Key Learnings + Bullet Points Summary
Ethan M. Rasiel, an ex-McKinsey associate, tells us the story of how ‘the firm’ approaches its consulting practices and provides additional insight on the day-to-day life of a management consultant.
Key Lesson #1. McKinsey’s three-pillar problem-solving process
Pillar #1: Facts
Even though saying that ‘facts are everything’ seems dull, boring and well-known, it’s crucial for consultants, mainly for two reasons:
- They replace instinct. Consultants often not only are generalists, but they also tend to jump from engagement to engagement. While an executive with 10 years of experience in a particular branch of the company might have developed a sound ‘gut feeling’ that helps guide their decisions, consultants can’t rely on that; they have to go for facts.
- They build credibility. After all, we are just a group of external people who might not be subject matter experts in the area. Many executives might even perceive us as a threat. Facts are irrefutable and in the long run, build us the credibility of people who know what they are doing, rather than freshly graduated MBA’s trying to be smart-asses
Pillar #2: Structure: be MECE
Ideas and issues should be MECE: Mutually Exclusive and Collectively Exhaustive.
Mutually Exclusive means that each factor contributing to a problem is one separate and distinct issue, without any overlap; overlap represents muddled thinking and leads to confusion.
Collectively Exhaustive means we cover the entire problem/market/population.
Pillar #3: Initial hypothesis
Always start with the initial hypothesis (IH). We come up with IH by doing just enough research to state one. Then, we plan our engagement in a way to prove/disprove the initial hypothesis.
If the hypothesis was correct, it’ll be part of our final recommendation. If it turns out we were wrong — disproving the IH will give us enough insight to plan and test a more accurate hypothesis.
We come up with IH by:
- Breaking down the problem into components.
- Finding key drivers for each component.
- Making actionable recommendations for each key driver.
The initial hypothesis is not always correct. Take an occasional step back, look at data you have researched and ask yourself, ‘how does it fit the initial hypothesis’? If it doesn’t, how might we change the hypothesis? Do reality checks, so you don’t chase down blind alleys.
Key Lesson #2: Step back and look at a big picture
When tackling a challenging problem, it’s easy to focus on the day-to-day grind, jumping from research to analysis to study further. It’s easy to lose sight of the goal and just gather more facts to gather facts.
To avoid this trap, we should build a habit of occasionally pausing, looking at the big picture and the engagement goal, and asking ourselves:
- ‘How does what we are currently doing contribute to the big picture?’
- ‘How does it solve the problem or advance our thinking?’
- ‘It is the most important thing we should be doing right now?’
These questions often help us self-correct and refocus on what really matters.
Key Lesson #3: Align by creating fact packs
Fact packs are a powerful alignment tool. As the name suggests, it’s a collection of relevant facts about an issue.
Preparing fact packs allows every discussion participant to be on the same page. It’s incredible how many wasted meeting hours there are just because different people in the room know other pieces of the puzzle.
Every good brainstorming should start with a fact pack, too. At least a day before a problem-solving question, prepare and distribute the newest fact pack to participants, so we don’t waste precious time during the session to exchange information and will be able to come up with more informed solutions.
Key Lesson #4: Know when to stop — don’t boil the ocean
With the Internet at our disposal, massive amounts of information are available to us on the web. Yet, it doesn’t mean we should use it all.
An important principle is to gather just enough facts to make a point or prove/disprove a hypothesis, and no more.
It’s tempting to ‘analyse everything’ — perhaps we’ve missed something? Maybe a breakthrough is just around the corner? One more report.. one more chart… don’t.
Know your priorities. There’s a limited amount of time we have. We must always focus on actions that have, in the long run, the highest return on investment for our time.
It’s often better to do ‘just enough’ research and analysis of 5 key drivers than overly excessive analysis on 2 key drivers. It’s like boiling the ocean to get a handful of salt.
- Find the key drivers — many factors affect your business; focus on the most important ones. Select up to 3 key drivers; ignore the rest.
- Pluck the low-hanging fruit. If you discover something in the middle of the problem-solving process, don’t hoard them for a final presentation — share them right away. These quick wins build momentum, helps the client see the value you deliver and boosts morale. In the end, they’ll make your job easier.
- Document what you’ve learned every day, whether creating a new chart every day or writing down the top 3 learnings.
- Always ask, ‘Why is something done this way? Is this the best way it can be done?’. Be fundamentally sceptical about everything.
- The fact the client says they have an ‘X’ problem doesn’t mean ‘X’ is really the problem. The only way to figure out if the problem you have been given is the real problem is to dig deeper. Get facts. Ask questions. Poke around.
- Keep your eyes peeled for examples of the 80/20 rule; it’s almost everywhere.
- Always prewire everything to stakeholders before presenting them something. The presentation should be more of an artistic performance than bringing a breakthrough.
- Never accept ‘I have no idea’ as an answer. It usually means either ‘I’m too busy to think about it’ or ‘I don’t think I’m smart enough to know’ or ‘I am too lazy’. Ask a few pointed questions and drill deeper — you’ll be amazed how much people know.
- Don’t reinvent the wheel. There’s a high chance someone already had a similar problem — look for that person or any case study.
- One message per chart/visual. If you need more than one, create two visuals, even if they are almost identical.
- Know your solution so thoroughly that you can explain it clearly and precisely to your client in 30 seconds.
- Start with an annual report — it will get us up to speed quickly.
- Look for outliers; they give interesting insights.
- Look for best practices in the industry.
- When preparing for an interview, always know what are the 3 most important things you want to learn.
- While you might be convinced you already ‘know’ the answer, if the question is essential, ask it anyway. There might be more than one answer.
- Start with general questions and move to more specific and personal ones later. Don’t start an interview with “what are your responsibilities” — people might feel threatened.
- If you want people to say more than they have, or if you think they left out something — just say nothing and let the silence hang. The chance is they will start talking just to fill the gap.
- Have the interviewee’s boss set up the meeting. They’ll be less likely to be a jerk.
- Paraphrase, paraphrase, paraphrase. It shows you listen and confirms understanding.
- Adopt the Columbo tactic.
- Always write a thank-you note. It’s polite, and professional, and could pay back in unexpected ways.