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PROBLEMSOLVINGWITHTHEMCKINSEYMETHODMembrane,ForBetterTomorrowPROBLEMSOLVINGWITHTHEMCKINMCKINSEY

PROBLEMSOLVINGAPPROACHIntuitionDataProblemSolutionBusinessNeed

CompetitiveOrganizationalFinancialOperationalAnalyzing

FramingDesigningGatheringInterpretingPresenting

StructureBuy-inImplementation

DedicationReactionCompletionIterationLeadership

VisionInspirationDelegationManaging

TeamClientSelfFocusoftoday’sdiscussionMCKINSEYPROBLEMSOLVINGAPPROFRAMINGTHEPROBLEM–KEYTIPSStartwithstructure,notdataBreaktheprobleminto“MECE”parts(usingissuetrees)FormasoundhypothesisastotheanswerIdentifywhatconditionsarenecessaryandsufficienttoprovethehypothesis(usinghypothesistrees)Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–KEYTIPSFRAMINGTHEPROBLEM–ISSUETREEEXAMPLEProblem:HowcantheAcmeWidgetCompanyincreaseprofitsfromitsexistingbusinesslines?Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–ISSUETRFRAMINGTHEPROBLEM–ISSUETREEEXAMPLEHowcanAcmeincreaseprofitsfromexistingbusinesslines?Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–ISSUETRFRAMINGTHEPROBLEM–ISSUETREEEXAMPLEHowcanAcmeincreaseprofitsfromexistingbusinesslines?FromWidgetsFromThrum-matsFromGrommetsWhichBusinessLines?Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–ISSUETRFRAMINGTHEPROBLEM–ISSUETREEEXAMPLEHowcanAcmeincreaseprofitsfromexistingbusinesslines?FromWidgetsFromThrum-matsFromGrommetsIncreaseRevenuesDecreaseExpensesWhichBusinessLines?How?Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–ISSUETRFRAMINGTHEPROBLEM–ISSUETREEEXAMPLEHowcanAcmeincreaseprofitsfromexistingbusinesslines?FromWidgetsFromThrum-matsFromGrommetsIncreaseRevenuesDecreaseExpensesDecreaserawmaterialcostsDecreaselaborcostsDecreaseoverheadcostsWhichBusinessLines?How?How?Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–ISSUETRFRAMINGTHEPROBLEM–ISSUETREEEXAMPLEHowcanAcmeincreaseprofitsfromexistingbusinesslines?FromWidgetsFromThrum-matsFromGrommetsIncreaseRevenuesDecreaseExpensesDecreaserawmaterialcostsDecreaselaborcostsDecreaseoverheadcostsNegotiatewageconcessionsImplementalabor-savingproductionprocessWhichProductLines?How?How?How?NegotiatehigherproductivityquotasFRAMINGTHEPROBLEM–ISSUETRFRAMINGTHEPROBLEM–ISSUETREEASSIGNMENTProblem:HowcanIhavemoremoneyattheendofeachmonthwithoutincurringdebt?Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–ISSUETRISSUETREESVS.HYPOTHESISTREESIssuetreesidentifyallpotentialideasIssuetreesask“How”wecouldmeetadesiredoutcomeIssuetreesareexcellentfororganizingideasina“MECE”mannerCompleteissuetreesuncoverallpotentialideasHypothesistreesfocusandbuildupanargumentorconclusionHypothesistreesask“Why”webelievesomethingtobetrueHypothesistreesareexcellentfornarrowingdowninvestigationtoessentialsCompletehypothesistreesbuildupacompleteargumentHypothesistreesfocusonthe“sowhat”ofanydatathatispresentedMembrane,ForBetterTomorrowISSUETREESVS.HYPOTHESISTREFRAMINGTHEPROBLEM–HYPOTHESISTREEEXAMPLEHypothesis:WecanincreasetheprofitabilityoftheAcmeWidgetCompanythroughastreamlinedproductionprocessforthrum-mats.Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–HYPOTHESFRAMINGTHEPROBLEM–HYPOTHESISTREEEXAMPLEWecanincreasethrum-matprofitabilitywiththenewproductionprocess.Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–HYPOTHESFRAMINGTHEPROBLEM–HYPOTHESISTREEEXAMPLEWecanincreasethrum-matprofitabilitywiththenewproductionprocess.Itwillreduceourcosts.Ourorganizationcanimplementthenecessarychanges.Wecanmaintainproductqualitywhileimplementingtheprocess.Why?Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–HYPOTHESFRAMINGTHEPROBLEM–HYPOTHESISTREEEXAMPLEWecanincreasethrum-matprofitabilitywiththenewproductionprocess.Itwillreduceourcosts.Ourorganizationcanimplementthenecessarychanges.Wecanmaintainproductqualitywhileimplementingtheprocess.Theprocessdoesnotrequirenewfacilities.Theprocessdoesnotrequirenewskills.Why?Why?FRAMINGTHEPROBLEM–HYPOTHESFRAMINGTHEPROBLEM–HYPOTHESISTREEASSIGNMENTHypothesis:Thebestwayformetohavemoremoneyattheendofthemonthistospendlessthroughcomparisonshopping.FRAMINGTHEPROBLEM–HYPOTHESDESIGNINGTHEANALYSIS–KEYTIPSLayouttheissuesinawrittenworkplanbypriorityIdentifytheessentialanalysesnecessarytodrawconclusionsoneachissueDisregardanalysesthatare“interesting”butnotessentialtoprove/disprovethehypothesisAvoidtime-consuminganalysesdesignedformoreprecisionthannecessaryBegineachanalysiswiththeend(specificendproductsandtiming)inmindDESIGNINGTHEANALYSIS–KEYTDESIGNINGTHEANALYSIS–WORKPLANEXAMPLEIssue/HypothesisCanweimplementthenewproductionprocess?YesDoestheprocessrequirenewfacilities?NoIfitdoesrequirenewfacilities,canweacquirethemeconomically?YesAnalysesTechnicalspecificationsListoffacilitiesthatmeetnewcriteriaMapof“facilitiesgap”Sourcesofrequiredfacilities/equipmentCosttofillgapsEffectonprojectrateofreturnDataSourcesArticles,interviewsFacilitiesmanagement,interviewsFacilitiesmanagement,thrum-matlinesupervisors,interviewsOperations,tradepublicationsOperations,contractors,interviewsFinancedepartment,prioranalysisEndProductChartListChartListTableSpreadsheetResponsibilityTomTomBelindaBelindaBelindaTerryDuedates3-Jun5-Jun7-Jun7-Jun10-Jun12-JunDESIGNINGTHEANALYSIS–WORKPGATHERINGTHEDATA–KEYTIPSUsetheworkplantofocusthesearchSearchthewebandotherpublicsourcesforessentialfactsIdentifyandinterviewexpertstouncoverhard-to-findfactsanddeeperinsightsConductprimaryresearchonlyifunavoidableMembrane,ForBetterTomorrowGATHERINGTHEDATA–KEYTIPSUINTERPRETINGTHERESULTS–KEYTIPSLookforthe80/20opportunitiesAlwaysask,“what’sthesowhat?”PerformsanitychecksDrawachartforeachinsightDon’tmakethefactsfityourhypothesisPulltogether“thestory”Membrane,ForBetterTomorrowINTERPRETINGTHERESULTS–KEYBACKUPMembrane,ForBetterTomorrowBACKUPMembrane,ForBetterTom22ISSUETREE–SAVINGMONEYHow?How?...How?How?HowcanIhavemoremoney

