“Case Interview” is the cornerstone of consulting recruitment, playing a decisive role in final results. In 30 minutes, your “consulting” qualities will be tested to the limit as you cruise through a hypothetical “consulting project” with the interviewer.
Yes, this is a BIG topic. The depth of content in this single article is HUGE with various chapters ranging from beginner’s topics to more advanced ones. You would want to bookmark this page and go back often throughout your whole preparation journey.
1. What is a Case Interview?
Case interviews are job interviews with business context.
To put it simply, a case interview is a job interview with business context. This kind of interview originates and remains a signature of the management consulting industry.
In a case interview, you will interact with an interviewer to analyze and (hopefully) solve case studies of business problems. In about 30 minutes (depending on firms and interviewers), the course of actions real consultants do in real projects will be replicated.
Here are some examples of business problems you may very well see in real case interviews:
- Let’s say we have a restaurant called “In-and-out Burger” with recently falling profits. How can you help?
- “The CEO of a cement company wants to close one of its plants. Should they do it?”
- “A Top 20 bank wants to become a top 5. How can the bank achieve that goal?”
Along the interview, the interviewer will assess your ability to think analytically, probe appropriate questions, and make the most client-friendly pitches. Be noted that the analytical thought process is more important than arriving at correct answers.
On this end, the interviewer rarely intervenes; the candidate will lead the approach from structuring the problem, drawing frameworks, asking for data, synthesizing findings, to proposing solutions. This format can be difficult for beginners but it provides you much control over the case.
On this end, the interviewer controls the process in significant ways. He or she has the candidate work on specific parts of the overall problem and sometimes disregard the natural flow of the case. The game here is not to solve the one big problem, but rather to nail every question, every pitch, every mini-case perfectly. Because the evaluation is done on question basis, the level of insightfulness required is higher.
Most cases will fall somewhere in the middle section of that spectrum, but for education purposes, we need to learn case interviews from both extreme ends.
Great details in each and every aspect of the case, as well as tips, techniques and study plans are coming in the chapters below. You may skip straight to Chapter 3 if you have business background and confident in your own understanding of the terminology used in case interviews.
All consulting firms claim that all educational backgrounds have equal chances. But no matter what, case interview reflects real-life business problems and you will, therefore, come across business concepts.
Not everybody has the time to go to a full Business Undergraduate program all over. So through this compact Chapter 2, I will provide you, the non-business people, every business concept you need in case interviews.
2.1. Accounting and financial terms – The language of business
Accounting & Financial Terms are often called the language of business, which is used to communicate the firm’s financial and economic information to external parties such as shareholders and creditors.
There are three basic financial statements: Balance Sheet, Income Statement, and Cash Flow Statement.
|Balance Sheet||Income Statement||Cash Flow Statement|
A snapshot of the current stage of the company’s property, debt, and ownership at one given point in time, showing:
The neat thing about the Balance sheet is that it’s always balanced. Every action, every transaction changes the three components but it’s always in harmony.
A record of the business performance through a period of time, given it a quarter or a year. The Income Statement directly tells you how the company is doing in terms of making money, the heart of any business.
There’s a famous saying that: Income statement is an opinion, Cash Flow statement is the fact.
The Cash Flow statement just strictly monitors the cash flow in or out, categorized in different sections. Three of them are:
Upon completion this section, you should be able to read and interpret financial statements for business diagnosis and decision-making.
More importantly, you possess the conceptual base to start solving case interviews on your own. Do not forget that, as with any other language, becoming proficient with accounting and financial terms require constant practice.
2.2. Organizational structure – The heart of a company
When it comes to organizational structure, it is important to notice the fine line between the company’s ownership and management.
Technically, at the highest level, there are shareholders. For private companies, the group of shareholders and their shares are not necessarily disclosed and publicly tradable. For public companies, on the other hand, shares are publicly traded on different stock exchanges. One of the most famous is the NYSE, which stands for New York Stock Exchange.
- A company can have one, a few, or millions of individual owners, but being governed by the Board of Directors – a group of people elected by owners, with the President or Chairman being their highest leader.
- The Board usually hires a management team to manage the company. They are led by the Chief Executive Officer – CEO, who makes every decision on day-to-day work. Most of the time, the Board of Directors doesn’t directly intervene in the CEO’s work, but they reserve the right to fire CEOs.
- Besides that, there’s a committee called Supervisors. The supervisor’s job is to independently monitor the CEO and the management team and report up to the Board.
