Kellogg Book Essay

This book is intended to be a resource for members of the Kellogg School of Management Class of 2005 as they look for summer internships in the consulting industry (as well as for general management internships) for the summer of 2004. The book will also be useful to current first-year students during the fall of 2004 as they look for full-time postKellogg consulting jobs, as well as to the yet-to-be-admitted Kellogg Class of 2006 in their summer and full-time job searches. While we hope this document results in more Kellogg students reaching their employment goals, we are also confident that using this resource to prepare for case interviews will reduce the stress associated with the interviewing process. Additionally, students will find this document to be a useful reference for Kellogg’s core strategy course, MGMT 431, regardless of whether or not they plan to interview for consulting jobs. This introduction will provide an overview of the different sections of the book, recommend how it is to be used, and offer general thoughts of how this fits book in to the bigger picture. To this last point, the book is not intended to be the only resource that Kellogg students will need during the recruiting process for consulting. Rather, it is meant to be a central body of work that provides a complete and thorough introduction to the process, offers its reader a road map of the basic toolkit needed to succeed in these interviews, and also points him or her to other resources that may be helpful. Background on this book and acknowledgements can be found in Appendix A. 2004 Kellogg Consulting Club Case Book 2 Sections This book is divided into six sections, plus five appendices. Section I is this introduction, whose goals are stated above. Section II provides an overview of the case interviewing process and offers general advice on how to perform magnificently during the interviews. (It is adapted primarily from the Fleischmann, Fong, and Marciano article that is alluded to in Appendix A, and has been reorganized into seven sub-sections. ) Section III provides ten sample cases. The first seven of these are meant to be solved in a 30-to-45 minute interview; the first six contain slides. The last three cases are shorter and attempt to emulate the 10-to-15 minute case nterviews that are used by some consulting firms. After all of the practice cases, Section IV discusses fit interviewing, which is a typically smaller, but no less important, part of the overall process. Again, this section is adapted primarily from the earlier work of Fleischmann et. al. Section V provides one-page overviews of each of the eleven consulting firms that are currently planning to in terview Kellogg first-years for jobs during the summer of 2004. Of special interest in this section are the interview formats used by various companies. Students who are interviewing should use this information to customize their case practice and preparation, based on the formats used by the companies that are most of interest to them. Finally, Section VI provides some concluding thoughts and attempts to synthesize the key â€Å"take-away† points of the book. How To Use The Book We would like to conclude this introduction by orienting the reader as to how we envision this book being used. We have mentioned previously that it is not designed to be the only available or necessary resource on the subject. Students who attempt to use it in this way are doing themselves a disservice. Instead, it should be used in tandem with the many other 2004 Kellogg Consulting Club Case Book 3 resources that are available, such as case books from other business schools, Kellogg Career Management Center (CMC) counselors, students at Kellogg who have worked in consulting or are planning to, company representatives and literature, and the rest of the list of resources that is summarized in Appendix B. As for this book, sections I, II, IV, and VI are written to be read straight through (not necessarily in only one sitting). Section III provides practice cases that should be used or studied one at a time. Section V provides thumbnail data on companies that are interviewing at Kellogg, and is meant to be a quick reference for students who are interviewing in those firms. Particular attention should be placed on the various interview formats used by each different company. To maximize results, candidates should study cases that most closely mimic the ones that are given by the firms that they are planning to interview with and/or most want to work for. It is our hope that the combination of this book and of other available resources will maximize the effectiveness of Kellogg students during the winter quarter 2004 interviewing process. If anyone has any questions about the book or the process, they should feel free to directly contact me, either of the Associate Editors, Prof. Marciano, the Kellogg CMC, or any of the 2003-2004 Kellogg Consulting Club co-chairs1. We are all here to help Kellogg first-years get as many summer consulting job offers as possible. Best of luck in the process! Edwin Van Dusen Editor, 2004 Kellogg Consulting Club Case Book Evanston, Illinois December, 2003 1 The co-chairs are Leo Castro, Ami Fadia, Hanna Norfleet, Jason Greenwald, Brian Oxley, and Ojas Wadikvar, all from the Kellogg Class of 2004. 