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Part 1: Analyze – Framing the Problem
Part 2: Analyze – Designing the Analysis
Part 3: Analyze – Gathering the Data
Part 4: Analyze – Interpreting the Results .
Part 5: Present – Structuring Recommendations and Achieving Client Buy-In
Part 6: Manage – Managing the Team
Part 7: Manage – Managing the Client
Part 8: Manage – Managing Yourself
Table of Contents
To frame a problem means to apply a structure to it. McKinsey consultants do this by developing an initial hypothesis based on the facts available. That hypothesis then becomes the road map for the research and analysis needed to develop a solution.
Business problems never exists in a vacuum – there will always be some context provided by the logical structures or groupings which will already be in common use in the industry in which the business operates. The first step in analyzing a business problem is to frame it correctly.
There are several potential ways to frame a problem:
■As a question critical to the success of the business – with the solution to be found as the answer to this key question.
■By breaking a big problem down into its component elements – each of which can then be solved individually.
■By looking for the key drivers of the problem – the factors that cause the problem in the first place.
■By use of a logic tree – which looks at the problem from 20,000 feet high and then moves progressively closer until all the minute details are examined.
■By using the classifications which are currently in use in the industry concerned.
Note the framework used must be exhaustive – covering every eventuality – if it is to be comprehensive enough to generate practical solutions. McKinsey consultants use the acronym MECE meaning “Mutually Exclusive, Collectively Exhaustive” to remind themselves every problem needs to be broken down into distinct components that don’t overlap but taken together cover every relevant issue.
Once a problem has been reduced to its essential components, the next step is to then form a hypothesis as to the most probable solution. By having an initial hypothesis (even if it later comes to be proven wrong), your ongoing research and analysis will be more efficient and effective.
By suggesting a hypothesis for the solution at this stage:
■Future research becomes oriented more towards gathering the facts needed to prove or disprove the hypothesis.
■You will be able to see potential blind alleys more readily – and avoid wasting time on irrelevant issues.
■A consultant can come quickly up to speed with an unfamiliar industry.
■A team can work on the one hypothesis – rather than having each person in the team head off in random directions.
■Conclusions can start to be drawn early – again saving time analyzing an infinite number of alternatives.
■You will be able to make decisions quickly – enabling more facts to be gathered and analyzed.
■You may find the problem is not really what you first though but is something entirely different.
■It will be possible to do a “Quick-and-dirty test” as an early screening – Ask “What assumptions need to be true for this hypothesis to hold up?” If any of those assumptions are obviously false, then it follows the hypothesis cannot be valid, saving you the time of doing more detailed analysis.
To test their initial hypothesis and progressively refine it, McKinsey consultants put together issue trees. Every hypothesis will suggest a number of issues which must be addressed. An issue tree takes each of those issues and breaks them down into sub-issues in a visual progression.