Below CEOs, there are two generally two ways of structuring the company. One way is through business lines and the other one is through functions. Think of business lines as mini-companies themselves inside the big company. Within functions, here are a few most typical divisions most companies have:
2.3. Business strategy concepts
Even with business students, strategy is a challenging topic – especially with those without a strategy major. These fundamental concepts will get you started.
- Organization: In general, this refers to how a company is organized, what are different components that make up a company
- Governance refers to how a company is managed and directed, how well the leader team runs. The leader team includes the Board of Directors and Board of Managers. A company with good governance has good leadership people, tight control, and effective check & balance processes, etc.
- Process looks like rules and common practices of having a number of processes, entailing every single activity. Process design should include 4 factors: who, what, when, and accompanied tools.
For example, let’s look at Kim’s family picnic process.
- The who part is presented on the y-axis, left-hand side, labeling all departments, a.k.a: family members, involved.
- The what part is presented through the big mid-session with each box represents every single activity.
- The when and tools parts are presented at the bottom
- B2B vs B2C: stand for “business-to-business” and “business-to-customer”. These two terms refer to two types of transactions a company typically does: transactions with other companies and transactions with individual customers.
- Bottom-up vs Top-down: this refers to two opposite schools of thought or action. Top-down usually encompasses various general branches while bottom-up tends to narrowly focus.
2.4. Management consulting terms & concepts
These are the most common consulting terms you may encounter not even in case interviews but in your daily consulting tasks.
- Lever: Think of this as one or a group of initiatives, actions to perform to meet certain goals. e.g. some levers to help increase customer experience in a hotel are free breakfast, free Wi-Fi, 24/7 support, etc.
- Best practice: Refers to how things should be done, especially if it has been successfully implemented elsewhere.
- Granular: This refers to how specific and detailed a break-down or an issue goes. For example, a not-so-granular breakdown of the NBA is the West and the East conferences. A much more granular is something like this: Leagues, Conferences, Divisions, and Teams.
- MECE: MECE is so important and we explain it in detail in this article. In short, MECE is the standard, per which we can divide things down in a systematic, comprehensive, and non-overlapping way.
There are three parameters the consulting world uses in the categorization of businesses.
- Industry: used to group different companies mostly based on their product (Banking, Construction, Education, Steel Industry, etc.)
- Function: is the categorization mostly based on missions and the type of roles of different parts of a company. We can count some as Human Resource, Finance, Strategy, Operation, Product Development, etc.
- Location: is where things are, geographically.
Normally two consultants ask each other “What do you work on?”, they need to give 3 pieces of information in all of those three parameters, such as “I worked on a Cement project, focusing on Finance, in Southeast Asia”. In fact, all of the McKinsey support networks are organized in this way. During my projects, I would need to speak to some Cement experts, some Finance experts, and some local experts as well.
This chapter is relatively long, yet it is still way shorter than 4 years at business college. I hope this will act as a great prerequisite to your case interview study. Make sure that you have mastered all of these content before really tackling the Case Interview.
3. Case Study Interview Example – The Typical Flow of a Case Interview
In a simplified way, a typical case would go through these phrases (we will talk about exceptions in great detail later):
Case question -> Recap -> Clarification -> Timeout -> Propose issue tree -> Analyze issue tree -> Identify root-causes -> Solutions -> Closing pitch
Let’s say we have a restaurant called “In-and-out Burger” with recently falling profits. How can you help?
Let me playback the case to make sure we are on the same page. So our client is “In-and-out Burger”. The case objective is to solve the profits problem. Do I understand it correctly?
Thank you. The first step in solving any problem is to make sure we solve the right problem. I would like to ask a few clarification questions to make sure I really understand the case from top to bottom. So here are my questions: No. 1… No. 2… No.3 …
*answers without giving away too many hints*
(There are ways to trick him/her to give you more than he/she should. We will talk about this in later chapters below)
(Once felt like the problem is well understood along with a few perks of data, take a timeout to kick start the problem-solving process)
Thank you for all the information. The case objective is very clear now. I would like to take a short timeout to gather my thoughts
|Propose Issue Tree||
(After an intensive thinking process, you propose an issue tree to break down the problem and hopefully find the root-cause soon. You may also talk a little bit about your overall approach before actually doing it. More on this later!)
To completely solve the problem and create long-lasting impact, we need to dig in and find the real root-causes, not just fixing the symptoms. To do that in the most efficient way, I would create an issue tree and analyze all possible root-causes systematically, in a top-down fashion.
So here is my proposed issue tree for this problem. On the top layer, I would break the analysis into 2 big branches: Revenue and Cost. This overall approach and the issue look ok to you?
|Analyze Issue Tree||
(Go into each branch, ask for data to test if the branch contains the root-cause. Remember, only test the highest-level branch, don’t go into the sub-branch just yet. More on this later!)
