Case interviews at management consulting firms are business puzzles. Just like solving a puzzle, a strategic method should be used to solve a case interview. The best consulting candidates don’t randomly start putting pieces of data together, but instead utilize a system as they work to crack a case.
There are an endless number of ways to tackle a case interview. However, there are a few commonalities all cases share that are crucial to know before any interview. Below are the three things you must know as you begin to solve a case interview.
1. The problem you are being asked to solve
There are four different pieces of information provided in the background of every case: industry, company, key data and business problem. Of these, one rules them all - the business problem. Otherwise, you can’t create a structure, because structures are created based on the problem, not on the industry, company or data.
This may sound like an obvious statement, but to crack the case interview, you’re going to need to be crystal clear on the problem you are solving. Surprisingly, this simple and fundamental component of solving a case is often overlooked.
Here are two of the most common mistakes we’ve seen candidates make as they try to tackle the problem the client is facing.
Needing more clarification but not asking for it
Problems in case interviews are complex. They can involve industries you never knew existed and the client’s issue will be one you have never encountered. Consulting firms never like to make it easy on their candidates because neither do their clients!
Candidates can sometimes feel unforced pressure to not ask too many questions. However, when you don’t fully understand the problem the client is facing in a case interview, asking for clarification is a must (just don’t ask for additional data!) Good consultants ask clients many questions on the job so they can deliver relevant analysis for projects. Don’t worry about asking too many clarifying questions if you really don’t know something.
Solving for the wrong problem
Another issue many candidates face when solving a case is that they solve the wrong problem. Sometimes it’s because they are moving too quickly and other times it’s because business terms get mixed up.
For instance, a client may be entering a new market with an existing product, and that would require a very different framework than entering a new market with a new product. The two may have some overlapping components, but they are distinct and present very different challenges. Take strong notes when being provided with the problem and confirm as many details as you can with the interviewer.
As you listen to the problem presented in the case, ensure that you are solving for what the client specifically needs solving. Take your time and listen carefully, as there may be nuances that can change your entire approach. When you are presented with a case problem, we suggest writing it at the top of your paper and boxing it. Then, treat it as a “North Star” and refer to it consistently as you go through your case.
2. The metric you will use to measure success
After clearly understanding the problem, the next step is pinpointing the metric you need to measure in order to successfully solve a case interview. We generally think there is a metric to measure everything - not necessarily a financial metric, but a metric.
Whether your client is a corporation or a non-profit, there is a metric that organizations use to measure their success. Though not completely exhaustive, see below for some examples of the metrics different types of clients use.
Corporation
The most common type of client in a case interview will be the corporation. After all, commercial clients are the biggest source of revenue for consulting firms. At the end of the day, the bottom line is the bottom line. You are there to increase profitability for your client. Of course, there are various strategies to get there. Below are some examples:
Revenues/costs - How much revenue needs to increase, or costs need to decrease in order to reach the client’s desired profit goals?
Market share – How large is the segment of the market we can capture for the client, and how much would that increase profit?
New market - Projected annual profit from entering a new market with existing products and services.
New product - Projected annual profit from introducing a new product or service.
Nonprofit
Beyond corporate work, consulting firms also work with nonprofits to help them achieve their goals. Even though nonprofits are generally more mission-driven, they still need to monitor progress through important metrics.
For instance, a nonprofit client that focuses on improving efforts for cancer research could measure its success by the amount of funding raised each year. Another nonprofit client that aims to increase access to clean water could define their success by the percent of households that receive uncontaminated running water at home. Even for nonprofit clients, set up a framework that is designed to measure the right metric for success.
Institutions
A third type of client that you may serve in case interviews is the institution. Similar to corporations and nonprofits, institutions also track metrics to measure their success. For an educational institution, the client may look at technology as a way to deliver courses at a lower cost per student.
For a government institution, the client may be interested in more completely covering a constituency.For example, the Department of Public Health may measure X% of vaccinations it provides for Y% of the cost of private health insurance for Z% of the population.
3. The data you need to measure the metric
When solving a case interview, your structure should be designed to extract the relevant data needed to calculate the metrics the client considers most significant.
Speed is crucial
You don’t need to get the right data on your first try, but the quicker you can get to the right data, the faster you will be able to crack the case. Speed to solution is what separates top consultants from the rest. As a result, it’s important to not just get to the data, but avoid the data or components in your structure that are superfluous or irrelevant.
For instance, if you need to measure market share growth, the main things you won't be needing are internal company operating information or supply chain costs. If you need to measure revenue growth, you won’t be needing any information on costs. (This sounds obvious, but many times candidates confuse revenue with profitability.)
Consultants are paid not just for the insight they provide but also the speed with which they provide their analysis. The best consultants are able to get to the meat of the problem quickly, gather pertinent information and conduct analysis that leads to a final recommendation.
Keep drilling
Once you receive relevant data needed to measure the metric for success, it’s important to keep drilling. In the real world, a client’s business problems can be solved in numerous ways. For example, a client could fix its profitability issues by either increasing its revenue or decreasing its costs. However, case interviews are typically based on a consulting firm’s previous projects, and therefore there is already a pre-set solution that you as a candidate need to uncover.
If you have set up your structure and have started to receive some data after asking questions, you know you’re on the right track and you need to keep drilling. For instance, let’s pretend your case problem is related to market share for a client’s existing product. You set up your structure and first ask about relevant competitors and past market share growth rates. If an interviewer presents you with data for the main competitors, after analyzing the data, you should then ask for further information about each competitor. Keep drilling down until you reach a dead end and the flow of data stops. That’s a signal to move onto the next part of your framework.
Sourced from Efinancialcareers - written by Naaman Mian