The McKinsey Way Summary

Introduction

“McKinsey exists to solve business problems. The consultants who succeed at McKinsey love to solve problems”. Indeed, given the prestigiousness of the firm, it is indisputable that its consultants must excel in what they do, problem-solving. What are their secrets? A highly structured, fact-based proprietary methodology that McKinseyites are taught to employ; and a carefully thought out operating process to implement its problem-solving model and bring value to their clients, both of which are explored in details by Ethan M. Rasiel, former McKinsey & Company associate, in his book, The McKinsey Way.

The book is divided into five parts: The McKinsey way of thinking about business problems; The McKinsey way of working to solve business problems; The McKinsey way of selling the solutions; Surviving at McKinsey; and Life after McKinsey. The first two parts look at how these elite consultants approach business problems and effectively solve them. Next, the third part explains how to get the client to buy into such good design solutions, and take them from paper into real life. Finally, in the last two parts of the book, the author shares his tips to succeed in any high pressured organization such as McKinsey and the personal memories of the alumni while working at the firm.

McKinsey Way of Thinking

Building the Solution: Fact-based, rigidly structured, hypothesis-driven

1. Facts are friendly: Solutions always begin with facts, and are supported by facts. Facts compensate for the lack of gut instinct and bridge the credibility gap.
2. Feel free to be MECE: Problem-solving requires structured thinking, which MECE (“mutually exclusive, collectively exhaustive”) aims to achieve. MECE allows a person’s thinking to be complete while avoiding confusion and overlap. The golden rule is to have between two to five top items when listing out the issues, factors, solutions, etc.
3. Solve the problem at the first meeting — the initial hypothesis : Before deep-dive analysis, McKinseyites always come up with top-line initial hypotheses (IH). Indeed, these actionable recommendations are formed from a combination of facts and structure gathered at the early stage of the study. The consultant will then use them as a problem-solving map, which would guide them through the complexities of a typical business problem.

Developing an Approach

1. The Problem is not always the problem: To fulfill the responsibility to act in the client’s best interests, a consultant must find the root cause or the “real” problem that their clients are facing. This can be done by treating the given initial problem as symptoms and “digging deeper; getting facts; asking questions, and poking around”.
2. Don’t Re-invent the wheel: To focus on the “drivers” of the problem and jumpstart working toward a solution, one should utilize the available, existing analytical tools and frameworks.
3. … But every client is unique: Although many business problems and their solutions may be similar, it is critical to validate the IH with fact-based analysis instead of trusting blindly one’s gut instinct.
4. Don’t make the facts fit your solution: It is important to keep an open and flexible mind. IH should not be viewed as the answer. The goal of the problem-solving process is to find the root cause of the problem.
5. Make sure your solution fits your clients: For a solution to be valuable and implementable, a consultant must take into account the client’s strengths, weaknesses, capabilities, and limitations.
6. Sometimes you have to let the solution come to you: In situations in which the IH cannot be formed, fact-based analysis and creative thinking will eventually do the trick.
7. Some problems you just can’t solve, solve them anyway: Redefining the problem, adapting the solution and working through the politics are the ways to deal with situations deemed as unsolvable.

