Case Interview End-to-end Secrets Program Austin Bicycle Case Performance No.1 For more free and detailed materials on Management Consulting Preparation, visit: www.mconsultingprep.com 2014 MConsultingPrep, Inc.
Austin Bicycle Case - Performance No.1 Hi, this is Kim, welcome to another performance in our Case Interview Tips & Techniques program. You are about to hear a very interesting case, as it is very much different from other conventional cases. The topic is unique and the candidate made a lot of interesting pitches. I ended up asking a lot of other follow-ups questions which I did not plan to ask at the first place. At the beginning I planned this case to be in the interviewer-led format, but it turned out that the interview was much more interactive! The candidate is a relatively experienced interviewee. She has done over 20 cases before. So let's get right into it! Good morning! How are you? I am doing very well. How are you? Great! So are you ready to tackle the case? Yes I am So the case today is about the city of Austin, Texas. As you know, Austin is a very bicycle-friendly city with a long bike-riding culture. However, over the last decade, that culture has been going down. Now the city government would like us, McKinsey, to come in and help investigate and cure the problem! Ok. Can I ask a few clarifying questions? Sure! You said that the culture has been going down for the last decade. Does it mean the number of people using bicycle has been reducing? Good question! When I said the culture has been going down, it means there's reduction in term of both how many people ride bikes and how often they ride. And I want to clarify the objective. Do we have any quantitative measurement for our objective of "curing the problem"? 1
Here you see the candidate asks for specific measurement of the objective. Even though this is slightly irrelevant for this particular case as this is a public sector case. It's a good habit: to specifically quantify objectives! Well. The city government conducts an annual survey and collect observation statistic to estimate the "share of bicycles of all traffic" in the city. That's the quantitative measurement. However, the city governor also said that that measurement is not perfect. So the key objective is to save the culture, not to boost the number. The measurement is just a reference point. Do you have any other clarification questions? That should be all I have for now......(silent for 3 seconds)... Ok. So we are helping Austin to solve the declining bicycle problem. To tackle this problem, I would first look at factors that make people decide to ride a bicycle in the past. Then, I would look at which among those factors have change over the last 10 years and what are their impacts on the bicycle culture. Based on those findings, I would draw conclusions and suggestions for the problem. Here you can see the candidate shows a good habit, which is to align with me on the problem and the objectives and to layout upfront the general approach for the case even before I ask for it. Because this habit will appear so often, I actually have a name for it. Let's call it the "map habit". If you think about case interview like a road trip, at some points during the trip you may want to stop for a second checking the map and thinking of 2 things: (1) is what part of the road you have covered and (2) which route you are going to next. Case Interview is very much similar. Even if you are still on the right track, it's a good habit to pause often to explicitly reflect where you have been and where you are going next. 2
Fair approach! Let's drill into it. Based on your business intuition, what are some factors that make Austin people ride bike in the past? Can I have 30 seconds to gather my thoughts? Sure! Ok. I look at the use of bicycle from two perspectives. First, as a mean of transport and second as a leisure activity. As a mean of transport, people choose bicycle over other kinds because it is cheap and pretty fast. As a leisure activity, people may choose to use bicycle for many reasons. I would say mostly because it brings more fun or is healthier in comparison with other means of transport. One very popular question I usually get from candidates is how to think of the "correct" framework. How to know what's the framework on the interviewer's "answer key". Well this is a very interesting example to illustrate my point on this. Usually, there is more than one way to be right. You can use a different framework from what's on the interviewer s mind and as long as it is MECE and makes sense, the interviewer will accept it! For this Austin case, I actually have a different framework on my mind. But because this makes sense, I have to keep listening and see how it goes! By the way, let me point out to you some minor flaws in this framework. It implicitly assumes the people in Austin haven't changed. What if there has been nothing different from both the transportation and the leisure aspect... and it is just that people from other places have moved into Austin which dilutes the bike-riding culture. You can fix this by explicitly making assumptions or incorporating this into the framework. Let's look at each perspective then? For the transportation perspective, what are some hypotheses you can think of that would explain the problem? There are two possible hypotheses here: Either, the cost of using bicycle has increased over the last decade which makes it uneconomical compared to other kinds of transportation. That's the first hypothesis. Or riding bicycle has become slower in key areas compared to that in the past. I think that I will start with the first hypothesis. And the reason is that it is much easier to be tested than the second hypothesis. 3
Here is an example that the candidate doesn't provide a very MECE answer. Given that it is very hard to be MECE in questions that ask for specific items, two things you can do to slightly improve the MECE level: No.1: You can use broader terms or concepts. For example, instead of "fast", you can say "non-financial factors". No.2: If you want to stay in granular level, you can provide more granular insights. For this particular question, two possible ideas are too few. Are there any other hypotheses in the transportation branch? There is not any other on the top of my head. When interviewer asks this type of "anything-else?" question, he or she usually has more ideas that you should be thinking of too. So it's a big no to give up this easily! I can give you a hint here. When people choose transportation options, what are some values affecting their decision? Of course besides speed and affordability you said earlier? (Silent for 8s) Make sure you distinguish between two modes: speaking mode and thinking mode. Avoid silent time in case interviews. If you need time to think, explicitly ask for it! I would say convenience is another important factor. For example, when driving a car, it would be faster, but driver may have a hard time finding a parking lot. 4
