There are two problems with McKinsey recommendations:
- As you've mentioned, you have to address the completely different parts of the analysis where the interviewer guided you
- In many cases, you can't provide a definite answer since you don't have enough information
Addressing the first problem you should:
- Provide the recommendation for the initial objective of the case
- Put everything else you have discussed in the additional part
- Our objectives were to understand why the profit is declining by X and how to bring the profit back within one year (Don't forget that your objective should be measurable in terms of money / other metric and time)
- According to the analysis we've done so far, my recommendation is to shut down the division A and to concentrate on the divisions b/c if we want to increase the profit, and there is a number of reasons for that.. (Remember that your arguments should include numbers).
- You provide the arguments a) First of all, problems in Division A are the major driver of the decline in profits - 90% of the decline in profits refer to Division A. b) Secondly, the decline is driven by the contracting market size that is shrinking at xx percent and is not expected to improve in the near future. c) Finally....
- Additionally, I would like to check the following... (In the last bullet, you simply provide a list of other things you have discussed, but they were not the part of the original objective / the things you slightly discussed but haven't come to any conclusion, like the questions on creativity)
As for the second problem - Indeed, in many cases, you can't provide a definite answer. Consultants may be testing several things:
- Are you comfortable enough with providing preliminary recommendations based on limited data? (Imagine a CEO whom you met in the elevator and who wants to know the preliminary findings)
- Will you make a mistake of providing a recommendation with a high level of certainty without having a proper supporting data?
Imagine a case when you have to make a decision whether a PE fund should acquire a company. You make a proper structure (Market, Competitors, Company, Feasibility of Exit) and in 25 min of a case, you've managed only to go through the Market and Competitors branches of the analysis. What will be your recommendation?
In this case, you have to provide a Soft Recommendation:
- You start with an objective ("Our objective was to understand whether we should buy this company")
- You provide a preliminary recommendation highlighting the uncertainty("According to the limited data we have so far, our preliminary recommendation is to buy this company and there are three reasons for that..." or "Purely based on the data we have about the market it looks like it's a good idea for a number of reasons..")
- You provide the reasons ("First of all the market is big at X and growing at Y, Secondly the competition is fragmented with the target company having x% of the market. Thirdly...")
- You Mention the pieces of data that you need to provide a full recommendation ("But to come up with a final recommendation I would like to look at the company financials, key capabilities and..." or "But to be 100% sure in our recommendation we need to check...)