management consulting problem solving

McKinsey Problem Solving: Six steps to solve any problem and tell a persuasive story

The McKinsey problem solving process is a series of mindset shifts and structured approaches to thinking about and solving challenging problems. It is a useful approach for anyone working in the knowledge and information economy and needs to communicate ideas to other people.

Over the past several years of creating StrategyU, advising an undergraduates consulting group and running workshops for clients, I have found over and over again that the principles taught on this site and in this guide are a powerful way to improve the type of work and communication you do in a business setting.

When I first set out to teach these skills to the undergraduate consulting group at my alma mater, I was still working at BCG. I was spending my day building compelling presentations, yet was at a loss for how to teach these principles to the students I would talk with at night.

Through many rounds of iteration, I was able to land on a structured process and way of framing some of these principles such that people could immediately apply them to their work.

While the “official” McKinsey problem solving process is seven steps, I have outline my own spin on things – from experience at McKinsey and Boston Consulting Group. Here are six steps that will help you solve problems like a McKinsey Consultant:

Step #1: School is over, stop worrying about “what” to make and worry about the process, or the “how”

When I reflect back on my first role at McKinsey, I realize that my biggest challenge was unlearning everything I had learned over the previous 23 years. Throughout school you are asked to do specific things. For example, you are asked to write a 5 page paper on Benjamin Franklin — double spaced, 12 font and answering two or three specific questions.

In school, to be successful you follow these rules as close as you can. However, in consulting there are no rules on the “what.” Typically the problem you are asked to solve is ambiguous and complex — exactly why they hire you. In consulting, you are taught the rules around the “how” and have to then fill in the what.

The “how” can be taught and this entire site is founded on that belief. Here are some principles to get started:

Step #2: Thinking like a consultant requires a mindset shift

There are two pre-requisites to thinking like a consultant. Without these two traits you will struggle:

• A healthy obsession looking for a “better way” to do things
• Being open minded to shifting ideas and other approaches

In business school, I was sitting in one class when I noticed that all my classmates were doing the same thing — everyone was coming up with reasons why something should should not be done.

As I’ve spent more time working, I’ve realized this is a common phenomenon. The more you learn, the easier it becomes to come up with reasons to support the current state of affairs — likely driven by the status quo bias — an emotional state that favors not changing things. Even the best consultants will experience this emotion, but they are good at identifying it and pushing forward.

Key point : Creating an effective and persuasive consulting like presentation requires a comfort with uncertainty combined with a slightly delusional belief that you can figure anything out.

Step #3: Define the problem and make sure you are not solving a symptom

Before doing the work, time should be spent on defining the actual problem. Too often, people are solutions focused when they think about fixing something. Let’s say a company is struggling with profitability. Someone might define the problem as “we do not have enough growth.” This is jumping ahead to solutions — the goal may be to drive more growth, but this is not the actual issue. It is a symptom of a deeper problem.

Consider the following information:

• Costs have remained relatively constant and are actually below industry average so revenue must be the issue
• Revenue has been increasing, but at a slowing rate
• This company sells widgets and have had no slowdown on the number of units it has sold over the last five years
• However, the price per widget is actually below where it was five years ago
• There have been new entrants in the market in the last three years that have been backed by Venture Capital money and are aggressively pricing their products below costs

In a real-life project there will definitely be much more information and a team may take a full week coming up with a problem statement . Given the information above, we may come up with the following problem statement:

Problem Statement : The company is struggling to increase profitability due to decreasing prices driven by new entrants in the market. The company does not have a clear strategy to respond to the price pressure from competitors and lacks an overall product strategy to compete in this market.

Step 4: Dive in, make hypotheses and try to figure out how to “solve” the problem

Now the fun starts!

There are generally two approaches to thinking about information in a structured way and going back and forth between the two modes is what the consulting process is founded on.

First is top-down . This is what you should start with, especially for a newer “consultant.” This involves taking the problem statement and structuring an approach. This means developing multiple hypotheses — key questions you can either prove or disprove.

Given our problem statement, you may develop the following three hypotheses:

• Company X has room to improve its pricing strategy to increase profitability
• Company X can explore new market opportunities unlocked by new entrants
• Company X can explore new business models or operating models due to advances in technology

As you can see, these three statements identify different areas you can research and either prove or disprove. In a consulting team, you may have a “workstream leader” for each statement.

Once you establish the structure you you may shift to the second type of analysis: a bottom-up approach . This involves doing deep research around your problem statement, testing your hypotheses, running different analysis and continuing to ask more questions. As you do the analysis, you will begin to see different patterns that may unlock new questions, change your thinking or even confirm your existing hypotheses. You may need to tweak your hypotheses and structure as you learn new information.

A project vacillates many times between these two approaches. Here is a hypothetical timeline of a project:

Step 5: Make a slides like a consultant

The next step is taking the structure and research and turning it into a slide. When people see slides from McKinsey and BCG, they see something that is compelling and unique, but don’t really understand all the work that goes into those slides. Both companies have a healthy obsession (maybe not to some people!) with how things look, how things are structured and how they are presented.

They also don’t understand how much work is spent on telling a compelling “story.” The biggest mistake people make in the business world is mistaking showing a lot of information versus telling a compelling story. This is an easy mistake to make — especially if you are the one that did hours of analysis. It may seem important, but when it comes down to making a slide and a presentation, you end up deleting more information rather than adding. You really need to remember the following:

Data matters, but stories change hearts and minds

Here are four quick ways to improve your presentations:

Tip #1 — Format, format, format

Both McKinsey and BCG had style templates that were obsessively followed. Some key rules I like to follow:

• Make sure all text within your slide body is the same font size (harder than you would think)
• Do not go outside of the margins into the white space on the side
• All titles throughout the presentation should be 2 lines or less and stay the same font size
• Each slide should typically only make one strong point

Tip #2 — Titles are the takeaway

The title of the slide should be the key insight or takeaway and the slide area should prove the point. The below slide is an oversimplification of this:

Even in consulting, I found that people struggled with simplifying a message to one key theme per slide. If something is going to be presented live, the simpler the better. In reality, you are often giving someone presentations that they will read in depth and more information may make sense.

To go deeper, check out these 20 presentation and powerpoint tips .

Tip #3 — Have “MECE” Ideas for max persuasion

“MECE” means mutually exclusive, collectively exhaustive — meaning all points listed cover the entire range of ideas while also being unique and differentiated from each other.

An extreme example would be this:

• Slide title: There are seven continents
• Slide content: The seven continents are North America, South America, Europe, Africa Asia, Antarctica, Australia

The list of continents provides seven distinct points that when taken together are mutually exclusive and collectively exhaustive . The MECE principle is not perfect — it is more of an ideal to push your logic in the right direction. Use it to continually improve and refine your story.

Applying this to a profitability problem at the highest level would look like this:

Goal: Increase profitability

2nd level: We can increase revenue or decrease costs

3rd level: We can increase revenue by selling more or increasing prices

Each level is MECE. It is almost impossible to argue against any of this (unless you are willing to commit accounting fraud!).

Tip #4 — Leveraging the Pyramid Principle

The pyramid principle is an approach popularized by Barbara Minto and essential to the structured problem solving approach I learned at McKinsey. Learning this approach has changed the way I look at any presentation since.

Here is a rough outline of how you can think about the pyramid principle as a way to structure a presentation:

As you build a presentation, you may have three sections for each hypothesis. As you think about the overall story, the three hypothesis (and the supporting evidence) will build on each other as a “story” to answer the defined problem. There are two ways to think about doing this — using inductive or deductive reasoning:

If we go back to our profitability example from above, you would say that increasing profitability was the core issue we developed. Lets assume that through research we found that our three hypotheses were true. Given this, you may start to build a high level presentation around the following three points:

These three ideas not only are distinct but they also build on each other. Combined, they tell a story of what the company should do and how they should react. Each of these three “points” may be a separate section in the presentation followed by several pages of detailed analysis. There may also be a shorter executive summary version of 5–10 pages that gives the high level story without as much data and analysis.

Step 6: The only way to improve is to get feedback and continue to practice

Ultimately, this process is not something you will master overnight. I’ve been consulting, either working for a firm or on my own for more than 10 years and am still looking for ways to make better presentations, become more persuasive and get feedback on individual slides.

The process never ends.

The best way to improve fast is to be working on a great team . Look for people around you that do this well and ask them for feedback. The more feedback, the more iterations and more presentations you make, the better you will become. Good luck!

If you enjoyed this post, you’ll get a kick out of all the free lessons I’ve shared that go a bit deeper. Check them out here .

Do you have a toolkit for business problem solving? I created Think Like a Strategy Consultant as an online course to make the tools of strategy consultants accessible to driven professionals, executives, and consultants. This course teaches you how to synthesize information into compelling insights, structure your information in ways that help you solve problems, and develop presentations that resonate at the C-Level. Click here to learn more or if you are interested in getting started now, enroll in the self-paced version ($497) or hands-on coaching version ($997). Both versions include lifetime access and all future updates.

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How to Problem-Solve Like a Management Consultant

Published: Apr 05, 2021

Traditionally, the art of problem-solving has been the professional domain of management consultants. However, you don’t have to be pursuing a management consulting career in order to be an adept problem-solver. Below are four mental models for effectively solving business problems like a consultant.

1. Start with a hypothesis.

First, it’s important to define the problem you’re trying to solve by making a hypothesis. Doing so offers clarity in terms of the next steps and the information needed to move forward.

For example, say you’re given the problem of trying to determine why a company is losing market share. You suspect the cause is poor customer experience, so this becomes your hypothesis. You start with that, and then you collect data and perform research that either proves or disproves this hypothesis.

Hypothesis testing is not a new model. Its earliest dates to the early 1700s, when the model was used to understand whether male and female births were equally likely. However, if you’re new to setting up a hypothesis, it might feel unnatural starting out. Eventually, though, you’ll likely come to appreciate the simplicity and clarity with which it allows you to navigate a complex problem.

2. Understand the difference between causation and correlation.

It’s important to differentiate between causation and correlation. Just because two data points move together in the same or opposite direction (correlation), it doesn’t mean that one causes the other (causation).

Using the example above, market share and the quality of customer experience might both be declining at the same time, but poor customer experience might not be causing the decline in the market share. Having the insight to differentiate between causation and correlation will allow you to course correct if necessary. If you find that there’s no causation, then you’ll be able to redefine your hypothesis and begin the process of problem-solving all over again

3. Think “Mutually Exclusive Collectively Exhaustive.”

The underlying idea behind Mutually Exclusive Collectively Exhaustive (MECE) was developed by McKinsey & Company in the 1960s to help management consultants structure and frame business problems. The roots of MECE, however, date back to around 40 B.C., when Aristotle’s work on logic and syllogism was compiled into six collections of Organon .

MECE, in its simplest form, represents an approach to decomposing or segmenting a problem into a collection of ideas that are mutually exclusive to each other but when considered holistically are collectively exhaustive. For example, building upon the business problem above, what are the potential drivers that can cause the company’s market share to decline? You might be tempted to offer a laundry list of plausible drivers, such as customer experience, new market entrants, product quality, and new regulation.

