Does Framework Selection Matter?
In your videos you recommended to start broad. I noticed you always apply the 3CP: consumer, company, competition, products and you mentioned in the videos that many ways lead to the case 'solution' but you prefer to start with the consumers.
Do interviewers actually care about the framework?
I think most interviewers are pretty flexible on which framework is used provided: 1) the framework covers the relevant issues, and 2) leads you to the right conclusion in a reasonably efficient way.
For example, I use the Customers, Competition, Company, Products framework. I don't know anyone else who used this specific framework. BUT, I know lots of people who do cases who regularly cover customers, company operations, and market competition. Nobody I ever interviewed used the same frameworks that I did what I interviewed and it didn't matter to me -- provided the framework is relevant.
My colleagues who interviewed MBA candidates (I mostly interviewed PhD / JD / MD candidates) say this a common problem amongst MBA grads -- they know all the lingo and framework names, but often misapply them. So in that respect, it does matter.
I guess the only time an interviewer would care about a framework selection is if the candidate is force fitting a well known framework like Porter's 5 Forces onto a situation where it clearly wasn't relevant. Or using a supply/demand capacity framework when the issue was more strategic or market driven.
E.g. if the objective is to increase revenues (market share) of a specific division of a company
Typically I would start with coming up with a framework and then say this:
"I would like to analyze this problem by first looking at the external environment, I think we need to understand about the industry and competition first to get some insights whether increasing revenues is achievable and realistic. After this I would like to examine the internal environment by examining the company into detail, the products, the consumers and the financial analysis of the firms operations to come up with some tailor made strategies and finally I willl present the conclusion. Is there any part you would prefer me to analyze first? "
1. External Environment
-Industry (growth, total market size, market share of our client)
-Competition (segmentation (rivals, substitutes, new entrants), Action/Reaction, Comparison with our client)
(if appropiate given the nature of the business/ industry I would potentially also look at Suppliers , Legal (e.g. patents etc), Technology (any new developments etc) , Auditors , Economy (e.g. recession)
2. Internal Operations
-Company (Strategy (why does the client wants it (and does it makes sense, any quantifiiable target, when (timeframe)), Strenghts , Weaknesses)
-Products & Services (which products, advantages/disadvantages of each, distribution channels, marketing )
-Consumers (segmentation, needs, preferences, why buy our product, perception of us compared to competitors
-Financial aspects (profit, costs (here (fixed, variable, sunk), outsourced (fixed, variable, sunk) (costprice *volume used)), revenues (pxv)
(if appropiate: People, Processes, Knowhow: e.g. do we have people, processes, know how to do this)
(if appropiate: Financing )
-Repeat the objective of the case
-Recommend the strategy
-Mention the advantages (e.g. experience with this, costs of only 10m but revenue increase of 100m), disadvantages (risks) of the strategies I recommend
I actually noticed that in some cases when you start with the internal operations first you will get the data much faster and come to a quicker solution.
What is your view on this? Should I start internally or externally first e.g. would an interviewer be annoyed by this general approach? Could you please provide me with some guidance whether this is the correct way to proceed?
I think the internal/external organization of the main issues is fine. For a strategy type case, the internal/external approach would cover the major issues.
I do disagree somewhat with your approach to a conclusion.
A framework is just a way to organize the ANALYSIS and NOT a laundry list of every question that should be asked in every case. You want the approach to by hypothesis driven (VERY important) and if you're doing it right, the "conclusion" becomes somewhat self evident over time.
You definitely do not want to mechanically ask your standard list of 100 questions. I usually use my general business framework to START a case, but very often end up using a different framework entirely if needed. This flexibility is important.
If I start off big picture, but realize we're talking an industry capacity type case, I'll immediately switch to a supply/demand type framework. If It's an M&A case, I'll use my M&A framework.
If I start with customer analysis and realize nothing insightful is emerging from my analysis, I'll quickly switch to one of the other areas (for me typically competitors) -- skipping the rest of the question I might typically ask for customers.
I let the hypothesis and then the data drive the approach.
When you first start doing cases, it's very hard to do this... something I call analytical/framework flexibility. I know when I first started practicing using these frameworks, it took a lot of practice to get comfortable with them.
Once I got comfortable with them, I stopped doing cases so mechanically and would use one, two, or even three frameworks in a case... IF the data forced me to revise my hypothesis and IF a different framework would be more effective in identifying the right issues.
As for starting internally or externally first, I don't think it matters... so long as you don't spend all your time one of those areas especially if its the wrong one.
Also, I don't think an interviewer will penalize you for starting broad / big picture first. If they want you to dive into a customer analysis rather than a competitive analysis, they will give you data the leads you in that direction. (e.g., all competitors market shares have not changed, product mix amongst competitors has not changed, pricing levels have not change, cost structures have not change.... HINT: NOTHING AMONGST THE COMPETITORS HAS NOT CHANGED.... FURTHER HINT: The big insight is NOT in analyze the competitors.)
Now if the interviewer gives you this data and you ignore it several times over, THEN you will get penalized. A good consultant might miss one such data point (or deliberately keep going down the wrong path to get a confirming data point, before switching areas) but not miss two in a row.
In my opinion, if an interviewer gives you three pieces of data in a wrong that indicates you're going down the wrong path and you refuse to revise your approach, then the interview is essentially over.
When I went through the interview process, I probably went down the "wrong path" initially 40 out of 60 times. My hypothesis was it was a revenue problem, but all the data suggested it was not... so I had to switch to cost analysis. Or my hypothesis was that it was an industry-wide problem, but the data suggested only the financial performance of my client was having problems... hence forcing me to revise my hypothesis that it's a company specific problem, and prompting to drop my industry analysis and focus on the internal issues (customers, company operations, etc...)
In fact I know a number of interviewers that do this deliberately. They'll have two different cases with the same opening description (e.g., you client's profits have dropped 20% in one year, what do you do?) and if you go down the revenue path first, they'll give you dead ends to see if you'll realize it's not a revenue problem and switch to costs. If you go down the cost side first, they'll give you a dead end and make it a revenue oriented case problem.
The reason for doing this is not to torture candidates. It's because in a real life engagement you only have so many people and so many weeks to do the work. If you waste resources in an unproductive direction for too long, you'll go over budget, miss a deadline, lose a client, or run your team into the ground.
The interviewer wants to see how you handle these dead ends -- which happens all the time in real consulting projects.