Issue Tree Structuring

The Issue Tree is a valuable tool for analyzing the causes of issues during a case interview. When faced with a complex issue, the Issue Tree helps you break it down into its components. By focusing on the most urgent aspects and employing a hypothesis-driven approach, you can progress more quickly—a skill highly valued in consulting. 🚀🔎 In this article, you'll learn how to effectively use the Issue Tree, understand the differences between problem-based and solution-based trees, and how to leverage this technique to excel in your case interviews. Problem-Based Tree vs. Solution-Based TreeIn case interviews, two main types of Issue Trees are utilized:Problem-Based Tree: This helps you identify and understand the root causes of the issue and why it occurred in the first place.Solution-Based Tree: This is used to develop recommendations and clarify how the issue can be resolved.Ensure that the issues are MECE (mutually exclusive, collectively exhaustive). Otherwise, it will be challenging to address each area effectively. Use a hypothesis-driven approach to tackle the most significant issues first (see Pareto Principle).In consulting, the preferred approach is "answer-first" or "results-first." This involves starting with the main solution or conclusion and then working out the rationale. This is closely related to the Pyramid Principle.💡 Prep Tip: Practice these and other essential frameworks with our drills! Issue Tree as a Foundation for Consulting ProjectsAt the start of a new project, your team typically creates an Issue Tree. Once you agree on all relevant sub-issues, you gain an overview and focus on the key questions based on your hypotheses (answer-first style). Since all branches of the Issue Tree are MECE, the project manager can efficiently distribute the workload across the team. Each branch leads to a separate workflow that can be worked on independently, avoiding unnecessary interfaces that could cause inefficiencies. This explains why a small consulting team can achieve a lot in a short time.Once the causes of an issue are identified, the team uses a solution-based tree to determine how the issue can be resolved. Example of an Issue Tree in a Case InterviewImagine you need to calculate how many people can stand simultaneously on an airport runway during a case interview.Step 1: Problem Analysis with the Top-Down ApproachIn the top-down approach, you start by structuring the main problem or the case question and systematically break it down into its individual components. The goal is to identify all relevant areas or factors that influence the problem.First, you consider the overarching components (e.g., the total area of the runway) and then break these down into more specific details (e.g., the width and length of the runway).Step 2: Solution Development with the Bottom-Up ApproachIn the bottom-up approach, you focus on concrete numbers and data at the most detailed level of the problem and work your way up. You estimate necessary values, such as the width and length of the runway, and use these in your calculations to solve the main problem.As you can see, the top-down approach allows you to systematically break down the main problem into its components and identify all relevant influencing factors. The bottom-up approach then helps to develop a well-founded solution to the main problem by analyzing specific numbers and data.💡 In our case library, you'll find over 200 cases on various topics that will help you practice creating an Issue Tree! Check them out. Key Takeaways on Issue Trees in Case InterviewsThe Issue Tree is a central tool for structuring your case and developing hypotheses.Differentiate between problem-based and solution-based Issue Trees.Use hypotheses to quickly identify the root causes of the issue.Ensure Issue Trees are MECE to avoid inefficient dependencies between branches.👉 Prep Tip: Practice your cases with peers and arrange meet-ups on our meeting board.

In the field of consulting, the hypothesis plays a central role in the analysis of problems, the development of solutions and the derivation of strategic recommendations. A hypothesis is a preliminary assumption or conjecture made on the basis of existing information and data. It serves as a starting point for investigations to gain empirically verifiable knowledge. This article explores the meaning, purpose, and application of hypotheses in the consulting context.The Importance of a Hypothesis in ConsultingIn the world of consulting, where complex business issues must be solved, the hypothesis is a fundamental component in developing structured approaches to solving them. A hypothesis allows consultants to sort through their thoughts and focus specifically on certain aspects of an issue. It also serves as a guideline to direct and guide the research process as data are collected and analyzed.The hypothesis also functions as an "educated guess" or informed conjecture based on existing knowledge, experience, and market insights. It helps structure the advisory process and guide efforts in the right direction.Components of a HypothesisA well-formulated hypothesis consists of several essential components:Independent and Dependent Variables: The hypothesis defines the relationship between an independent (manipulated) variable and a dependent (measured) variable. The independent variable is the one that is purposefully changed in an experiment, while the dependent variable is the response that is measured.Prediction: The hypothesis contains a clear prediction about how the change in the independent variable will affect the dependent variable. This prediction is what is tested in the experiment.Testability: A hypothesis must be testable, meaning that it can be tested by experimental investigation. It should be formulated in such a way that its correctness or incorrectness can be determined from observations and data.Clear Formulation: the hypothesis should be precise and clearly formulated to avoid misunderstandings. Clear wording also facilitates communication of the results.The Purpose of a Hypothesis in ConsultingFormulating a hypothesis serves several important purposes in consulting:Directional Thinking: A hypothesis forces consultants to think about possible causes and relationships that may have led to a problem. It promotes structured thinking and prevents aimless poking around in problem-solving.Focused Analysis: Hypotheses help focus the investigation on relevant data and information. This prevents an overload of unimportant details and allows for an in-depth analysis of the aspects that are most likely to have an impact.Measurable Results: A clear hypothesis makes it possible to establish concrete criteria for the success or failure of an investigation. This creates a basis for evaluating the effectiveness of proposed solutions.Structured Communication: A precisely formulated hypothesis facilitates communication between consultants and clients. It enables the planned steps, methods and expected results to be communicated in an understandable way.The Application of Hypotheses in ConsultingThe use of hypotheses in consulting spans several key phases of the consulting process and contributes significantly to structuring and finding solutions. In the problem identification phase, hypotheses help identify potential causes and influencing factors of a business problem by serving as a starting point for in-depth investigations.During data collection and analysis, hypotheses act as a guide to extract targeted relevant information, enabling more precise and focused data analysis.In the solution development phase, hypotheses play an important role in the evaluation and selection of different solution approaches. By serving as criteria to assess the probability of success of different options, they contribute to the development of the most promising solutions. Finally, hypotheses enable strategic recommendations to be derived. They provide a sound basis for formulating persuasive arguments in favor of particular strategies and for convincing clients of the soundness of proposed actions.Overall, the application of hypotheses functions as a systematic approach in consulting to bring structure to complex issues, perform targeted analyses, and ultimately derive informed decisions. This approach promotes the efficiency and effectiveness of the consulting process and ensures that the solutions developed are based on sound and validated assumptions.ConclusionThe hypothesis is an essential tool in consulting that helps structure complex problems, conduct targeted analyses, and derive informed solutions. It promotes a structured and focused approach and plays a crucial role in communicating ideas and recommendations to clients. In an industry based on informed decision-making, hypothesis is a powerful tool to influence the success of consulting projects.