In consulting, we don't like one-bullet answer. In this point, even though I do not have any other insights, I have an impression that the answer is incomplete just because of the "one-bullet" answer I get. A better way to deliver this answer is: "So from what we have been discussing so far, there are three items: speed, affordability, and convenience, blah... blah... blah". Even though the ideas are the same, this pitch sounds much more complete! Good point! Is there anything else? No. I don't think so. At least from a transportation perspective. Oh! How about safety? That factor pops up in my mind and I think it's an important factor. So let's recap what was happening in the last minute. The candidate made a series of serious mistakes which could be very easily avoided. First, instead of asking for an official timeout, the candidate tried to continue the case and rushing out some unstructured and incomplete insights. Next, when being prompted to give more insights, the candidate gave up easily instead of taking another try by asking for a timeout and resetting the whole answer. Next, when being pushed harder, the candidate continued the bumpy flow and released another insight in unstructured fashion. And lastly, when being prompted again, the candidate missed the last chance to hit the reset button to structure the whole question and to deliver a concrete and complete answer. Now how do you avoid this bad sequence? No.1: ask for a timeout when you need to! No.2: only speak when you are ready and give an as concrete answer as possible. No.3: apply the spirit of the "map habit" above. No matter how an answer to a single question was spread, always group them together to deliver structured and complete pitch! You can notice here that it is not that the candidate is not insightful. She produced a lot of insights. It's just the techniques isn't there. Now having heard about all of these, I expect you not to make this type of fatal series of mistakes in any of your future interviews. 5
Ok. Let's say, the team investigate based on your proposed approach. They have found some really interesting data which is presented in this exhibit. What are some insights and conclusions can you draw from this? Ok. Can I have a minute to look at the data? Sure!...(about 30 seconds later)... Ok. I would make comment on three factors we just discuss: Cost, Speed and Safety. It is good here that the candidate tries to layout upfront what she going to say. However, if you notice carefully, there was another factor the candidate herself mentioned. That is "convenience". Perhaps the candidate didn't take careful and organized notes, she forgot an insight she said just a moment ago. And because there is not much data about shuttle service, so I will leave it out. In terms of cost, bicycle appears to be the cheapest mean of transport compared to scooter or car. That is true for now and in the past. In term of speed, bicycle ranks second. From 2005 to 2014, any means of transport takes longer time. What is interesting here is that while bicycle and scooter take only about 2-3 minutes longer, car takes about 40% longer. In terms of safety, bicycle ranks best in both years. Overall, bicycle appears to be better over time in any metrics. So I think the conclusion here is that people should use bike more often as a mean of transport. 6
There are several logical flaws I can detect out of the candidate s answer. If you are listening and haven't caught anything, it may be a good idea to reverse the video, re-listen, and look carefully for some logical flaws. Anyway, here are those flaws: No.1: Just because bus wasn't available in 2005 doesn't mean that you can take out bus from the analysis. Bus does make changes in cost ranking. In 2005, bicycle was the cheapest options while in 2014 bus is the cheapest. No.2: For speed, we shouldn't rank these options based on average time per day spent on commuting. In fact, when I see the exhibit, this is one area I would want to clarify very carefully because it can be interpreted in multiple ways. Is car actually slower than bicycle? Or it is because people use car for further commuting needs? No.3: It is not intuitive to compare "minutes" to "percentage" like the candidate did when she said: "bicycle and scooter takes only about 2-3 minutes longer, car takes about 40% longer. Fair enough! Let's move to the leisure perspective. What are some leisurerelated hypotheses you can think of to explain the downward trend of bicycle riding in Austin? Ok. Can I think for a few seconds? Go ahead! I think that there are two possible hypotheses here: The first hypothesis is that there are more entertaining activities now than in the past, which drives people away from driving a bicycle for fun. The second hypothesis is that driving a bicycle itself has become less entertaining than it used to be. For the first branch, what information do you need to test this hypothesis? 7
Obviously, the information has to be drawn from a population who used to ride a bicycle in the past but now no longer do so. The needed information here is how much time they spent for all and each leisure activity and how that has changed. For example, If the information reveals that people spend the same amount of time for leisure activities over the last decade but less time for bicycle and more time for, say, television then the hypothesis is proved. I don't entirely agree. But let's think about this question. How do you get this kind of information? Let me think for a few seconds. Ok...(about 20 seconds later) I will use survey method. Specifically, I would ask a sample of, say 300 people, these questions (1) How much time did you use to spend on leisure activities? (2) How much time did you use to spend on riding a bicycle for fun? (3) How much time do you spend on leisure activities now? (4) How much time do you spend on riding a bicycle now, for fun? This questionnaire does not specifically test the first branch hypothesis (more entertaining activities). The survey will tell you that yes or no the Austin people ride bike less for leisure activities. But what it doesn't tell is: it is really caused by more entertaining activities or just because riding bike has becoming less entertaining. Does this survey really test just the first branch? Or it actually tests the bigger hypothesis? 8
