How to Open, Analyze and Close a Case Interview - Part 1 (Video 3 of 12)

okay right on track here okay let's talk about how to open analyze and close a case so it's a three step process I'm going to go through the process mechanically and then I demonstrate it one thing too is I mentioned earlier there is sort of more well I'll say also that folk later actually by one dimension was when you go when you practice cases I found for myself there was very mechanical early on in the process of practicing and so step one step two step three every single time very rigidly until I sort of mastered that process and then later what I do is I would be sort of more creative and more flexible and I don't know if that's sort of how everyone does it but I just point that out that for me it was very regimented early on until I could do it in my sleep sort of this the first part of a case and then I started getting very flexible so an example is you heard of frameworks which is sort of standardized approaches for solving certain kinds of problems you oftentimes find that in reality you'll use multiple frameworks within a case it was hot but I call it a call that a compound framework problem and and it's very hard for someone who's just practicing to do a compound case problem cuz they're thinking which problem is it and which framework to I fit it in but as you get information through the case you realize ah I thought it was a you know cost problem but it's actually like a marketing problem different problem different framework and sometimes people can't make that transition okay so here's how I open the case a lot of ways to be right first thing I do is I stall okay they say client says you know should I go acquire my biggest competitor okay and I always say no joke hmm that's an interesting question about myself ten seconds okay five seconds before I speak because if you get past six tutty's show if you pause for more than five seconds people think something's wrong five seconds say the word another five seconds I'm thinking like how the heck do I solve this problem I have no freaking idea and I've had out of my sixty cases I did I probably I said that by at least twenty thirty times and about fifteen of them I literally had no idea because it was sort of really out of left field and I had to slap and think for a second so it's good to have a phrase don't all use that phrase but if you it all come back to me okay the first thing you want to do is you want to verify your understanding effects and terminology very important because in different industries they use different words than many different things so for example if I had a client who's in reinsurance and so I might give a case that would say the CEO of a reinsurance company is concerned that premiums are down 15% what do you tell the client to do and and if I were on the receiving end of that my first thought is he that's an industry question what the hell's reinsurance right and so I would say can I have some background questions before I get started sure what's reinsurance it's the insurance company for insurance companies oh okay so for example if you're in a hurricane insurance companies have insurance policies on their homeowners policies so they lose more than two billion dollars in Florida for example the reinsurance company pays okay so the insurance company which I get that that's special what's a premium is that like profits no that's like revenues that's what people pay on their policy they call it premiums okay so basically you're saying that the client is asking me that revenues are down 20% what should you do is that right yes I got it okay so almost all the time I would ask I'll ask clarifying questions for a couple reasons because you don't want to like just because of a difference in vocabulary words like blow a case because you misunderstood the information so if you don't get it explain it and sometimes what happens is a lot of interviews they will use their actual clients cases they'll just change the names so they have like they've done lots of data analysis and they know everything and so some of these clients are really esoteric businesses and I had one I had one case that was um in a really bizarre health care insurance client was the client situation and it took me ten minutes just to even figure out what what business are they in and like and there's like there's not a customer but there's a customer and affiliate it was a very complicated relationship and I couldn't even understand the basic facts of the case let alone the problem they were asking I had a very hard time understanding is there a one customer do they pay no they don't pay somebody else pays oh so the person paying the money is that person receiving the service correct but there's a fourth party involved that's the government oh how does that work and I couldn't understand that and so I spent I devoted time to figuring out just what the heck are they talking about so if you don't understand what the talk met take the time to make sure you understand it because if you're solving the wrong problem you can't get it right okay second thing that verify is making sure that the that you're understanding the problem this client wants solved is in fact right so pay attention to the specific words and literally the grammar what's the subject what's the object right and think about what it is they're asking ends and I would spit it back out paraphrase it's like a good listening skill in general spit it back out so do you mean a client wants to know whether or not they should merge with their biggest partner correct got it okay so that's important and the last one is when you open a case the third step in opening case is you structure the case for analysis which is a framework based picking the right framework essentially and