Now I would like to explore the first branch: Revenue. I would like to ask for a few data points to test if the root-cause is in this branch or not. If yes, I would go deeper, creating another layer with sub-branches. If not, I would cross out this whole Revenue branch, and spend valuable time with the Cost branch. Does this issue tree look good to you? [Analyze the tree]
(After the interviewer confirms (mostly likely he/she will), you ask for data to test the Revenue branch. There are many possible tests, but the most simple and popular ones are: historical and competition benchmarks. More on this later.)
Now I would like to explore the first branch: Revenue. I would like to ask for a few data points to test if the root-cause is in this branch or not. If yes, I would go deeper, creating another layer with sub-branches. If not, I would cross out this whole Revenue branch and spend valuable time with the Cost branch.
So, has revenue been increasing or decreasing over the past few years?
(One by one, branch by branch, sub-branch by sub-branch, you analyzed the whole issue and found out rising raw material cost as the key root-cause for the profit problem.)
So we have exhaustively analyzed the whole issue tree and the data clearly shows that raw material negatively affects the bottom line. Fixing this root-cause will completely eradicate the profit problem. The next step is to cure this root-cause.
May I take a time-out to come up with solutions?
(Take time-out to think, and deliver solutions)
Good job finding the root-cause and coming up with those solutions. If you have 30 seconds right NOW to speak with the company’s CEO, what would you tell him?
Mr. CEO, thank you for working with us on this interesting business problem. After rigorous analyses, we have concluded that the rising in raw material cost is causing overall profit to plummet. Here are three solutions: No.1… No.2… No.3…
We’d be extremely happy to continue to work with you to implement those solutions!
4. Deep-dive into Candidate-led Cases – Logical Foundation of Consulting Problem-Solving
Though most cases will be conducted in mixed format, let’s dive deep and learn about each extreme end of the spectrum to get the full picture.
Even though this is the harder format, it shows us the foundation of how management consulting works, i.e: the consulting problem solving logics!
If you were exposed to case interviews, you have probably heard about some of these concepts: framework, issue tree, benchmark, data, root-cause, solutions, etc. But how do they all fit into the picture?
4.1 It all starts with the PROBLEM
Before getting into anything fancy, the first step is to define and be really clear about the problem.
This sounds easy but can be quite tricky. Here are a few guidelines:
- What’s the objective?
- What’s the timeline required?
- Any quantified or well-described goals?
For example, one client can state a problem as: “I lost my car key”. In normal contexts, this is a perfectly simple and straight-forward problem. But a consultant tackling this would go ask clarification questions to achieve even more details:
- Objective: the client in fact just needs to be able to use the car.
- Timeline: this is an urgent need. He is happy only if we can help him within the next hour.
- Specificity: help the client put his car into normal operation like before he lost the key.
4.2 Find the ROOT-CAUSE, don’t just fix the symptom
To completely wipe out the problem and create long-lasting impacts, consultants always search and find the root-causes.
For example, fixing the symptom is like you breaking the door lock, getting into the ignition electrics behind the wheel, and connecting the wires to start the car.
That does fix the surface symptom: the client can drive the car. But it does NOT create a long-lasting impact because without you there, the car can’t be started. The client will need to rely on you every single time. Plus, more problems even arise (now he needs to fix the broken door lock too).
A much better approach is to find the root-cause. What is the bottom-line reason causing the problem? Once we trace, find, and fix it, the problem will be gone for good.
In this example, the root-cause is “the lost key”. We need to find its location!
4.3 Use ISSUE TREE to isolate potential root-causes into groups
There could be thousands of possible root-causes. How do we make sure every possible one is examined? If we are to list out all thousands and test one by one, there is simply not enough time. On the other hand, if we just list out some of the most “possible” ones, we run a high risk of missing the true root-cause.
This is where we need issue trees! We would group possible root-causes into big groups. Those big groups will have smaller sub-groups and so on. All is done in the spirit of top-down and MECE. By doing this, we have an organized way to include all possible root-causes.
Continue with the example: A “bottom-up” approach to search for the car key is to go straight to specific places like the microwave’s top, the black jacket pocket, under the master bed, etc. There can be thousands of these possible locations.
The top-down approach is to draw an issue tree, breaking the whole house into groups and examine the whole group one by one. For example: first floor, second floor, and the basement.
4.4 Issue Tree only works if it’s MECE
What happens if we break down the search area into the First floor and East wing? The search area would not cover the whole house and there will be some overlapping which creates inefficiencies.
