The Mckinsey Way – Using the Techniques of the World’s Top Strategic Consultants
Author: Ethan Rasiel
Mckinsey is generally regarded as the world’s most successful strategic consultant firm and the #1 hiring aspiration for top school MBAs. People marvel at how young consultants deep dive into real world complex business problems and get ready to give actional recommendations to management teams within few months. The McKinsey way, written by Ethan M. Rasiel (former McKinsey consultant) conveys to outsiders some ideas of what it’s like to think like a Mckinsey consultant and work at McKinsey.
The review below is submitted by Arpita Phatak of Welingkar Business School.
The book has been divided into five parts:
Part One: The McKinsey way of thinking about Business Problems
Building the solution
Solutions should be fact based, rigidly structured and Hypothesis driven.
Facts are the bricks with which you will lay a path to your solution and build pillars to support it. While analyzing a problem, fact gathering is done rigorously and exhaustively as a first step. Use MECE (‘Mutually Exclusive, Collectively Exhaustive’):
- Make a list of all the issues which are in the problem that you are required to solve. Make the issues separate and distinct from each other that are mutually exclusive.
- Make sure that you have thought of every possible thing that can come under the problem making the list collectively exhaustive.
A good McKinsey issue list contains neither fewer than two nor more than five top-line issues.
The initial hypothesis (IH) is the third pillar of the McKinsey problem-solving process. The essence of the initial hypothesis is “Figure out the solution to the problem before you start.” The Hypothesis is just a theory to be either proved or disproved. If your IH is correct, then it will be the first slide in your presentation. If it turns out to be wrong, then, by proving it wrong, you will have enough information to move toward the right answer.
Problems must be broken down into various components, each solved with an actionable, top-line recommendation. Resulting into what McKinsey calls the issue tree (you start with your initial hypothesis and branch out at each issue.)
Developing an approach
Don’t reinvent the wheel – Most business problems resemble each other more than they differ. This means that with a small number of problem-solving techniques, you can answer a broad range of questions.
Consulting firms such as McKinsey have their own problem-solving methods such as Forces at Work.
Many similarities between business problems does not mean that similar problems have similar solutions. You have to validate your initial hypothesis with fact-based analysis.
Don’t make the facts fit your solution – Avoid the temptation to view your initial hypothesis as the answer and the problem-solving process as an exercise in proving the IH. Keep an open and flexible mind. Don’t let a strong initial hypothesis become an excuse for mental inflexibility.
Make sure your solution fits your client. The most brilliant solution is useless if your client or business can’t implement it. Know your client. Know the organization’s strengths, weaknesses, and capabilities. Tailor your solutions with these factors in mind. Businesses are made up of real people with real expectations and weaknesses and limitations. People can do only so much with finite resources and in real conditions.
80/20 and other rules to live
- Don’t boil the ocean: It means don’t try to analyze everything. Be selective and figure out the priorities of what you are doing.
- Find the key drivers:Focusing on the key drivers helps you to reach the core of the problem which you can then apply through fact-based analysis. Key drivers save you time and effort.
- The Elevator test: If you can explain your solution to your client in thirty seconds, then it can be safely said that you understand your solution enough to sell it.
- Pluck the low-hanging fruit: Use the immediate improvement opportunities, they give you credibility, boost morale, and satisfy your customer in a long term relationship.
- Make a chart everyday: During the problem-solving process, you learn something new every day, write it down. A busy day can mix up your learning from the day.
- Hit singles: Accept the fact that you simply cannot do everything. Choose your battles and try to get them right the first time. “If you manage it once, you raise unrealistic expectations from those around you. Once you fail to meet expectations, it is very difficult to regain credibility.”
- Look at the big picture: While solving a difficult problem it is easy to lose sight of your goal, so when you get all hustled up, take a metaphorical step back and figure out exactly what you are trying to achieve? How does what you’re doing solve the problem? A particular analysis done by you might be intellectually and logically correct but if it doesn’t get you closer to the solution it is practically a waste of time.
- Just say, “I don’t know”: One important aspect of professional integrity is honesty—with your clients, your team members, and yourself. Honesty includes recognizing when you haven’t got a clue. Admitting that is a lot less costly than bluffing.
- Don’t accept “I have no idea”: If you ask someone questions about their business, and they say I don’t know, it is a code for either, “I’m too busy to take the time to think about this,” or “I don’t think I’m smart enough to know about these things,” or “I’m too lazy to come up with anything useful.” So don’t get disheartened, keep probing, people always have an idea.
Part Two: The McKinsey way of working to solve business problems
Selling a Study
All the business problems are like mice, they go unnoticed until they start nibbling your cheese.
“Remember, McKinsey doesn’t sell.”
Even though the majority of a partner’s compensation depends on the amount of business they bring to the McKinsey, no one ever makes cold calls, not one ad runs in any magazine, and no one ever goes out to knock on doors.
