Frameworks

Question 1

What is a framework?

Answer 1

• Overarching plan of the questions that you need to answer and the steps that you need to take to help your client make a decision.
• Needs to be a customized plan.

Question 2

The Fundamentals of Frameworks
- Don’t want you to rely on …
- Learn to create …

Answer 2

memorized frameworks that rarely works. Instead we show you have to master the principles and fundamentals so you can show your interviewer that you can think for yourself in a systematic way to solve your problems.

a philosophy to build your own frameworks that can be translated into a systematic process to structure any case.

Question 3

Two broad types of frameworks

Answer 3

Issue Trees
Conceptual Frameworks

Question 4

Issue Trees

Answer 4

• E.g. profitability issue tree
• Break the problem into parts
• Highly analytical
• Easier to be fully MECE
• Allow for isolating the problem

→ Use for simple problems (e.g. short-term fixing)

Question 5

Conceptual Frameworks

Answer 5

• E.g. the 3Cs (Customer, Competition, Company)
• Look at a problem from different angles
• Highly contextual
• Try to be as MECE as possible
• Allow for a systematic view of the problem

→ Use for complex problems (e.g. long-term strategy)

Question 6

The anatomy of the 3Cs Framework

Answer 6

Customers (demand side)
- How do different customers behave, and what do the value, need or desire?

Competition (supply side)
- What can each competitor do given strengths, weaknesses and resources?

Company (supply side)
- What can YOU offer your customers given your own strengths, weaknesses and resources?

Question 7

Contextualization Questions 5W2H

Answer 7

What, Why, Where, When, Who, How, How much

Question 8

Frameworks: the 4-step approach

Answer 8

1. Define and structure
2. Raising key issues
3. Create hypotheses
4. Create tests for hypotheses

Question 9

Define
- Critical for …
- Use …
- Aim for …

Answer 9

poorly defined cases
clarifying questions
3-5 well formulated questions

Question 10

Three types of useful clarifying questions:

Answer 10

• Explain the objective in detail
• Explain the business model
• Give specifics to general statements (#s, definitions, units of measurement etc.)

Question 11

Guidelines for clarifying questions

Answer 11

• Density matters! Each question you ask must add a lot of value when it comes to understanding the situation.
• Explicitly say you’re going to clarify before you structure the case
  
  • You DON’T want to solve the problem yet!

Question 12

Two paths to structure a problem:

Answer 12

1. Creating an Issue Tree from scratch
2. Creating a Conceptual Framework specific to the problem
   a. Adapting from a proven framework
   b. Creating a framework from scratch

Question 13

Raising key issues

Ask … questions using the … in a … way
- Specific for the …, relevant to the … (not … questions)

E.g. for airline strategy
Instead of (generic): Who are my customers and how much do they buy?

→ Ask (specific): …

Answer 13

Ask insightful questions using the 5W2H in a PROBLEM-SPECIFIC way
- Specific for the case, relevant to the industry (not generic questions)

E.g. for airline strategy
Instead of (generic): Who are my customers and how much do they buy?

→ Ask (specific)
What are the key segments within Business and Leisure travel, and how large is each item in terms of # of seats sold and revenues?

Question 14

Aim for these 5 characteristics in your list of key questions for each category:

Answer 14

1. Make them problem-specific
2. Have the obvious issues
3. Have some non-obvious issues
4. Be as exhaustive as possible
5. Raise the few critical non-obvious issues (advanced)

Question 15

Two reasons why you need hypotheses:

Answer 15

• Each question you ask must have a purpose, focus on what’s move the needle
• It helps you get more specific into a question so you can answer it ina testable, data-driven way

Question 16

Example from airline strategy case

• Issue: What are the key segments within Business and Leisure travel, and how large is each in terms of # of seats sold and revenues?
• Hypo:

Answer 16

• There must be at least one highly profitable segment that is poorly served by us and our competitors that we can target from now on.
  1. It makes the issue relevant
  2. It is testable
  3. It has the potential to drive the case forward

Question 17

Create tests for hypotheses

Example from airline strategy case

• Issue: What are the key segments within Business and Leisure travel, and how large is each in terms of # of seats sold and revenues?
• Hypo: There must be at least one highly profitable segment that is poorly served by us and our competitors that we can target from now on.

→ Hypotheses Testing Plan:

Answer 17

1. List of segments with market size (# of seats, $ value) and price sensitivity (price per ticket vs. avg.) [looking for high-price, high.volume segment]
2. Survey customers from promising segments to see what are their main frustrations and desires [looking for segment with frustrations and unfilled desires]
3. Determine what segment can our company serve better

Question 18

How will I be able to create a framework, raise key issues, create hypotheses and come up with tests for hypotheses in 2-3 minutes?

Answer 18

Create the framework

1. Creating the categories ~ 15-30 sec
2. Think about the key issues for each category and write them down (don’t need to write them in down in whole phrases) ~ 1-2 min
3. Think about testable hypotheses (don’t need to write these down) → no extra time (think about them at the same time as you think about the key issues)
4. No need to create tests for hypotheses, only do after you have done the framework.

Question 19

Communicate the 4 steps

Answer 19

1. Walk them through each category and explain why they are important.
2. Go category by category explaining all the key issues.
   a. For a few of the key issues, express your underlying hypotheses.
3. After you present your framework:
   a. Interviewer-led: Tests for hypotheses comes up as follow-up questions tp your framework.
   b. Candidate-led: Tests for hypotheses comes up as your immediate next step after presenting the framework.→ Practice hypotheses-testing!

Question 20

Ways to make your 3C framework problem-specific:

Answer 20

• Adding NEW, RELEVANT categories (adapting the 3Cs)
• Making your issues PROBLEM-SPECIFIC

Question 21

Three broad types of categories to add to a 3C framework

Answer 21

Other key decision makers
Direct interfaces (between decision makers)
Structural factors (”rules of the game”)

Question 22

Key decision makers

Answer 22

Supply side

• Company
• Competitor
• Suppliers (e.g. automotive industry)
• Employees (e.g. consulting)
• Investors (e.g. start-ups)
• Academia (e.g. bio-tech firms)
• …

Demand side

• Customers
• Customer’s customer (e.g. doctors, teachers)
• …

Link between supply side and demand side

• Distribution channels
• Government (e.g. pharma industry and military)
• …

Question 23

Direct interfaces (between decision makers)

Answer 23

• Product
• Unions
• Cartels
• Regulatory agencies
• …

Question 24

Structural factors (”rules of the game”)

Answer 24

Broader world

• Technology
• Infrastructure
• Environment
• Economy
• Law
• Culture and social beliefs
• …

Question 25

Making your category options even more specific, e.g. instead of competition:

Answer 25

Direct and indirect competitors
New entrants
[Name of your major competitor]
…

Question 26

How many categories should you have?

Answer 26

4-5 categories is enough for most cases, depends on cases

Question 27

The Landscape Technique

Answer 27

Context-driven structures. Take something complex and make an intuitive break-down description. MECE and relevant.