Book Details

• Full Title: The McKinsey Way: Using the Techniques of the World's Top Strategic Consultants to Help You and Your Business

• Author: Ethan M. Rasiel

• ISBN/URL: 0-07-136883-3

• Reading Period: 2020.03

• Source: Googl-ing on the books every consultant must read

General Review

• Read this book if you want to get a brief insight into what consultants do.

• This book touches on several established ways of solving business problems, managing teams, selling ideas etc.

Specific Takeaways

The McKinsey Way of Thinking about Business Problems

Building the Solution

• Solution for client's problem must be (1) fact-based, (2) rigidly structured, and (3) hypothesis-driven

• Being fact-based helps in the lack of instinct (because consultants generally do not have the same familiarity with the business or industry) and lends credibility

• Being MECE (mutually exclusive, collectively exhaustive) helps in structuring the solution

• Define the Initial Hypothesis (i.e., what might be the solution to the problem)

  • Start by breaking down the problem into its key drivers

  • Next, make an actionable recommendation regarding each driver

  • Next, take each top-line recommendation and break it down into level of issues

  If a given recommendation is correct, what issues does it raise? Consider the likely answers to each issue. Then go down another level. For each issue, what analyses would you need to make to prove or disprove your hypothesis?

• Test the Initial Hypothesis

Developing an Approach

• The Problem is Not Always the Problem

  • Figure out whether the problem given is the real problem by digging deeper

• Don't Reinvent the Wheel

  • Use established problem-solving methods like: Analysis of Value Added, Business Process Redesign, Product-Market Scan etc.

  • Use analytical frameworks (e.g., Forces at Work)

    • Forces at Work:

      • identify client’s suppliers, customers, competitors, and possible substitute products

      • identify the changes in each of the categories above, and the impact on client

      • how will the changes affect the way the client designs, manufactures, distributes, sells, and services its products

• … But Every Client is Unique (No Cookie-Cutter Solutions)

• Don't Make the Facts Fit Your Solution

• Make Sure Your Solution Fits Your Client

  The most brilliant solution, backed up by libraries of data and promising billions in extra profits, is useless if your client or business can’t implement it. Know your client. Know the organization’s strengths, weaknesses, and capabilities—what management can and cannot do. Tailor your solutions with these factors in mind.

• Sometimes You Have to Let the Solution Come to You

  • If you cannot think of any Initial Hypothesis, proceed with data gathering to get a better picture of the situation

• Some Problems You Just Can't Solve… Solve Them Anyway

  • When the problem seems unsolvable, try the following:

    • Redefine the problem (early)

    • Tweak your way to a solution – if the solution cannot be implemented by the client for any reasons, tweak the solution before implementation

    • Work through the politics – if politics is preventing you from formulating / implementing a solution, think about the incentives of various players in the organization, and try to align to such incentives

80/20 and Other Rules to Live By

• 80/20

• Don't boil the ocean – learn to know what to ignore

• Find the Key Drivers

• The Elevator Test – be able to summarize the key points into a very short and powerful package

• Pluck the Low-Hanging Fruit

• Make a Chart Everyday – make a record of what was learned every day and what insight can be drawn

• Hit Singles (baseball metaphor) – don't try to do too much; focus instead of consistently delivering what you are supposed to do; if you set up high expectations and do not achieve it, you will lose any hard-earned credibility

• Look at the Big Picture – is what you are doing leading you towards the eventual goal?

• Just Say, "I Don't Know"

• Don't Accept "I Have No Idea" – people always have an idea when probed further; if he or she is not certain, an educated guess can be made

The McKinsey Way of Working to Solve Business Problems

Selling a Study

How to Sell Without Selling

• Instead of hardselling, McKinsey markets its brand, such that businesses know who to call when there is a problem to be solved

• McKinsey markets through publications, having its partners sit on various boards, etc.