Mckinsey produces a regular stream of books and articles, some of them quite famous and influential, along with their quarterly journal, The McKinsey Quarterly, which is sent to all of the clients and former consultants, many of whom are at high positions at potential client firms. Mckinsey also maintains a vast network of informal contacts with potential clients and partners who are encouraged to participate in various extracurricular activities.
Assembling a team
Firm relies on teams because the complexity of the problem the firm faces cannot be solved by a single person – at least to the firm’s high standards. In the face of complexity, many hands don’t just make light work; they make for a better result.
In order to solve a business problem successfully one need to choose their team carefully, analysis of what skills and personalities work best with the project is necessary. Mckinsey teams are selected based on two theories – Find smartest people for your team and select people with specific experience and skills.
If you make your boss look good, your boss will make you look good. That’s the quid pro quo of hierarchy. In a company with hierarchical organisation the most important person in your life is your boss, even in a company like McKinsey with the flattest organisational hierarchy, because in the whole organisation your boss is the only person who can see you. Making your boss look good mainly includes two things, that is doing the job to the best of your ability and making sure your boss knows everything you know, when he/she needs to know it.
At McKinsey the problem solving process begins with research, it is the skill exercised by most new associates. It is a step before one has to form an initial hypothesis or uncover the key drivers.
Whatever the problem, chances are that someone, somewhere, has worked on something similar —find out who they are and get to know them. Do your research and ask questions; you will save yourself a lot of time and effort. Your time is valuable, so don’t waste it by reinventing the wheel!
McKinsey consultants fill the gaps in their knowledge base and tap into the experience and knowledge of their clients by conducting lots and lots of interviews. Through research you definitely get to learn a lot but daily nitty-gritty in an organisation can only be known by asking questions to the people at the front line.
When you go into an interview, be prepared. You may have only 30 minutes with a person whom you may never see again. Know what you’re going to ask. In order to be prepared, write an interview guide. Your interview guide should contain all the questions you need answers to, also figure out what you need from this interview and what are you trying to achieve. Start the interview with general questions and then move towards specific ones. Ask the interviewee if there’s anything else they’d like to tell you or any question you forgot to ask. More often than not they will say no, but sometimes you get the gold. Remember that the interviewee knows the organisational workings; they know what is escaping notice and where the problem is. If you are lucky, they will tell you.
Tips for conducting successful interviews:
“Always think strategically when conducting an interview. You have a goal to reach and limited time to reach it.”
- Have the interviewee’s boss set up the meeting. This sets the tone that the interview is important, making them all the more serious towards it.
- Interview in pairs. Doing so will help you catch non-verbal cues while one is taking notes. Also, it is useful to have two different views of what happened in the interview. Corroborating interview notes at the end is of importance.
- Listen; don’t lead. The purpose of the interview is to get exhaustive information which can only be obtained through listening. Talk just to keep the interview on track. Ask open ended questions instead of yes or no questions to get better results.
- Paraphrase, paraphrase, paraphrase. Repeat the answers back to the interviewee with some structure applied to their answers, this will help you understand whether you understood the subject correctly or not. This also gives the interviewee a chance to add information and amplify important points.
- Use the indirect approach. Be sensitive to the interviewee’s feelings, make them feel comfortable. Keep in mind that they might feel threatened, that is why you shouldn’t directly dive into tough questions.
- Don’t ask for too much. Be focused towards the most important questions in your interview guide. Don’t discomfort the person by pressing too hard, interviews for business problems can be an uncomfortable experience for people, which can make them uncooperative.
- Adopt the Columbo tactic. Once the interview is over everyone becomes more relaxed, making the interviewee far less defensive and more likely to give you information that you seek.
When you get back to your office after interviewing someone, take the time to write a thank-you letter. It’s polite and professional, and could pay you back in unexpected ways.
Brainstorming is the most essential thing in Strategic consulting.
Typically the brainstorming session is for two hours if not more. The session starts with a clean slate with no preconceptions and prejudices, as there is no point in looking at the data in the same old way. Put your research into a “fact pack” which is a neatly organised summary of key points and data discovered and circulated in your team. Make sure everyone in your team makes a Fact pack, once everyone is familiar with the team’s fact base, the team should fall in two camps on the subject.
Keep in mind that there are no bad ideas if it was sincerely meant and no dumb questions. Never be afraid to ask why something is the way it is or is done the way it’s done. Be ready to dispense your idea, no matter how good it is if it’s not part of the team’s answer at the end of the session. Don’t make the session too long as you will hit the point of rapidly diminishing returns.
Part Three: The McKinsey way of selling solutions
McKinsey communicates with clients through presentations; the firm spends a lot of time presenting ideas to other people. For your presentation to succeed, it must take the audience down the path of your logic in clear, easy to follow steps. Your presentation reflects the thinking of the person or team that put it together.
