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PROBLEMSOLVINGWITHTHEMCKINSEYMETHODMCKINSEYPROBLEMSOLVINGAPPROACHIntuitionDataProblemSolutionBusinessNeed•Competitive•Organizational•Financial•OperationalAnalyzing•Framing•Designing•Gathering•InterpretingPresenting•Structure•Buy-inImplementation•Dedication•Reaction•Completion•IterationLeadership•Vision•Inspiration•DelegationManaging•Team•Client•SelfFocusoftoday’sdiscussionFRAMINGTHEPROBLEM–KEYTIPS•Startwithstructure,notdata•Breaktheprobleminto“MECE”parts(usingissuetrees)•Formasoundhypothesisastotheanswer•Identifywhatconditionsarenecessaryandsufficienttoprovethehypothesis(usinghypothesistrees)FRAMINGTHEPROBLEM–ISSUETREEEXAMPLEProblem:HowcantheAcmeWidgetCompanyincreaseprofitsfromitsexistingbusinesslines?FRAMINGTHEPROBLEM–ISSUETREEEXAMPLEHowcanAcmeincreaseprofitsfromexistingbusinesslines?FRAMINGTHEPROBLEM–ISSUETREEEXAMPLEHowcanAcmeincreaseprofitsfromexistingbusinesslines?FromWidgetsFromThrum-matsFromGrommetsWhichBusinessLines?FRAMINGTHEPROBLEM–ISSUETREEEXAMPLEHowcanAcmeincreaseprofitsfromexistingbusinesslines?FromWidgetsFromThrum-matsFromGrommetsIncreaseRevenuesDecreaseExpensesWhichBusinessLines?How?FRAMINGTHEPROBLEM–ISSUETREEEXAMPLEHowcanAcmeincreaseprofitsfromexistingbusinesslines?FromWidgetsFromThrum-matsFromGrommetsIncreaseRevenuesDecreaseExpensesDecreaserawmaterialcostsDecreaselaborcostsDecreaseoverheadcostsWhichBusinessLines?How?How?FRAMINGTHEPROBLEM–ISSUETREEEXAMPLEHowcanAcmeincreaseprofitsfromexistingbusinesslines?FromWidgetsFromThrum-matsFromGrommetsIncreaseRevenuesDecreaseExpensesDecreaserawmaterialcostsDecreaselaborcostsDecreaseoverheadcostsNegotiatewageconcessionsImplementalabor-savingproductionprocessWhichProductLines?How?How?How?NegotiatehigherproductivityquotasFRAMINGTHEPROBLEM–ISSUETREEASSIGNMENTProblem:HowcanIhavemoremoneyattheendofeachmonthwithoutincurringdebt?ISSUETREESVS.HYPOTHESISTREES•Issuetreesidentifyallpotentialideas•Issuetreesask“How”wecouldmeetadesiredoutcome•Issuetreesareexcellentfororganizingideasina“MECE”manner•Completeissuetreesuncoverallpotentialideas•Hypothesistreesfocusandbuildupanargumentorconclusion•Hypothesistreesask“Why”webelievesomethingtobetrue•Hypothesistreesareexcellentfornarrowingdowninvestigationtoessentials•Completehypothesistreesbuildupacompleteargument•Hypothesistreesfocusonthe“sowhat”ofanydatathatispresentedFRAMINGTHEPROBLEM–HYPOTHESISTREEEXAMPLEHypothesis:WecanincreasetheprofitabilityoftheAcmeWidgetCompanythroughastreamlinedproductionprocessforthrum-mats.FRAMINGTHEPROBLEM–HYPOTHESISTREEEXAMPLEWecanincreasethrum-matprofitabilitywiththenewproductionprocess.FRAMINGTHEPROBLEM–HYPOTHESISTREEEXAMPLEWecanincreasethrum-matprofitabilitywiththenewproductionprocess.Itwillreduceourcosts.Ourorganizationcanimplementthenecessarychanges.Wecanmaintainproductqualitywhileimplementingtheprocess.Why?FRAMINGTHEPROBLEM–HYPOTHESISTREEEXAMPLEWecanincreasethrum-matprofitabilitywiththenewproductionprocess.Itwillreduceourcosts.Ourorganizationcanimplementthenecessarychanges.Wecanmaintainproductqualitywhileimplementingtheprocess.Theprocessdoesnotrequirenewfacilities.Theprocessdoesnotrequirenewskills.Why?Why?FRAMINGTHEPROBLEM–HYPOTHESISTREEASSIGNMENTHypothesis:Thebestwayformetohavemoremoneyattheendofthemonthistospendlessthroughcomparisonshopping.DESIGNINGTHEANALYSIS–KEYTIPS•Layouttheissuesinawrittenworkplanbypriority•Identifytheessentialanalysesnecessarytodrawconclusionsoneachissue•Disregardanalysesthatare“interesting”butnotessentialtoprove/disprovethehypothesis•Avoidtime-consuminganalysesdesignedformoreprecisionthannecessary•Begineachanalysiswiththeend(specificendproductsandtiming)inmindDESIGNINGTHEANALYSIS–WORKPLANEXAMPLEIssue/HypothesisCanweimplementthenewproductionprocess?YesDoestheprocessrequirenewfacilities?NoIfitdoesrequirenewfacilities,canweacquirethemeconomically?YesAnalysesTechnicalspecificationsListoffacilitiesthatmeetnewcriteriaMapof“facilitiesgap”Sourcesofrequiredfacilities/equipmentCosttofillgapsEffectonprojectrateofreturnDataSourcesArticles,interviewsFacilitiesmanagement,interviewsFacilitiesmanagement,thrum-matlinesupervisors,interviewsOperations,tradepublicationsOperations,contractors,interviewsFinancedepartment,prioranalysisEndProductChartListChartListTableSpreadsheetResponsibilityTomTomBelindaBelindaBelindaTerryDuedates3-Jun5-Jun7-Jun7-Jun10-Jun12-JunGATHERINGTHEDATA–KEYTIPS•Usetheworkplantofocusthesearch•Searchthewebandotherpublicsourcesforessentialfacts•Identifyandinterviewexpertstouncoverhard-to-findfactsanddeeperinsights•ConductprimaryresearchonlyifunavoidableINTERPRETINGTHERESULTS–KEYTIPS•Lookforthe80/20opportunities•Alwaysask,“what’sthesowhat?”•Performsanitychecks•Drawachartforeachinsight•Don’tmakethefactsfityourhypothesis•Pulltogether“thestory”BACKUP22ISSUETREE–SAVINGMONEYHow?How?...How?How?HowcanIhavemoremoneyattheendofeachmonthwithoutincurringadebt?IncreaseincomeReduceexpensesReceiveawindfallReceivemore$frominvestmentsReceivemore$fromworkPaylessforsameamountofitemsBuylessLegallyIllegallyWorkmorehoursMakemoreperhourBuylowerqualityitemsShoparoundforspecials•Food•Cloth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