Be Careful What You Promise: Structuring an Engagement

• Be careful about scope, make sure it's achievable

Assembling a Team

Getting the Right Mix

• Consider raw intellect and also relevant experience

• Understanding the problem, and get people with the necessary skills. E.g., if the problem requires heavy number crunching and deep analysis, get people who are comfortable with that; if the problem requires big reorganization with many sensitive decisions to be made, get people with good people skills

A Little Team Bonding Goes A Long Way

• Learn also to respect each team member's time outside work, and avoid taking up those time for bonding activities if possible

Take Your Team's Temperature to Maintain Morale

• Make sure each team member is happy with what he or she is doing, and take remedial actions immediately if he or she is not

• Steer a steady course – don't change your mind about team priorities and analyses all the time

• Let team members know why they are doing what they are doing

• Respect

• Get to know your teammates as people – whether married, any hobbies, etc.; also share about yourself

• When things doesn't well: show empathy

Managing Hierarchy

Make Your Boss Look Good

• Keep information flowing so your boss knows what you are doing

An Aggressive Strategy for Managing Hierarchy

• In a less hierachical organization, it might be possible to assert equality across seniority level in a positive way: e.g., pointing out your boss's mistakes to earn trust from your boss

Doing Research

Don't Reinvent the Wheel

Specific Research Tips

• Start with the annual report – the "Message to Shareholders" or "Chairman's Remarks", when read with healthy amount of skepticism provides a good sense of the company's performance in the past year, and its strategy moving forward

• Look for outliers

• Look for best practice – find out what the best performers in the industry are doing and imitate them

Conducting Interviews

Be Prepared: Write An Interview Guide

• What are the questions I need answered?

• What do I really need from this interview? What am I trying to achieve? Why am I talking to this person?

• Know the background of the interviewee – is she a prickly CEO? or a middle-level manager whose plea for change have gone unheeded?

• Start with general questions before going to specific (and more sensitive) questions – e.g., start with anodyne questions about the industry

• Ask some questions that I already know the answer to:

  • To gain further insight about how honest/knowledgeable the interviewee is

  • To discover any blind spots that I might have

• End the interview by asking if there's anything else the interviewee would like to add, if if there's any question that I missed

When Conducting Interview, Listen and Guide

• Allow the interviewee to talk more

• Indicate interest by leaning in, taking notes, and giving verbal cues (like, "oh, yes", "uh-huh")

• To get more from the interviewee, try letting the silence dangle after the interviewee has finished, and wait for him to continue talking

Seven Tips for Successful Interviewing

• Have the interviewee's boss set up the meeting

• Interview in pairs – take turns asking questions and taking notes

• Listen; don't lead – in most interviews, I will be looking not for yes-or-no answers, but exhaustive answers; ask open-ended questions instead of multiple choice questions

• Paraphrase, paraphrase, paraphrase – repeat the answer back to the interviewee (preferrably with stucture applied) to check whether I understood them correctly. This is especially important because when people given impromptu answers, they will not be able to emphasize or provide sufficient structure to the answer

Use the Indirect Approach

• Being too direct might force the interviewee into a defensive mode, resulting in less information being revealed

Don't Ask Too Much

• To avoid being inundated by irrelevant information

• To avoid pressing the interviewee to hard, and closing the door to future interviews / more information

Adopt the Columbo tactic

• After the interview is over, when everyone is ready to leave (and has his or her guard down), as the important question

Don't Leave the Interviewee Naked

• Try to allay any fear the interviewee may have; one way to do this is to show how the process (not just the interview, but the whole problem solving process) will benefit him

• Be willing to share information with the interviewee too. People don't like to be kept in the dark

Difficult Interviews

• People who are openly aggressive

  • If my backing is more senior than the difficult person, I can openly challenge him to show that I'm not to be trifled with

• People who refuse to talk or give access to relevant documents or data

  • I will need to pull rank, or threaten to do so

• People who refuse to get to the point

  • Either find someone else to get the information from, or speak to the person's boss to explain the situation and get the boss to have a word with him

• People who will likely be fired because of my work

  • Nothing much I can do

Always Write a Thank You Note

Brainstorming

Proper Prior Preparation

• Prepare a fact pack, circulate it, and make sure everyone reads it prior to the meeting

• Decide whether everyone should go to the meeting with a (1) blank slate, or (2) a hypothesis

In a White Room

• Don't bring any preconceptions into the room

• There are no bad idea

• There are no dumb questions

• Be prepared to kill your babies – don't be married to my hypothesis

• Know when to say when – stop or take a break when productivity drops

• Get it down on paper

Some Brainstorming Exercises

• Post-it notes – everyone write ideas to a post-it note and pass it to the leader, who reads it aloud; this allows quick generation of ideas without being bogged down by discussing the details