As opposed to just creating a laundry list, MECE breaks out drivers into two categories: internal and external. Internal drivers (such as customer experience and product quality) and external drivers (such as new market entrants and new regulation) are mutually exclusive to each other and together encapsulate all the plausible drivers, and so are considered collectively exhaustive.

4. Use the 80/20 rule.

The 80/20 rule states that, in any business problem, 80 percent of the outcomes stem from 20 percent of the causes. Widely considered as an aphorism, the 80/20 rule does have an academic foundation in the Pareto Principle from the early 1900s, when it was first used to observe the distribution of wealth in Italy in the early twentieth century.

The 80/20 rule, as a model, helps to prioritize actions and focus on drivers that matter the most. Using the example above, there might be five potential drivers causing the decline in the market share: (1) poor customer experience, (2) new market entrants, (3) decline in quality of the product, (4) customers’ evolved preference, and (5) new regulatory requirements. However, new market entrants might be causing 80 percent (or most) of the decline. Consequently, the 80/20 rule helps with identifying and developing a succinct narrative around the crux of the problem.

A final note

While these mental models will help you solve business problems, you can’t solely rely on them under all circumstances. For example, certain problems require focusing on correlation more than causation. Also, redundancy, which MECE strives to eliminate, is sometimes needed. Nevertheless, these models will serve you well as building blocks for structuring even the most complex business problems.

Recipient of the Presidential Award from The White House, Vibhu Sinha is an intrapreneurial and bottom-line driven senior management professional with experience in leadership roles across banking and capital markets, advising institutional clients on corporate strategy, idea generation and pitching, financial planning and analysis, M&A, investor relations, and ESG. Vibhu developed his acumen in Behavioral Psychology at Harvard University as part of the master's degree program, and also earned an M.B.A. from UCLA Anderson.

How to master the seven-step problem-solving process

In this episode of the McKinsey Podcast , Simon London speaks with Charles Conn, CEO of venture-capital firm Oxford Sciences Innovation, and McKinsey senior partner Hugo Sarrazin about the complexities of different problem-solving strategies.

Podcast transcript

Simon London: Hello, and welcome to this episode of the McKinsey Podcast , with me, Simon London. What’s the number-one skill you need to succeed professionally? Salesmanship, perhaps? Or a facility with statistics? Or maybe the ability to communicate crisply and clearly? Many would argue that at the very top of the list comes problem solving: that is, the ability to think through and come up with an optimal course of action to address any complex challenge—in business, in public policy, or indeed in life.

Looked at this way, it’s no surprise that McKinsey takes problem solving very seriously, testing for it during the recruiting process and then honing it, in McKinsey consultants, through immersion in a structured seven-step method. To discuss the art of problem solving, I sat down in California with McKinsey senior partner Hugo Sarrazin and also with Charles Conn. Charles is a former McKinsey partner, entrepreneur, executive, and coauthor of the book Bulletproof Problem Solving: The One Skill That Changes Everything [John Wiley & Sons, 2018].

Charles and Hugo, welcome to the podcast. Thank you for being here.

Hugo Sarrazin: Our pleasure.

Charles Conn: It’s terrific to be here.

Simon London: Problem solving is a really interesting piece of terminology. It could mean so many different things. I have a son who’s a teenage climber. They talk about solving problems. Climbing is problem solving. Charles, when you talk about problem solving, what are you talking about?

Charles Conn: For me, problem solving is the answer to the question “What should I do?” It’s interesting when there’s uncertainty and complexity, and when it’s meaningful because there are consequences. Your son’s climbing is a perfect example. There are consequences, and it’s complicated, and there’s uncertainty—can he make that grab? I think we can apply that same frame almost at any level. You can think about questions like “What town would I like to live in?” or “Should I put solar panels on my roof?”

You might think that’s a funny thing to apply problem solving to, but in my mind it’s not fundamentally different from business problem solving, which answers the question “What should my strategy be?” Or problem solving at the policy level: “How do we combat climate change?” “Should I support the local school bond?” I think these are all part and parcel of the same type of question, “What should I do?”

I’m a big fan of structured problem solving. By following steps, we can more clearly understand what problem it is we’re solving, what are the components of the problem that we’re solving, which components are the most important ones for us to pay attention to, which analytic techniques we should apply to those, and how we can synthesize what we’ve learned back into a compelling story. That’s all it is, at its heart.

I think sometimes when people think about seven steps, they assume that there’s a rigidity to this. That’s not it at all. It’s actually to give you the scope for creativity, which often doesn’t exist when your problem solving is muddled.

Simon London: You were just talking about the seven-step process. That’s what’s written down in the book, but it’s a very McKinsey process as well. Without getting too deep into the weeds, let’s go through the steps, one by one. You were just talking about problem definition as being a particularly important thing to get right first. That’s the first step. Hugo, tell us about that.

Hugo Sarrazin: It is surprising how often people jump past this step and make a bunch of assumptions. The most powerful thing is to step back and ask the basic questions—“What are we trying to solve? What are the constraints that exist? What are the dependencies?” Let’s make those explicit and really push the thinking and defining. At McKinsey, we spend an enormous amount of time in writing that little statement, and the statement, if you’re a logic purist, is great. You debate. “Is it an ‘or’? Is it an ‘and’? What’s the action verb?” Because all these specific words help you get to the heart of what matters.

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Simon London: So this is a concise problem statement.

Hugo Sarrazin: Yeah. It’s not like “Can we grow in Japan?” That’s interesting, but it is “What, specifically, are we trying to uncover in the growth of a product in Japan? Or a segment in Japan? Or a channel in Japan?” When you spend an enormous amount of time, in the first meeting of the different stakeholders, debating this and having different people put forward what they think the problem definition is, you realize that people have completely different views of why they’re here. That, to me, is the most important step.

Charles Conn: I would agree with that. For me, the problem context is critical. When we understand “What are the forces acting upon your decision maker? How quickly is the answer needed? With what precision is the answer needed? Are there areas that are off limits or areas where we would particularly like to find our solution? Is the decision maker open to exploring other areas?” then you not only become more efficient, and move toward what we call the critical path in problem solving, but you also make it so much more likely that you’re not going to waste your time or your decision maker’s time.

How often do especially bright young people run off with half of the idea about what the problem is and start collecting data and start building models—only to discover that they’ve really gone off half-cocked.

Hugo Sarrazin: Yeah.

Charles Conn: And in the wrong direction.

Simon London: OK. So step one—and there is a real art and a structure to it—is define the problem. Step two, Charles?

Charles Conn: My favorite step is step two, which is to use logic trees to disaggregate the problem. Every problem we’re solving has some complexity and some uncertainty in it. The only way that we can really get our team working on the problem is to take the problem apart into logical pieces.

What we find, of course, is that the way to disaggregate the problem often gives you an insight into the answer to the problem quite quickly. I love to do two or three different cuts at it, each one giving a bit of a different insight into what might be going wrong. By doing sensible disaggregations, using logic trees, we can figure out which parts of the problem we should be looking at, and we can assign those different parts to team members.

Simon London: What’s a good example of a logic tree on a sort of ratable problem?

Charles Conn: Maybe the easiest one is the classic profit tree. Almost in every business that I would take a look at, I would start with a profit or return-on-assets tree. In its simplest form, you have the components of revenue, which are price and quantity, and the components of cost, which are cost and quantity. Each of those can be broken out. Cost can be broken into variable cost and fixed cost. The components of price can be broken into what your pricing scheme is. That simple tree often provides insight into what’s going on in a business or what the difference is between that business and the competitors.

If we add the leg, which is “What’s the asset base or investment element?”—so profit divided by assets—then we can ask the question “Is the business using its investments sensibly?” whether that’s in stores or in manufacturing or in transportation assets. I hope we can see just how simple this is, even though we’re describing it in words.

When I went to work with Gordon Moore at the Moore Foundation, the problem that he asked us to look at was “How can we save Pacific salmon?” Now, that sounds like an impossible question, but it was amenable to precisely the same type of disaggregation and allowed us to organize what became a 15-year effort to improve the likelihood of good outcomes for Pacific salmon.

Simon London: Now, is there a danger that your logic tree can be impossibly large? This, I think, brings us onto the third step in the process, which is that you have to prioritize.

Charles Conn: Absolutely. The third step, which we also emphasize, along with good problem definition, is rigorous prioritization—we ask the questions “How important is this lever or this branch of the tree in the overall outcome that we seek to achieve? How much can I move that lever?” Obviously, we try and focus our efforts on ones that have a big impact on the problem and the ones that we have the ability to change. With salmon, ocean conditions turned out to be a big lever, but not one that we could adjust. We focused our attention on fish habitats and fish-harvesting practices, which were big levers that we could affect.

People spend a lot of time arguing about branches that are either not important or that none of us can change. We see it in the public square. When we deal with questions at the policy level—“Should you support the death penalty?” “How do we affect climate change?” “How can we uncover the causes and address homelessness?”—it’s even more important that we’re focusing on levers that are big and movable.

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Simon London: Let’s move swiftly on to step four. You’ve defined your problem, you disaggregate it, you prioritize where you want to analyze—what you want to really look at hard. Then you got to the work plan. Now, what does that mean in practice?

Hugo Sarrazin: Depending on what you’ve prioritized, there are many things you could do. It could be breaking the work among the team members so that people have a clear piece of the work to do. It could be defining the specific analyses that need to get done and executed, and being clear on time lines. There’s always a level-one answer, there’s a level-two answer, there’s a level-three answer. Without being too flippant, I can solve any problem during a good dinner with wine. It won’t have a whole lot of backing.

Simon London: Not going to have a lot of depth to it.

Hugo Sarrazin: No, but it may be useful as a starting point. If the stakes are not that high, that could be OK. If it’s really high stakes, you may need level three and have the whole model validated in three different ways. You need to find a work plan that reflects the level of precision, the time frame you have, and the stakeholders you need to bring along in the exercise.

Charles Conn: I love the way you’ve described that, because, again, some people think of problem solving as a linear thing, but of course what’s critical is that it’s iterative. As you say, you can solve the problem in one day or even one hour.

Charles Conn: We encourage our teams everywhere to do that. We call it the one-day answer or the one-hour answer. In work planning, we’re always iterating. Every time you see a 50-page work plan that stretches out to three months, you know it’s wrong. It will be outmoded very quickly by that learning process that you described. Iterative problem solving is a critical part of this. Sometimes, people think work planning sounds dull, but it isn’t. It’s how we know what’s expected of us and when we need to deliver it and how we’re progressing toward the answer. It’s also the place where we can deal with biases. Bias is a feature of every human decision-making process. If we design our team interactions intelligently, we can avoid the worst sort of biases.

Simon London: Here we’re talking about cognitive biases primarily, right? It’s not that I’m biased against you because of your accent or something. These are the cognitive biases that behavioral sciences have shown we all carry around, things like anchoring, overoptimism—these kinds of things.

Both: Yeah.

Charles Conn: Availability bias is the one that I’m always alert to. You think you’ve seen the problem before, and therefore what’s available is your previous conception of it—and we have to be most careful about that. In any human setting, we also have to be careful about biases that are based on hierarchies, sometimes called sunflower bias. I’m sure, Hugo, with your teams, you make sure that the youngest team members speak first. Not the oldest team members, because it’s easy for people to look at who’s senior and alter their own creative approaches.

