The 7 Steps to Becoming a Management Consultant
STep 4: learn everything you can about case interviews
what is a case interview?
In addition to typical interview questions (tell me about your experience, why you want to work here, etc.), consulting interviews contain a fairly intimidating section called a “case” interview. In a case interview you are asked a specific business situation. For example, you might hear, “your client is a major retailer whose profit has declined by 10% the last 3 years. I’d like you to tell me why and what they should do about it.” You’ll spend roughly 30-40 minutes discussing the situation with the interviewer and providing a recommendation. Case questions are purposely vague and do not have a set answer. The interviewer will provide only limited information and avoid steering you in any particular direction. It is up to you to drive the conversation, ask intelligent questions and make insightful conclusions. After 20-30 minutes of gathering information, analyzing the implications and driving a back and forth conversation with the interviewer, you will be expected to sum up what you’ve learned and what the “client” should do into a concise summary. Something like:
“Our client is a retailer who is experiencing several years of declining profitability. To understand what is driving the problem we explored the broader market, their direct competitors, their sales history and their cost structure and identified that there are likely 2 root causes: 1) their largest competitor has been conducting price cuts on 3 products that traditionally make up over 40% of our client’s business, driving down overall volume; and 2) their top supplier has increased their costs, driving down our client’s profit margins. To address the first issue, our client should explore their pricing strategy, diversify their product portfolio so they are less dependent on a few select products and reassess how they market themselves to understand if there is a way to differentiate less on price and more on the value they deliver to customers (allowing them to charge more). To address the second issue, they should assess if there is an opportunity to use multiple suppliers so they are less dependent on a single source as well as look into long-term contracts and bulk purchasing that may lower their overall pricing.”
The best way to really understand what a case interview is like is to see one. College2Consulting offers videos of real students in real case interview situations as part of a free trial course so that you can see what a case interview entails. Go to www.college2consulting.com/preview to watch one now.
Why do firms ask case questions?
In the real world, as a consultant you will be thrown into difficult situations, solving problems that don’t have a straightforward answer. Consulting firms are looking for candidates who can think on their toes and who can handle abstract questions without much information. They need to know you are comfortable taking a broad, undefined problem and breaking it down into manageable chunks. They need to see the logic you put behind the recommendations you make. You cannot assess these skills by looking at a resume or asking about past work experience. Asking case questions allows a firm to see firsthand your problem solving skills, analytical rigor, creative thinking, and communication capabilities. This is why firms put so much emphasis on the case interview, and why you, as a candidate, need to put so much effort into preparing for the case portion.
How should you approach a case question?
The worst thing you can do in a case interview is blurt out an answer. These are complex business problems that do not have a simple solution. What’s more, the interviewer really doesn’t care what the end answer is; they want to see how you got there. Remember, they are looking to see how you approach a problem, what types of questions you ask, what types of information you need and then what you do with it. The answer really doesn’t matter, because the problem is made up to begin with.
Make sure you really understand the problem to solve
The first thing you want to do when you approach a case question is make sure you’re clear on exactly what it is you’re going to solve. As the interviewer gives you the situation, write it down and then play back what you heard and the question you’re going to try to answer. You wouldn’t believe how often an interview candidate will zoom off towards an answer to the wrong question.
Develop a framework to structure your analysis
Next, you want to think about how to structure the problem so you can explore different areas and keep your information organized. Consultants call this a “framework” and there are different frameworks for different types of situations. A framework can be as simple as saying, “I’d like to explore 3 main areas - 1) the company itself, 2) the company’s customers, and 3) the competition.” From there you can ask specific questions about each of those topics to start to understand what the root cause of the problem is. Frameworks are incredibly helpful and are really the secret to taking a broad, nebulous case question and breaking it down into manageable chunks. There are specific frameworks for things like profitability, competitive analysis, or market entry situations. In reality you’ll end up taking elements of multiple frameworks and building something customized to your unique case situation. The developing of a “framework” is all done in the first 2-3 minutes after an interviewer has given you a problem to solve. There are several books and courses, such as College2Consulting, that provide detailed examples of frameworks and how to customize them.
Drive a back-and-forth dialog with your interviewer
With your framework laid out, you can begin a dialog with your interviewer, asking questions and making assumptions to fill out each piece of your structure. You want to drive the conversation, not wait for the interviewer to give you information. The key is to be very logical about which questions you’re asking and what information your gathering. You want to pull on your own knowledge of an industry or a business to make informed decisions. Each piece of your framework should lead to a logical set of questions that are relevant to the problem you’re trying to solve. Let’s say you’re working on the retailer from the declining profitability question above, and one of the areas you are exploring is ‘Competition’ from the Company, Customers, Competition framework we discussed. You would want to ask questions about the retailer’s main competitors and what their performance has been over the last several years. However, you would also want to interject your own knowledge. If you know that retailers are undergoing price pressure due to e-commerce stores like Amazon, you could start with that as a hypothesis and then ask questions specifically around digital competitors to understand if that might be driving the problem.
Whenever possible, use numbers and facts to quantify your analysis
Consultants are always hungry for data because it prevents their recommendations from being subjective. A bad answer to a case question is, “The market is big and the company can make a lot of money.” A good answer might be, “The market is approximately $10B annually, and given our clients recent performance and lack of strong competitors, it is reasonable that they can grow their current market share from 10% to 15%, resulting in a gross revenue increase of $500M annually by entering 3 new local markets that represent over 25M new customers.”
Watch your time
You’ll typically be given 25-30 minutes to work through a case question with the interviewer. The conversation can go in a lot of different directions and it is up to you to control the time. Make sure if you have 3 major pieces to your framework that you are managing your time to gather information for each. At the same time, make sure you are being flexible and reading signals from the interviewer. If it doesn’t sound like one of your three areas is particularly relevant given what you’ve learned, move on. The worst thing you can do is be halfway through your analysis and have the interviewer say, “Looks like we're about out of time. What’s the answer?” Instead, you want to have completed each piece of your framework and be able to say, “It looks like we have about 2 minutes left, I’d like to recap what I’ve learned and summarize my recommendation.”
Provide a strong summary
One of the simplest mistakes interviewees make is to do a lovely analysis and then leave the answer floating in the wind. If you’ve done your case correctly, you’ve likely just spent 25-30 minutes covering a range of different topics. It is now your job to replay that information in a concise way that leads to a logical conclusion. You want to recap what the question was, review the major areas you explored to come to an answer, highlight the most insightful information and then provide a specific recommendation.
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