1. WHAT IS CASE INTERVIEW?
In the broadest sense, a Case Interview is like a normal job interview with business content involved. By doing this, companies can have a better idea of how well a candidate thinks, analyzes, and works through business problems. For more on this topic, read the Bain post on case interview.
2. WHAT DOES THE FORMAT LOOK LIKE?
Each company uses a slightly different case interview format. But for the scope of this video, we will focus on the most common format that the Big 3 – McKinsey, BCG, and Bain – use. That is the 1-on-1 format with no case data revealed before the actual interview.
To better illustrate the concept we just discussed, here is a typical example of a “business problem” in a typical case interview at McKinsey, BCG, and Bain:
“Let’s say we have a restaurant called “In-and-out Burger” with recently falling profits. How can you help?”
The case interview will be a working session between the interviewer and the candidate to solve that business problem. During this process, the candidates’ skill sets will be demonstrated and evaluated.
3. WHAT IS EVALUATED IN A CASE INTERVIEW?
In a Case Interview, the final result is not as important as the process. In other words, the interviewer will judge whether you work through the business problem in the “right way”, regardless of whether or not you solved it correctly.
This is because consulting firms believe that if a candidate has a good methodology, he or she can consistently solve many other business problems, whereas a lucky candidate who solves a case using a rusty approach may not be able to solve future cases.
So what is the “right-way” to solve cases? There are several components to this.
- No.1: A good method will look for the root cause of the problem, not just the symptoms on the surface.
For example, if a patient is having pain in his chest, a “non-root-cause” approach would be to provide some medications, whereas a “root cause” method would be to run tests and see what is really causing the chest pain and cure it. So simply put, look for the root cause!
Now that we know we have to find the root-cause, the next thing is to make sure that we can identify ALL root-causes. That leads us to:
- No.2: A good method will break down the big problem into smaller pieces in a MECE way.
MECE stands for “mutually exclusive and collectively exhaustive“, which in simple language really means 2 things.
- 1st: the small pieces of those big ones cannot overlap (this is “mutually exclusive”). For example, a non-MECE way to break down the student body of a course is: Group 1: international students and Group 2 Female students. These 2 groups do overlap. Some international students can be female.
- 2nd: those small pieces all added together has to equal the big problem. For example, a non-MECE way to break down the student body of a course is: Group 1: students from China and Group 2: students from the United States. These 2 groups combined do not necessarily equal the total student body.
In this example, some MECE ways to break that student body down are: Male and Female or International students and Domestic students.
Now back to the original story, we were discussing the 2nd component of a good method in case interviews, which is to breakdown any big problem into smaller pieces in an MECE way. What would that look like in the “In&Out” example?
Here is a bad method:
Could the declining profitability be due to weak management? Increase in competition? Increase in beef costs? Or shift of customer tastes? While all of the these can very well be the root cause, that’s not a MECE way to break down the big profitability problem. There are some overlaps and no guarantee that all possible root causes are listed.
Here is a good method:
The declining profitability is either caused by (a) decreasing sales revenue or (b) increasing cost! Then within each branch, we can break it down further. Now you may wonder how we consistently do this. What is a good way for always breaking down big problems in the proper form? This leads us to the next concept: Case Interview Frameworks.
3.2 Case Interview Frameworks
In simple language, a Framework is like a pre-set template that candidates can use to breakdown frequently-seen business problems or cases.
By using frameworks, you can be certain that your approach is always structured and MECE.
Some of the most popular frameworks are:
- Profitability framework (used for profitability cases)
- McKinsey M&A framework (used for Merger & Acquisition cases)
- Porter’s Five Forces (used for Market Entry cases)
- Other’s like 4C, 4P, etc. frameworks (used for other general cases)
You will find more detailed information on Case Interview Frameworks in other videos and on our website.
Come back to the big picture. Now that we can break down the problem in MECE ways, we have to find the root-cause fast! The No.3 component of a “good method” is to appropriately prioritize which small piece to delve into. This leads us to the next concept: Hypothesis.
Hypothesis is an educated guess of where the root cause might be, and therefore, going into branches that are more likely to contain the root cause.
Hypotheses should be based on information provided in the case.
So to summarize, a good method to approach a business problem has three components:
- No.1: Look for the root cause and solve it, not just the symptoms
- No.2: Look for the root cause by breaking down the big problem into smaller pieces in an MECE way
- No.3: Use hypothesis to prioritize pieces that most likely contain the root cause.