McKinsey PST 05: Last 13%

This is the fifth theory session of the Problem Solving Test Course. I introduce all the remaining types of questions (client interpretation, formulae, recommendation), explain solution algorithms, and showcase them on a few examples.

[TRANSCRIPT]

This is the fifth theory session of the problem-solving test course which is dedicated to the remaining types of questions which are: and recommendations.

We will learn how to tweak the algorithms that we learned in the previous sessions to apply to the specific question types and then we’ll start some examples.

Recall that there are four major questions types: premise, fact, conclusion and the last 13 percent (or everything else) Today we are talking about this last type.

Last 13 percent

questions include three subtypes: give a recommendation; build the formula and interpret the words of a client.

How do we solve these question types? By applying the same algorithms as before, but with slight modifications.

Recommendation question is solved as a premise question with 2 selection criteria: 1 high efficiency, reaching goal/efficacy with minimal resources and 2 low risk. A formula

question is solved as a fact question, but without calculations.

More specifically: we build the generic equation or a formula, insert the data, simplify the expression and pick our preferred answer option. A client interpretation

question is similar to a premise question with parts of a statement as selection criteria.

The critical selection criteria though is absence of misinterpretation.

We need to check if the options have not changed the meaning of clients or teams words.

Now let’s have a look at examples for each question type.

This is a recommendation question from one of the official problem-solving tests.

You might want to pause the video now and try to solve the question on your own.

Okay let’s follow our usual algorithm.

Step 1 restate the fact. Which of the following courses of action would you recommend to the marketing and promotions department for Kosher Franks in city 2.

So the question immediately arises – what are the goals of marketing and promotion the Department of Kosher Franks.

What do we need to recommend?

So i write down.

what are their goals? Let’s read the text now.

Okay so the problem is that they don’t know the effectiveness of their channels. Which of these channels,

if any, are truly effective at driving sales.

So the question of fact is: the marketing and promotions department does not know which of the methods are effective at driving sales.

Let us read and restate the options now. Option A: spend six months next year doing only mass media and then another six month doing only targeted marketing to determine which is most effective.

So this in effect means that one method only for six months.

Then another method for another six months. Option B suspend all marketing campaigns for six months to determine whether any of the campaigns are significantly contributing to sales.

So this means suspends all marketing campaigns for six months. Option C increases all types of marketing campaigns slowly one by one to determine if there is a significant increase in sales driven a specific campaign. And we noticed that it is similar to Option D actually decrease each type of marketing campaign

slowly one by one to determine if there is a significant decrease in sales caused by removal or a specific campaign.

So for Option C i write down: slight increase one by one; for Option D slight decrease

one by one. And obviously you don’t need to write these things down in real PST.

I’m writing it down right now for instructive purposes only. In a real test

just don’t spend time on it.

Okay now I’m more or less understand the options at hand.

Our next step is fine and use a selection criteria.

Remember that this is a recommendation question,

so have basically two selection criteria: 1 effectiveness or efficiency in reaching the goal and 2 low risk of that recommendation.

Let’s now consider each option one by one and figure out, if the option has high efficiency and low risk. Option A do one campaign for six months and do another campaign for six months.

I think in terms of efficiency this option is questionable, because the campaigns can be interdependent so if it gets rid of mass market media marketing that might affect the efficiency of targeted marketing and vice versa.

So I’m not really sure, I think I will put a questionmark here. In terms of low risk option A

is definitely a cross because this is very risky to stop one marketing campaign for six months.

if in the relative it drives most of the sales.

Option B suspend a marketing campaign for six months. In terms of efficiency

this is a cross because we wont know the efficiency of separate channels. In terms of low risk

again it’s across because you might lose lots of sales if would do that. Option C and D. Slight increase and slight decrease of each marketing campaign one by one. Well in terms of risk

I think that will be OK because the increase and decrease are slight.

So I’m writing down okay in terms of efficiency

that’s a more tricky question I think.

The thing is that right now we have some marketing campaigns,

so our marketing spend on them is not zero.

That means in theory we can decrease to lower some marketing spend on each campaign,

so a decrease is probably possible, whereas an increase might not be possible if you reached the ceiling of the efficiency.

