How does McKinsey solve problems?

McKinsey are people who come with PowerPoint presentations and state the bleeding obvious.

- A civil servant official in the UK Government, 2005

If you want to ruin a company, you only have to try fixing it with the help of external consultants.

- Ferdinand Piëch, the CEO of Volkswagen

McKinsley's executives are de facto industrial spies

- Duff McDonald in The Firm: The Story of McKinsey and Its Secret Influence on American Business

McKinsey was founded in 1923 and as we know, is a very successful consulting firm with a global presence. Companies take pride in stating that they have hired the services of McKinsey. McKinsey prides in its exclusivity and its advice is still considered as a panacea for most ills by the corporate world. So much so that even media houses like the New York Times, who have written  scathing articles about McKinsey, have hired them later for handling issues. However, one has to be fundamentally skeptical about everything.

Every consulting firm has its negatives and McKinsey is not without them. There have been cases where they have got the whole math wrong. Examples of McKinsey's bad CV include Enron (the less said the better), Swissair's bankruptcy, advice to AT&T that cell phones would only be a niche market in 1999, advice to GE which led it to lose a billion dollars in 2007 etc. There are accusations that managements hire McKinsey as a cover for their decisions. The fact is that only a comparatively small number of consulting projects are actually completely successful.

McKinsey prevents its clients from disclosing the work that it does. Thus, while it does not explicitly take the brownie points for the good work done, it simply doesn’t take blame for a bad job. It has also been influential in many corporate decisions.

However, the name McKinsey sells. To be fair there are cases where they have done a thorough job. Here is a lowdown on how McKinsey approaches problems. There is very much a possibility that we can adopt the same in our daily professional lives. I have tried to adapt some of those in this post, largely from the book 'The McKinsey Way' by Ethan M. Rasiel

When a team sits down to discuss, their solution:

1.        is fact based,

2.        is structured and

3.        driven by hypothesis.

This is the fundamental approach McKinsey adopts to all its assignments. A lot of time is used in gathering facts, to support or refute a hypothesis. There is analysis of the components of the problem. Facts compensate for lack of gut instinct and bridge the credibility gap. They use an acronym - MECE - "Mutually Exclusive, Collectively Exhaustive" which is to build thoughts with maximum clarity and completeness. If each issue is distinct and separate, then it is mutually exclusive. You need to think of everything, which means each aspect of the problem has to be collectively exhaustive. Sometimes, one needs to figure out the solution to the problem even before one starts. By putting the initial hypothesis on paper and determining how to prove or disprove it, one sets up the road map to an eventual solution. 

With healthy debate and experience, one gets a sense of what is provable and what is not, helping avoid blind alleys. One gets a problem solving map by plotting an issue tree.

No two business problems are identical. Problem solving is organic and complex like medicine. Sometimes, the problem is not always the problem. A doctor does not rely on the patient's diagnosis.

Many problems resemble each other than they differ and hence with a small number of solving techniques, one can answer many questions. So don't reinvent the wheel.

Don't make the facts fit into the solution. When academic ideals meet business realities, the latter wins.

When you work in teams, there is bound to be politics. Try to see how your solution affects the opposition and build a consensus for change by seeing what incentives exist in your solution to the opposition.

The 80/20 rule of consulting is that 80% of things are dependent on 20% of the things and vice versa. It can be sales, time or anything.

One has to work smarter but not harder; not waste time and effort. Try to ignore most of the data much of it is actually useless.

Don't boil the ocean - which means don't try to analyze everything.

Many factors affect decisions and focus on the key drivers. If the complexity of your problem doubles, the time taken to solve it quadruples.

Pluck the low hanging fruit - taking advantage of little opportunities to score small goals within the overall framework gives a boost to the team and acts as firm steps to the larger goal.

Look at the big picture - All the small tasks that are done as part of the problem solving technique should be relatable to the final goal.

The most important part of working in a team is saying 'I don't know' when you actually don't have a clue. One important aspect of professional integrity is honesty.

In a team, make people go the whole hog by gently nudging them. A slight push would tilt them from not being able to participate out of reluctance or even plain laziness to actually getting involved.

We can try to imbibe some of these at our workplace and perhaps even in our personal lives, can't we?