saying to solve this case we need to understand form the core ideas so to open a case stall verify structure I'll move it up you yes next slide what I mean by structuring case I love when people do that it's a four step process to structure a case means first identify the type of problem or situation they were trying to solve for the client like it's a profit problem as a very common one profits are down what do you do okay it's a profit problem or they're thinking of launching a new product oh it's a new product problem okay or they're thinking of entering the China market oh that's a market entry problem so there's sort of categories of problems and I'll show you for what kinds of problems which frameworks I found useful to solve those kinds of problems so it's like a matching thing so the first thing we're doing when you open your case is figure out what the heck are they talking about okay what kind of problem is it and sometimes it's confusing so that's why you have to verify your understanding make sure you understand that find the problem type and then pick the right framework for that kind of problem okay because you sort of pick the wrong framework you start gathering data in the wrong places right and it sort of wastes time more than anything else once you have a framework chosen you want to pick the key components identify the key components of that framework so as an example I'll show you in a second it was a profit problem the framework is you know revenues minus cost equals profits all right so to understand profits are down by 20% we need to look at revenues and when you look at costs and then help us understand that's like a standard opening for a profit problem now I'll walk through all the standard verbiage you don't want to mention the actual framework by name so don't say you know oh that's a mergers and acquisition framework problem or that's a Porter's five forces problem I'm just use the framework it makes you look smarter and they know they know they know you're sort of know this stuff and but it just like returns right that sort of came out of your head and then finally draw the framework out it's important so I'll give you an example that right now so let's say the example is the case interview is the CEO of ABC company comes news a profits are down by 20 percent what do you do okay and I would say I would verify I mean that's interesting we think about that for a second verify my understanding what they're asking for and and then say okay that's a profitability problem I know that I've seen those before and what I would say great to understand how to address this clients situation we need to look at their company's profits and why it's decreasing by 20 percent once we understand that we can figure out what we can do about it to understand profitability we need to look at two key things revenue and costs and I would literally literally literally draw this as I'm talking and just from a dynamic standpoint sometimes actually might share closer to them so rather than being sort of adversarial I will do it this way let me show you to understand props we gotta look at revenues first okay and then costs right and that's more collaborative and its clients cool too right if you're meeting the average sale of clients it's a long is there's a reason for your final if you're meeting an adversarial client when you when a police officer and tear gets a criminal what do they do right across from one another if you're being collaborative you do it together you see and so it has a different body language so I'll do that so you look a little things and but but also the other reason is that we don't have to like write upside down because they can't really see if you do it this way they can't read it like I can't draw it upside down so I got to come around and say come on over here let me show you firstly I look at profits revenues and costs or I'll draw it my way and then I'll turn it around and show it to them these like a lot of little slip little things but you want to figure out how you're comfortable sort of presenting information visually I told you I'd visuals client friendly right so you can't just say obviously profitability going to look at revenues and costs right within costs are sort of fixed cost be able to cross this out on that kind of cost unit constantly I look at the trend line of this they can't follow it right so you got to draw it out so it's very important to draw that out and so for all the major types of case problems I will give you the list of my four favorite frameworks and I'll give you the standard opening that I've used on those four frameworks and like I mentioned earlier opening a case is very mechanical and then as you get information that's where sort of creative problem solving and analytical sort of comes into play but up at this point it's really bad sort of opening it correctly that's how to structure a case the next up on the process is once you sort of open it up you sort of laid out how you're going to approach this case all the major categories of issues next thing is to analyze the case I googled the word analyzed last night turns out the definition which was actually kinda nice is the separation of any material or abstract entity interest into an element's which basically means to analyze means to break apart into pieces okay so if you have a business it's a bunch of Lego blocks analysis means you pull apart the Lego blocks look at each one individually and by the way that that's the what I call the backup framework if you ever get a case where you don't know what's going on and it doesn't match any of the ones I mentioned and I had a couple of those you get the wacko you get weird ones once in a while if you got enough a new version it's not a matter if we you know if you'll get them you