Dear Mentor:

How can I perform well in a case interview?

I just returned from a summer internship to finish the second year of my MBA. The campus recruitment season is upon us. I am very interested in pursuing a career in management consulting. Many consulting firms conduct case interviews. I would like tips on how I can perform well in these interviews. Thanks.

Aspiring Consultant, Chicago, Illinois, USA

Dear Aspiring Consultant:

A case interview is a discussion, between the interviewer and the interviewee, on a real or hypothetical business or non-business scenario. Through this process, the interviewer intends to assess the interviewee's analytical and people skills in handling realistic situations. These interviews, while being most common in the consulting industry and in strategy consulting in particular, are not limited only to the consulting industry. You are liable to come across these interviews, from time to time, in other industries as well.

The case interview approach provides the interviewer insights into your thinking process for problem solving. Problem solving is often independent of your expertise in any industry - expertise in an industry simply gives you additional knowledge, which can be acquired later, when needed. The interviewer is interested in: your expertise in general business, ability and creativity to analytically apply your learnings from formal education and work experience, and raw intelligence. Problem solving is a learnable skill, so the interviewer is assessing whether the "acceptable raw material" is there, on which the prospective firm should invest for further development, to capture lucrative rewards.

More specifically, the interviewer is assessing whether you can: identify the problem, formulate the problem so that it can be solved, and then proceed in an analytical (or structured) fashion to solve the problem. The interviewer wants to see you develop a structured "framework" for solution, for a correctly identified and well-formulated problem. The interviewer is NOT looking for the answer - it is the path you take to get to the solution that is of interest. Even when you think you know the answer, do not jump to it. Remember, the interviewer is interested in your thinking process leading to the solution. So it is your responsibility to walk through the process systematically, and to provide insights into your thinking and rationale. Chances are that you don't know the answer. Chances are that the interviewer has given you rather limited information, not enough to even formulate the problem, let alone solve it or know the answer to it. You can freely ask questions, and the interviewer would help you. You are in fact expected to ask questions to make progress, but your questions must be relevant to making progress in the discussion, and revealing of your structured thinking.

There is no magic formula for success on case interviews, but you can develop a structured approach for dealing with them. All consulting firms have their own style of approaching their consulting engagements. For example, a well-know strategy consulting firm for years has used the 3Cs formula: customer, competition, and costs. Interestingly, the sequence of 3Cs and details of analyzing them have evolved, but not the formula itself. In the reengineering days of the past, the cost used to be the first C, but now it is customer. Another well-known consulting firm always focuses on the shareholder value and related analyses. While knowing the firm's approach to its engagements is helpful, it is not necessary. You can develop your own structured approach to problem solving that would stand you in good stead, whether independent of or in conjunction with your knowledge of the firm's style.

As you might know, the founders of iMahal have extensive consulting experience, including strategy consulting. They have been involved in numerous case interviews, both as interviewees and interviewers. Here is one structured approach to problem solving that we have found useful in management consulting, and particularly in case interviews. The labeling of steps is systematic, but the associated details do not fit neatly into individual steps. The start and finish of details for each step is somewhat arbitrary, based on personal preference. One can reasonably argue that the details at the end of one step should really fit into the details at the beginning of the next step, or vice-versa. Fair enough, but that discussion is academic. From a practical stand-point, the overall approach and structure are valuable.

Step 1: Identify the problem.

The interviewer is likely to start by briefly describing a scenario. For example, a client facing declining market share, or erosion in profitability, or decreasing levels of customer satisfaction, decreasing year-over-year revenues for only some of the retail stores, or the need to size the market for a new product or service, or how to expand a business, and so on. Each situation deserves its own unique analysis, but the process is similar.

The initial description is often, but not always, the symptom or result of the situation, and not the real cause of the problem. Regardless, through discussion, real potential problems (causes) must be identified for analysis, thus breaking down the original scenario for a systematic analysis.

For example, in the case of declining market share, the cause could be the products portfolio relative to emerging competitive offerings, or pricing strategy, or availability of products at the point-of-sale, and so on.

Step 2. Analyze the problem.

Somewhere along the way, in the preceding discussion, the interviewer is likely to focus the discussion on one specific aspect, even though the real world problem might be multi-dimensional. For example, the interviewer might say, "You can assume that it was the product portfolio relative to new competitive offerings in the marketplace, cutting into client sales."

The challenge for you now is to articulate how you would analyze the product portfolio -- you must find a structured way to determine which products are responsible for the decline in share and why. For example, you may propose to do market share trend analysis to identify which products have declining market share, and when the decline began and what other events in the marketplace could have caused it. You might also propose to conduct market research of actual end-users to determine the reasons for their increasing preference for competing products.

The interviewer can then follow up and ask you to outline how you would do the market research. You may say that we would identify the representative sample of users of a product with declining share and biggest impact on overall revenue or profitability. The interviewer may say that is good, but I am more interested in what you would ask them. And the discussion can go on, and on.

Follow the interviewer's lead. You must not try to finish all the steps outlined here. Remember, the interviewer is assessing your thinking process.

The interviewer may guide the discussion further, by giving you more information. For example, we learned that one product simply had a better alternative in the marketplace and users were willing to pay an even higher price for it, another product was competitive in functionality, but the competitors had cut the price. Or, the interviewer may say that product portfolio needs to be revamped and tell me what you would do.

Step 3. Formulate options.

Given that you have analytically discussed and determined the causes of the problems, the next step is to think through the process of identifying potential solutions.

For example, you may propose the following actions: develop new products more suited for evolving user preferences and competitive environment; enter new geographic market with current product portfolio; eliminate products with sharply declining share and redouble efforts to gain market share for competitive or superior products; and so on. The choices are numerous.

Step 4. Develop selection criteria.

Careful thinking skills should be demonstrated as you next discuss what to do about the solution choices.

But how would you know which solution choices are better? Do you know the client's objectives, beyond arresting the share decline? It is often possible to increase share by slashing prices and you don't even need any analysis and big bucks to consultants. The fact is that you don't know how to evaluate the choices, without fully appreciating the end game. Thus the need for this step.

The criteria may include market share, growth, margins, revenues, fit with company mission and goals, and so on.

Step 5. Make recommendations.

Each option outlined in Step 3 must be evaluated against the objective criteria of Step 4, quantitatively when possible and qualitatively when necessary.

It is highly unlikely that you would get past Step 3 in a case interview, let alone completing the entire process. But it all depends on the interviewer. The interviewer may guide you through some steps more quickly than others. No two case interviews are the same, even on the same case. Discussion evolves, based on your interaction with the interviewer. Regardless, having an overall framework for problem solving can only help.

One last note. Just as there is a multitude of variations on cases, there is multitude of jargon in the consulting industry. For example, some prestigious strategy consulting firms take pride in emphasizing that they follow a hypothesis-driven approach. What they simply mean is that they do not conduct research and analysis, hoping to find something insightful, but they bring insights to formulating the hypotheses which are then accepted or rejected based on research and analysis. In simple English, it simply means that you figure out what you are looking for, before you start the search. Well, the problem-solving approach presented above is in fact hypothesis-driven, if labels do really matter.

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