2004 Kellogg Consulting Club Case Book 4 II. How to Ace Case Interviews2 Overview of Section This section provides a complete and comprehensive overview of the case interview process and is probably the single most important section in the book, along with Section III on practice cases. It offers advice on how to best navigate the process, and is divided into seven sub-sections to make the material easier to understand and digest: 1. Sub-section one provides an overview of the case interviewing process. 2. Sub-section two discusses the use of frameworks, and the need to strike a balance between a structured approach and the pitfalls of an overly regimented analysis. 3. Sub-section three walks through a step-by-step illustration of a case interview and is in turn sub-divided into five parts. 4. Sub-section four reviews several common case situations and how to handle them. These include public math, how to get unstuck, and the infamous estimate questions. 5. Sub-section five reviews seven common types of cases that are frequently found in case interviews. 6. Sub-section six goes through some overall tips on how to handle the process. Please do not be put off by the â€Å"laundry list† format of this section, for it contains some important nuggets of advice and wisdom. 7. Finally, sub-section seven provides some concluding thoughts about the process. 2 As mentioned in the Introduction, the text in this section has been primarily adapted from the 2001 Fleischmann, Fong, and Marciano article, although some of the content and wording are new. They, and we, would like to give special thanks to Jason Moss and Chris Riley (both members of the Kellogg Class of 2001) for their invaluable contributions to the initial document, from which this section is primarily adapted. 2004 Kellogg Consulting Club Case Book 5 We have endeavored to distill the most important aspects of the case interview process into this section while keeping it to a manageable length. Obviously, since entire books have been written on this subject, it was not possible for us to include every detail or every opinion on the matter. Students should probably begin by reading this section to get the major points, and then can consult some of the additional resources listed in Appendix B if they feel that they still need to get more depth and detail. Sub-Section One of Seven – Overview of Case Interviews This section will describe the format and structure of case interviews, discuss the various types of cases that one may encounter, and provide practical tips and advice on enhancing one’s chances for success. Fit interviews will be discussed in Section IV later in this book. The consulting interview process may be unlike any series of interviews that a person has been through before Kellogg. While each consulting firm has its own distinct style and method of interviewing, virtually all screen candidates using a combination of â€Å"fit† and â€Å"case† interviews. Understanding and being prepared for both of these types of interviews improves one’s chances of obtaining a position in the field and also reduces the angst associated with the process. The framework is simply a tool to help you structure your response, so do not get too hung up here and waste valuable time that you could be using to advance the discussion. Your initial framework should be a broad sketch, not a detailed blueprint, of how you intend to go about solving the case problem. The details of your analysis should evolve interactively with the interviewer as you progress through the interview. Based on the framework you have developed, you should be able to identify several possible paths towards addressing the case issue. For example, consider a case about Firm X whose profits declined last year. Firm X’s reduced profits could be due to sagging revenues, rising costs, or both. Given that your interview time is limited, it is important to prioritize the issues you will investigate in the case. Investigate the most likely solution to the problem first, followed by the second most likely, and so on. The initial information that you have been given 2004 Kellogg Consulting Club Case Book 14 may steer you towards a particular path. Take cues (subtle or overt) from your interviewer about which paths hold the most merit. For example, if you were told that Firm X recently altered its product mix, you might want to start by examining the prices of its various products. Based on the information you have received, and the framework you have developed, you should formulate an initial hypothesis about the case problem you are evaluating. In the parlance of case interviews, a hypothesis is what you believe to be the central issue of the case, or the solution to it. With regard to Firm X, your initial hypothesis could be that the root cause of its declining profits is that it is selling relatively more low price/low margin products than it had in the past. You may not be given enough information at the onset of a case to develop a reasonable hypothesis from the start. If that happens, progress through your framework, elicit information from the interviewer, and develop a hypothesis as soon as you can. If your initial hypothesis turns out to be wrong, which is often the case, try another one. It is not an automatic â€Å"ding† to not guess the answer correctly on the first try. But it is a likely