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Should we be explicit about our hypothesis during the case interview?

Anonymous A

I heard that one of the key qualities of a good candidate is to always be hypothesis driven when approaching a case. My question is how explicit do you have to be when doing it in the actual interview? One way to do it is to be very explicit by saying "My hypothesis is that the profit decreases due to the market problem, and I am going to test if my hypothesis is correct" but sometimes this could sound too textbook and even for some people jumping to conclusion. the second way is to indicate that you have a hypothesis in your head and indicate it to the interviewer, something like "Well, I see that profitability has gone down and this could be the result of the market failure" or something like that. Would this be enough? Which way is better?

Thanks!

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Vlad replied on 06/24/2018
McKinsey / Accenture / Got all BIG3 offers / More than 300 real MBB cases / Harvard Business School

Hi,

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 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!

Francesco replied on 06/25/2018
#1 Expert for coaching sessions (1600+) | Ex BCG | 800+ reviews with 100% recommendation rate

Hi Anonymous,

the first option would be better in this case, as the way you presented the second option would appear unstructured for an interviewer, almost like you are guessing the solution. Key thing related to this is that you should first present the structure and then make an hypothesis on the area to investigate, this will make easier for the interviewer to follow your reasoning. The thread below contains some more details on this and some examples of how to do it:

https://www.preplounge.com/en/consulting-forum/what-is-some-example-of-opening-hypothesis-1880

Best,

Francesco

Guennael replied on 06/24/2018
Ex-MBB, Experienced Hire; I will teach you not only the how, but also the why of case interviews

Yes, absolutely yes. "My hypothesis is" should be part of your vocabulary. I have seen a Principal think long and hard in front of our Partner, before saying these 3 words at the beginning of a thought. Consultants say it, show us you can be one of us and speak like us.

Now, you dont necessarily have to start the initial framework by stating a hypothesis - but it should be implied. And be ready at al times to state your hypothesis if you haven't. Again - I was asked for mine on my first few projects.