Question:
Thank you for all the great material you provide. It really helps me understand what a case interview is and how to tackle a case. I am still far from mastering the frameworks, but I am getting more and more confident.
I have specific questions that I found during the study process and look forward to hearing your answers.
I had a first round interview with my dream company, during which I got a 45-minute case with a operations spin. I followed the main rules you mentioned and thought out loud. However, I wasn’t sure at all if there was a framework I could start with.
Can you please give some suggestions on this specific case and generally operations ones?
The case was that our client is a major discounted retailer. They have been experiencing high shrinkage rate (theft rate) at about 3.5%, which is higher than the industry. 60% of the shrinkage is internal and 40% is external.
How would you go about finding out what’s the problem and how would you suggest to solve it?
I just downloaded Look over My shoulder® and am listening to it all the time to prepare for a final round interview coming up in a few days.
Thank you again!
My Reply:
The case in question does not fit a standard framework, but that doesn’t mean it can’t be structured. A framework or a structure is nothing more than an organized way of approaching the problem.
Basically what you want to do in this case is create a customized “Issue Tree” (In Look Over My Shoulder®, refer to the 3 sample issue tree diagrams for Cases 2, 4 and 5 to see what I’m referring to).
In fact, based on how the case is presented, I’d say you’ve already been given the first piece of the issue tree. The top of the tree is 3.5% shrinkage. This breaks out into 60% internal and 40% external.
You would want to break down internal into its component parts (such as by location, by time of day, by retail floor vs. warehouse) and same with external.
You’d also would want to see if these amounts of % have changed over time. If they have, figure out which component changed the most.
As I mention repeatedly in Look Over My Shoulder®, a very common but problematic mistake many people make is they try to “solve” the case immediately from the start.
There are several examples of candidates making this mistake in the LOMS recordings and transcripts as well as several instances of my voice over commentary pointing out the mistake and how the candidate could have avoided it.
In most cases, the temptation to try to solve the case from the start is wrong.
Here’s how you can tell if a candidate is making this mistake.
They start saying things like…
“Well, maybe the client could install more security cameras to stop the shrinkage.”
“Oh, they already have security cameras.”
“Maybe they could hire some more security guards.”
“Oh, they already have security guards.”
Basically each proposed solution is trying to solve a problem that may not exist. The reason the candidate is doing this is because the candidate has no idea what’s causing the actual problem.
Or stated differently, the 3.5% shrinkage is not the problem. It is merely a symptom of the problem.
Before you propose solutions, you should already know precisely what the underlying problem is. And when you present the solution, you should already know in advance it is going to work.
To start this process, you begin by isolating the problem. In other words for internal shrinkage, what is driving that number to be so high?
The problem with trying to solve a case from the start is you don’t yet know what the problem is. And as a result, candidates will often propose these amazing solutions to the wrong problem.
Once you’ve broken down the issue tree into its component parts, you should be able to isolate which causes contribute to the majority of the shrinkage problem.
Then it’s a matter of using common sense or intuition to figure out how to address that specific cause of shrinkage — knowing if you can fix it, it has a big impact on the overall shrinkage number.
For more case interview preparation resources, review my free video series on Case Interview Secrets .