The case interview is an example of a real business problem a client once faced. This part of the recruitment process is not designed to stump you, but rather to reflect the challenges that clients encounter. They are used to test:
- The approach you take to solving a problem
- How analytical and creative your thinking is
- Your usage of data to quantify your recommendation(s)
- Your communication skills in conveying your ideas
A case usually takes 30 min. Approx. 5 min. are used for the introduction, 20 min. for problem solving and 5 min. for the conclusion.
Keep in mind that the preparation work for the first and second round of interviews is the same! The interviewers will be more senior, but will test the same skills and will use similar business cases.
McKinsey vs BCG
The key DIFFERENCE between McKinsey and BCG cases is that McKinsey cases are generally more structured, whereas BCG cases are more flexible in their approach.
At McKinsey, the interviewer leads the interview and the candidate is expected to answer specific questions.
At BCG, the candidate is expected to lead the interview. The interviewer will provide the candidate with a problem and the candidate is expected to solve the problem in a rather unsupervised manner. Like with McKinsey, structure is key, whilst a unique / creative solution is valued.
Another difference is that at McKinsey cases will always be business cases whereas at BCG you might receive brainteasers as well.
The key SIMILARITIES of McKinsey and BCG are:
- Both value structure above everything! There are many ways to solve the same problem, but the structure must be very clear.
- Both consider creative ideas / unique approaches in addition to your structure a plus.
- Both want the interview to be a conversation rather than an interview.
- Both look at the whole interview as a package. Don’t loose yourself if you make one small mistake – we are all only humans.
Along with our own experience, we received feedback from more than 20 McKinsey and BCG recruiters, consultants and partners on how to best approach a business case. Below is a summary of all the insights we’d like to share with you!
The generell structure of a case follows:
The 5 Key Elements of a Case
Framework / Qualitative questions / Numerical questions / Graphs / Recommendations
Regardless of whether you are interviewing with McKinsey or BCG, the guidance below will help you improve your performance.
1. Building your Framework
The first part of the case study is creating your structure to solve the problem. Consider the following example:
“Our client is an airline company. Despite a significant growth in sales in the last 5 years, the profits are not increasing. What would you tell the client?” (main question)
- Paraphrase the question asked to ensure you understood the details and the overall goal well. Keep this recap short and to the point. Ask if you missed anything to be sure you understood everything.
- Clarify things (e.g. “You mentioned growth. Does that refer to sales revenue?”).
- Take your time. Ask for 1 minute to structure your thoughts (no more than 2 mins. to avoid the interviewer getting bored).
- Draw your framework on paper turning the paper horizontally. THIS IS CRUCIAL!
- ALWAYS draw a problem tree to visualise your framework.
- Think of it as a process: what is the first step? Second, third? (e.g. first you may want to look at the economy to rule out the possibility of the problem being external to the client [e.g. could the reason be a global economic recession?] before zooming in on the sector [e.g. could it be an increase in the number of competitors?] or the company [e.g. could it be a change in the management team?]).
- Structure your framework into two layers.
The first layer is generic and allows you to draw up a basic structure (e.g. since our client is struggling with profitability, and Profit = Revenue – Cost, the first layer would consist of revenue and cost factors).
In the second layer, you want to go into more detail regarding the different factors (in this case factors that define revenue and cost). Make sure to go into deeper details here than just revenue is composed of price and quantity sold. Think deeper: what effects price in the airline industry. How is it for demand? Does it fluctuate? etc. Going deeper shows that you have a better understanding of the issue at hand.
- Use realistic examples (e.g. if you are naming types of costs, give examples for each of them, such as food and drinks in variable costs, specifying that costs are higher for people flying in business class).
- Explain what your assumptions and hypotheses are. McKinsey is hypothesis-driven, which means that consultants often take a hypothesis as a starting point (and reject it if necessary).
- Walk the interviewer through your framework.
- Use specific terminology that is relevant to the case and the industry (e.g. say “airplanes” rather than “products”).
- Don’t call your framework “framework” – just say it’s the way you structure your thoughts.
- Whenever possible or useful, visualise your thoughts/arguments (e.g. graph or process) to help you make your point.
Here is a sample structure. Notice the 2 different layers.
Find a book with basic ready-made frameworks (see Casebooks). Use them as a reference to get an idea of which approaches can work for different problems – this will cover you if you go blank for a moment in the interview.
However, use those frameworks only as a starting point. The best framework is the one YOU develop using your own, unique approach. As you practise more and more, you will begin to combine, merge and adapt ready-made frameworks to make them yours.Make sure your framework follows “MECE”, a grouping principle for separating a set of items into subsets that are mutually exclusive and collectively exhaustive.
2. Qualitative Questions
“What do you think are the main costs of our client?”
- Ask if you can take one minute to think if this helps you give a better answer – make sure you ANSWER the question! If useful, refer back to your original structure.
- Use specific examples and terminology of the sector/client (e.g. not products, but airplanes) and be creative/ think outside the box.
- Avoid just naming a bunch of things without using any structure (e.g. if you have 10 costs in your mind, make sure you group them for example in variable vs. fixed or operational vs. overhead)
- State how they (the costs) relate to the main question of the case.
- Don´t wait for the next question once you have given your answer. Say “What I would do next is…”. This shows the interviewer initiative and leadership. You can use your initial framework as guidance.
3. Numerical Questions
“How can the client increase profits by 2% yearly?”