So for an issue tree to work properly, it has to be MECE – Mutually Exclusive and Collectively Exhaustive … which in simple language just mean 2 things: no overlap and no gap
4.5 How to draw MECE issue trees? Use FRAMEWORKS!
Each problem requires an unique issue tree. Coming up with MECE and spot-on issue trees for each problem can be really difficult. This is where “framework” helps.
Think of frameworks as “frequently used templates” to draw issue trees in any particular context. Many people use the word “framework” to refer to “issue tree” but this is conceptually incorrect.
We will talk about frameworks in more detail in the below chapters. You can also check out this deep-dive article on Frameworks.
4.6 Choosing which branch to go to first? Use HYPOTHESES!
So let’s say you have an issue tree of First floor, Second floor, and Third floor. Now what?
To make the problem solving process even faster and more efficient, we use hypotheses. In simple language, it’s the educated guess of where the root-cause may lie in. So we can prioritize the branch with the highest chance.
So let’s say, the client spends most time on the first floor, it’s where he/she most likely leaves the car key. Any consultant would hypothesize that the root-cause is in the first-floor branch and go search there first.
Notice: hypothesis and issue tree always go together. It doesn’t make sense to draw an issue of First, Second, and Third floor and hypothesize that the key is in the East wing. Many times, hypotheses are even the inspiration to draw issue trees.
4.7 How to test a branch? Use DATA and compare it with BENCHMARK
Now that we decide to test branch “First floor”, how do we do that?
We prove or disprove our hypothesis by collecting DATA. That data is then compared with benchmarks to shed more meaning. Two main types of benchmarks are: historical and competitive. For example, let’s say by some magic, the client has a metal detection machine which can measure the metal concentration of any space.
To test the “first-floor” branch, the consultant would come to the first floor, measure the metal concentration and compare it with the data before the car key is lost, a.k.a: historical benchmark.
4.8 If a hypothesis is true, drill down; if it’s false, switch sideways
What happens when we test a hypothesis?
Assuming that we have access to enough data, it either gets proven TRUE or proven FALSE. How do we proceed from here?
- Proven True: go DOWN the issue tree to sub-branches! Let’s say the metal detector identified the key IS indeed on the first floor. Go deeper. Draw sub-branches of that first-floor branch and repeat the process.
- Proven False: go HORIZONTAL to other big branches! Let’s say the metal detector denies the key presence in the first floor. We then can cross out this branch and go test others, a.k.a: the second and third floor.
Test, Sleep, Test, Repeat … until the ROOT-CAUSE shows up!
4.9 Once identified the ROOT-CAUSES, go for SOLUTIONS
With all proven root-causes identified, the last step is to come up with solutions to kill the problem … and we are done! There can be multiple solutions to each root-cause. These solutions should attack straight to the root-cause.
5. Deep-dive into Interviewer-led Cases – Learning the most popular question types
While candidate-led cases are all about the logical foundation of problem solving, interviewer-led cases are more about tackling each individual question itself. The structure of the whole case is relatively loose and flexible.
In this chapter, we touch on some of the most popular ones. You can read in-depth about each in this designated article.
5.1 Framework/Issue Tree Questions
“Which factors would you consider when tackling this problem?”
This is one of the most popular question types in case interviews, often asked in the beginning. It comes with several shapes and forms, but the real meaning is always: “Give me the bloody issue tree!”
So how do you tackle it? Just like in candidate-led cases. Take a timeout; brainstorm about the problem and how it should be broken down into; plug a few frameworks to see how it looks; and go for the most appropriate issue tree.
Unlike in candidate-led cases where you only present the upper-most layer, here you should walk the interviewer through the whole issue-tree, covering at least 2 layers. Interviewer-led cases are much less interactive. It’s more like they ask you a question, you deliver a comprehensive and big answer. They ask you another one. And so on.
5.2 Market-sizing / Guesstimate Questions
“How many face masks are being produced in the whole world today?”
This is among the most popular question types and you will likely face a few of them throughout several interview rounds. These questions ask you to “guess” and come up with number estimations in non-conventional contexts. These questions are called “Guesstimate”.
When a guesstimate question asks you to “guess” the size of a market, it’s called a “Market-sizing” question. Though this variation is very popular in consulting, the nature is nothing different from other Guesstimate questions.
It can be intimidating to face a question like this. Where to start? Where to go? What clues to hold on to?
The key is to understand that you don’t have to provide an exactly correct answer. In fact, nobody knows or even cares. What matters is HOW you get there. Can you show off consulting traits, using a sound approach to come up with the best “estimate” possible?
Read the designated article on this for great details. Here, let’s walk through the 4-step approach that you can apply to absolutely every market-sizing question.
