Hypothesis in Case Interview

In simple language, a hypothesis is an educated guess of where the bottleneck might be.

A Hypothesis exists because they save time.

It is usually not economically feasible to run thorough investigations for every single aspect of business. Consultants usually “guess”… or should I say… hypothesize where they can find the insights and drill down there. Hypothesis is, therefore, one of the most important case interview concepts.

There are 4 secret rules of thumb that I will be giving you. These are very easy-to-apply tips which many candidates miss.

  • No.1: Hypotheses need to follow the frameworks chosen

If you haven’t watch our Case Interview 101 video, I strongly encourage you to do so now. This part will make a lot more sense once you know the basics of a case interview, frameworks, hypotheses and how they all link together.

Ok, assume you have done that. Let’s discuss why and how hypothesis needs to follow the frameworks chosen.

Suppose you need to find your car key. A “framework” you sketch out is a location-based framework with 3 branches: 1st floor, 2nd floor, and 3rd floor.

You later realize that you brother borrowed your car yesterday. So you hypothesize that your brother is keeping your key.

While this is ok in real life, this is considered as a bad hypothesis in case interview, because it does not follow the framework you set up.

To fix this, simply “convert” that thinking into the framework. “So since my key has something to do with my brother, whose room is on the 3rd floor. My hypothesis is that my key is on the 3rd floor.”

  • No.2: Hypotheses should be top down

Now let’s say not only you think it’s your brother, you also realize that your brother has the habit of putting keys on top of the microwave in the kitchen. You say to the interviewer:

” I hypothesize that the key is on top of the microwave in the kitchen”

Again, this may be ok in real life, but this is not how you want to position your hypothesis. Any hypothesis in case interviews should be top-down. That means if the framework defines the first level of the issue tree is “1st floor”, “2nd floor”, “3rd floor”, the first hypothesis needs to stay on that level, not anywhere lower.

So to fix this, simply “bring” the hypothesis up to the most relevant level. In this situation, it’s the first level. “My brother usually put keys on top of the microwave in the kitchen on the first floor. So my hypothesis is that the car key is on the 1st floor.”

  • No.3: Always have a hypothesis. It does not have to be right all the time.

Candidates often hesitate to set up hypotheses, thinking that “My hypothesis could be wrong.

Hypotheses are meant to be wrong and to open up better ones. The term “hypothesis-driven” actually means to always have a hypothesis in solving any business problem. Keep guessing wrong until you find the right one!

  • No.4: Hypotheses should be based on the information provided.

Most of us underestimate how often we forget information in cases. The fact is: in real interview, the level of pressure and information is so high that even the brightest and most organized candidates forget and ignore a lot of important data. I have seen this in Harvard, Wharton, or World Bank candidates. If it happens to them so often, it can very well happen to you.

 

Most of the insights above are applicable for candidate-driven and mixed cases. For pure interviewer-led cases, the game is a little bit different. Since you do not set up the approach and direct the flow, hypotheses are needed mostly when the interviewer explicitly asks a “hypothesis” questions.

Some common forms of “hypothesis questions” are:

  • Why do you think that happens?
  • What are some hypotheses you can think of that explain abc?
  • What are some possible reasons for xyz?

For these questions, my list of tips for you is a little bit different.

  • No.1: You need more than one hypothesis. Now the job is to list them out, not to use them.
  • No.2: Your proposed hypotheses should be structured and MECE. Please refer to our video on the concept of MECE for more details.
  • No.3: This is a modified version of No.3 we mentioned above. Hypotheses in interviewer-led cases do not necessarily need to be true. As long as they can explain the facts, then it’s considered good.
  • No.4: This is exactly the same as the candidate-led version. Hypotheses should reflect the data you have! This is the universal rule of thumb for any hypothesis.

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Well I hope this has been a helpful and easy-to-follow lesson.

If you have any questions, comments, or feedback, please write them below. We will try our best to read and answer each one. This is very beneficial for us to develop even better content that suit your needs.

If you would like to see how these concepts and tips are applied and illustrated in real interview setting, you may want to join hundred of candidates around the world in our Case Interview End-to-end Secrets program. Moreover, we even devote a whole eBook on this important and exciting topic and it’s for sure included in the End-to-end program.

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