Consulting 7.3 Dealing with numbers: Guesstimates and brainstorming

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This lesson will help you brainstorm and estimate data, percentages and trends. 

Introduction

The previous lessons were about a wide variety of ways of describing data. This lesson will build on that language and help you use it to discuss and estimate big-picture ideas. 

Recall the previous lessons: 

  • 7.1 Dealing with numbers: The basics:
    • Big numbers 
    • Percentages versus ratios 
  • 7.2 Dealing with numbers: Trends
    • A variety of language for up and down 
    • Making recommendations 
Warm Up

Guesstimates are a common aspect of the hiring process at many consulting firms. Have you done this before? Do you do it now?

Thinking big picture and thinking outside the box both require guessing approximate amounts. 

 

Language

A. Clarifying is important. Look at the following examples: 

Question: How many people in your city do you think are wearing red today?

  • How do you define “red”?
  • Does that include all shades? 
  • Burgundy wouldn't be considered red, would it? 

Now, use similar questions to define the question, "How many people will take public transportation in London on a typical Monday?"

B. When brainstorming, you may want to use vague language. Look at the following words or phrases, discuss anything new with your instructor, and practice using each one:

  1. A back-of-the-envelope calculation 
  2. A ballpark figure/in the ballpark of 
  3. In the neighborhood of 
  4. In the region of
  5. In the vicinity of 
  6. Approximately 
  7. Roughly 

C. After clarifying, typically follow these steps. 

  1. First, break the problem into smaller pieces. You might try to be MECE (mutually exclusive, collectively exhaustive).
  2. Then use estimation and judgment to solve each piece.
  3. Finally, consolidate all of those pieces into a final conclusion.

 A. Clarifying is important. Here is the highlighted language: 

  1. How do you define [part of the question]? 
  2. Does that include [parts of the answer]?
  3. [Subject] wouldn't be [part of the answer], would it/they? 

So, some examples based on the question, "How many people will take public transportation in London on a typical Monday?"

  1. How do you define “take public transportation”? 
  2. Does that include the train, the bus, and anything else?
  3. Taxis wouldn't be public transportation, would they? 

B. There might be some new language here. If you'd like an example question, you can ask: 

  • How many people in your city do you think are wearing red today?

Notice that 2-5 are all phrases of location. Obviously the meaning is the same. Note that only "ballpark" can be used as an adjective. 

  1. A back-of-the-envelope calculation 
    E.g. "Let me just do a back-of-the-envelope calculation here." 
  2. A ballpark figure/in the ballpark of 
    E.g. "Well, the total population is in the ballpark of 4 million people." 
  3. In the neighborhood of 
    E.g. "What percentage of people wear red? I'd guess it's in the neighborhood of 10%." 
  4. In the region of
    E.g. "in the region of ###"
  5. In the vicinity of 
    E.g. "in the vicinity of ###"
  6. Approximately 
    E.g. "So, approximately 400,000 people are wearing red in my city." 
  7. Roughly 
    E.g. "So, roughly 400,000 people are wearing red in my city."

C. This is just getting into consulting territory.

Most of the time, let them do their thing. If anything, they can teach you about this. 

  1. MECE (mutually exclusive, collectively exhaustive) is a very basic framework. You can say it means, "just include everything" or, if you want to use an idiom, "cover your bases."
    • pronounce MECE as /miis/ 
  2. Then use estimation and judgment to solve each piece.
    • This is just a best guess 
  3. Finally, consolidate all of those pieces into a final conclusion.
    • You can use conclusions like those from Speaking Test Strategies: 
      • So, that means...
      • So, to wrap up...
      • So, in the end...

*Note* 
The other way is to use both a top-down and a bottom-up approach. 

  • Bottom-up: the MECE approach of breaking the problem into small pieces.
    You can call this "segmentation".
    • For example, who exactly buys this product? If it's young men who earn a lot, we can segment by age, gender and income.
  • Top-down: First, we think about the macro number and estimate the percentage.
    • For example, what's the number of stores? What percentage of sales is this product?
Practice

Let's practice a few guesstimate questions: 

  1. How many dogs are there in New York City?

  2. How many people in Tokyo will buy iced tea from a vending machine today? 
  3. How much money do people in your country spend on chocolate in an average month?