Hugo Sarrazin: It’s helpful, at that moment—if someone is asserting a point of view—to ask the question “This was true in what context?” You’re trying to apply something that worked in one context to a different one. That can be deadly if the context has changed, and that’s why organizations struggle to change. You promote all these people because they did something that worked well in the past, and then there’s a disruption in the industry, and they keep doing what got them promoted even though the context has changed.

Simon London: Right. Right.

Hugo Sarrazin: So it’s the same thing in problem solving.

Charles Conn: And it’s why diversity in our teams is so important. It’s one of the best things about the world that we’re in now. We’re likely to have people from different socioeconomic, ethnic, and national backgrounds, each of whom sees problems from a slightly different perspective. It is therefore much more likely that the team will uncover a truly creative and clever approach to problem solving.

Simon London: Let’s move on to step five. You’ve done your work plan. Now you’ve actually got to do the analysis. The thing that strikes me here is that the range of tools that we have at our disposal now, of course, is just huge, particularly with advances in computation, advanced analytics. There’s so many things that you can apply here. Just talk about the analysis stage. How do you pick the right tools?

Charles Conn: For me, the most important thing is that we start with simple heuristics and explanatory statistics before we go off and use the big-gun tools. We need to understand the shape and scope of our problem before we start applying these massive and complex analytical approaches.

Simon London: Would you agree with that?

Hugo Sarrazin: I agree. I think there are so many wonderful heuristics. You need to start there before you go deep into the modeling exercise. There’s an interesting dynamic that’s happening, though. In some cases, for some types of problems, it is even better to set yourself up to maximize your learning. Your problem-solving methodology is test and learn, test and learn, test and learn, and iterate. That is a heuristic in itself, the A/B testing that is used in many parts of the world. So that’s a problem-solving methodology. It’s nothing different. It just uses technology and feedback loops in a fast way. The other one is exploratory data analysis. When you’re dealing with a large-scale problem, and there’s so much data, I can get to the heuristics that Charles was talking about through very clever visualization of data.

You test with your data. You need to set up an environment to do so, but don’t get caught up in neural-network modeling immediately. You’re testing, you’re checking—“Is the data right? Is it sound? Does it make sense?”—before you launch too far.

Simon London: You do hear these ideas—that if you have a big enough data set and enough algorithms, they’re going to find things that you just wouldn’t have spotted, find solutions that maybe you wouldn’t have thought of. Does machine learning sort of revolutionize the problem-solving process? Or are these actually just other tools in the toolbox for structured problem solving?

Charles Conn: It can be revolutionary. There are some areas in which the pattern recognition of large data sets and good algorithms can help us see things that we otherwise couldn’t see. But I do think it’s terribly important we don’t think that this particular technique is a substitute for superb problem solving, starting with good problem definition. Many people use machine learning without understanding algorithms that themselves can have biases built into them. Just as 20 years ago, when we were doing statistical analysis, we knew that we needed good model definition, we still need a good understanding of our algorithms and really good problem definition before we launch off into big data sets and unknown algorithms.

Simon London: Step six. You’ve done your analysis.

Charles Conn: I take six and seven together, and this is the place where young problem solvers often make a mistake. They’ve got their analysis, and they assume that’s the answer, and of course it isn’t the answer. The ability to synthesize the pieces that came out of the analysis and begin to weave those into a story that helps people answer the question “What should I do?” This is back to where we started. If we can’t synthesize, and we can’t tell a story, then our decision maker can’t find the answer to “What should I do?”

Simon London: But, again, these final steps are about motivating people to action, right?

Charles Conn: Yeah.

Simon London: I am slightly torn about the nomenclature of problem solving because it’s on paper, right? Until you motivate people to action, you actually haven’t solved anything.

Charles Conn: I love this question because I think decision-making theory, without a bias to action, is a waste of time. Everything in how I approach this is to help people take action that makes the world better.

Simon London: Hence, these are absolutely critical steps. If you don’t do this well, you’ve just got a bunch of analysis.

Charles Conn: We end up in exactly the same place where we started, which is people speaking across each other, past each other in the public square, rather than actually working together, shoulder to shoulder, to crack these important problems.

Simon London: In the real world, we have a lot of uncertainty—arguably, increasing uncertainty. How do good problem solvers deal with that?

Hugo Sarrazin: At every step of the process. In the problem definition, when you’re defining the context, you need to understand those sources of uncertainty and whether they’re important or not important. It becomes important in the definition of the tree.

You need to think carefully about the branches of the tree that are more certain and less certain as you define them. They don’t have equal weight just because they’ve got equal space on the page. Then, when you’re prioritizing, your prioritization approach may put more emphasis on things that have low probability but huge impact—or, vice versa, may put a lot of priority on things that are very likely and, hopefully, have a reasonable impact. You can introduce that along the way. When you come back to the synthesis, you just need to be nuanced about what you’re understanding, the likelihood.

Often, people lack humility in the way they make their recommendations: “This is the answer.” They’re very precise, and I think we would all be well-served to say, “This is a likely answer under the following sets of conditions” and then make the level of uncertainty clearer, if that is appropriate. It doesn’t mean you’re always in the gray zone; it doesn’t mean you don’t have a point of view. It just means that you can be explicit about the certainty of your answer when you make that recommendation.

Simon London: So it sounds like there is an underlying principle: “Acknowledge and embrace the uncertainty. Don’t pretend that it isn’t there. Be very clear about what the uncertainties are up front, and then build that into every step of the process.”

Hugo Sarrazin: Every step of the process.

Simon London: Yeah. We have just walked through a particular structured methodology for problem solving. But, of course, this is not the only structured methodology for problem solving. One that is also very well-known is design thinking, which comes at things very differently. So, Hugo, I know you have worked with a lot of designers. Just give us a very quick summary. Design thinking—what is it, and how does it relate?

Hugo Sarrazin: It starts with an incredible amount of empathy for the user and uses that to define the problem. It does pause and go out in the wild and spend an enormous amount of time seeing how people interact with objects, seeing the experience they’re getting, seeing the pain points or joy—and uses that to infer and define the problem.

Simon London: Problem definition, but out in the world.

Hugo Sarrazin: With an enormous amount of empathy. There’s a huge emphasis on empathy. Traditional, more classic problem solving is you define the problem based on an understanding of the situation. This one almost presupposes that we don’t know the problem until we go see it. The second thing is you need to come up with multiple scenarios or answers or ideas or concepts, and there’s a lot of divergent thinking initially. That’s slightly different, versus the prioritization, but not for long. Eventually, you need to kind of say, “OK, I’m going to converge again.” Then you go and you bring things back to the customer and get feedback and iterate. Then you rinse and repeat, rinse and repeat. There’s a lot of tactile building, along the way, of prototypes and things like that. It’s very iterative.

Simon London: So, Charles, are these complements or are these alternatives?

Charles Conn: I think they’re entirely complementary, and I think Hugo’s description is perfect. When we do problem definition well in classic problem solving, we are demonstrating the kind of empathy, at the very beginning of our problem, that design thinking asks us to approach. When we ideate—and that’s very similar to the disaggregation, prioritization, and work-planning steps—we do precisely the same thing, and often we use contrasting teams, so that we do have divergent thinking. The best teams allow divergent thinking to bump them off whatever their initial biases in problem solving are. For me, design thinking gives us a constant reminder of creativity, empathy, and the tactile nature of problem solving, but it’s absolutely complementary, not alternative.

Simon London: I think, in a world of cross-functional teams, an interesting question is do people with design-thinking backgrounds really work well together with classical problem solvers? How do you make that chemistry happen?

Hugo Sarrazin: Yeah, it is not easy when people have spent an enormous amount of time seeped in design thinking or user-centric design, whichever word you want to use. If the person who’s applying classic problem-solving methodology is very rigid and mechanical in the way they’re doing it, there could be an enormous amount of tension. If there’s not clarity in the role and not clarity in the process, I think having the two together can be, sometimes, problematic.

The second thing that happens often is that the artifacts the two methodologies try to gravitate toward can be different. Classic problem solving often gravitates toward a model; design thinking migrates toward a prototype. Rather than writing a big deck with all my supporting evidence, they’ll bring an example, a thing, and that feels different. Then you spend your time differently to achieve those two end products, so that’s another source of friction.

Now, I still think it can be an incredibly powerful thing to have the two—if there are the right people with the right mind-set, if there is a team that is explicit about the roles, if we’re clear about the kind of outcomes we are attempting to bring forward. There’s an enormous amount of collaborativeness and respect.

Simon London: But they have to respect each other’s methodology and be prepared to flex, maybe, a little bit, in how this process is going to work.

Hugo Sarrazin: Absolutely.

Simon London: The other area where, it strikes me, there could be a little bit of a different sort of friction is this whole concept of the day-one answer, which is what we were just talking about in classical problem solving. Now, you know that this is probably not going to be your final answer, but that’s how you begin to structure the problem. Whereas I would imagine your design thinkers—no, they’re going off to do their ethnographic research and get out into the field, potentially for a long time, before they come back with at least an initial hypothesis.

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Hugo Sarrazin: That is a great callout, and that’s another difference. Designers typically will like to soak into the situation and avoid converging too quickly. There’s optionality and exploring different options. There’s a strong belief that keeps the solution space wide enough that you can come up with more radical ideas. If there’s a large design team or many designers on the team, and you come on Friday and say, “What’s our week-one answer?” they’re going to struggle. They’re not going to be comfortable, naturally, to give that answer. It doesn’t mean they don’t have an answer; it’s just not where they are in their thinking process.

Simon London: I think we are, sadly, out of time for today. But Charles and Hugo, thank you so much.

Charles Conn: It was a pleasure to be here, Simon.

Hugo Sarrazin: It was a pleasure. Thank you.

Simon London: And thanks, as always, to you, our listeners, for tuning into this episode of the McKinsey Podcast . If you want to learn more about problem solving, you can find the book, Bulletproof Problem Solving: The One Skill That Changes Everything , online or order it through your local bookstore. To learn more about McKinsey, you can of course find us at McKinsey.com.

Charles Conn is CEO of Oxford Sciences Innovation and an alumnus of McKinsey’s Sydney office. Hugo Sarrazin is a senior partner in the Silicon Valley office, where Simon London, a member of McKinsey Publishing, is also based.

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The Right Way to Solve Complex Business Problems

Corey Phelps, a strategy professor at McGill University, says great problem solvers are hard to find. Even seasoned professionals at the highest levels of organizations regularly...

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Corey Phelps, a strategy professor at McGill University, says great problem solvers are hard to find. Even seasoned professionals at the highest levels of organizations regularly fail to identify the real problem and instead jump to exploring solutions. Phelps identifies the common traps and outlines a research-proven method to solve problems effectively. He’s the coauthor of the book, Cracked it! How to solve big problems and sell solutions like top strategy consultants.

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Welcome to the IdeaCast from Harvard Business Review. I’m Curt Nickisch.

Problem-solving is in demand. It’s considered the top skill for success at management consulting firms. And it’s increasingly desired for everyone, not just new MBA’s.

A report from the World Economic Forum predicts that more than one-third of all jobs across all industries will require complex problem-solving as one of their core skills by 2020.

