The "MECE"Method! How is it used?

Today let's look at segmentations to group information in a logical manner of sub-elements that are Mutually, Exclusive, Collectively, Exhaustive "MECE".

In other words, elements should “exclude” each other, or be distinct and should “exhaust” the relevant field, i.e. contain everything that belongs to it. Business management consultants use the MECE structure for problem-solving.

Just a piece of advice most organizations require aspiring consultants to learn to use the MECE principle for not only structuring problems but also communicating solutions, whether they are attending a case interview at MBB or sitting across the desk from a client.

Creating a MECE hypothesis helps clarifies a problem. It’s like having a road map when you are in unknown territory. If your approach to structuring a problem is “not MECE,” “it is probably messy,” as they say.

"MECE" as a method should be used when crafting an "Issue Tree" for your case structure. Doing so will help you avoid dependencies between different branches of the tree and thus sub-problems can be properly isolated. 

Mutually Exclusive aims of reducing complexity by avoiding overlaps. Consultants need to make sure that possible solutions or groups are not accidentally considered twice. By proving exclusiveness forces we carefully look at each option, consequently leading us to a much deeper understanding of each issue. 

Collectively Exhaustive: aims to ensure a comprehensive collection without leaving alternatives. Exhaustive means that all possible options have been considered. The trick is to divide a problem into categories with a finite number of general groups.

For example: If we need to make “means of transportation” MECE, we don't just start collecting “per foot, train, plane, bicycle, bike etc.” Try to find categories, because this practice will prevent us from forgetting important options: wheels vs. no wheels OR air vs. water vs. land.

The MECE methodology is famously used at McKinsey interviewers along with other firms will especially look at whether we are able to structure information in a MECE format.

During a case interview, MECE is also helpful for calculating many well-known frameworks, such as Cost-Benefit, 4C's, Porter's Five Forces are all designed with the MECE principle in mind. 

So how do we use it?

Business consultants use the MECE framework (Issue Tree, Decision Tree, Hypothesis Tree) to segregate a client’s problems into logical data categories that can be analyzed systematically and meticulously by staff involved with the project.

Let’s talk about the Issue tree:

How is the MECE framework used to solve a clients’ issues at consultancies? One method consultants use is to create an “Issue Tree” to arrange all the information that they have and divide this information into all possible issues and sub-issues.

An issue tree is particularly helpful for solving large and complex problems as it facilitates splitting them up into smaller, solvable problems. “Issue trees” get their names from their structure that are narrow at the top with the problem statement, and wider towards the bottom, even as each level accommodates more specific sub-issues or smaller problems. However, some “trees” are also created left to write, but the principle remains the same.

A common type of cases in which a MECE issue tree is used is profitability cases. Suppose the problem statement is “My construction company is not profitable.” An issue tree is created, starting with the problem statement at the treetop.

The various sub-levels of the tree would answer the question “How to make the construction company profitable?” in broad, intuitive ways: “Increase revenue” and “Reduce costs.” The lower levels would also answer the question “How?”

The second level, with sub-issues of the first level, would answer the questions “How to increase revenue?” (under “Increase revenue”) on the one hand and “How to reduce costs?” on the other.

The answers under “Increase revenue” would be “Increase the number of orders” and “Increase the prices of items.” The answers under “Reduce costs” would be “Reduce salary expenditure,” “Reduce rental,” and “Reduce raw material expenses.”

On the third level, the issue tree would tackle the question “How to Increase the number of projects?” One way to increase projects would be to shift the project type and another would be to launch a marketing campaign so that the organization becomes more widely known.

On the other main branch, under “reduce salary expenditure,” options such as “fire redundant workers” could be mentioned, and also “shift to a less expensive locality” under “reduce rental”, and “change the vendors,” under “reduce raw material expenses.”

How does an issue tree help? It enables us to consider all options separately and exclusively and suggest the best option to the client. It helps create a common understanding among team members about the problem-solving framework and focus team efforts. It smoothens work distribution among team members.

Often, consultants who create an issue tree may need to “trim branches,” which means doing away with options that are not worth pursuing after a detailed initial consideration. In the example of the issue tree, given above, about how to increase the profitability of a construction company. No surprise increasing prices may not be an option for various reasons, and that “branch” of the issue tree may be left out or “trimmed.”

In real a world contexts, the problems may be much more complex. The suggested solutions would have to be backed by hard data so that they are logical and can be proven to be such.

Now Over to You:

Why is MECE important to your consulting business?

How does MECE affect your client decision making?

What makes a good consultant?

Resources:

https://www.preplounge.com/en/case-interview

https://www.mbacrystalball.com/blog/strategy/mece-framework/

https://managementconsulted.com/case-interview/how-to-be-mece/https://www.firmsconsulting.com/quarterly/build-hypotheses-mece-with-decision-tree/