Yeah... You're right. This survey only gives us the information about how differently people spend time on biking and leisure activities without telling us the reasons I will try and figure out other ways (about 60 seconds later) I think I would fix this questionnaire by adding a rating question. Specifically: how would you rate your biking experience now compared to the past and the options range from "much more entertaining" to "much less entertaining". This is actually very good because this questionnaire will also help us address the second branch. So this new question will actually help test the second branch (riding bike less entertaining). Now I still don't think the overall questionnaire can prove or disprove the first branch. Let's say... after conducting the survey, you have the amount of time on leisure activities stay constant, the amount of time on riding bicycle declining, and people do think that riding is becoming less entertaining. Can this result prove or disprove the first branch? Mm No it cannot. If the data reveals that people spend a constant amount of leisure activities, the same level of entertainment, but less time for bike as leisure then the first hypothesis is proven. But anyway, I agree will you that it is not an ultimate approach. A good habit worth noting here. Even when being stuck, the candidate still tries to be insightful, and really be a thought collaborator with the interviewer. You want to show that as well in your interviews. Fair enough, I think we should focus our effort on the second branch. Because even if the first branch can be proved or disproved, there's not much we can do about it. So for the second branch, can we go down 1 level deeper? What are some factors that may cause bicycle riding less entertaining? 9
I think there are two types of factors here. Either it is about riders themselves or external factors that affect the level of entertainment. For the first type, one example is riders becoming older, and they get bored of riding a bike. Example for the second type could be the trail becoming less entertaining or there are fewer trails near citizens. There is a good item I want to point out here. You may take this for granted, but the candidate has just provides a very MECE answer. A lot of times, I hear people actually go straight into next level details without doing this. For example, many candidates would say: "There were changes in the city's bike trail system, or people are getting older". This is not MECE and it should be avoided in case interviews. Let's drill down into the external factors. What specifically could be the reasons here? I think it has to do with either the biking environment or the biking equipment. As far as I know, when people bike for leisure, they mostly do so on the trail. With that in my mind, I think there are two factors related to the trail: (1) the distance from home to the trail, (2) How the trail is designed, is it beautiful? Is it safe? Is it entertaining? For biking equipment, well, I think the most important equipment is the bike. There are three factors here: (1) Is it easy to get a suitable bike? (2) Is it easy to use a bike or "learn to use" a bike, for leisure of course and (3) is it easy to maintain a bike for routine use? This answer is good in the sense that it's very structured. However, if I have to correct one thing, I would not use the word "biking environment" for the first group. "Environment" is a big word and it comprehends some factors in the second group too. So what word would you use for this? Or do you have another method of structure this answer? Please comment below! 10
Ok. The team has done a research based on this approach. One of the important pieces of data is the emergence of the University of Texas, Austin. Most students are from outside of Austin, who don't traditionally ride bike. Their most preferred mean of transport is scooter. And since most of their scooters are less than 50cc, they are allowed to be in the bicycle lanes and trails. They have negatively impacted the bicycle environment. What are some solutions you can think of to effectively solve this bottle-neck while still compromising the benefits of the two communities: bicycle and scooter rider? Ok. Please let me think for a few seconds. Ok. Ok. In the short run, our aim here is to impair the negative impact of scooter on the biking environment. There are two possible solutions. First, we should limit the time that scooter can run on trails. When most people are going to bike for fun, say from 5 am to 8 am, scooters are not allowed. Second, there must be speed limit for the scooter when they run on the trail along with the bikes to make sure that biker riders feel secure. In the long run, I think the best solution is rerouting either the scooter or the trail or providing other means of transport for those students. Generally as an interviewer, I like this answer as it is very structured and insightful. Breaking solutions in short-term and long-term solution is a plus point. There are just a few more insights I can add into this: (1): Further subsidy bus and impose tax on scooter-related activities like scooter sales tax, etc. (2): Work with the University of Texas, Austin to conduct campaigns on popularizing the use of bicycle for students, especially those from outside of Austin. Good! Let's say now you meet the city governor in an elevator. In 30 seconds, what would you tell him about the city bike problem? Good morning Sir! Our team is looking at your problem and we have made interesting progress. We found out that the citizen ride a bike much less because riding a bike is not fun as it used to be. The root-cause for this is the decrease in quality of biking trail in the city. We even have had confirmed how 11
and why the quality is decreasing and we are looking at ways to improve and turn over the situation. Our team would be glad to provide you with further solutions. In synthesizing question at the end of every case, usually you don't have a lot of time. So, choosing what NOT to say is very important. You should spend the majority of your time on those action-oriented insights. So just briefly explain the root-cause, no need to describe your path there, then tell the CEO, or in this case the governor, what he or she will need to do! Well that is it for this case. Thank you very much for your time today! Have a great day! You too! Thank you for the time. You have a great day! So I hope this has been an interesting and educational illustration to you. The candidate did fairly well in the beginning and at the end of the case. However, those struggles in the middle of the case would prevent me to pass this candidate to the next round if this were an actual interview. Have a great one and see you soon in the next case! 12