• Flipchart – put a number of flipchart around the room, each labelled with a different category or issue, and team members go around the room writing down idea in the appropriate flipchart

• Bellyaches up front – invite all relevant players into a room to explain what they didn't like about what was presented so far, followed by coming up with things they thought were good, and how such things might be implemented within their own business units

The McKinsey Way of Selling Solutions

Making Presentations

Be Structured

Remember that there are diminishing marginal returns to effort

• Try setting a deadline before the actual presentation after which there will be no further amendments to the slide deck

Prewire Everything

A good business presentation should contain nothing new for the audience. Walk all the players at the client through your findings before you gather them into one room.

• Before the final presentation at the full meeting, run the solution through the various stakeholders individually in private, in order to spot issues and address any disagreement

Displaying Data with Charts

Keep it Simple—One Message Per Chart

• Choose a good caption at the top of the chart, conveying the intended message

• Always put a source attribution to avoid questions like "Where did you get this information?"

Use a Waterfall Chart to Show The Flow

• Using vertical columns to show how a value is arrived at (e.g., a waterfall chart may start with Net Sales on the far left, followed by various Expenses, Depreciation/Amortization, Interest Income, Taxes etc., ultimately resulting in the Net Income on the far right. This will show how the components resulted in the final value)

Managing Internal Communications

Keep the Information Flowing

• There are two main ways to keep information flowing: messages and meetings

• For meetings, always have an agenda and leader

• One way to ensure everyone attends the meeting is to block out the same timing every week, and cancelling the session (as early as possible) if no meeting is required

Three Keys to an Effective Message

• brevity, thoroughness and structure

Always Look Over Your Shoulder

• Be very careful about confidentiality

Working with Clients

Keep the Client Team on Your Side

• Make their goals my goal

• Let them understand that this is an opportunity they can make actual change in their organization

• Let them understand that in any case, it is an opportunity for them to learn and get exposed to things they would not have been exposed to otherwise

How to Deal with "Liability" Client Team Members

• There are two types of "liability" members on a clietn team: merely useless and actively hostile

• If possible, try to swap the "liability" members out

• Otherwise,

  • if the "liability" member is merely useless, work around the member by giving him non-critical work

  • if the "liability" member is actively hostile, keep any sensitive information away from the member if possible

Engage the Client in the Process

• Have frequent and regular updates to keep in touch with clients and keep my projects on "top of mind" for them

Get Buy-In Throughout the Organization

• After presentation to the board, present to the middle-level managers; also do not neglect the people on the line

• Target the presentation to the audience

Be Rigorous about Implementation

• Make sure someone takes responsibility for getting the job done

• The implementation plan should be specific about what will happen and whe

Surviving at McKinsey

• Find Your Own Mentor

• Surviving on the Road

• A Good Assistant is a Lifeline

• Recruiting McKinsey Style: How to Do It (and How to Get Through It)

• If You Want a Life, Lay Down Some Rules

To Internalize Now

• When approaching a problem, try thinking in terms of key drivers and hypothesis

To Learn/Do Soon

• Find resources with examples on how to use McKinsey approach to coming up with the initial hypothesis

• Find resources with examples on various established problem solving frameworks (e.g., Analysis of Value Added, Business Process Redesign, Product-Market Scan, Forces at Work)

• Find out what are the various corporate databases available

To Revisit When Necessary

• The topics presented are generally very concise. I should perhaps revisit if I need concrete examples of the concepts presented to jolt my memory.

Other Resources Referred To

• For an in-depth discussion of the square law of computation and other issues of complexity and problem solving, see Gerald M. Weinberg, An Introduction to General Systems Thinking (New York: John Wiley & Sons, 1975)

• Thomas J. Peters and Robert H. Waterman, Jr., In Search of Excellence: Lessons from America’s Best-Run Companies (New York: Harper&Row, 1982)

• Gene Zelazny, Say It With Charts: The Executive’s Guide to Successful Presentations (Homewood, IL: Dow-Jones Irwin, 1985)