80/20 and Other Rules to Live By

1. 80/20 rule: 80% of something is usually caused by 20% of something else. This rule works exceptionally well when finding patterns in data analysis, and can help to discover problems as well as opportunities in the client’s organization.
2. Don’t boil the ocean: To avoid wasting time and effort, it is crucial to figure out the priorities and to be selective when doing analysis.
3. Find the key drivers: A problem may have 100 factors affecting it. Therefore, consultants should always focus on identifying the “key drivers”, the most important factors, to get to the core of the problems.
4. The Elevator Test: Being able to present a solution clearly and precisely in 30 seconds by focusing on the top issues and recommendations is an essential skill a consultant should have to sell the solutions.
5. Pluck the low-hanging fruit: Providing practical insights or solutions for immediate improvements, before the overall problems have been solved, helps to reduce the pressure on the team, adds credibility and boosts the morale of both the team and the client.
6. Make Charts every day: Crafting facts into solutions every day, little by little, helps to push one’s thinking and avoid forgetting.
7. Hit Singles: Trying to solve a complicated business problem alone is almost impossible. Even if someone manages to do that once, he/she would raise unrealistic expectations. Failing to meet such expectations would jeopardize his/her credibility and career. It is advised to do enough and do it well.
8. Look at the big picture: During a study, it is crucial to take a step back every now and then, and assess the situation. This will help the study to stay on its goal and direction.
9. Don’t accept “I have no idea”: “I have no idea” is an unacceptable answer from interviewees and from oneself. Treating it as a challenge, being persistent and creative are methods to overcome such situations and get the desired information.

McKinsey Way of Working to Solve Business Problems

Selling a Study

1. How to sell without selling: McKinsey acquires clients through its credibility and popularity in problem-solving. The Firm does not sell but market instead. They produce a steady stream of books, articles, scholarly journals, etc., and invite a lot of coverage by journalists. Also, McKinsey maintains a vast network of informal contacts with past, current, and potential clients. The goal is to make sure that whenever a difficult problem arises, McKinsey is the first place that business leaders and executives would seek.
2. Be careful what you promise: To avoid over-promising and under-delivering, as well as team burnout, structuring the project properly at the beginning and setting realistic milestones will benefit both the team and the client.

Assembling a Team

1. Getting the mix right: Skills and personalities should be taken into account when deciding members for a project
2. A little team bonding goes a long way: Team bonding is recommended for numerous benefits such as increased productivity, improved morale, etc. However, a team leader should avoid making it a chore. He or she should consider and respect the teammates’ opinions and time when arranging team bonding events.
3. Take your team’s temperature to maintain morale: Maintaining a team’s morale is an ongoing responsibility that is crucial for the team’s performance. It is important to care, respect, and get to know the teammates as people. A team leader should also be steady with the team’s priorities and directions, as well as being transparent with team members.

Managing Hierarchy

1. Make your boss look good: Consultants should do their job to the best of their ability and be transparent to their supervisor. This would create a win-win situation.
2. An aggressive strategy for managing hierarchy: To be a successful consultant, one has to assert oneself.

Doing Research

1. Don’t Re-invent the wheel: To leverage valuable time and jumpstart a project, it is crucial to make use of available, relevant resources and people who know about the problem.
2. Specific research tips:

• Start with the annual report.
• Look for outliers.
• Look for the best practice.

Conducting Interviews

1. Be prepared: Write an interview guide: A constructed interview guide with all necessary questions and main purposes listed is crucial to get desired information from the interviewees and save time. A consultant should also get to know as much as possible about the interviewee in advance to conduct an appropriate approach. Last, starting with general questions then moving on to specific ones will help developing rapport and warm up the person being interviewed. Finally, ending the interview with a prototypical McKinsey question (if there is anything else he/she would like to tell) could uncover unexpected, valuable insights.
2. When conducting interviews, listen and guide: Showing interest, active listening while using positive body language, and taking notes are the best behaviors to conduct during an interview.
3. Seven tips for successful interviewing:

• Have the interviewee’s boss set up the meeting.
• Interview in pairs.
• Listen; don’t lead.
• Paraphrase, paraphrase, paraphrase.
• Use the indirect approach.
• Don’t ask for too much.
• Adopt the Columbo tactic.

4. Don’t leave the interviewee naked: Respecting the interviewee’s anxiety and showing how the process benefits them not only is the right thing to do but also helps to avoid obstruction and hostility.

5. Difficult interviews: Hostile, refuse to talk and “sandbaggers” are three types of difficult interviewees identified by the author. When facing these people, it is important to stay calm, persistent, and to “pull rank” whenever necessary.

6. Always write a thank-you note: A thank-you note for the interviewee is polite, professional, and could pay back in unexpected ways.

