustrating sometimes. They are giving you feedback based on a textbook answer regardless of whether that is what you need to convey in your interview

Do supplement candidate practice with coaching. An experienced coach will be able to give you concrete feedback around which areas you need to be comprehensive in and where you should prioritize

Best

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