That means everyone in city 2 has seen our ads participated in our trials and got our flyers,

so that might be actually a tricky, so I put a question mark in terms of efficiency. So comparing the options now,

we have one option which has two ticks and one of which has a tick and a question mark.

So the winner here is an option with two ticks which is option D.

OK we have a formulae.

question now. If you wants you might pause the video now and try to solve the question on your own. And here’s how I would solve it.

Which of the following formula accurately calculates the average speed in kilometres per hour?

of a Shinkansen train in a trip from Tokyo to Shin-Osaka? from the text we find out that the route from Tokyo to Shin-Osaka consists of three segments x kilometers of super fast lanes average speed 300 kilometres, y kilometres of fast lanes with average speed of 215 and z kilometres of Mini-shinkansen lines with average speed of 100 kilometres.

The generic formuale will be speed equals distance over time.

The same thing calls for average speed, average speed equals total distance or total time. T o simplify the expression we might want to multiply the numerator and the denominator by 50 and this is what you will get.

So that’s it.

Okay.

The answer is definitely not option A.

Looks like option B definitely not C D.

Okay.

Now finally a client’s interpretation example.

This is an example from official PST.

If you want to practice you can pause the video now and solve the question yourself and then check your progress.

We start with restating and figuring out the fact. Which of the following statements

best describes the CEO’s aims for the McKinsey study.

So we need to understand what the CEO’s aims are.

Let’s go to the text.

This is one statement.

OK the market was undergoing changes.

Our focus will no longer guarantee strong growth.

So these are the three ideas that you expressed in your statement.

So basically the question fact then is: past formulae doesn’t work, there are changes in the market and focus in class A appartment won’t guarantee growth.

Option A the CEO wants to understand changing industry trends and how rent estate need to adapt to ensure continued growth.

So I wirte down understand changes and how to adopt. Option B the CEO wants to know why the previous Success Factors are no longer sufficient for RentEstate to grow like in the past.

So this means why do previous Success Factors don’t work. Option C the CEO wants to understand if McKinsey would recommended that RentEstate provide different quality apartments in other markets.

So I write down recommend different quality apartments in other markets.

Option D the CEO wants to verify that the outlook for RentEstate’s current business growth is poor.

So the menaing is verify poor prospects. Let’s now use selection criteria to figure out which statement best describes CEO’s aims and the selection criteria would be parts of his statement.

One – past formula doesn’t work.

Two – changes in the market. Three – focus on class A apartments won’t guarantee growth. And the fourth selection criteria – would be no misinterpretation of CEO’s ideas. Option A is about understanding change and how to adapt to these changes.

So this reflects that the past formula doesn’t work,

there a change in the market,

yes and that the focus of class A apartments won’t guaranties growth.

Yes because the CEO suggests that he’ll need to change focus of his company and there is no misinterpretation in this option. Option B.

Why previous Success Factors don’t work?

He’s not actually asking why the Success Factors don’t work.

He’s wondering what Success Factors will work in the future.

So this is a misinterpretation of his words even though he indeed talks about past formula and the need for change in focus,

but nothing is said about changes in the market. Option C whether McKinsey would recommend different quality apartments in other markets.

Again the CEO is not asking directly for a recommendation for different apartments in different markets.

His questions more open ended.

What should the company do right?

Again.

This is a misinterpretation of his words because it is too specific.

Even though I think it’s okay with criteria 1 and 3, again nothing said about changes. Option D verified poor prospects.

Again this is a misinterpretation because his goal is not verifying poor prospects.

He wants to understand what he should do next.

Even though option D reflects the first idea that past formulae does work, yet it does reflect ideas 2 and 3. So obviously among these four options, option A with most ticks is our best candidate and the answer is A. Let us synthesize what we’ve learned today.

Last 13 percent

questions include three subtypes: give a recommendation, build the formal and interpret the words of a client.

A recomendation question is solved as a premise question with 2 selection criteria: one high efficiency (means reaching a goal), high effectiveness with minimum resources; and two low risk. A formula calculations olved as a fact question but without calculations. We build the generic equation formula, insert the data and simplify the expression and pick our preferred answer options. A client

interpretation is similar to premise question with the part of a statement and absence of misinterpretation.

Selection criteria.

Well that’s all for today.

If you have any questions feel free to leave comments below.

Thanks for watching.

And until next time.