A good business presentation contains nothing new for the audience; everyone amongst the client should be acquainted with the findings in private, well before the presentation. This includes the cardinal rule for being a successful consultant, not only do you have to come up with the “right” answer; you also have to sell that answer to your client.
Displaying Data with charts
Keep the chart simple by conveying just one message per chart. Too many charts will bore your audience, use absolute minimum necessary charts to make your point. Use the waterfall chart in order to demonstrate the quantitative flows in a versatile way to convey a lot of information in a clear, concise manner.
Working with clients
First thing to do when working with a client team is get them on your side, to do so turn their goals into your goals. Also, Team-bonding activities really add value when working with client teams. You will discover that not everyone on the team has the same goal as you do, either they are useless or just actively hostile. Get these ‘liability members’ off the team if you can or work around them, make sure the work they are doing is not critical to the project.
If the client doesn’t support you, your project will stall. Keep your clients engaged by keeping them involved. Clients will support you only if they think your efforts contribute to their interest, also client interests’ changes overtime, which will only be known to you if you are in frequent contact.
If your solution is to have a lasting impact on your client, you have to get support for it at all levels of the organisation. Sell your solution to every level of the organisation, from the board and down. Also, tailor your approach towards presentation as per your audience and respect them by explaining what is being done and why, let them know how their jobs fit into the organisation as a whole.
Part Four: Surviving at McKinsey
Find your own mentor
Take advantage of others’ experience if you can. Find someone senior in your organisation to be your mentor.
Surviving on the road
As a consultant you might have to travel for many months away from you family and friends, which can take a toll on your health, your relationship and your sanity. But with the right attitude you can overcome this: Try to visualise the business trips as an adventure, act like a tourist and try to make the most of whichever place you are in. Another way to survive on the road is ‘Proper planning’, schedule your time with clients so as to leave your Fridays or Mondays free, always pack light, find a reliable cab company etc.
Treat everyone with tremendous respect. Sometimes McKinsey people can be demanding and impatient; then they fail to understand why they don’t get what they want. Being respectful also keeps your stress level down—it’s easier to be friendly than frustrated—so it’s a win/win.
A Good assistant is a lifeline
They perform dozens of office tasks and are an exceptionally valuable resource. Treat your secretary well and make their jobs as easy to perform as possible. Be clear about what you want, give them room to grow and take out time to train them well.
Recruiting McKinsey style
One of McKinsey’s goals, as listed in its mission statement, is “to build a firm that is able to attract, develop, excite, motivate, and retain exceptional people.” Firm takes a lot of time and resources to recruit the cream of all the top MBA schools.
Firm hunts first and fore-most for analytical ability: they want to know whether you can break problems apart into their components and how do you structure problems, do you sense the implications of your solutions. In a case interview, the interviewer wants to see how well the interviewee can think about a problem, rather than how correctly she answers it.
McKinsey consultants work in teams and hence personality matters too. Candidate’s fit to the firm are also important. Many of you want to know how to get a job at McKinsey. The answer is simple: Be of above average intelligence, possess a record of academic achievement at a good college and a top business school, show evidence of achievement in all previous jobs, and demonstrate extraordinary analytical ability.
If you want a life, lay down some rules
If you work for more than eighty hours per week there is little or no time for a life. To do this you have to lay down some rules. Following are the rules: Make one day a week off-limit, Don’t take work home, Plan ahead. It can be difficult to stick with these basic rules sometimes, as your priorities will always be “Client, firm, you” and hence you will have to let life take a backseat to your career.
Part Five: Life after McKinsey
At McKinsey it’s never a question of whether but of when. Half of the class of newly recruited associates leaves the firm in about two years. Everyone who has ever worked at McKinsey leaves it with a slightly different impression. Many former McKinsey-ites have mixed views of the firm but all would say they have learned important lessons here.
Following are some valuable lessons shared by the McKinsey-ites:
- Preserve your integrity at all times. You will encounter any number of grey areas in business life—always take the high road.
- The Firm taught me that every problem has a solution.
- There is nothing new under the sun. Whatever you are doing, someone else has done it before-find that person.
- Execution and implementation is the key. Getting things done is the most important thing.
- Anything that gets in the way of efficient communication is anathema to a strong organisation. Structured thinking, clear language, a meritocracy with the obligation to dissent, and professional objectivity allow an organisation and its people to reach their maximum potential.
McKinsey contains an essential core: Fact-based, structured thinking combined with professional integrity will get you on the road to your business goals. The rest derives from that.
Why should you read this book: This book is a sure shot guide to great thinking and problem solving skills. Many of these techniques can be used in our own business and life.
Goodreads Link: The McKinsey Way by Ethan M. Rasiel | Goodreads