â€Å"ding† to give up or to lose sight of the main issue, which is to eventually solve the client’s problem. Some firms are more or less receptive to hearing an interviewee, very early on, state a hypothesis for analysis. The key lesson here is to know the firms that you are interviewing with. If you are interviewing with a firm that conducts its cases/engagements with an â€Å"Answer First† approach, then you should probably state a hypothesis early and then relate findings to it as the case progresses: â€Å"this supports my initial hypothesis†¦Ã¢â‚¬  or â€Å"that seems to refute my initial belief, my revised working hypothesis is now†¦Ã¢â‚¬ . Other firms may conduct their work by doing much more detailed data collection before forming a hypothesis. In this case, strive to form a hypothesis, but hold back on stating it until you have collected more data: â€Å"OK, I think I now have enough information to form a hypothesis – based on facts A, B and C, it looks like X might 2004 Kellogg Consulting Club Case Book 15 be happening. Here’s how I would evaluate whether X is truly going on†¦Ã¢â‚¬  With these firms, you may look like you’re jumping to conclusions if your hypothesis isn’t fact-based. Ask members of the firm about their firm’s preference prior to your interview (that’s what all those cocktail receptions are for). Step Three of Five – Articulation After you have developed your analytical framework, prioritized potential solution paths, and formulated your initial hypothesis, the next step is to articulate them to the interviewer. In the case of Firm X, it might go something like this: â€Å"Given that Firm X has experienced a decline in profitability, I am going to begin my evaluation by investigating the various elements that make up profit, namely revenues and costs (framework). Since you mentioned that Firm X has seen its product mix change over the past year, I will begin by analyzing the firm’s revenues, focusing first on pricing (prioritization). It could be that a decline in Firm X’s average price is causing its profits to suffer (hypothesis). If that turns out not to be the case, then I will look at changes in the company’s cost structure. † It is critical in case interviews to demonstrate a structured, logical, and thorough thought process. If you do not verbalize your thought process to the interviewer, (s)he will not be able to evaluate your performance. In addition to talking through your thought process, you may find it beneficial to sketch out your analysis framework on your note pad. Writing down your framework will help you to organize your thoughts, and to regain focus if you get stuck or your analysis becomes very complicated. Just as importantly, an illustrated framework shows the interviewer that you are thinking in a structured manner, and makes it easier for him or her to guide you. Many successful consulting interviewees extol the importance of â€Å"paper management† in case interviews. Interviewers often encourage candidates to take notes, and some even keep 2004 Kellogg Consulting Club Case Book 16 those notes to help remember the path that the interviewee took during his or her case. Whether or not this happens to you, your notepad is an excellent communications medium during your interview. Consultants are generally graphical thinkers – even if they didn’t start this way, they now communicate in slides, charts, and graphs. Speak their language – sketch out your thoughts on your paper, write large, and show the interviewer what you are doing. It is not uncommon for an interviewer to look under an interviewee’s shoulder onto his or her notepad, and comment on it and/or ask questions about its contents. For example, â€Å"I see from your notes that you have come up with five reasons why Firm A should acquire Firm B, and the first one is distribution synergies. What do you mean by that? † Draw out your framework so that the interviewer can see where you’re going, and steer you accordingly. Many interviewees divide their paper into three sections. In the first section, they note facts about the situation (both those given in the initial situation explanation as well as facts uncovered through questions). In section two, analysis is performed, and in section three key findings/conclusions are noted (this section is especially helpful when the candidate is asked to â€Å"sum up† at the close of the case). Note: this does not have to all occur on the same page – feel free to use multiple sheets of paper; the clearer your actions are to the interviewer, the better. Be as graphical and as structured as possible whenever you seek to convey concepts like organizational structure or whenever you do quantitative analysis. Quantitative analysis, in particular, should be laid out in rows and columns â€Å"Excel-style† (ideally with the equation noted above the columns) so that interviewers can follow your calculations. Doing fancy math in your head is great, but it’s more important to illustrate to the interviewer how you are coming to your numbers than to wow them with calculation speed. Your arithmetic may be correct, but your equation may be missing a critical variable. Drawing out your thoughts helps the interviewer 2004 Kellogg Consulting Club Case Book 17 identify this and correct your course. This is far preferable to leaving the interviewer wondering why your number