After all your preparation, it’s all come down to this moment. For months you have networked, practiced your “fit” stories, and done countless mock case interviews with friends. You sit down at the table with your interviewer and exchange introductions. Before you know it she says “let’s start the case” and proceeds to read you the interview prompt. What do you do next?
In a typical consulting case interview, after hearing the prompt, the first test of your problem-solving abilities is an exercise in “structuring the problem”, called a framework. Consultants are called upon by organizations to help solve their most challenging problems, and they often do this by taking a large, daunting question and breaking it down into small, more digestable questions that are more easily answered. These insights and solutions are then often synthesized to develop a recommendation that addresses the organization’s over-arching problem. You will have approximately two minutes of silence in which you will create your framework on a piece of paper before presenting it to your interviewer.
Your framework is your attempt to break down the problem your interviewer has presented. A typical framework looks like a horizontal tree, that begins by breaking the problem into a few high-level “buckets” to explore, before branching out into more specific variables and sub-variables that may drive outcomes in these buckets. For instance, a framework for a case about declining profitability may start out with a “Profit” bucket, which is broken down into “Revenue” and “Costs”, and then further broken down into drivers of both elements. This list of variables and sub-variables should include all the elements that you want to test/examine to try and understand the causes of the profitability issue and propose a solution.
A step-by-step example will probably be most helpful here. Let’s evaluate a hypothetical case in which an orthopedic surgery hospital is facing declining profitability, and we are called upon to fix this issue. How can we structure this problem?
Step 1: “Bucket” the Problem
Begin by breaking the question down into the highest-level buckets of considerations you would like to explore. Here, we break this question of declining profitability into the actual hospital profit, and the external market factors that might be influencing the profitability issues.
Step 2: Break the Buckets Down into their Component Variables
We now begin to break these buckets down into their underlying drivers. “Hospital Profitability” is a function of Revenue and Costs, while the “Market Factors” most relevant to this particular case are the size of the orthopedic surgical market, the patients this market serves, and the competitive landscape. In the next step, we will break these variables down into the sub-variables we would like to test.
Step 3: Further Break Down the Component Variables into Sub-Variables
Here we narrow the question to the specific drivers of profitability that we want to explore. For example, we have broken down the “Revenue” component of profitability into its underlying drivers. Perhaps the number of surgeries the hospital is performing is declining, or the hospital is doing a higher percentage of knee surgeries, which generate less revenue than shoulder surgeries. Similarly, we break down “Patient” considerations into population demographics and insurance coverage. Perhaps our population is getting younger, on average, which reduces the need for orthopedic surgeries.
While the case ultimately won’t delve into all of these elements, this framework shows your ability to break down a large, broad problem into very specific components, and exhibits an understanding of the specific industry in question. Note that rather than using generic words such as “Quantity” and “Price” for the Revenue sub-variables, we use industry-specific terms. This shows your interviewer that you are not just re-creating a framework that you have memorized, but rather this is a framework tailored to the issues facing an orthopedic hospital.
Step 4: Presenting the Framework
When your two minutes is up, it’s time to show your interviewer how you’ve structured the problem. Begin by spinning the framework toward your interviewer so that they can read it. First, quickly talk about the high-level “buckets” into which you have broken down the problem. From there, quickly walk through each of the sub-variables you would like to explore, explaining how each one might help us understand the cause of the problem and find a solution.
Once you present your framework, it is time to move into the analytical portions of the case, which we will explore in next month’s entry.
Originally from northern New Jersey, Ryan is an MBA Candidate at Columbia Business School, where he is a Columbia Fellow. After graduating from the University of Notre Dame, he worked for six years in New York in investment banking and equity research. After passing all three levels of the CFA exam on the first attempt, Ryan finally realized he would rather work alongside companies to help them grow, as opposed to determining what their stocks were worth. He made the transition to Columbia to pursue a career in management consulting, and will be joining a consulting firm upon graduation.