The McKinsey Mind

The McKinsey Mind: Understanding and Implementing the Problem-Solving Tools and Management Techniques of the World's Top Strategic Consulting Firm

By Ethan M. Rasiel & Paul N. Friga

Ethan and Paul both are McKinsey alumni, in this book they summaries their experience of McKinsey way of working. This book is combination of occasionally humorous-anecdotes of McKinsey alumni with the personal recollections of the author to describe the techniques that McKinsey consultants use to help clients to become more efficient and effective.

McKinsey way of “Framing problem”-

The first step to solve any problem is the “understand and structure the problem”.

Structure can refer to particular problem-solving framework or more generally to defining the boundaries of a problem and then breaking it down into component elements.

• Without structure, our ideas won’t stand-up.
• Use structure to strengthen our thinking.

Most of us are not blessed from birth with the ability to think in rigorous, structured manner; we must learn now. Unfortunately, that skill is not part of most university curricula, and few companies have the resources of the inclination to teach it to their employees.

McKinsey way of “Brainstorming”- Six golden rules of “Brainstorming”-?

1. There is no bed idea.
2. There is no dumb question.
3. ?Be prepared to kill your babies, to see your ideas get shot-down and to pull the trigger yourself if necessary.
4. Know when to day when; don’t let brainstorming drag on past the point of diminishing return.
5. Get it down on paper

And last important-

1. ?Don’t come into meeting thinking you know the “answer”. Be prepared to learn.

McKinsey way of “Design the Analysis”-

• Find the key factors- Figures out which factors most affect the problem and focus on those Drill down to the core of the problem instead of picking apart each and every piece.
• ?Don’t boil the ocean- Analytically minded people face a great temptation to do analyses that are interesting rather than relevant. Work smarter, not harder. In today’s data saturated world, it’s easy to analysis every aspect of a problem six ways to Sunday. But it’s waste of time unless the analysis we’re doing add significant value to the problem-solving process. We need to figure out which analysis we need to perform to approve (or disapprove) our hypothesis, we need to do them and move on.
• Forget about absolute precision- In Business, for the most part, is not an exact discipline like physics or math. We can spend a lot of time improving the precision of our business analysis models, but eventually we reach the point of diminishing returns or loss time. We don’t need to have “the perfect model”. We just to have something that’s better than what we have today.

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McKinsey way of “Interviewing”-

Interview is art of get to “know to unknown”, and its only possible with less speaking and more listening.

• Be prepared; Write an interview guide. There are two reasons why we should have guide, first placing our thoughts on paper forces us to organize them and second it helps us to “keep ourselves as well interview on track”.
• Boil down our questions. Reduce our numbers of questions those answered in the limited time.
• When conduct interview, listen and guide to interviewee rather than interrogate.
• ?Don’t leave interviewee naked. People become uncomfortable under the stress situation, as an interviewer we need to establish a connection with her in order to get those few bits of information. Don’t squeeze the interviewee dry and leave him regretted.
• ?Be sensitive. The interview is a two-way exchange that involves much more than one-way information transfer. If we let the interviewee become our partner in this process, we’ll be able to develop this relationship. And most important thing start interview with less-sensitive issues or topics.

McKinsey way of “Knowledge management”-

Knowledge is not-data and information. Data are facts, observation about occurrences and numbers. Information is collection and synthesis of data.

Knowledge is the mix of information, experience and context in a value-adding process, the process occurs first in the heads of individual (known as “Uncodified knowledge”) and can be share with others through discussion and documentation (knows as “codified knowledge).

Knowledge management is the systematic by which an organization maximizes the value of uncodified and codified knowledge in the firm.

• Don’t reinvent the wheel. Whatever problem we’re facing, chances are that someone, somewhere has worked on something on similar, hence use this “knowledge-base” and avoid reinvent wheel by start from beginning. McKinsey use two type of database first is “know what” and second is “know who”.
• ?Develop a rapid-response culture. Extremely important in “Knowledge management” is the rate at which one employee response to another employee request.
• Control the quality of Data: garbage in. garbage out.

McKinsey way of “Data interpretation toward strategy orientation”-

All the excels or spreadsheets and three-dimensional animated pie charts is the world don’t mean anything unless someone can figure out the actions implied by these analyses and their value to organization.

• McKinney divided analysis interpretation in two parts-

1. ?The process to understand data: piecing together the story the data are telling us and steps we should take based on that story.
2. ?A course of action needs to take, based on story dried from data interpretation.

• Consulting isn’t about analysis; its about insights. If can’t draw an insight from what we’ve done just, then it’s waste of time. Crunching numbers or doing var charts for sake of doing, doesn’t help unless it brings to life some insight, some key finding that will make us or team “Hmm, Interesting”.
• Remember that there are limits of data. Data don’t speak themselves; we need to draw inferences from data. Once we get interferences, we’ve reached the point where intuition take lead from data. Data without intuition merely a raw information, and intuition without data is just guess-work. Put the two together create a foundation of sound decision making.
• Don’t make the facts that fit your solution; “be prepared to kill you babies”.
• Respect the limit of organization. The most brilliant strategy in the world won’t help us, if our organization can’t implement it. We should keep in mind that “strategic solution” those doesn’t match with skills, systems, structures and most important ethic and culture of organization, are simply worthless. If we planned our analysis correctly in the first place, we should be able to answer these questions before we make our recommendation.