The problem is, we’re often really bad at problem-solving. Our guest today says even the most educated and experienced of senior leaders go about it the wrong way.

COREY PHELPS: I think this is one of the misnomers about problem-solving. There’s this belief that because we do it so frequently – and especially for senior leaders, they have a lot of experience, they solve problems for a living – and as such we would expect them to be quite good at it. And I think what we find is that they’re not. They don’t solve problems well because they fall prey to basically the foibles of being a human being – they fall prey to the cognitive biases and the pitfalls of problem-solving.

CURT NICKISCH: That’s Corey Phelps. He says fixing these foibles is possible and almost straightforward. You can improve your problem-solving skills by following a disciplined method.

Corey Phelps is a strategy professor at McGill University. He’s also the co-author of the book “Cracked It: How to Solve Big Problems and Sell Solutions like Top Strategy C onsultants.” Corey thanks for coming on the show.

COREY PHELPS: Thank you for the opportunity to talk.

CURT NICKISCH: Another probably many, many biases that prevent people from solving big problems well.

COREY PHELPS: Absolutely.

CURT NICKISCH: What are some of the most common, or your favorite stumbling blocks?

COREY PHELPS: Well, one of my favorites is essentially the problem of jumping to solutions or the challenge of jumping to solutions.

CURT NICKISCH: Oh, come on Corey. That’s so much fun.

COREY PHELPS: It is, and it’s very much a result of how our brains have evolved to process information, but it’s my favorite because we all do it. And especially I would say it happens in organizations because in organizations when you layer on these time pressures and you layer on these concerns about efficiency and productivity, it creates enormous, I would say incentive to say “I don’t have time to carefully define and analyze the problem. I got to get a solution. I got to implement it as quick as possible.” And the fundamental bias I think is, is illustrated beautifully by Danny Kahneman in his book “Thinking, Fast and Slow,” is that our minds are essentially hardwired to think fast.

We are able to pay attention to a tiny little bit of information. We can then weave a very coherent story that makes sense to us. And then we can use that story to jump very quickly to a solution that we just know will work. And if we just were able to move from that approach of what Kahneman and cognitive psychologists called “System 1 thinking” to “System 2 thinking” – that is to slow down, be more deliberative, be more structured – we would be able to better understand the problem that we’re trying to solve and be more effective and exhaustive with the tools that we want to use to understand the problem before we actually go into solution-generation mode.

CURT NICKISCH: Complex problems demand different areas of expertise and often as individuals we’re coming to those problems with one of them. And I wonder if that’s often the problem of problem-solving, which is that a manager is approaching it from their own expertise and because of that, they see the problem through a certain way. Is that one of the cognitive biases that stop people from being effective problem solvers?

COREY PHELPS: Yeah. That’s often referred to as the expertise trap. It basically colors and influences what we pay attention to with respect to a particular problem. And it limits us with respect to the tools that we can bring to bear to solve that problem. In the world of psychology, there’s famous psychologist, Abraham Maslow, who is famous for the hierarchy of needs. He’s also famous for something that was a also known as MaSlow’s axiom, Maslow’s law. It’s also called the law of the instrument, and to paraphrase Maslow, he basically said, “Look, I suppose if the only tool that you have in your toolkit is a hammer, everything looks like a nail.”

His point is that if you’re, for example, a finance expert and your toolkit is the toolkit of let’s say, discounted cash flow analysis for valuation, then you’re going to see problems through that very narrow lens. Now, one of the ways out of this, I think to your point is collaboration becomes fundamentally important. And collaboration starts with the recognition that I don’t have all of the tools, all of the knowledge in me to effectively solve this. So I need to recruit people that can actually help me.

CURT NICKISCH: That’s really interesting. I wonder how much the fact that you have solved a problem before it makes you have a bias for that same solution for future problems?

COREY PHELPS: Yeah, that’s a great question. What you’re alluding to is analogical reasoning, and we know that human beings, one of the things that allows us to operate in novel settings is that we can draw on our past experience. And we do so when it comes to problem solving, often times without being conscious or mentally aware of it. We reach into our memory and we ask ourselves a very simple question: “Have I seen a problem like this before?”

And if it looks familiar to me, the tendency then is to say, “Okay, well what worked in solving that problem that I faced before?” And then to say, “Well, if it worked in that setting, then it should work in this setting.” So that’s reasoning by analogy.

Reasoning by analogy has a great upside. It allows human beings to not become overwhelmed by the tremendous novelty that they face in their daily lives. The downside is that if we don’t truly understand it at sort of a deep level, whether or not the two problems are similar or different, then we can make what cognitive psychologists called surface-level analogies.

And we can then say, “Oh, this looks a lot like the problem I faced before, that solution that worked there is going to easily work here.” And we try that solution and it fails and it fails largely because if we dug a little bit deeper, the two problems actually aren’t much alike at all in terms of their underlying causes.

CURT NICKISCH: The starkest example of this, I think, in your book is Ron Johnson who left Apple to become CEO of JC Penney. Can you talk about that a little bit and what that episode for the company says about this?

COREY PHELPS: So yes, its – Ron Johnson had been hired away from Target in the United States to, by Steve Jobs to help create Apple stores. Apple stores are as many people know the most successful physical retailer on the planet measured by, for example, sales per square foot or per square meter. He’s got the golden touch. He’s created this tremendously successful retail format for Apple.

So the day that it was announced that Ron Johnson was going to step into the CEO role at JC Penney, the stock price of JC Penney went up by almost 18 percent. So clearly he was viewed as the savior. Johnson moves very, very quickly. Within a few months, he announces that he has a strategic plan and it basically comes in three parts.

Part number one is he’s going to eliminate discount pricing. JC Penney had been a very aggressive sales promoter. The second piece of it is he’s going to completely change how they organize merchandise. It’s no longer going to be organized by function – so menswear, housewares, those sorts of things. It’s going to be organized by boutique, so there’s going to be a Levi’s boutique, a Martha Stewart Boutique, a Joe Fresh Boutique and so on.

And it would drop the JC P enney name, they would call it JCP. And he rolls this out over the course of about 12 months across the entire chain of over 1100 stores. What this tells us, he’s so confident in his solution, his strategic transformation, that he doesn’t think it’s worth it to test this out on one or two pilot stores.

CURT NICKISCH: Yeah, he was quoted as saying: “At Apple, we didn’t test anything.”

COREY PHELPS: We didn’t test. Yes. What worked at Apple, he assumed would work at JC Penney. And the critical thing that I think he missed is that JC Penney customers are very different from Apple store customers. In fact, JC Penney customers love the discount. They love the thrill of hunting for a deal.

CURT NICKISCH: Which seems so fundamental to business, right? Understanding your customer. It’s just kind of shocking, I guess, to hear the story.

COREY PHELPS: It is shocking and especially when you consider that Ron Johnson had spent his entire career in retail, so this is someone that had faced, had seen, problems in retailers for decades – for over three decades by the time that he got to JC Penney. So you would expect someone with that degree of experience in that industry wouldn’t make that leap of, well, what worked at Apple stores is going to work at JC Penney stores, but in fact that’s exactly what happened.

CURT NICKISCH: In your book, you essentially suggest four steps that you recommend people use. Tell us about the four steps then.

COREY PHELPS: So in the book we describe what we call the “Four S method,” so four stages, each of which starts with the letter “s”. So the first stage is “state the problem.” Stating the problem is fundamentally about defining what the problem is that you are attempting to solve.

CURT NICKISCH: And you probably would say don’t hurry over that first step or the other three are going to be kind of pointless.

COREY PHELPS: Yeah, that’s exactly the point of of laying out the four s’s. There’s a tremendous amount of desire even amongst senior executives to want to get in and fix the problem. In other words, what’s the trouble? What are the symptoms? What would define success? What are the constraints that we would be operating under? Who owns the problem? And then who are the key stakeholders?

Oftentimes that step is skipped over and we go right into, “I’ve got a hypothesis about what I think the solution is and I’m so obsessed with getting this thing fixed quickly, I’m not going to bother to analyze it particularly well or test the validity of my assumptions. I’m going to go right into implementation mode.”

The second step, what we call “structure the problem” is once you have defined the problem, you need to then start to identify what are the potential causes of that problem. So there are different tools that we talked about in the book that you can structure a problem for analysis. Once you’ve structured the problem for analysis and you’ve conducted the analysis that helps you identify what are the underlying causes that are contributing to it, which will then inform the third stage which is generating solutions for the problem and then testing and evaluating those solutions.

CURT NICKISCH: Is the danger that that third step – generating solutions – is the step that people spend the most time on or have the most fun with?

COREY PHELPS: Yeah. The danger is, is that what that’s naturally what people gravitate towards. So we want to skip over the first two, state and structure.

CURT NICKISCH: As soon as you said it, I was like, “let’s talk about that more.”

COREY PHELPS: Yeah. And we want to jump right into solutioning because people love to talk about their ideas that are going to fix the problem. And that’s actually a useful way to frame a discussion about solutions – we could, or we might do this – because it opens up possibilities for experimentation.

And the problem is that when we often talk about what we could do, we have very little understanding of what the problem is that we’re trying to solve and what are the underlying causes of that problem. Because as you said, solution generation is fun. Look, the classic example is brainstorming. Let’s get a bunch of people in a room and let’s talk about the ideas on how to fix this thing. And again, be deliberate, be disciplined. Do those first stages, the first two stages – state and structure – before you get into the solution generation phase.

CURT NICKISCH: Yeah. The other thing that often happens there is just the lack of awareness of just the cost of the different solutions – how much time, or what they would actually take to do.

COREY PHELPS: Yeah, and again, I’ll go back to that example I used of brainstorming where it’s fun to get a group of people together and talk about our ideas and how to fix the problem. There’s a couple challenges of that. One is what often happens when we do that is we tend to censor the solutions that we come up with. In other words, we ask ourselves, “if I say this idea, people are gonna, think I’m crazy, or people going to say: that’s stupid, that’ll never work, we can’t do that in our organization. It’s going to be too expensive, it’s going to take too much time. We don’t have the resources to do it.”

So brainstorming downside is we we self-sensor, so that’s where you need to have deep insight into your organization in terms of A. what’s going to be feasible, B. what’s going to be desirable on the part of the people that actually have the problem, who you’re trying to solve the problem for and C. from a business standpoint, is it going to be financially attractive for us?

So applying again a set of disciplined criteria that help you choose amongst those ideas for potential solutions. Then the last stage of the process which is selling – because it’s rare in any organization that someone or the group of people that come up with the solution actually have the power and the resources to implement it, so that means they’re going to have to persuade other people to buy into it and want to help.

CURT NICKISCH: Design thinking is another really different method essentially for solving problems or coming up with solutions that just aren’t arrived at through usual problem-solving or usual decision-making processes. I’m just wondering how design thinking comes to play when you’re also outlining these, you know, disciplined methods for stating and solving problems.

COREY PHELPS: For us it’s about choosing the right approach. You know what the potential causes of a problem are. You just don’t know which ones are operating in the particular problem you’re trying to solve. And what that means is that you’ve got a theory – and this is largely the world of strategy consultants – strategy consultants have theories. They have, if you hear them speak, deep understanding of different types of organizational problems, and what they bring is an analytic tool kit that says, “first we’re going to identify all the possible problems, all the possible causes I should say, of this problem. We’re going to figure out which ones are operating and we’re going to use that to come up with a solution.” Then you’ve got problems that you have no idea what the causes are. You’re in a world of unknown unknowns or unk-unks as the operations management people call them.