does not match the number that is given in the case solutions. To err is human, but to do so in a way that leaves the interviewer wondering about whether the problem was with your arithmetic or your thought process is likely to prove fatal. Step Four of Five – Analysis: Ask Questions, Gather Information, and Test Hypotheses Having articulated your framework and initial hypothesis, you are ready to move into the analysis phase, which should be the bulk of the interview. In the analysis phase, you should ask questions, synthesize the information provided, and draw conclusions based on the facts. By asking questions and bringing to light new information, you will be able to determine whether your initial hypothesis was valid or invalid. If the data proves your hypothesis to be invalid, systematically follow your framework and progress to the issue with the next highest priority. In addition, based on new information you receive, develop a new hypothesis as soon as possible. For example: â€Å"Based on what I’ve learned so far, it appears as though Firm X’s product mix and revenues are not the most important cause of its declining profitability. So now I’ll move on to investigate the firm’s costs (transition to next branch of the framework). You mentioned that Firm X recently signed a new agreement with its unions, so I’ll start by examining its labor costs. It could be that an unfavorable union contract has inflated the firm’s labor expenses and negatively impacted its profits (new hypothesis). † Asking questions, collecting information, and developing and testing hypotheses is an iterative process, and constitutes a good case interview. As you receive answers to your inquiries, you should be able to hone in on the solution to the problem, and the interviewer may point you in the right direction. Even if all of your hypotheses are ultimately proved invalid, if 2004 Kellogg Consulting Club Case Book 18 you have solicited relevant facts and drawn conclusions in a structured, logical manner, you will have done well. Do not forget that it is important to verbalize your thought process throughout the entire interview. Avoid long periods of silence — the interviewer is attempting to evaluate how you think, and mute introspection precludes this. When doing calculations, tell the interviewer everything that you’re doing. This maximizes the interviewer’s ability to coach you and illustrates your thought process. It takes practice to be able to do this with aplomb, but it is a skill well worth developing. Asking questions is a fundamental part of the process, but remember to do so within the context of your framework, as opposed to firing off questions in no particular order. As you work through the case, it is a good idea to verbally summarize where you are, what you have learned, what the information means in diagnosing the problem, and where you are headed next. Summarizing can also be a useful technique to buy yourself time to think if you become stuck. Take caution not to summarize too frequently, however, because it takes away from the time that you should be using to analyze the case issue. Step Five of Five – Summary and Recommendation When you feel you have covered all the bases in your analysis, or when you have run out of time, end by summarizing the situation and providing a recommendation. If at all possible, always end your interviews with a succinct recommendation. Try not to recap the path of analysis that you have just performed. Instead, draw on key facts to give a clear answer to the central question of the case. For example, â€Å"I do not recommend that the firm enter the market, given that the industry in question is characterized by low barriers to entry, intense rivalry, and significant supplier power† (all of which you discovered through your analysis). 2004 Kellogg Consulting Club Case Book 19 You might also add next steps or additional considerations, as appropriate, to make your analysis more balanced and thorough. For example, â€Å"Based on the discussion that we had today, I would not recommend at this point that the firm enter the market. However, I would also want to know more about the regulatory trends in the market, and about the industry’s distribution channel mix, before making a final decision in a real situation. † Remember, cases are usually complex. If you imply to the interviewer that you have completely addressed the issue in 30 to 45 minutes, you may be perceived as short-sighted or arrogant. It’s much better to state what you’ve found and can reasonably infer, and then identify the areas that you’d like to further penetrate (if given more time) and the assumptions that you’ve made that you think your conclusions are most sensitive to. An important point to keep in mind is that even if you are dead wrong, if you have approached the problem in a logical, structured, and thorough manner, you have done well. You will likely encounter the â€Å"elevator test† at the end of some of your interviews. It typically goes something like this, â€Å"We’re out of time. Sum this up in 30 seconds so I can tell the client our major findings. The purpose of this exercise is to see whether you can identify the most important elements of the case, distill complex issues into concise, easily understandable terms, and maintain your poise when thrust into a stressful situation.