- Ask if you can take one minute to think if this helps you give a better answer.
- Walk the interviewer through your approach first (e.g. First, I would calculate the number of customers needed. Then, I would use that number to…).
- Walk the interviewer through your calculations (e.g. numbers you plan to multiply). The actual calculation can be done in silence.
- Pay attention to how you ask for additional information. Avoid general (too broad) questions (e.g. what are the costs of our client?) by showing that you are one step ahead (e.g. I assume our client has high fixed costs like plane maintenance, B and C. and variable costs like D, E and F. Do we have an estimation of these amounts?).
- Make calculations on a separate piece of paper.
- Ask if you can round numbers to be faster. Sometimes they say no, but generally it’s not a problem.
- Review the results (say “Let me check if this figure make sense”)
- Making mistakes is ok, BUT not realising a figure is VERY wrong (delta >5%) is a problem.
- If stuck, go back and find the mistake (say “I think I made a mistake. Let me go back to find the problem”).
- If you have serious doubts about your approach/ what you are about to do, ask: “Do you agree with me that this is a good approach..?”.
- Summarise the findings / state how they relate to the main question of the case.
- Don’t wait for the next question once you give the answer. Say “Given these findings, …”. You may even want to put your result in perspective to outlining a key assumption you took again if that makes sense. You can use your initial framework as guidance.
“They only have this graph. What can you tell me about it?”
- Ask if you can take a few secs to think if this helps you give a better answer.
- Read the title and X/Y axes.
- Walk the interviewer through the graph briefly: what is it about? what are the main 2-3 takeaways?
- Clearly state the most relevant takeaways and how they relate to the case. They might be obvious, but you have to mention them!
- Explain how the paragraph relates / helps to answer the main question of the case.
- Ask if you can take a few secs to think if this helps you give a better answer.
- Look the interviewer in the eye.
- Don’t spend time summarising the case. Go straight to the recommendation.
- Give a clear answer to the main question of the case (e.g. The client isn’t increasing profits because…). Even if you aren’t sure your answer is right, you should give one. You can also say “With more information / time I could give more details“.
- Structure your recommendation in the following way:
- State the recommendation first (e.g. I recommend not entering the market)
- State 2-3 facts which back up the recommendation in order of priority
(e.g. …because the market is saturated and competition is very high with low profit margins.)
- State any risks associated with your decision in order of priority if useful
(e.g. However, we have to consider the risk of falling behind our direct competitor if we do not diversify).
- State any next steps you’d recommend the firm to do in order of priority
(e.g. As a next step, I would recommend the client to consider acquiring an existing player in the new market)
Our client can increase profits by 5% yearly by doing 2 things: 1) increase the cheapest fares by an average of $50 (this can improve results immediately), and 2) improve the service for the premium segment (this is a medium-term strategy to improve branding). (recommendation & facts)
It is important to keep in mind 2 risks: the potential entry of new airlines in the next few years (it would make more difficult to increase prices without losing customers) and also the expected increase in the cost of plane parts (it can counterbalance our efforts to increase profits)
Our client needs to do a few things: first, review all the assumptions used, especially the one about expected number of new customers; second, conduct a survey to ensure that customers are not very price sensitive; and third, ….
Being structured, having business intuition and being able to communicate clearly is as important as being accurate with numbers. Make sure you find good partners to practise cases.
How many cases to crack? As many cases as you need to feel comfortable. Some practice 10 cases, some 30 cases. We personally did many cases for practice because it was what helped us perform well. However, this is a very personal thing. Make sure you do each case properly and in depth – it is definitely more useful to go through one practice case in depth than to do 5 practice cases but not go deep into them. Keep in mind that it is about developing the skills that help you crack any case – each one is different. Be careful with overpractising – it can kill your creativity and fresh style (which interviewers recognise immediately and hate)!
During the Interview
- Smile, be cheerful, and humble. Show that you are happy, confident and thankful to be here today.
- Number the papers you are given for calculations and notes. Use a separate paper for each question.
- Separate a couple of pages for numerical calculations, so your notes and numbers are not mixed. They will collect all your notes and use them as part of your assessment.
- Look at the interviewer in the eye and treat him/her like a colleague/boss to whom you need to explain things.
- Avoid monologues! The interview must be interactive; you need to speak WITH the interviewer and make him/her part of the game. If you talk for more than 5 mins without any interaction, take it as a signal that you aren’t engaging enough!
- Be yourself. The interviewer wants to get to know you! Not a stereotypical consultant. So be yourself with all your strengths and weaknesses.
- If you ever get stuck in a case or don’t know how to approach a problem, draw the value chain/production process and approach the problem from the process perspective – this has helped us out of a jam or two.
- Don’t learn frameworks off by heart. That is an immediate out and bores the interviewer.
- Don’t lie. Integrity is a very important value that is vital when working with clients.
- Don’t answer a question if you’re not confident saying it – interviewers smell bullshit very easily.
- Don’t panic if you don’t know how to move on. Be honest about it and ask for help. Think about a different approach (drawing up the value chain/process has helped me a lot in tricky situations).
- Never argue with the interviewer in an unprofessional manner. Always use facts to back up your statement. Remember that interviewers don’t want to trick you – if they point out something, they are trying to help you find a mistake or lead you in a different direction.
- Don’t be afraid to admit your math mistake. Mistakes can happen. Being stubborn is unprofessional.