Brainstorming

1. Proper prior preparation: Effective brainstorming requires hard-nosed advance work.
2. In a white room: Brainstorming is about generating new ideas and requires the participation of all members regardless of their hierarchy. Respecting each other, being creative, and writing down ideas are recommended for a productive brainstorming session.
3. Some brainstorming exercises:

• The Post-it exercise.
• The flipchart exercise.
• Bellyaches upfront.

McKinsey Way of Selling Solutions

Making Presentations

1. Be structured: For a presentation to succeed, it must be structured and logical in clear, easy-to-follow steps.
2. Remember that there are diminishing marginal returns to effort: It is important to recognize the point at which nitpicking no longer add value, and draw the line on changes. Trying to make the presentation perfect at the last minute often does more harm than good.
3. Prewire everything: A good business presentation should contain nothing new for the audience. All the players at the client should have been walked through findings before the grand presentation.

Displaying Data with Charts

1. Keep it Simple — One message per chart: The more complex a chart becomes, the less effective it is at conveying information. A good chart should convey only one message with an effective but simple one-sentence caption on top, and the source at the bottom. It is also important to avoid having too many charts as they may bore the audience.
2. Use the waterfall chart: The waterfall chart is an excellent method of illustrating quantitative flow.

Managing Internal Communications

1. Keep the information flowing: For a successful team operation, information should flow constantly between members. The team should be up to date with the board outline of the project and the boss should be up to date with the team’s progress. Message and meetings are effective channels to transfer information if performed openly and frequently.
2. The three keys to an effective message: A good business message has three attributes; brevity, thoroughness, and structure. Including all three in any voice mail, e-mail, or memo to get the message across effectively.
3. Always look over your shoulder: An effective and professional consultant always maintains confidentiality.
4. Working with Clients
5. Keep the client team on your side: It is crucial to make sure that members of the client team understand why their efforts are important and beneficial for them.
6. How to deal with “Liability” client team members: If possible, getting “liability” members off the client team is the best solution. Otherwise, a consultant should be creative and persistent to handle these situations.
7. Engage the client in the process: A consultant can keep the clients engaged by understanding their agendas, providing frequent updates, and, whenever possible, delivering practical insights or solutions for immediate improvements even before the end of the study.
8. Get buy-in throughout the organization: To create real change that has a lasting impact, the solution should get acceptance from everyone in the organization that it affects.
9. Be rigorous about implementation: A rigorous and thorough plan must be prepared to implement major change. Specific people should also be selected carefully to be responsible for rolling out the solution.

Surviving at McKinsey

1. Find Your Own Mentor: An experienced mentor can provide guidance and experience for one’s career in consulting.
2. Surviving on the Road: Consultants travel a lot. Therefore, it is best to have proper planning, a good attitude and a positive perspective.
3. Taking These Three Things with You Wherever You Go: Traveling needs should be narrowed down to the most essential items to travel lightly.
4. A Good Assistant is a Lifeline: In consulting, assistants are extremely helpful regardless of their title. They should be treated well, given clear objectives and room to grow.
5. Recruiting McKinsey Style: Being above average intelligent, possessing a great academic and work achievement, and demonstrating extraordinary analytical ability are the most crucial attribute to become a McKinsey consultant.
6. If You Want a Life, Lay Down Some Rules:

• Make one day a week off-limits.
• Don’t take work home.
• Plan ahead.

Life After McKinsey

1. The Most Valuable Lesson
2. Memories of McKinsey

In the last part, the author listed out all the valuable lessons and memories gathered from interviews with McKinsey alumni, which have been presented throughout the book. He then concluded with a statement: “Fact-based, structured thinking combined with professional integrity will get you on the road to your business goals. The rest derives from that. Go and learn”. With this wonderful piece of reading, Ethan M. Rasiel has successfully provided a glimpse on the way this worldwide consulting institution approaches and solves the most complex business problems encountered by their clients.