What else? Okay, what else?
A common question that interviewers ask in cases is "What else?" As in, "what could be the causes of profits dropping? Okay, what else? Okay, what else," and on and on ad infinitum.
Casers often look at this as a test of their a) creativity or b) business acumen. And sure, those are part of it. But what they miss is that it's really a test of their ability to structure a problem.
Let's look at an example.
Interviewer: The client's revenue is flat but their profits are declining. What could be the cause of this?
Caser: Well since Π = R - C, if revenue is flat, and profits are declining, costs must be increasing.
I: Great, which costs could it be?
C: (runs all cost line items possible through her head) I guess it could be labor, parts, land, interest, taxes, or something else?
I: Okay, what else?
C: Umm, maintenance cost?
I: Okay, what else?
C: …electricity?
I: Okay, what else?
C: Advertising?
I: Okay, what else?
C: … I don't know, that's all I can think of.
I: Okay, well we did some research and found out that the issue was that transaction costs were skyrocketing.
The caser has gotten herself into an impossible position. The interviewer is never going to stop asking what else, because the caser has gotten into a laundry list situation. There's no structure to her response, so there's no reasonable place for her to stop. It's not clear that she's reached the end of the list, or if the list even has an end to it. So how can this go differently?
Interviewer: The client's revenue is flat but their profits are declining. What could be the cause of this?
Caser: Costs must be increasing. (Note that you don't have to explain very simple concepts to the interviewer - they know that Π = R - C already.)
I: Great, which costs could it be?
C: So I'd break this down into fixed and variable costs. Are either of those specifically decreasing?
I: Not sure where the cost is, can you go a bit deeper?
C: Sure. Let's break down fixed costs physical capital costs, human capital costs, operating costs, and financing costs. For variable costs I would look at input costs, sales costs, transaction costs, transportation costs, and servicing costs. Are any of these areas increasing?
I: Yes, transaction costs are increasing.
Think about this in the context of a tree diagram. The first interviewer is building a list horizontally, at the bottom level of the tree diagram. That means that every new addition is a node on that tree, not attached to anything. The second caser is starting at the top of a tree diagram and working downward. This means that each new addition is refinement of an existing idea. It is generally much easier for people to go deeper than it is to go broader.
Like everything else in casing, these "what else" questions are all about understanding how you think. When in doubt, show the interviewer that your thinking is well structured.