McKinsey way of “Presenting Ideas”-

To ensure that our presentation must convey ideas to the audience in the clearest, most convincing way possible. To ensure our presentation meet with audience goals, should give it a structure that the audience can easily grasp and follow.

• The elevator tests. Know our solution so thoroughly that we can explain it clearly and precisely to our audience in the course of a 30-second elevator ride. If we can pass this “elevator test” then our solution is well enough to sell.
• Support Ideas with a solid structure. “I’ve put half-baked ideas into great presentation and seen them soar, and I’ve put great ideas into bad presentation and watched them die” Bob Grada (former director of McKinsey). Make no mistake, presentation matter. Each of our charts should have just one message for the audience to absorb and the simpler, the better.
• Prewiring and tailoring through ideas. Prewiring mean taking our audience through our finding before we give our presentation. Tailoring means adapting our presentation to our audience, both before we give it an if necessary, after also. Together, these techniques will boost chances of acceptation our ideas.

McKinsey way of “Managing Team and communication”-

Most bookstore have atleast one row (sometime entire section) dedicated to providing advice on “how to create and lead a high performing team” but still this riddle is uncodified.

• Consider not just demonstrated ability, but potential ability.
• Keep the information flowing. Information is power, unlike other resources, information can actually increase in value as it is shared, to the benefits of everyone in our team.
• Remember that we have two ears and only one mouth. Most of us speak more then we listen, in managerial situation, this can cause problems. People stop contribute once they feel “their inputs is being ignored”.
• It’s not just what we say, its how we say it. We all have default communication styles rooted in, among others thinks, our upbringing, education and training. Our words choices and tone of voice have great impact on our daily interaction with co-workers and family members. We need to develop a conscious understanding of our communication style-and sometime to change it.
• Take your team’s temperature to maintain morale. No one likes to walk into a freezing-cold or a boiling hot room. Taking the temperature is an analogy that stresses the importance of staying in touch with you team to maintain a sense of the level of motivation and enthusiasm during critical or challenging time.
• Feedback and evaluation regularly but make it balanced. Feedback is a double-edged sword. On one hand, we have strong interest in finding out what people think of us, as a mean both to improve ourselves and feed our ego. On the other hand, feedback can make us uncomfortable when it forces us to confront our weakness. Handle it properly when given vice-versa receiving.

Feedback is most important tool. Giving too few comments leave people in the dark, too many comments also can have negative effect.

McKinsey way of “Client management”-

Who is our client depending on our circumstances? It could be our customer, team, boss, supplier and combination thereof.

There are three area of client management: Obtaining, Maintaining and retaining.

• Identify the client. Knowledge of the true identity of your clients and a strategy for handling competing set of needs is not an easy task but is one to which we should dedicate time and attention up front.
• Create a pull rather than a push demand. The is practical application of the McKinsey approach to indirect selling. Rather than sticking a foot in the door and barging in cold, build-up a reputation and let it preceded you. Put the client in a position to recognize that you’re the one who can fill her need-then she’ll call you.
• Create involvement opportunities. It become extremely important to integrate client team members at all levels within the organization.

McKinsey way of “Managing yourself”-The term self-management (along with-it cousin Self-help & self-Improvement) mean different thing to different people. We are all, by definition, unique individuals and the strategy that help us in life and career must be different.

• Find our own mentor- Take advantage of other’s experience by finding someone senior in organization.
• Delegate around limitation, create help group and network - In a modern era, we can’t last very as a one-man band. Not even Tiger Woods play in every golf tournament. Because we can’t do everything by ourself, we have to develop a group of people we can rely on to help our shoulder burden. That group might might be our official team or just an informal network we can call on certain tasks. Once we’ve found people whose ability we trust, don’t let then go they’re worth weight in gold.

• Respect the time, and get others to respect our time- Work is like a gas: it expand to fill the time available. We must decide based on nature of our personal ambition and nature of our job and organization, how much time we’ll devote for what work. We need to respect our time. We’ll also have to get others to respect our time. “stress is the feeling we get when out guts says “NO” and our mouth says “YES”, we have to train our mouth to says “NO”. Learn to prioritize potential time commitments according to their ability to help we get thing done.

• Perform sanity checks- In the words of Socrates “The unexamined life isn’t worth living”. In life as in business, sometimes we need to step back and look a big picture. It might make sense to ask ourselves a few pointed questions. Are we happy with our jobs? With our hierarchy? With our organization? If not, then do the likely future rewards of our current situation justify the the sacrifices we’re making? If not, then we are really in right position or career". If not, what should we do to changes things?

Changing jobs is not the only answer, however, nor is it always an option. Sometimes we can manage the expectations of those around us, bring them closer to reality and reason, to improve our situation.