CURT NICKISCH: That’s terrible.

COREY PHELPS: In other words, you don’t have a theory. So the question is, how do you begin? Well, this is where design thinking can be quite valuable. Design thinking says: first off, let’s find out who are the human beings, the people that are actually experiencing this problem, and let’s go out and let’s talk to them. Let’s observe them. Let’s immerse ourselves in their experience and let’s start to develop an understanding of the causes of the problem from their perspective.

So rather than go into it and say, “I have a theory,” let’s go the design thinking route and let’s actually based upon interactions with users or customers, let’s actually develop a theory. And then we’ll use our new understanding or new insight into the causes of the problem to move into the solution generation phase.

CURT NICKISCH: Problem-solving – we know that that’s something that employers look for when they’re recruiting people. It is one of those phrases that, you know, I’m sure somebody out there has, has the title at a company Chief Problem Solver instead of CEO, right? So, it’s almost one of those phrases that so over used it can lose its meaning.

And if you are being hired or you’re trying to make a case for being on a team that’s tackling a problem, how do you make a compelling case that you are a good problem solver? How can you actually show it?

COREY PHELPS: It’s a great question and then I have two answers to this question. So one is, look at the end of the day, the proof is in the pudding. In other words, can you point to successful solutions that you’ve come up with – solutions that have actually been effective in solving a problem? So that’s one.

The second thing is can you actually articulate how you approach problem-solving? In other words, do you follow a method or are you reinventing the wheel every time you solve a problem? Is it an ad hoc approach? And I think this issue really comes to a head when it comes to the world of strategy consulting firms when they recruit. For example, Mckinsey, you’ve got the Mckinsey problem-solving test, which is again, a test that’s actually trying to elicit the extent to which people are good applicants are good at solving problems

And then you’ve got the case interview. And in the case interview, what they’re looking at is do you have a mastery over certain tools. But what they’re really looking at is, are you actually following a logical process to solve this problem? Because again, what they’re interested in is finding- to your point – people that are going to be good at solving complex organizational problems. So they’re trying to get some evidence that they can demonstrate that they’re good at it and some evidence that they follow a deliberate process.

CURT NICKISCH: So even if you’re not interviewing at a consulting firm, that’s a good approach, to show your thinking, show your process, show the questions you ask?

COREY PHELPS: Yeah, and to your point earlier, at least if we look at what recruiters of MBA students are saying these days, they’re saying, for example, according to the FT’s recent survey, they’re saying that we want people with really good problem solving skills, and by the same token, we find that that’s a skill that’s difficult for us to recruit for. And that reinforces our interest in this area because the fundamental idea for the book is to give people a method. We’re trying to equip not just MBA students but everybody that’s going to face complex problems with a toolkit to solve them better.

CURT NICKISCH: Corey, this has been really great. Thank you.

COREY PHELPS: Thanks for the opportunity. I appreciate it.

CURT NICKISCH: That’s Corey Phelps. He teaches strategy at McGill University, and he co-wrote the book “Cracked It: How to Solve Big Problems and Sell Solutions Like Top Strategy Consultants.”

This episode was produced by Mary Dooe. We got technical help from Rob Eckhardt. Adam Buchholz is our audio product manager.

Thanks for listening to the HBR IdeaCast. I’m Curt Nickisch.

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Issue Tree in Consulting: A Complete Guide (With Examples)

What’s the secret to nailing every case interview ? Is it learning the so-called frameworks? Nuh-uh.

Actually, that secret lies in an under-appreciated, yet extremely powerful problem-solving tool behind every real consulting project . It’s called the “issue tree”, also known as “logic tree” or “hypothesis tree” – and this article will teach you how to master it.

Table of Contents

What is an issue tree?

An issue tree is a pyramidal breakdown of one problem into multiple levels of subsets, called “branches”. It can be presented vertically (top-to-bottom), or horizontally (left-to-right). An issue tree systematically isolates the root causes and ensures impactful solutions to the given problem.

The issue tree is most well-known in management consulting , where consultants use it within the “hypothesis-driven problem-solving approach” - repeatedly hypothesizing the location of the root causes within each branch and testing that hypothesis with data. Once all branches are covered and root causes are found, impactful solutions can be delivered.

The issue tree is only part of the process used in case interviews or consulting projects. As such, it must be learned within the larger context of consulting problem-solving, with six concepts: problem, root cause, issue tree, hypothesis, data & solution , that strictly follow the MECE principle .

Every problem-solving process starts with a well-defined PROBLEM...

A problem is “well-defined” when it is attached with an objective. Let’s get straight to a business problem so you can get a good perspective on how it is done. So here’s one:

Harley-Davidson, a motorcycle company, is suffering from negative profit. Find out why and present a solution.

Now we’ve got our first piece of the tree:

 ...then tries to find its ROOT CAUSES…

To ensure any solution to the problem is long-lasting, consultants always look for the root cause.

Problems are often the last, visible part in a long chain of causes and consequences. Consultants must identify the very start of that chain – the root cause – and promptly deal with it to ensure that the problem is gone for good.

The diagram is a simple representation. Real problems can have multiple root causes. That’s where the issue tree comes to the rescue.

Since Harley has been reporting losses, it tried to decrease cost (in the simplest sense, profit = revenue - cost) by shutting down ineffective stores. As you may have imagined, it wasn’t very effective, so Harley set out to find the real source of the problem.

...by breaking it down into different BRANCHES of an issue tree

An issue tree ensures that all root causes are identified in a structured manner by breaking the problem down to different “branches”; each branch is in turn broken down into contributing sub-factors or sub-branches. This process is repeated through many levels until the root causes are isolated and identified.

For this problem, Harley deducted that losses must be due to decreasing revenue or increasing cost. Each branch is in turn segmented based on the possible reasons

For a branch to be included in the issue tree, there must be a possibility that it leads to the problem (otherwise, your problem-solving efforts will be wasted on the irrelevant).

To ensure that all possibilities are covered in the issue tree in a neatly organized fashion, consultants use a principle called “ MECE ”. We’ll get into MECE a bit later.

A HYPOTHESIS is made with each branch…

After we’ve developed a few branches for our issue tree, it’s time to hypothesize, or make an educated guess on which branch is the most likely to contain a root cause. 

Hypotheses must adhere to 3 criteria:

It must follow the issue tree – you cannot hypothesize on anything outside the tree 

It must be top-down – you must always start with the first level of the issue tree

It must be based on existing information – if your information suggests that the root cause is in branch A, you cannot hypothesize that the root cause comes from branch B

Once a hypothesis is confirmed as true (the root cause is inside that branch), move down the branch with a lower-level hypothesis; otherwise, eliminate that branch and move sideways to another one on the same level. 

Repeat this process until the whole issue tree is covered and all root causes are identified.

Harley hypothesized lower revenue is either due to losing its customers because they came to competitors or they weren’t buying anymore, or it couldn’t attract new buyers

But wait! A little reminder: When solving an issue tree, many make the mistake of skipping levels, ASSUMING that the hypothesis is true instead of CONFIRMING  it is. 

So, in our example, that means from negative profit, we go straight into “losing old customers” or “can’t attract new customers” before confirming that “decreasing revenue” is true. So if you come back and reconfirm “decreasing revenue” is wrong, your case is completely off, and that’s not something consultants will appreciate, right?

Another common mistake is hopping between sub-branches before confirming or rejecting one branch , so that means you just jump around “losing old customers” and “can’t attract new customers” repeatedly, just to make haste of things. Take things very slowly, step-by-step. You have all the time in the world for your case interview.

But testing multiple sub-branches is possible, so long as they are all under the same branch and have the same assessment criteria.

So for our example, if you are assessing the sales of each motorcycle segment for Harley, you can test all of them at once.

The hypothesis is then tested with DATA... 

A hypothesis must always be tested with data.

Data usually yield more insights with benchmarks – reference points for comparison. The two most common benchmarks in consulting are historical (past figures from the same entity) and competitor (figures from similar entities, in the same timeframe).

Using “competitor benchmark” to test if competitors are drawing away customers, Harley found that its competitors are also reporting losses, so it must be from something else!

...to find an ACTIONABLE SOLUTION

After the analyzing process, it’s time to deliver actionable solutions. The solutions must attack all the root causes to ensure long-lasting impact – if even one root cause remains untouched, the problem will persist.

Remember to deliver your solutions in a structured fashion, by organizing them in neat and meaningful categories; most of the time, solutions are classified into short-term and long-term.

So Harley found that it is losing its traditional customer base - old people, as they were the most vulnerable groups in the pandemic, so they stopped buying motorcycles to save money for essentials, or simply didn’t survive. 

Harley also found that it can’t attract new, younger buyers, because of its “old-school” stigma, while also selling at premium price tags. So the short-term solution is setting more attractive prices to get more buyers; and the long-term solution is renewing itself to attract younger audiences.

Our case was a real problem for Harley-Davidson during the pandemic, whose sales plummeted because its target audience were either prioritizing essentials, or dead. So now, Harley has to change itself to attract younger people, or die with its former customer base. 

What Is MECE and How Is It Used in an Issue Tree?

A proper issue tree must be MECE, or “ Mutually Exclusive, Collectively Exhaustive .” Mutually exclusive means there’s no overlap between the branches, and collectively exhaustive means all the branches cover every possibility. This is a standard all management consultants swear by, and together with the issue tree, a signature of the industry. 

To answer whether an issue tree is MECE or not, you need to know all the basic and “advanced” rules of the MECE principle, and we’ll talk about those here. If you want a more comprehensive guide on MECE, check out our dedicated article on MECE .

Basic rule #1: Mutually exclusive

Adherence to this rule ensures that there will be no duplicated efforts, leading to maximum efficiency in problem-solving. It also allows the consultant to isolate the root cause more easily; otherwise, one root cause may manifest in multiple branches, making it harder to pinpoint.

For example, an apparel distributor trying to find out the cause of its decreasing unit sales may use the cleanly-separated product segments: High-end, mid-range, and entry-level. A non-mutually exclusive segmentation here would be: high-end products and footwear.

Basic rule #2: Collectively exhaustive

A collectively exhaustive issue tree also covers only the relevant factors - if one factor is not related to the problem, it must not be included. 

If the aforementioned apparel distributor omits any of the product segments in its analysis, it may also ignore one or a few root causes, leading to ineffective problem-solving. But even if it produces runway-exclusive, not-for-sale pieces, those are not included in the issue tree because they don't contribute to unit sales.

Advanced rule #1: Parallel items

This rule requires that all items are on the same logical level.

High-end, mid-range, and entry-level are three parallel and MECE branches. But if we replace the first two with “high-and-mid-range”, the whole issue tree becomes non-parallel and non-MECE, because the new branch is one level higher than the remaining “entry-level” branch.

Advanced rule #2: Orderly List

This rule requires that all items are arranged in a logical order.

So for our apparel distributor, the branches can be arranged as high-mid-low or low-mid-high. Never go “high-low-mid” or “mid-low-high”, because this arrangement is illogical and counter-intuitive.

