Frameworks Flashcards
What is a framework?
- 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.
The Fundamentals of Frameworks
- Don’t want you to rely on …
- Learn to create …
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.
Two broad types of frameworks
Issue Trees
Conceptual Frameworks
Issue Trees
- 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)
Conceptual Frameworks
- 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)
The anatomy of the 3Cs Framework
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?
Contextualization Questions 5W2H
What, Why, Where, When, Who, How, How much
Frameworks: the 4-step approach
- Define and structure
- Raising key issues
- Create hypotheses
- Create tests for hypotheses
Define
- Critical for …
- Use …
- Aim for …
poorly defined cases
clarifying questions
3-5 well formulated questions
Three types of useful clarifying questions:
- Explain the objective in detail
- Explain the business model
- Give specifics to general statements (#s, definitions, units of measurement etc.)
Guidelines for clarifying questions
- 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!
Two paths to structure a problem:
- Creating an Issue Tree from scratch
- Creating a Conceptual Framework specific to the problem
a. Adapting from a proven framework
b. Creating a framework from scratch
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): …
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?
Aim for these 5 characteristics in your list of key questions for each category:
- Make them problem-specific
- Have the obvious issues
- Have some non-obvious issues
- Be as exhaustive as possible
- Raise the few critical non-obvious issues (advanced)
Two reasons why you need hypotheses:
- 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
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.
- It makes the issue relevant
- It is testable
- It has the potential to drive the case forward
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:
- List of segments with market size (# of seats, $ value) and price sensitivity (price per ticket vs. avg.) [looking for high-price, high.volume segment]
- Survey customers from promising segments to see what are their main frustrations and desires [looking for segment with frustrations and unfilled desires]
- Determine what segment can our company serve better
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?
Create the framework
- Creating the categories ~ 15-30 sec
- 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
- 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)
- No need to create tests for hypotheses, only do after you have done the framework.
Communicate the 4 steps
- Walk them through each category and explain why they are important.
- Go category by category explaining all the key issues.
a. For a few of the key issues, express your underlying hypotheses. - 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!
Ways to make your 3C framework problem-specific:
- Adding NEW, RELEVANT categories (adapting the 3Cs)
- Making your issues PROBLEM-SPECIFIC
Three broad types of categories to add to a 3C framework
Other key decision makers
Direct interfaces (between decision makers)
Structural factors (”rules of the game”)
Key decision makers
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)
- …
Direct interfaces (between decision makers)
- Product
- Unions
- Cartels
- Regulatory agencies
- …
Structural factors (”rules of the game”)
Broader world
- Technology
- Infrastructure
- Environment
- Economy
- Law
- Culture and social beliefs
- …
Making your category options even more specific, e.g. instead of competition:
Direct and indirect competitors
New entrants
[Name of your major competitor]
…
How many categories should you have?
4-5 categories is enough for most cases, depends on cases
The Landscape Technique
Context-driven structures. Take something complex and make an intuitive break-down description. MECE and relevant.