attheendofeachmonthwithoutincurringadebt?IncreaseincomeReduceexpensesReceiveawindfallReceivemore$frominvestmentsReceivemore$fromworkPaylessforsameamountofitemsBuylessLegallyIllegallyWorkmorehoursMakemoreperhourBuylowerqualityitemsShoparoundforspecialsFoodClothingUtensilsEntertainmentTravelOtherBetterpaidindustryHigherjoblevelAdditionaljobOvertimeWinlotteryInherit22ISSUETREE–SAVINGMONEYHow23HYPOTHESIS-DRIVEN–TREESAVINGMONEYThebestwayformetohavemoremoneyattheendofthemonthistospendlessthroughcomparisonshoppingWhy?Why?Why?Which?ComparisonshoppingisaninterestingopportunityChangingmylifestyleisnotanoptionAdditionalinvestmentsdonotwipeoutsavingsSavingsarefeasibleTocompensatefordemandingworkload,IneedtoinvestinweeklyvisitstothespaandtheoperaMyprofessiondoesnotallowmetowearlowerqualityclothesTobalancethejunkfoodIeatduringtheweek,Ineedatleastonethree-coursemealontheweekendSavingsin$Opportunitycostofadditionaltime

takenupbycomparisonshoppingNewformatsoffersamequalityatlowerpriceKeyspendingcategorieshavecompetitioninnewformatsHypermarketsPriceClubHomeDepotAutomall23HYPOTHESIS-DRIVEN–TREESAVPROBLEMSOLVINGWITHTHEMCKINSEYMETHODMembrane,ForBetterTomorrowPROBLEMSOLVINGWITHTHEMCKINMCKINSEY