Advanced rule #3: The “Rule of Three”

The ideal number of branches on any level of the issue tree is three - the most intuitive number to the human mind.

Three items are often enough to yield significant insights, while still being easy to analyze and follow; segmentations into 2 or 4 are also common. 5 is acceptable, but anything more than that should be avoided.

Our apparel distributor may have dozens of product lines across the segments, but having that same number of branches in the issue tree is counter-intuitive and counter-productive, so we use the much more manageable 3 segments.

Advanced rule #4: No Interlinking Items

There should be minimal, and ideally no connections between the branches of the issue tree. 

If the branches are interlinked, one root-cause may manifest itself in multiple symptoms across the tree, creating unnecessary confusion in the problem-solving process.

Variants of an issue tree

Beside the “why tree” we used to solve why Harley was reporting losses, there are two other common trees, the “which tree” and the “how tree.” The which tree answers which you should do among the choices, and the how tree answers how you should do something.

Why tree helps locate and attack root causes of a problem

We’ve shown you how a why tree could be used to break down a problem into smaller pieces to find the root causes, which involves several important concepts, but in short there are 3 things you need to do:

Locate root causes by narrowing down your search area. To quickly locate root causes, use breakdown by math, process, steps or segment, or any combination of those. We’ll talk about that a bit later

Identify root causes from what you’ve hypothesized. Remember, all hypotheses must be tested with data before reaching a conclusion

Suggest solutions to attack the root causes to eliminate the problem for good. However, sometimes the root causes cannot be solved effectively and efficiently, so we might also try to mitigate their effects

Which tree helps make the most suitable decision

The which tree is a decision-making table combining two separate issue trees – the available options, and the criteria. The options and criteria included must be relevant to the decision-maker. When considering choosing X over something, consultants might take a look at several factors:

Direct benefits: Does X generate more key output on its own?

Indirect benefits: Does X interact with other processes in a way that generates more key output?

Costs: What are the additional costs that X incur?

Risks: Can we accept the risks of either losing some benefits or increasing cost beyond our control?

Feasibility: Do we have enough resources and capability to do X?

Alternative: Are there any other alternatives that are better-suited to our interests?

Additionally, the issue tree in “Should I Do A or B” cases only contains one level. This allows you to focus on the most suitable options (by filtering out the less relevant), ensuring a top-down, efficient decision-making process.

How tree helps realize an objective

The how tree breaks down possible courses of action to reach an objective. The branches of the tree represent ideas, steps, or aspects of the work. A basic framework for a how tree may look like this:

Identify steps necessary to realize the objective

Identify options for each steps

Choose the best options after evaluations

Again, like the two previous types of issue trees, the ideas/steps/work aspects included must be relevant to the task. 

A restaurant business looking to increase its profitability may look into the following ideas:

Consulting frameworks – templates for issue trees

Don’t believe in frameworks….

In management consulting, frameworks are convenient templates used to break down and solve business problems (i.e. drawing issue trees).

So you might have heard of some very specific frameworks such as the 4P/7P, or the 3C&P or whatever. But no 2 cases are the same, and the moment you get too reliant on a specific framework is when you realize that you’re stuck.

The truth is, there is no truly “good” framework you can use. Everyone knows how to recite frameworks, so really you aren’t impressing anyone.

The best frameworks are the simplest, easiest to use , but still help you dig out the root causes.

“Simplest, easiest to use” also means you can flexibly combine frameworks to solve any cases, instead of scrambling with the P’s and the C’s, whatever they mean.

“Simplest, easiest to use” frameworks for your case interviews

There are 5 ways you can break down a problem, either through math, segments, steps, opposing sides or stakeholders.

Math : This one is pretty straightforward, you break a problem down using equations and formulae. This breakdown easily ensures MECE and the causes are easily identified, but is shallow, and cannot guarantee the root causes are isolated. An example of this is breaking down profits = revenues - costs

Segments : You break a whole problem down to smaller segments (duh!). For example, one company may break down its US markets into the Northeast, Midwest, South and West regions and start looking at each region to find the problems 

Steps : You break a problem down to smaller steps on how to address it. For example, a furniture company finds that customers are reporting faulty products, it may look into the process (or steps) on how its products are made, and find the problems within each steps

Opposing sides : You break a problem down to opposing/parallel sides. An example of this is to break down the solution into short-term and long-term 

Stakeholders: You break a problem down into different interacting factors, such as the company itself, customers, competitors, products, etc. 

To comprehend the issue tree in greater detail, check out our video and youtube channel :

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A case interview is where candidates is asked to solve a business problem. They are used by consulting firms to evaluate problem-solving skill & soft skills

Case interview frameworks are methods for addressing and solving business cases.  A framework can be extensively customized or off-the-shelf for specific cases.

MECE is a useful problem-solving principle for case interview frameworks with 2 parts: no overlap between pieces & all pieces combined form the original item

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Consulting Approach to Problem Solving

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• Problem Definition and Scoping
• Problem definition may sound abstract or boring, but it's incredibly important to solve the RIGHT PROBLEM. Like a detective at a crime scene, a consultant needs to stay open-minded; think broadly about the problem and "look around" for obvious (and missing) clues. In practical terms, a clear problem statement helps the consulting manager keep the scope broad enough for flexibility and creativity, while narrow enough that the work can get done within the project time-frame.
• Frameworks and Logical Structuring
• Using the analogy of a jigsaw puzzle, the prior step of "problem definition" was looking at the picture on the box and defining the edges of the puzzle. This step of "problem break down" is sorting the puzzle pieces into different colors: red, yellow, blue, green. Different business frameworks help to simplify complex problems and identify the key drivers (e.g., 80/20 pareto principle). It also offers the opportunity to get early client feedback and form early hypotheses on what the answer(s) could be. Finally, it helps to organize the work so the team can divide up the work effectively.
• Hypothesis-Based Consulting
• Unless you are a scientist, the word "hypothesis" will likely seem a little strange. It's the idea that you are making an "educated guess" on what the solutions could be. It's a statement (not a question) that you work to prove through testing. How is this related to consulting? Consultants are often hired to solve the toughest problems in a short amount of time. The only way to accomplish that is by being smart and selective in what they do. This is the secret to how consultants successfully "crack the case" on their clients' problems.
• Consultants Love Data
• Yes, consultants LOVE data. It is the raw ingredients in the cooking of useful recommendations. Too often, the data is messy, biased, old, fragmented, or missing. As a result, one of the first tasks in a consulting project is to identify and collect usable data sets. It's an enormous task - often unglamorous - but also the only way you can test your hypotheses and develop recommendations. Data lends credibility to consultants' recommendations.
• Data Request and Data Cleansing
• Once you've identified the data you need, the journey has just begun. Using a cooking analogy, you've only put together the shopping list. You still need to get the ingredients, check for freshness, get enough, wash / peel / cut them before you can do the cooking. The same applies for data. It takes effort, client engagement, and some wisdom to request data efficiently.
• Get the "Right Data" for the Project
• There is too much data out there to analyze it all; you need to be selective. One way to do that is to follow a structured process or methodology. It doesn't have to be fancy or proprietary. It just needs to outline for yourself and the client, what you are going to do when. This project plan is at a high-level and helps you to reorient your efforts to the right data, right analysis, and right timing. The following DMAIC framework is used frequently in performance improvement projects.
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• Berbelek @berbelek 2 years ago About "Management Consulting" specialization (5 courses): I worked a lot with consultants and I kind of like them ;) I also believe they often have some unique skills and interesting methods to analyze, decompose and solve complex problems. So I wan… Read more About "Management Consulting" specialization (5 courses): I worked a lot with consultants and I kind of like them ;) I also believe they often have some unique skills and interesting methods to analyze, decompose and solve complex problems. So I wanted to learn more about their tools and tips, some universal and generalized approach to problem solving. Unfortunately I have mixed feelings after completing the specialization. The "Introduction" was promising, but in my honest opinion the rest of these courses do not deliver. Perhaps they're just tailored to a different type of student. I think the specialization may be really interesting for consulting newbies and (perhaps even more) for those who want to start their career in consulting. If you have some experience, I'm afraid you may be disappointed. Helpful

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• Effective Problem Solving: Tips and Strategies for Management Consulting

Leadership Skills

Effective Problem Solving is a vital skill for management consultants in today's fast-paced and dynamic business world. In order to stay competitive and deliver impactful results, consultants must be able to identify and solve complex problems efficiently and effectively. However, this is easier said than done. Problem solving requires a combination of critical thinking, analytical skills, and creativity.

It also involves understanding the root causes of a problem and developing strategic solutions that address them. In this article, we will explore the key tips and strategies for effective problem solving in management consulting, specifically in the context of leadership skills and decision making. Whether you are a seasoned consultant or just starting out in your career, this article will provide valuable insights and practical advice on how to improve your problem solving skills and become a more successful consultant. So let's dive in and discover the power of effective problem solving!When it comes to running a successful business, problem solving and decision making are crucial skills for any manager or consultant.

In today's competitive market, being able to effectively identify and solve problems is essential for driving growth and staying ahead of the competition. However, it's important to understand that problem solving is not a one-size-fits-all approach. Every business and every problem is unique, which means that different strategies and techniques may be needed for different situations. There are some key principles that can guide your problem solving process and help you achieve success.

2.Analyze the root cause:

3.brainstorm potential solutions:, 4.evaluate and select the best solution:, 5.implement the solution:, 6.monitor and adjust:, project management.

This will help you stay focused and ensure that all team members are on the same page. Next, it is important to create a detailed project plan that outlines the tasks, timelines, and responsibilities of each team member. This will help you stay organized and on track throughout the project. During the execution phase, effective communication is key.

Organizational Development

A strong company culture is the backbone of any successful organization. It sets the tone for how employees interact with each other and with clients, and it can greatly impact productivity and morale. To develop a strong company culture, managers and consultants must first understand the values and beliefs that are important to the organization. This can be achieved through surveys, focus groups, and regular communication with employees. Once these values are identified, they should be integrated into all aspects of the organization, from hiring and onboarding to performance evaluations and team building activities. Teamwork is another essential element of organizational development.

In order to effectively solve problems, teams must be able to work together cohesively and efficiently. This requires clear communication, respect for different perspectives, and a shared sense of purpose. Managers and consultants can foster teamwork by facilitating team building activities, encouraging open communication, and providing opportunities for cross-functional collaboration. Improving overall performance is the ultimate goal of organizational development. By creating a strong company culture and fostering teamwork, managers and consultants can help employees feel more engaged and motivated in their work.

Being able to identify and address issues within a team or project can help prevent setbacks and keep things running smoothly. Effective leaders also know how to delegate tasks and trust their team members to handle them, allowing them to focus on bigger picture strategies and decision making. Another important skill for leaders is communication. Clear and effective communication is crucial for ensuring that everyone is on the same page and working towards the same goals.

Leaders should also be able to listen actively and provide constructive feedback to help their team members grow and improve. Leadership also involves being able to adapt and make quick decisions in times of uncertainty or change. This can be especially important in the fast-paced world of management consulting, where things can shift rapidly. To develop strong leadership skills, it's important to continuously seek out opportunities for growth and learning.

