Book Summary : The McKinsey Way

My mentor recommended this book to me. To be honest I heard him said “The McKinsey Age”, but I could not find such book on the internet database, and so I assumed he meant “The McKinsey Way”. He mentioned it’s a really great book that trademarked McKinsey consultants’ thinking as their own. He wished our consulting company would have similar kind of pedagogy/framework.

I’ve summarised all 180 pages of the book in this post, and put my two cents into it:

McKinsey Way of Thinking

1. Building the Solution : fact-based, structured, and hypothesis-driven

• Extensive facts before gut feelings
• MECE : Mutually exclusive, collectively exhaustive — when you list your ideas/issues, make sure the points dont overlap. Overlap represents muddled thinking by the writer and leads to confusion for the reader. McKinsey people issue list contains neither fewer than two nor more than five top-line issues. Try to fit the ‘other issues’ into the top-line issue
• Solve the problem at the first meeting — the initial hypothesis: Make an actionable recommendation, then test out your thinking with your teammates

2. Developing an Approach

• The Problem is not always the problem: try to analyse more and treat clients’ problem as ‘symptoms’ rather than a verdict.
• Don’t Re-invent the wheel… : use the frameworks available to you
• … but every client is unique : use the tool, but adjust it to clients’ problems
• Dont make the facts fit your solution : Keep an open and flexible mind!
• Make sure your solution fits your clients : Businesses are full of real people, with real strengths and weaknesses and limitations. When academic ideals meet business realities, business realities usually win.
• Sometimes you have to let the solution come to you. Don’t panic! If you get your facts together and do your analyses, the solution will come to you.
• Some problems you just cant solve, solve them anyway : Redefine the problem, and work through the politics.

3. 80/20 and Other Rules to Live By

• 80/20 rule : 80% of something is usually cost by 20% of something else. It is all about data. When you have your data, put it on a spreadsheet or in a database. Sort it in various ways. Play with the numbers. You will begin to see patterns, clumps that stand out. Those patterns will highlight aspects of your business that you probably did not realise. They may mean problems, but they also mean opportunities.
• Dont boil the ocean : work smarter, not harder. There’s a lot of data out there relating to your problem, and a lot of analyses you could do. Ignore most of them. Don’t try to analyze everything. Be Selective; figure out the priorities of what you are doing. Know when you have done enough, then stop. Otherwise, you will spend a lot of time and effort for very little return, like boiling the ocean to get a handful of salt
• Find the key drivers : Many factors affect your business. Focus on the most important one — the key drivers. It means drilling down to the core of the problem, rather than picking the whole problem apart piece by piece, layer by layer. Then, you can apply thorough, fact-based analysis where it will do the most good and avoid going down blind alleys
• The Elevator Test : know your solution so thoroughly that you can explain it clearly and precisely to your client in 30 seconds. Show them the issues and the three most important recommendation
• Pluck the low-hanging fruit : they boost morale and give you added credibility by showing anybody who may be watching that you’re on the ball and mean business.
• Make Charts everyday : avoid losing the facts amidst your busy schedule. Even bullet points will do.
• Hit Singles : You can’t do everything, so don’t try. Just do what you’re supposed to do and get it right. It’s much better to get to first base consistently than to try to hit a home run — and strike out 9 times out of 10
• Look at the big picture : Every now and then, take a mental step back from whatever you’re doing. Ask yourself some basic questions : How does what you’re doing solve the problem? How does it advance your thinking? Is it the most important things you could be doing right now? If it’s not helping, why are you doing it?
• Don’t accept “I have no idea” : people always have an idea if you probe just a bit. Ask a few pointed questions — you’ll be amazed at what they know. Knowing that with some educated guessing, and you can be well along the road to the solution. Just as you shouldn’t accept “I have no idea” from others, so you shouldn’t accept it from yourself, or expect others to accept it from you.

McKinsey Way of Working to Solve Business Problems

1. Selling a Study

• Sell without selling : Soetimes the right way to sell your producct or service is not to barge into your customer’s home with a bunch of free samples. Just be there, at the right time, and make sure the right people know who you are. In McKinsey, 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 Firm produces a steady stream of books and articles, some of them extremely influential, such as the famous In Search of Excellence by Peters and Waerman. McKinsey also publishes its own scholarly journal, The McKinsey Quarterly, which it sends gratis to its clients, as well as to its formal consultants, many of whom now occupy senior positions at potential clients. The Firm invites (and gets) a lot of coverage by journalists. Many McKinsey partners and directors are internationally known as experts in their fields. 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 siting on the boards of charities, museums, and cultural organizations; many members of these boards are executives at current or potential clients. McKinsey consultants also address industry conferences. Make suure that the right people know the Firm is there
• Be careful what you promise : Don’t bite off more than you can chew. Structure your project properly at the beginning, it will at least get you off to the right start

2. Assembling a Team

• More people mean more hands to gather and analyze data, and more minds to figure out what the data really mean. Learn to select the right people for your team
• Getting the mix right : Think about what sorts of skills and persolanities will work best for your project. Then choose your teammates carefully.
• A little team bonding goes a long way