PROBLEMSOLVINGAPPROACHIntuitionDataProblemSolutionBusinessNeed

CompetitiveOrganizationalFinancialOperationalAnalyzing

FramingDesigningGatheringInterpretingPresenting

StructureBuy-inImplementation

DedicationReactionCompletionIterationLeadership

VisionInspirationDelegationManaging

TeamClientSelfFocusoftoday’sdiscussionMCKINSEYPROBLEMSOLVINGAPPROFRAMINGTHEPROBLEM–KEYTIPSStartwithstructure,notdataBreaktheprobleminto“MECE”parts(usingissuetrees)FormasoundhypothesisastotheanswerIdentifywhatconditionsarenecessaryandsufficienttoprovethehypothesis(usinghypothesistrees)Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–KEYTIPSFRAMINGTHEPROBLEM–ISSUETREEEXAMPLEProblem:HowcantheAcmeWidgetCompanyincreaseprofitsfromitsexistingbusinesslines?Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–ISSUETRFRAMINGTHEPROBLEM–ISSUETREEEXAMPLEHowcanAcmeincreaseprofitsfromexistingbusinesslines?Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–ISSUETRFRAMINGTHEPROBLEM–ISSUETREEEXAMPLEHowcanAcmeincreaseprofitsfromexistingbusinesslines?FromWidgetsFromThrum-matsFromGrommetsWhichBusinessLines?Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–ISSUETRFRAMINGTHEPROBLEM–ISSUETREEEXAMPLEHowcanAcmeincreaseprofitsfromexistingbusinesslines?FromWidgetsFromThrum-matsFromGrommetsIncreaseRevenuesDecreaseExpensesWhichBusinessLines?How?Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–ISSUETRFRAMINGTHEPROBLEM–ISSUETREEEXAMPLEHowcanAcmeincreaseprofitsfromexistingbusinesslines?FromWidgetsFromThrum-matsFromGrommetsIncreaseRevenuesDecreaseExpensesDecreaserawmaterialcostsDecreaselaborcostsDecreaseoverheadcostsWhichBusinessLines?How?How?Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–ISSUETRFRAMINGTHEPROBLEM–ISSUETREEEXAMPLEHowcanAcmeincreaseprofitsfromexistingbusinesslines?FromWidgetsFromThrum-matsFromGrommetsIncreaseRevenuesDecreaseExpensesDecreaserawmaterialcostsDecreaselaborcostsDecreaseoverheadcostsNegotiatewageconcessionsImplementalabor-savingproductionprocessWhichProductLines?How?How?How?NegotiatehigherproductivityquotasFRAMINGTHEPROBLEM–ISSUETRFRAMINGTHEPROBLEM–ISSUETREEASSIGNMENTProblem:HowcanIhavemoremoneyattheendofeachmonthwithoutincurringdebt?Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–ISSUETRISSUETREESVS.HYPOTHESISTREESIssuetreesidentifyallpotentialideasIssuetreesask“How”wecouldmeetadesiredoutcomeIssuetreesareexcellentfororganizingideasina“MECE”mannerCompleteissuetreesuncoverallpotentialideasHypothesistreesfocusandbuildupanargumentorconclusionHypothesistreesask“Why”webelievesomethingtobetrueHypothesistreesareexcellentfornarrowingdowninvestigationtoessentialsCompletehypothesistreesbuildupacompleteargumentHypothesistreesfocusonthe“sowhat”ofanydatathatispresentedMembrane,ForBetterTomorrowISSUETREESVS.HYPOTHESISTREFRAMINGTHEPROBLEM–HYPOTHESISTREEEXAMPLEHypothesis:WecanincreasetheprofitabilityoftheAcmeWidgetCompanythroughastreamlinedproductionprocessforthrum-mats.Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–HYPOTHESFRAMINGTHEPROBLEM–HYPOTHESISTREEEXAMPLEWecanincreasethrum-matprofitabilitywiththenewproductionprocess.Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–HYPOTHESFRAMINGTHEPROBLEM–HYPOTHESISTREEEXAMPLEWecanincreasethrum-matprofitabilitywiththenewproductionprocess.Itwillreduceourcosts.Ourorganizationcanimplementthenecessarychanges.Wecanmaintainproductqualitywhileimplementingtheprocess.Why?Membrane,ForBetterTomorrowFRAMINGTHEPROBLEM–HYPOTHESFRAMINGTHEPROBLEM–HYPOTHESISTREEEXAMPLEWecanincreasethrum-matprofitabilitywiththenewproductionprocess.Itwillreduceourcosts.Ourorganizationcanimplementthenecessarychanges.Wecanmaintainproductqualitywhileimplementingtheprocess.Theprocessdoesnotrequirenewfacilities.Theprocessdoesnotrequirenewskills.Why?Why?FRAMINGTHEPROBLEM–HYPOTHESFRAMINGTHEPROBLEM–HYPOTHESISTREEASSIGNMENTHypothesis:Thebestwayformetohavemoremoneyattheendofthemonthistospendlessthroughcomparisonshopping.FRAMINGTHEPROBLEM–HYPOTHESDESIGNINGTHEANALYSIS–KEYTIPSLayouttheissuesinawrittenworkplanbypriorityIdentifytheessentialanalysesnecessarytodrawconclusionsoneachissueDisregardanalysesthatare“interesting”butnotessentialtoprove/disprovethehypothesisAvoidtime-consuminganalysesdesignedformoreprecisionthannecessaryBegineachanalysiswiththeend(specificendproductsandtiming)inmindDESIGNINGTHEANALYSIS–KEYTDESIGNINGTHEANALYSIS–WORKPLANEXAMPLEIssue/HypothesisCanweimplementthenewproductionprocess?YesDoestheprocessrequirenewfacilities?NoIfitdoesrequirenewfacilities,canweacquirethemeconomically?YesAnalysesTechnicalspecificationsListoffacilitiesthatmeetnewcriteriaMapof“facilitiesgap”Sourcesofrequiredfacilities/equipmentCosttofillgapsEffectonprojectrateofreturnDataSourcesArticles,interviewsFacilitiesmanagement,interviewsFacilitiesmanagement,thrum-matlinesupervisors,interviewsOperations,tradepublicationsOperations,contractors,interviewsFinancedepartment,prioranalysisEndProductChartListChartListTableSpreadsheetResponsibilityTomTomBelindaBelindaBelindaTerryDuedates3-Jun5-Jun7-Jun7-Jun10-Jun12-JunDESIGNINGTHEANALYSIS–WORKPGATHERINGTHEDATA–KEYTIPSUsetheworkplantofocusthesearchSearchthewebandotherpublicsourcesforessentialfactsIdentifyandinterviewexpertstouncoverhard-to-findfactsanddeeperinsightsConductprimaryresearchonlyifunavoidableMembrane,ForBetterTomorrowGATHERINGTHEDATA–KEYTIPSUINTERPRETINGTHERESULTS–KEYTIPSLookforthe80/20opportunitiesAlwaysask,“what’sthesowhat?”PerformsanitychecksDrawachartforeachinsightD

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