5.3 Math questions
“If the factory can lower the clinker factor by 0.2,
how much money will they save on production cost?”
Almost all cases involve some math. So you will face math questions for sure. These “questions” can go at you either explicitly and implicitly. Sometimes, the case interviewer will ask out loud a math problem and have you solve. But sometimes, you have to do multiple calculations on the background to push the analysis forward.
Either way, a strong math capability will help you a lot during cases and the future career in consulting. See this Consulting Math article for more details.
5.4 Chart Insight Questions
“What insights can you draw from this chart?”
Consultant works with data and a big chunk of those data are presented by charts. Many times, the interviewer would pull out a sanitized exhibit from an actual project and have you list out insights you can see from it.
There are many types of charts. Getting yourselves familiar with the most popular ones is not a bad idea.
- Bar charts simply compare the values of items that are somewhat parallel in nature.
- Line charts illustrate the continuous nature of a data series, e.g: how my heart rate evolved through time.
- Pie charts illustrate proportions, i.e “parts of a whole” analyses.
- Scatter-plots use data points to visualize how two variables relate to each other. Correlation for example.
Tips on tackling chart-insights questions:
- Read labels first: from Chart titles, Axis title, Legend title, etc. Don’t jump straight to the content of the chart. It takes more time to get lost there and having to go back to read the label. Besides, you may also run a risk of mis-understanding the content.
- Look for abnormalities: important insights always lie in those unexpected and abnormal data. Look for them!
5.5 Value Proposition Questions
“What factors does a customer consider
when deciding which car insurance company to buy from?”
In simple language, this question type asks you: what do the customers want? Understanding exactly this need will put any company into the best position to tailor products / service.
Like any other questions, Value-proposition questions are not only about correctly identifying customer preferences (insights), but also about analyzing and delivering the answer in a structured fashion. Here are a few tips for you to do that:
How to be more Insightful:
- It always helps to break customers into groups and provide different substance for each.
- Put yourselves into the customers’ shoes. Think from the first-view perspective and more insights will arrive.
- If there is any data/ information previously provided in the case, definitely use it.
- A library of factors? Safety, speed, convenience, affordability, flexibility, add-on services, durability, fashion, ease of use, location, freshness, etc.
How to appear more structured:
- Follow this structure: Customer group 1, Customer group 2, etc. Under each: Factor A, factor B, factor C.
- Develop your personal script for this question type. Make sure it’s easy to follow and structured in nature.
5.6 Information Questions
What kind of data do you need to test this hypothesis? How do you get data?
Consulting is a data-driven industry. As consultants, we spent most of our time gathering and presenting data to clients ( see the What the heck does a consultant do video). No surprise information questions are relatively popular in cases.
The best way to tackle this question type is to understand inside out the types of data actual consultants use in real projects. Because almost no candidate knows about this. This is also a very quick way to build rapport. The interviewer will feel like he/she is talking to a real consultant.
You can get a list of information sources in case interviews and consulting projects from our Prospective Candidate Started Pack for absolutely free!
6. Another, Actual Case Interview Example
Enough theory! Enough cute little illustration here and there. Time to get our hands into a serious case interview example.
Notice the following when watching the video:
- How the problem is given and clarified
- How the problem-solving approach is layouted and executed
- How the candidate use wording and frame the pitches
- The dynamic of a case. How energy transfers from one to another person.
Every case is unique in its own way but principles are universal. The more examples you see, the better. This video is extracted from our Case Interview End-to-end Secrets program, where you can find 10 complete examples like this and many other supplement contents.
7. Study Plan
Case Interview preparation is a long and tough process. In an ocean of books, videos, programs, how do we navigate to maximize learning? Most materials floating around are quite good, at least in terms of substance. But the timing and the organization of them can be confusing.
- Too much theory in the beginning can burn brain power very quickly.
- Tackling cases without basics can develop bad habits, which eventually cost more time to unlearn.
- Practicing complicated (or even just normal) cases in the beginning can destroy morale drastically.
So a good study plan is constantly switching between 3 activities: reading theory, watching examples, and practicing, with cases increasing difficulty level. It’s so crucial to start with super easy cases, be patient, and stay on that level until you are ready to move up. There are so many skills, habits, and scripts to develop and these take time.
“The quickest way to do just about everything is … Step by Step”
Even for candidates with cases coming up urgently, I still strongly recommend spending the most valuable time practicing cases that match your level. After all, cases are just the context. What you will be evaluated on is your approach, your skills, your techniques, etc.
So, this is a sample study plan you can adopt for yourselves:
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