3. Managing Hierarchy

4. Doing Research

• Don’t Re-invent the wheel : There is a huge stream of information out there for you to take advantage of.
• Specific research tips : — start with the annual report ( turn to “Message to Shareholders” or “Chairman’s Remark” to see how the company has performed in the last year, where management hopes to take the company in the future, and the strategy for getting there) — look for outliers : things that are especially good or bad — look for the best practive: find out what the best performers in the industry are doing and imitate them (often, this is the quickest antidote to poor performance). Usually, you can’t find out about best practices in the library, so you have to think creatively. Sometimes you can find best practice within your company. Someone, some team, or some division is outperforming the rest of the company. Find out why. Figure out how to implement the top performer’s secrets throughout your organization

5. Conducting Interviews

• Be prepared: Write an interview guide. Know what you’re going to ask. Know the kind of person you’re going to interview. Start with general questions and move on to specific ones. Start with anodyne questions about the industry overall. This will help the interviewee “warm up” and allow you to develop rapport. Ask a “ringer” which is question that you already know the answer to, to gain insights into the interviewee’s honesty and/or knowledge. Always ask whether there’s anything else he’d like to tell you or any question you forgot to ask
• When conducting interviews, listen and guide: always let the interviewee know you’re listening. Nod and take notes. Keep the interviewee on track. If you want people to say more than they have, if you think they have left out something important but you’re not sure what it is, say nothing. Let the silence hang. Be sensitive to the interviewee’s feelings to get them to cooperate
• Don’t leave the interviewee naked : interviews can be unnerving to them. You have a responsibility to be sensitive to their fears. It’s not only the right thing to do;it makes good business sense too. You have a professional responsibility to respect the interviewee’s anxiety, to allay it, and not to take advantage of it. Allaying the fears of interviewees means demonstrating how the process benefits them — not just the interview, but the whole process of solving the organisation’s problems.
• Always write a thank-you note: take the time to write a thank-you letter. It’s polite and professional, and could pay you back in unexpected ways

6. Brainstorming

• Proper prior preparation : Effective brainstorming requires some hard-nosed advance work
• In a White room: the point of brainstorming is the generation of new ideas. So start with tabula rasa — a clean slate. When you get your team into the room, leave your preconceptions at the door. Bring the facts you know, but find new ways of looking at them.

McKinsey Way of Selling Solutions

1. Making Presentations

• Be structured : for your presentation to succeed, it must take the audience down the path of your logic in clear, easy to follow steps.
• Remember that there are diminishing marginal returns to effort : resist the temptation to tweak your presentation right up to the last minute. Weigh the value of a change agains a good night’s sleep for you and your team. Don’t let the best be the enemy of the good.
• Prewire everything : a good business presentation should contain nothing new for the audience. Walk all the players at the client through your findings before you gather them into one room.

2. Displaying Data with Charts

• Keep it Simple — One message per chart : the more complex a chart becomes, the less effective it is at conveying information. use charts as a means of getting your message across, not as an art project. Also, put your source. Too many charts will bore your audience.
• Use the waterfall chart.

3. Managing Internal Communications

• Keep the information flowing : Information is to your team what gasoline is to a car’s engine. If you choke off the flow, you’ll stall
• The three keys to an effective message : a good business message has three atributes; brevity, thoroughness and structure. Include all three in every voice mail, e-mail or memo you send and you’ll get your message across.
• Always look over your shoulder : You cannot be an effective consultant if you don’t maintain confidentiality. Know when you can talk and wehn you can’t. Be just a bit paranoid.

4. Working with Clients

• Keep the client team on your side : when you’re working with a client team, you and the team have to work together or you won’t work at all. Make sure that members of the client team understand why their efforts are important to you and beneficial for them
• How to deal with “Liability” client team members : you may find that not everyone on the client team has the same abilities or goals as you do. Get “liability” members off the client team if you can; otherwise, work around them.
• Engage the client in the process : If the client doesn’t support you, your project will stall. Keep your clients engaged by keeping them involved
• Get buy-in throughout the organisation : If your solution is to have a lasting impact on your client, you have to get support for it at all levels of the organisation.
• Be rigorous about implementation : making change happen takes a lot of work. Be rigorous and thorough. Make sure someone takes responsibility for getting the job done

Surviving at McKinsey

1. Find Your Own Mentor : take advantage of others’ experience if you can. Find someone senior in your organization to be your mentor.
2. Surviving on the Road : traveling across the globe can take a lot out of you. Making travel an adventure will lighten your load. So will proper planning and a good attitude
3. Taking These Three Things with You Wherever You Go : Narrow your traveling needs down to the very few things you must have with you when you leave.
4. A Good Assistant is a Lifeline
5. Recruiting McKinsey Style
6. If You Want a Life, Lay Down Some Rules : When you work 80 hours or more per week, after eating, sleeping and personal hygiene, there’s not much time left over for anything else. If you want a life, you have to do a little advanced work.

Life After McKinsey

1. The Most Valuable Lesson
2. Memories of McKinsey