Strategic Planning

One key strategy for developing an effective business plan is to conduct thorough research and analysis. This involves gathering information about the market, competitors, and industry trends. It also includes identifying potential challenges and risks that may arise. By understanding the current landscape, managers and consultants can create a plan that takes into account all relevant factors and positions the business for success.

Another important aspect of strategic planning is setting long-term goals. These goals should be specific, measurable, achievable, relevant, and time-bound (SMART). By setting clear objectives, managers and consultants can focus their efforts and track progress towards achieving them. This also helps in making informed decisions as it provides a benchmark for evaluating the success of the plan.

Effective problem solving in management consulting requires a well-developed strategic plan that outlines clear goals and a roadmap for achieving them. By conducting thorough research and setting SMART goals, managers and consultants can ensure that their decision making is based on informed strategies rather than guesswork. Effective problem solving is a crucial skill for management consulting. By following key principles and utilizing strategies such as strategic planning, organizational development, project management, and leadership skills, you can improve your ability to solve problems and drive business success.

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What Is Management Consulting? (A Complete Guide)

The global market for management consulting services is valued to be more than $130 billion, and constitutes over half of the total consulting market worldwide, according to Consultancy.org . 

So what does this elusive profession actually entail?

Management consulting is a fast-growing field that provides advice, solutions, and strategies to improve the overall efficacy and functioning of an organization. Management consultants have industry-specific skills and experience that allow them to provide insight into different aspects of a business.

This jet-setting, lucrative, and high-stakes profession draws in the rising talent from top business schools aiming to work in the ‘Big Four’ and is a fast favorite among MBA students .

But what exactly does a day in the job look like? What are the skills needed to excel in this career? How much can you earn? And how does one get a foot into the door?

Lucky for you, this handy guide to management consulting is here to answer all your questions. 

Table of Contents

So what exactly is management consulting?

Let me paint a picture for you. 

Imagine that you’ve been getting a severe toothache for almost a week. You’re unable to chew food without a constant sharp nagging pain.

You decide to see a dentist who upon inspection tells you that you have a severe cavity and suggests a root canal. He also recommends herbal toothpaste and gives you a brochure on how to prevent cavities in the future. 

Well, management consultants work exactly like this dentist but for organizations.

They diagnose problems and prescribe solutions and strategies to improve company health. They help organizations solve issues that they can’t handle themselves or need specialized advice and expertise for.

In some cases, organizations lose the objectivity needed to look at the big picture and make smart business and operational decisions.

Here, management consulting comes into play by providing an outside, factual, and unbiased perspective on how to optimize company performance. The consultant will work with management to identify issues within the organization and also provide research-driven suggestions for improvement.

They offer expert analysis and recommendations across various organizational dimensions including:

• strategic planning
• organizational design
• human resource development
• technology strategy
• financial modeling
• information systems implementation
• operations optimization
• project management
• customer relationship management
• implementation support to help a company achieve its goals. 

In many ways, management consultancy is similar to corporate training as both require knowledge of people, processes, and procedures which are then applied towards improving the overall effectiveness of an organization.

What projects might a management consultant work on?

Management consulting is an intriguing field as consultants get to work on projects across a wide variety of sectors such as manufacturing, retail, healthcare, technology, financial services, transportation, education, energy, telecommunications, food service, hospitality, and leisure.

Some examples of the projects a consultant might work on include:

• Assisting an automobile manufacturing company in cutting costs by 5%
• Advising an international supermarket chain on whether it should enter the Indian market
• Suggesting a sustainable solution to produce 3D printing machines
• Helping a mobile phone company implement a new accounting software in three months

How much do management consultants earn?

It’s no secret that management consultants rake in the big bucks. According to Glassdoor , the national average salary for a management consultant is $103,817 annually in the United States.

That’s just the overall average, however. 

Case Interview states that graduates fresh out of college in the US attract an average starting salary of $83,500 at top companies such as McKinsey, Bain, and Boston Consulting Group, excluding signing and performance bonuses.

This goes up to around $149,000 for MBA joinees and consultants with some experience under their belt. 

Top consultants who are partners in these high-tier firms usually earn a basic take-home pay of $570,000-$1,000,000 excluding bonuses. 

These are salaries on the higher end of the scale though and may vary depending on which company you join or if you choose to work independently. 

What does a day in the life of a management consultant look like?

There’s not a day that goes by the same while working as a management consultant. A typical day might involve:

• Working in-person or remotely as part of a team focused on solving challenges faced by their clients
• Analyzing industry reports, data, and other resources
• Conducting primary interviews to understand the problem being solved
• Developing insights based on these findings through secondary research
• Consulting with other teams to gain a big-picture understanding
• Providing objective feedback about current practices and processes
• Creating actionable plans and proposals to address identified gaps and weaknesses
• Writing reports and presentations outlining potential solutions
• Traveling to different places as the project demands 
• Providing executive-level briefings to senior leaders and stakeholders about emerging trends and new opportunities.
• Identifying critical areas where change needs to occur to ensure long-term success
• Managing client expectations throughout the process

Is management consulting a good career?

There’s no doubt why many people aspire to become management consultants: It’s glamorous, exciting, challenging, rewarding, well-paid, and offers great opportunities for growth .

But there’s also a flip side that comes with this profession. 

So let’s take a look at the pros and cons of this career to help you make an informed decision. 

1. It’s a Career Choice That Pays Well

Being a management consultant means having access to big money; especially if you’re working in the ‘Big Four’ (Deloitte, Ernst & Young , KPMG, and PwC) or the ‘Big Three’ (McKinsey, Bain, and BCG). 

According to a Quora thread , the reason for the high pay is multi-faceted.

Traditional management consulting firms usually follow the rule of ten, which means that they typically target problems that have at least ten times the value of the firm’s consultancy fees, and the solutions are usually worth many millions of dollars.

Consultants also have niche industry expertise while working hours that go well beyond the standard 9 to 5. 

2. Good Opportunities for Growth

Being a management consultant opens doors to new challenges and experiences every day. And with such a diverse set of responsibilities, there’s always room for advancement and professional development.

Management consulting also has very few boundaries when it comes to scope of practice.

You could end up doing anything from strategy consulting to operations advisory, IT governance, financial management, data analytics, and so forth depending on the needs of the client. 

Through work, you’ll gain hands-on experience in every aspect of running a successful business and also get to learn about various industries. 

3. Opportunity to build your network

As a management consultant, you’ll likely be interacting with the top brass at the client organization. This gives you a chance to build relationships with key decision-makers and learn from them. 

 4. A High Level of Independence 

One of the biggest benefits of being a management consultant is that there’s not much supervision or micromanagement.

Unlike most corporate jobs where employees must report back their progress daily and weekly, managers expect consultants to keep track of themselves. 

1. Long hours and a high-stress environment

Management consulting is a demanding profession as you are expected to work long hours and it’s not uncommon for consultants to have stressful days at the office. Managing clients isn’t easy and managing multiple projects simultaneously can make things worse.

The lack of structure sometimes leads to burnout among consultants who don’t see enough time off. Working well into the night becomes routine and even weekends can feel like weekdays. 

2. Being away from home and family

Frequent travel comes with the job and when combined with the long hours means that you have to spend a good chunk of time away from home. It becomes tough to balance family life (especially for people who have children) with professional commitments.

The unpredictability of your schedule also doesn’t leave much space for planning vacations or other personal obligations. 

3. You might not always see the fruits of your labor

Clients might decide not to implement the recommendations of the consulting firm once the contract has ended. In other cases, the client may choose to bring in another company to do the project instead of using what was recommended by the consulting firm.

So, you might not always see the tangible results of your effort. 

This profession does come with its perks and drawbacks but if you harbor an interest in management consulting and are unsure of where to start, read on to learn how you can get started in this field. 

What educational qualifications do you need to enter this profession?

The basic entry-level requirement is a bachelor’s degree in a business-aligned field such as business administration, accounting, finance, economics, marketing, organizational psychology, or human resource management. 

However, with the increasingly competitive landscape, an MBA is a more typical requirement which also affords you the opportunity to enter the profession at a higher level with a larger paycheck .

If you don’t have a degree though, don’t fret.

Smaller firms do accept applicants without a university degree but who either possess analytical and quantitative reasoning skills, strong technical expertise in a field, or relevant work experience.

How can you land a job in management consulting?

The sure-fire way is to pursue an MBA at top business schools as recruiters are always on the lookout for fresh talent.

In fact, the top consulting companies have a list of target schools to cherry-pick graduates from. 

It’s also not uncommon for students to take internships before graduating to get a foot in the door.

A Quora response by a former partner of Booz Allen Hamilton succinctly lists three ways to land your first job in this field:

• enter as a business analyst if you’re fresh out of college
• join as an associate consultant from a top MBA school
• or if you’re further along the professional ladder, enter with specialized experience in a consulting-related field. 

It’s also important to network and build relationships with alumni and people at the companies you’d like to work in as this will help you stand out when applying for jobs .

Keep an eye out on LinkedIn for open positions and tailor your resume according to the organization. 

Once you land an interview, a key component in the entire process is the ‘case interview’ where you’re asked to analyze a particular project and offer recommendations based on the available data.

Here’s a mock interview from Bain to guide you on what to do. 

What can you expect at your first job?

So you’ve cleared the interview, signed on the dotted line, and it’s your first day at the office! Congrats!

But what can you expect here?

Most companies offer training programs and orientation sessions to acclimatize fresh graduates with job requirements and company culture. You’ll also have access to mentors from experienced professionals to help you navigate any challenges along the way.

Your manager will likely give you assignments based on his/her needs or as the project demands.

Some managers prefer having junior associates do all the grunt work while others want them to focus more on strategic planning.

You’ll most likely spend your time doing base research, typing up notes, creating presentations, or working with Excel to collate data. 

You’ll also get numerous opportunities to soak up knowledge and learn new skills. This includes attending conferences, workshops, seminars, webinars, and other events where you can network with peers and industry leaders.

What skills can help you succeed as a management consultant?

Natural leadership abilities.

The ability to lead effectively and build trust amongst colleagues is vital to being successful in a team environment.

It also helps if you’re good at delegating tasks and motivating others toward achieving common objectives.

Being able to inspire confidence in clients and peers alike is a key quality to achieving success in this profession. 

Effective Communication Skills

Good communication skills are essential in any field but especially so in management consulting where it’s crucial to establish rapport with stakeholders and gain their trust.

You’ll also spend a lot of time communicating ideas through meetings and presentations.

Thus, effective verbal and written communication skills are essential as well as strong listening abilities.

Flexibility

The Greek philosopher Heraclitus once said, ‘The only constant in life is change’.

This rings especially true in the life of a management consultant as you might find yourself working across multiple industries or even countries during a single project.

Thus, you need to keep a flexible attitude and adapt quickly to challenges as they arise. 

The only constant in life is change Heaclitus – Greek Philosopher

Quantitative reasoning

Management consultants rely heavily on numbers and statistics when making recommendations. Thus, it’s important to be data-savvy and be able to explain information clearly and succinctly using charts and graphs.

Strategic Thinking & Problem Solving

You must be able to think critically, analyze data, understand complex situations, and come up with effective solutions to overcome challenges.

