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Title4.3. Case 4 Storage Ex 3 Transcript
TagsPrices Profit (Accounting) Hypothesis Computer Data Storage Small Business
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Page 1

Case 4 – Storage – Ex 3 – Transcript

In this final example, I'll actually be interviewing myself, so hopefully I
will pass this one. And this is intended to be my example of what a best practice
case interview sounds like. And there are a couple things to keep in mind, I'll
sort of write off a laundry list and then I'll mention one thing in particular that I
think is very useful to observe, that would be difficult to observe in the other
cases, the other examples for this particular case.

So a couple of things to notice in this case. One is notice the 80/20
analysis up front, which basically is in the three different divisions, this company
figuring out which of the three we ought to focus our energies on, and so I tackle
that issue as a candidate up front and early, numerically. So I have a specific
number that I'm looking at to determine which areas I'm looking at. And notice
how I structure and set up the three areas I will potentially be looking at, and
why I'll be looking at them, and the order I'll be looking at them, and why I chose
that particular order. So again, thinking out loud and stating very clearly and
explicitly what my intentions are.

Notice as I go through the case and as I get information from the
interviewer – which again happens to be myself – that the new conclusions and
the more refined conclusions that I develop throughout the case is coming from
the data provided by the interviewer. So rather than just having just some idea
that I’m intuitively thinking must be the right idea, and will not let go of, I
instead let the facts and data provided in the case shape my thinking. So this is
an example of being data driven – looking at the data, both quantitatively and
qualitatively, to come up with a new hypothesis or new idea of what I think is
going on, and then structuring what data I need to validate that particular
hypothesis.

And so it's a very important thing. It's not just taking a guess, but
quantifying and specifically stating what data I need to prove that particular
hypothesis is an approach that I've been trying to use throughout this last
particular example.

00:02:07
Other things to notice in addition to being very hypothesis driven,

whenever I switched frameworks or I switched branches in my issue tree, you'll
notice that I typically try to synthesize what I've learned so far, what is and is not
true, what is still left to be determined, and what data I need to determine
whatever hypothesis still remains. So that's an important thing to keep in mind
as well.

So look out for those things, and one thing in particular I wanted to
emphasize is – and I did this – whenever I interview myself, whenever I do a
case interview, I try to take good notes. And one of the things I encourage
everyone to get in the habit of doing is drawing in your notes in terms of issue
trees. And so you'll notice in my handwritten notes that are included with the
transcript of this particular interview, which it is very worthwhile to go dig those
up, so if you happen to be listening on the audio version, you definitely would
benefit enormously by making sure you have the transcript and in particular the
diagrams related to this particular case example with you as you're listening to
the case. And what you'll hopefully find out, notice is how easy it is to visually

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Case 4 – Storage – Ex 3 – Transcript

diagram and visually follow where I am in my logic.
So I'll say, you know, I have three major branches I want to analyze

today. I'm going to start with this branch, because I think it has the highest
potential opportunity; then I'm going to this next branch because it also has high
potential opportunity, but maybe not as much as the first one; and this third one
looks unlikely but I'll leave it in there just in case the other two don't pan out.
And then really in a very structured, very systematic, very easy to see visually
type process, you'll see me sort of go through a branch at a time and trying to
figure out is this an option, does this work, is this a possibility, either yes or no;
and systematically using a process of elimination and eliminating certain
branches of my analysis, and indicating that they are not really very useful or
impactful.

00:03:56
So pay attention to how easy it is to visualize what I'm doing based on

my drawing. At the same time, when you think about your other case examples
that you've heard today and through these recordings, notice that in the cases that
were not rated as very good, how actually very difficult it is to draw out the logic
of what the person is trying to say. They're jumping around a lot, they're very
non-linear, so they're thinking very laterally, very creatively – which is good in
business when you're an owner or CEO, but as a consultant, you have to think
very linearly, and if there is any kind of creativity it has to be within the linear
analysis.

So pay attention to that, I think you'll find that to be very eye opening,
that diagram in process again is something I think that everyone should use. It
does take some practice. And I find if you cannot diagram your intended
analysis, generally it means your intended analysis is not a very good one. A
good analysis by and large you should build a diagram, or frameworks that are
easy to diagram. And again if you can't diagram it, then it probably means you're
thinking about the problem in the wrong way and you might want to take a step
back and think about what approach you're taking, and making sure it's the right
one before you continue.

So with that, I'm just going to go ahead and you can hear me interview
myself on a case that I would consider a best practice case. Let's go ahead and
get started now.

In this particular case on the storage company, this example case is one of how to
do it correctly, so I would rate this an A grade. And I will actually be interviewing
myself on this one because of all the people I gave this particular case to,
unfortunately, nobody got the whole case right. Different people got either the
beginning or the end right, but no one pulled the whole thing together. So what
I’d thought I’d do is interview myself, which is always interesting, and hopefully
you don’t tire of my voice. And so you can see what it sounds like to nail this
particular case. So let me go ahead and get started with them.

Interviewer: This particular company is a storage company based in the middle of the United
States. They have three major businesses, all revolving around storage which is

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Case 4 – Storage – Ex 3 – Transcript

00:37:54
What it also helps you do is when you are being hypothesis driven, there

are parts of the framework or the bullet points within each area of a framework
that really aren't that relevant. And so you're able to ignore those because it takes
time to basically ask questions and get data. And if that data doesn't actually
change the hypothesis, or change your interpretation of whether a hypothesis is
true or not, generally it's not very useful information. And which at McKinsey
we used to call it actionable, you know, don't bother getting some piece of
information if, regardless of the information you get, it's not going to change the
answer. That's what actionable means.

So notice that I use certain elements of the business situation framework
just enough to answer and test whether my hypothesis is correct or not. And by
the way, this is an example of, if you look at the visual diagram of this particular
case, you'll see I have an issue tree, I start off with the business situation
framework, lots of different ways of analyzing the data and I'm sort of borrowing
different pieces I’ve thought to piece together this case. And quite honestly, in
the more advanced cases, this is fairly common, that you need bits and pieces of
what you know and you have to sort of assemble it on a customized basis, to
solve a particular case.

What you will also notice is that I'm actually jumping around from one
topic to another fairly quickly. And unlike some of the other candidates that
have also jumped around, what I'm doing is being hypothesis driven while I'm
jumping around. So I'm basically trying to explain to the interviewer, what I'm
trying to determine, and I need to get these pieces of information to determine
whether my hypothesis is true or not. And so when you do that with a
hypothesis, it's easier for the interviewer to follow as you switch across a variety
of topics, because you have a particular objective in mind, and it's very clear why
you're asking for that information.

Interviewer: The company does not historically have these skills.

And at this moment the client walks in and says I got to jump on a plane, I know you’ve
been working very hard on this analysis, what is your conclusion on the data
storage business specifically and then overall what should I do for my company?

00:39:53

Candidate: Well let me talk about data storage first. I think it’s very much a growth business,
the market is growing at 15 percent per year, and there seems to be ample
opportunity to grow at a rate faster than the market place, particularly in the
Fortune 500 segment. I think that growing to $15 million in sales is doable,
although it’s a little unclear whether it’s doable within twelve months and so that
would certainly be an issue that would be worth analyzing further.

From the company overall I think that the two greatest opportunities to turn
around the profitability of this company within the twelve month time frame, is to

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