How McKinsey solves problems
News | Knowledge Seeker | July 23, 2009 at 7:13 am
After finishing reading The McKinsey Way, a short, 92-page book, readers will feel like having mentally listened to an “extended” elevator pitch about the work practices, culture and people of one of the leading consulting firms. The “elevator test” is something every senior associate must anticipate and be prepared for well in advance—the test may arise when the CEO of the client organisation has an emergency to attend to and he demands the associate to present the solution to him in a nutshell. The associate must effectively brief the CEO, who’s rushing to meet his lawyer outside his office, the results of months of research work in a couple of minutes before the elevator reaches the ground floor.
Ethan M Rasiel, the author, who worked at the firm at its New York office for four years (from 1989 to 1992), must have imagined that his readers, like that rushing CEO, are always taking the elevator—for, he had presented the approaches and techniques (such as MECE—pronounced “me-se” and stands for Mutually Exclusive Colle-ctively Exhaustive), the term McKinsey uses for attracting clients, analysing and solving their business problems in interestingly short and simple way. He also explains how he learnt the culture of the firm. Then a newcomer, he once wished his senior colleague “good luck. I hope you sell them on this one.” Pat came the reply, “No, no. Remember, McKinsey doesn’t sell.”
According to the author, no senior McKinsey directors make cold calls at the offices of Bill Gates and Ted Turner, asking if they have problems they want solved. The Firm doesn’t run ads in Forbes or Barron’s advertising 50 percent off telecommunications consulting. Although a partner’s compensation depends in large part on the amount of business he brings to the firm, no one goes out to knock on doors. The firm waits for the phone to ring.
And ring it does, not because McKinsey sells, but because McKinsey markets. The book talks about the several different ways the firm markets its services to make sure that on the day a senior executive decides she has a business problem, one of the first calls she makes is to the local office of McKinsey. “The Firm produces a steady stream of books and articles, some of them extremely influential, such as the famous In Search of Excellence (co-authored by Tom Peters, a former associate of McKinsey). McKinsey also publishes its own scholarly journal, The McKinsey Quarterly, which it sends gratis to its clients, as well as to its former consultants, many of whom now occupy senior positions at potential clients. The Firm invites (and gets) a lot of coverage by journalists.
McKinsey maintains a vast network of informal contacts with potential clients as well. The Firm encourages its partners to participate in “extracurricular activities” such as sitting on the boards of charities, museums, and cultural organisations.
However, The McKinsey Way is not The IBM Way or The HP Way in the sense that it may not offer enough insights into how the Firm grew to become what it is today. The book is more like a former McKinsey-ite’s diary that tells how people at the Firm worked solving what problems with which tools under what sort of environments. The book is all about the McKinsey way of thinking about business problems; the McKinsey way of working to solve business problems; the McKinsey way of selling solutions and inside story of life at McKinsey.
While introducing problem-solving techniques, Rasiel also explains the importance the Firm places on them and when and where they are deployed. All the standard time-tested McKinsey approaches such as the MECE that get pounded into every new associate’s head from the moment of entering the Firm are explained. “MECE structures your thinking with maximum clarity…when you think you have determined the issues, take a hard look at them. Is each one a separate and distinct issue? If so, then your issue list is mutually exclusive. Does every aspect of the problem come under one (and only one) of these issues? If so, then your issues are collectively exhaustive,” Rasiel explains. MECE is a cardinal rule so much so that “every document (including internal memos), every presentation, every e-mail and voice mail produced by McKinsey-ite is supposed to be MECE.”
Detailed are the step-by-step processes in problem solving—arriving at the Initial Hypothesis, testing the Initial Hypothesis, etc. The different styles and approaches that are taken in going ahead solving the problems in the real world are explained with anecdotes from the former associates. The author feels that approaches make all the difference. He dedicates a chapter for the approaches that begins by saying “just knowing the essence of the McKinsey problem-solving process doesn’t mean that now you can go forth and conquer the business world by being fact based, structured and hypothesis driven.”
The book also talks about the work-life of its people. The clients’ expectations (“they want it fixed yesterday and for nothing”) invariably would make it a challenge (for the senior associates like Engagement Director (ED) or Director of Client Services) as to how to balance the desires and budget constraints of the clients with the limits of the team. However, he points out that as an organisation, McKinsey is extremely good at figuring out how much a team can do over the length of a typical study. “The best EDs can balance the competing demands of client and team to a nicety; they tell the client, “We’re going to do X and Y. We could do Z, but it would kill the team,” while telling the team, “Look, we’ve already promised the client that we would do Z, so we’ve got to deliver.” They then work the team to its limit while simultaneously making the client feel that he is getting value for money and exceeding his expectations.”
There are hints everywhere (especially in the chapter, ‘Surviving at McKinsey’) about the high demanding workday at the Firm. Rasiel quotes a former associate who says, “…leaving McKinsey is never a question of whether—it’s a question of when. We used to say that half-life of a class of new associates is about two years—by the end of that time, half will have left the Firm. That was true in my time there and still is today.” Those who leave McKinsey may never have to work the same hours at the same intensity in any other job.
Some of McKinsey’s former associates’ responses as to “What is the most valuable lesson you have learnt?” and “What’re your most unforgettable memories?” make interesting reading and reveal how profound an impression the Firm had created in them.
As the author says, although the responses show that McKinsey alumni took away many memories, the strongest ones had to do with the interesting people with different background that make the Firm what it is. A former employee tells that in this way, “The collegiate atmosphere. The thing I miss most about McKinsey is the canteen, not so much because the food was good, but because you could always take time out for an interesting conversation.” The McKinsey culture is mainly about “structure, structure, structure, MECE, MECE, MECE, MECE, hypothesis-driven, hypothesis-driven, hypothesis-driven,” that influences once personality so profoundly that a former associate, who stayed with the Firm too long, says: “I think anything I would say would be too cynical.”
Source : ExpressITpeople
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