definitely it's matter of when when in doubt pull apart the pieces now so for example a lot that the bad example so that's sort of the main idea to analyze means to break out into its component parts and this is what you do all day long as a consultant you're breaking things into parts you're breaking the parts into more parts and breaking those parts into more parts and we'll talk about why you do that and you have to do this in a case interview have to impossible to pass without doing this very important okay so and they say analyze a case it means breaking it apart and I'll give you some ways of how two standard ways of breaking things apart but even if you forget everything I said and that you get a question if the first thing is out of your mouth as well just interesting I'm not sure how to solve that let's break it apart okay that's a good way to start let's see okay step by step how do you analyze a case so to JDR clean ohmic lenses in two specific cases first thing I do is I ask them if there's any information about the situation that would suggest where I ought to start in my framework okay so I would say to understand why ABC company's profits are down 20% in how to respond to that we got to look at the revenues and the cost because those two combined foreign profits okay do we have any information from the client that would indicate whether this was a revenue problem or a cost problem okay 8% of time they'll say no okay although smile and smirk and still say no and sometimes they'll say sure you know why don't we start with costs first and it they deliberately lead you down a bit of wrong end like it's the lip it's they know it's a revenue problem but they're telling you what you saw with cost first just to see if you can figure out that you threw down the wrong direction this you can kind of come back up about 20% of time they actually tell you particularly if you have like a big framework has a lot of things you need to analyze they can save you time and it's sometimes they don't have to see sometimes they don't have data on parts of it so like if they know it's a revenue problem and they and because it's a real-life case they were working on they didn't do any of the cost analysis so they have no data so they don't want you to go there sometimes so if you ask them they'll sort of spiritual you're you sort of in that direction about 20% of time so that's what I use the J okay this is my plasters you can certainly succeed without without doing this crap and the next thing is you state a hypothesis okay and hypothesis interesting enough I actually never did this explicitly when I was interviewing I sort of did it implicitly they could tell I had a hypothesis I never use the words but it's actually not a bad idea to use the word hypothesis you know it comes from you know science and the scientific method of you you have an experiment and you think that you know the key to curing cancer is in like gene number 24 okay what do we got a new what we got to do is sort of isolate and prove whether or not that assertions by that hypothesis is correct well we got an instruction to experience a figure that out same process to solving business problems again this is a consulting process it's not the only process you can them business forms in creative ways lots of other ways but in consulting it has to be the sort of scientific method approach so I'll give you an example the hypothesis company ABC is profits down 20% we need to look at revenues and costs I'm going to hypothesize that it's probably revenue problem so I'm going to gather some data on to see whether that's true or not okay and then I'll stop continue have revenues declines stay the same or increased okay all revenues have increased oh okay hypothesis is wrong profits are down but revenues are up what does that mean interpretation it's a cost problem right okay so my hypothesis was incorrect new hypothesis I'll say ah obviously it's not a revenue problem the revenue is not causing the Dawson profitability it must be cost so that's an example of how that the dialogue would work a third step which I sort of already demonstrated is you once you state a hypothesis you want to pick a branch of the framework to start okay so I said my hypothesis is it's a revenue problem let's look and analyze revenues first has revenue change if so in which direction and next step is to identify the key issues within that branch of logic you'll see in a second ch's to these sort of frameworks that are sort of very logical so I will say - to understand whether or not revenue is causing the profitability problem we need to know if revenue has changed and in which direction so has revenue increased stay the same or decreased it's only one of those three things and those are the three issues do you have any data that we indicate which one of the three is correct okay and so Mary delivered about that sort of stating the things I want to know and consider and then ask for data and it's very important to do that by the way it seems like a little obvious but obviously revenue can only go up down or say the same right but you can we trying to be client friendly so we're laying out all the issues and on that one I'm particular I probably wouldn't draw it out because it's sort of simple you know but in general when you have when you're starting to work down a branch you want to break out what are the key issues within that branch state all the major issues and then dive in if you just dive in without stating all of them they will assume you missed them okay they will assume you missed them and I'll give you example a little bit later on then what you

Channel: caseinterview

Views: 673,240

Rating: 4.8902693 out of 5

Keywords: victor cheng

Id: 3iwZD_1Q0Jk

Length: 17min 45sec (1065 seconds)

Published: Sat Apr 23 2011