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1-Page Summary of The Mckinsey Way

Thinking Like a Consultant

Companies hire McKinsey & Company, a consulting firm that is well known for its problem solving expertise. The firm’s success can be attributed to the use of proven guidelines for problem-solving techniques. These include standard ways to approach problems, gather information and present findings.

McKinsey consultants always base their advice on facts. They don’t rely on intuition because they aren’t experts in any specific industry. This is important to young consultants who have to make presentations to executives who are skeptical of the information presented.

McKinsey’s entry-level consultants are typically very smart and have impressive resumes. However, they’re young and sometimes get dismissed by top executives when they present their ideas to them. They find that the best way to avoid this is to make sure they know the facts behind their case.

McKinsey requires clarity in communication by making sure every problem is considered distinctly and separately.

• The MECE principle means that each item on the list is a separate issue. If you don’t follow this rule, your thinking will be confused.

Problem Solving Techniques

McKinsey consultants start off by coming up with a solution to the problem. This is their initial hypothesis. They then research the problem and try to prove or disprove it. The initial hypothesis isn’t always accurate, but they use it as a map for solving the problem.

McKinsey consultants have a lot to teach us. They’re able to solve problems and find solutions that others can’t because they don’t just accept the obvious answer. They look deeper into the problem, which is something we should all do when faced with business issues. For example, once, McKinsey consultants were working on a project for a company that wanted them to help expand their manufacturing division in China. After several weeks of work, it became clear that expansion wasn’t going to work out as planned; instead, the company needed to close or sell its Chinese division.

There are many situations in business that are similar enough to apply the same solution. However, it doesn’t always work out that way. For example, one consultant says eighty percent of pricing problems can be solved by raising prices. The other twenty percent need lower prices instead. Therefore, when solving a problem you should analyze all the facts before reaching a conclusion on what to do next.

McKinsey believes in an eighty/twenty rule. They say that 80% of a company’s productivity will come from 20% of its employees, and vice versa. For example, 80% of the sales will be coming from 20% of the salespeople; while 20% of the job duties will occupy 80% of their time.

McKinsey found that eighty percent of a company’s sales come from twenty percent of its customers. The best customers are the ones who buy more products and services. By focusing on those big clients, companies can increase their total sales.

In order to solve a problem, you must first have realistic solutions. A great solution is useless if the business lacks resources or political support. If the business doesn’t want to change its status quo, then it’s important to redefine and attack something that can be changed easily.

McKinsey consultants also avoid over-analysing a problem. They only collect data that supports their hypothesis, and they stop there. It’s better to focus on the key drivers of a problem than to spend too much time analysing it.

Solutions must be boiled down to a thirty-second sound bite. That’s what the publisher of Field & Stream magazine told his sales force. If you can’t explain your product or solution in a thirty-second elevator ride, then you don’t understand it well enough to sell it. Ad sales grew as a result of this strategy.