It’s vital to consider various possibilities and then use research and data to reach the ideal solution for the project. 

Business Acumen

It is important to have an eye for business as understanding the financials, operations, marketing, sales, human resources, and legal aspects of a client’s business is crucial to understanding their needs.

It is also imperative to keep up with the latest trends, regulations, competitors, laws, and best practices of the industry you specialize in to help you make informed decisions. 

Management consulting is a field that has immense scope for growth. And we hope that this guide has been a helpful reference for learning more about this profession.

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The McKinsey Mind: Understanding and Implementing the Problem-Solving Tools and Management Techniques of the World's Top Strategic Consulting Firm Hardcover – October 17, 2001

The groundbreaking follow-up to the international bestseller­­a hands-on guide to putting McKinsey techniques to work in your organization

McKinsey & Company is the most respected and most secretive consulting firm in the world, and business readers just can't seem to get enough of all things McKinsey. Now, hot on the heels of his acclaimed international bestseller The McKinsey Way , Ethan Rasiel brings readers a powerful new guide to putting McKinsey concepts and skills into action­­ The McKinsey Mind . While the first book used case studies and anecdotes from former and current McKinseyites to describe how "the firm" solves the thorniest business problems of their A-list clients, The McKinsey Mind goes a giant step further. It explains, step-by-step, how to use McKinsey tools, techniques and strategies to solve an array of core business problems and to make any business venture more successful.

Designed to work as a stand-alone guide or together with The McKinsey Way , The McKinsey Mind follows the same critically acclaimed style and format as its predecessor. In this book authors Rasiel and Friga expand upon the lessons found in The McKinsey Way with real-world examples, parables, and easy-to-do exercises designed to get readers up and running.

• Print length 272 pages
• Language English
• Publisher McGraw Hill
• Publication date October 17, 2001
• Dimensions 6.3 x 1.1 x 9.3 inches
• ISBN-10 0071374299
• ISBN-13 978-0071374293
• See all details

4 stars and above

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From the back cover.

The First Step-by-Step Manual for Achieving McKinsey-Style Solutions--and Success

International bestseller The McKinsey Way provided a through-the-keyhole look at McKinsey & Co., history's most prestigious consulting firm. Now, the follow-up implementation manual, The McKinsey Mind , reveals the hands-on secrets behind the powerhouse firm's success--and discusses how executives from any field or industry can use those tactics to be more proactive and successful in their day-to-day decision-making.

Structured around interviews and frontline anecdotes from former McKinsey consultants--as well as the authors, themselves McKinsey alumni-- The McKinsey Mind explores how McKinsey tools and techniques can be applied to virtually any business problem in any setting. Immensely valuable in today's crisis-a-minute workplace, it discusses:

• Techniques for framing problems and designing analyses
• Methods for interpreting results and presenting solutions

The ability to think in a rigorous, structured manner--a McKinsey manner--is not a birthright. It can, however, be a learned behavior. Let The McKinsey Mind show you how to approach and solve problems with the skill of a McKinsey consultant and obtain the positive results that have been delivered to McKinsey clients for over a century.

McKinsey & Co. is renowned throughout the world for its ability to arrive at sharp, insightful analyses of its clients' situations then provide solutions that are as ingenious as they are effective. McKinsey succeeds almost as well as shielding its revolutionary methods from competitors' scrutiny.

Now, The McKinsey Mind pulls back the curtain to reveal the ways in which McKinsey consultants consistently deliver their magic and how those methods can be used to achieve exceptional results in companies from 10 employees to 10,000. Packed with insights and brainstorming exercises for establishing the McKinsey mind-set, this book is an in-depth guidebook for applying McKinsey methods in any industry and organizational environment.

Taking a step-by-step approach, The McKinsey Mind looks at the McKinsey mystique from every angle. Owners, executives, consultants, and team leaders can look to this comprehensive treatment for ways to:

• Follow McKinsey's MECE (mutually exclusive, collectively exhaustive) line of attack
• Frame business problems to make them susceptible to rigorous fact-based analysis
• Use the same fact-based analysis--in conjunction with gut instinct--to make strategic decisions
• Conduct meaningful interviews and effectively summarize the content of those interviews
• Analyze the data to find out the "so what"
• Clearly communicate fact-based solutions to all pertinent decision makers

Because organizational problems rarely exist in a vacuum, The McKinsey Mind discusses these approaches and more to help you arrive at usable and sensible solutions. It goes straight to the source--former McKinsey consultants now in leadership positions in organizations throughout the world--to give you today's only implementation-based, solution-driven look at the celebrated McKinsey problem-solving method.

" The McKinsey Mind provides a fascinating peek at the tools, practices, and philosophies that have helped this much-admired firm develop generations of bright young MBAs into trusted corporate advisors. But the book's practical, down-to-earth advice is not just for consultants. The disciplined way in which McKinsey consultants frame issues, analyze problems, and present solutions offers valuable lessons for any practicing or aspiring manager." --Christopher A. Bartlett, Daewoo Professor of Business Administration, Harvard Business School

"McKinsey and Co. rescues the biggest companies from disaster by addressing every problem with its own mixture of logic-driven, hypothesis-tested analysis. The McKinsey Mind helps everyone learn how to think with the same discipline and devotion to creating business success. According to the maxim, giving a man a fish may feed him for a day, but teaching him to fish will feed him for a lifetime. Paying McKinsey to solve your problem may help you for a day, but learning how they do it should help you for a lifetime." --Peter Wayner, Author of Free For All: How Linux and the Free Software Movement Undercut The High-Tech Titans

"The McKinsey Mind unlocks the techniques of the world's preeminent consulting firm and presents them in a format that is easy to understand and even easier to implement." --Dan Nagy, Associate Dean, The Fuqua School of Business, Duke University

About the Author

Ethan M. Rasiel was a consultant in McKinsey & Co.'s New York office. His clients included major companies in finance, telecommunications, computing, and consumer goods sectors. Prior to joining McKinsey, Rasiel, who earned an MBA from the Wharton School at the University of Pennsylvania, was an equity fund manager at Mercury Asset Management in London, as well as an investment banker.

Paul N. Friga worked for McKinsey & Co. in the Pittsburgh office after receiving his MBA from the Kenan-Flagler Business School at the University of North Carolina. He has conducted consulting projects relating to international expansion, acquisition and strategic planning, education, water, and other industries. He has also consulted for Price Waterhouse. He is currently pursuing his Ph.D. in Strategy at Kenan-Flagler and is Acting Director of the North Carolina Knowledge Management Center.

Product details

• Publisher ‏ : ‎ McGraw Hill; First Edition (October 17, 2001)
• Language ‏ : ‎ English
• Hardcover ‏ : ‎ 272 pages
• ISBN-10 ‏ : ‎ 0071374299
• ISBN-13 ‏ : ‎ 978-0071374293
• Item Weight ‏ : ‎ 2.31 pounds
• Dimensions ‏ : ‎ 6.3 x 1.1 x 9.3 inches
• #20 in Consulting
• #174 in Decision-Making & Problem Solving
• #572 in Business Management (Books)

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Learning how to break down and solve complex problems is a core skill you need in today’s business world.

The more complex and multi-faceted your problems are, the more your problem solving skills and techniques will be put to the test.

No one understands this better than some of the world's most highly paid and highly regarded problem solving professionals, the strategy consultants whose fame and fortune is dependent on their ability to quickly break down complex problems and develop effective solutions.

This page details two powerful problem solving techniques you can take from the consulting world to begin breaking down your problems and tackling them like a pro.

Problem Solving Technique #1: Focus On The Key Drivers

When analyzing a complex problem, focus your time and energy on the key drivers and big wins; don't get bogged down in the problem solving minutia. And although this sounds obvious, it is easy to inadvertently end up doing the exact opposite when first applying your problem solving techniques.

Consultants recognize that complex problems can have hundreds, if not thousands, of issues surrounding them and that can it be tempting to dig into and analyze them all for potential solutions. To fight this temptation, one problem solving technique that consultants use is to focus their time and energy on the ' key drivers ' of their problem; in other words, they focus on the largest and most salient aspects of the problem that, if solved, would have the biggest immediate impact.

When problem solving, ask yourself this:

"What are two or three 'key drivers,' or main issues, affecting the problem I am trying to solve?"

For example, if you are hired by an organization to cut costs, think of all the different ways you could potentially help them cut costs. Instead of spinning your wheels analyzing all of the potential cost saving areas, you’re better off focusing on the two or three costs that, if reduced, would have the largest overall impact on the organization.

If you're having trouble finding the key drivers of your problem, use the 80-20 rule to find your problem’s highest value components.

The 80-20 Rule: The Secret to Achieving More with Less

The 80-20 rule, or the Pareto principle, was first adopted as a problem solving technique by a management consultant who coined the phrase after Vilfredo Pareto’s 1906 research in which he observed that 20% of the pea pods in his garden produced 80% of the peas.

This principle has since become known as the 80-20 rule, and simply states that 80% of the effects, come from 20% of the causes. When applied to business, the rule can be used as follows:

• 80% of a company's profits come from 20% of its clients.
• 80% of a company's costs come from 20% of its operations.
• 20% of a company's clients produce 80% of its complaints.

Although this is not a universal principle, the distribution often holds true in many aspects of business and life and, as such, is one of the first problem solving techniques used by consultants to get to the heart of an issue.

For example, using the 80-20 problem solving technique for cutting costs, you could start by asking yourself questions like:

• Which 20% of the company’s divisions are generating 80% of its costs? – Reduce or reorganize the company’s divisions.
• Which 20% of the company’s production costs represent 80% of its cost of goods sold? – Streamline manufacturing processes.
• Which 20% of the company’s marketing costs are generating 80% of its new clients? – Cut the marketing fat.

If this problem solving technique produces too many key drivers, you can narrow them down by asking yourself which of them you can build a strong case for with hard data (see #2).

#2: Build Your Case with Hard Data

When problem solving, gathering and analyzing hard data is critical to effectively building a case for, and eventually selling, a solution.

As such, consultants focus their energy on the key drivers that they can prove or disprove, by gathering and analyzing hard factual data.

Executives are not going to give you the time of day unless you can prove your point with convincing facts and figures. As such, assume that no one will listen to you, or your message, unless you have strong factual evidence to back it up.

Arguably the most famous consulting firm in the world, McKinsey, is notorious for its rigorous data gathering methodologies and problem solving analysis. Why such a focus on hard data? As Ethan Rasiel notes in his book, " The McKinsey Way ", hard data allows McKinsey consultants to quickly achieve two things:

Make Up For Lack Of Gut Instinct

Consultants are typically generalists, which means they lack the 30 or 40 years of in-depth industry experience that their clients often have. Whereas a client might have a “gut” instinct for how to solve a specific problem based on their experience, McKinsey consultants will dig for hard data to prove or disprove their clients' “gut” instinct before moving forward.

Bridge The Credibility Gap

Hard data is objective and tends to be less prone to argument. As such, hard data allows McKinsey consultants, who are typically much younger and greener than their clients, to quickly establish credibility and authority when presenting their problem’s solutions.

Recognizing that hard data will be critical to the success of your problem solving, focus on key drivers that you can back up with hard data given your time constraints.

For example, if your solution to the problem of needing to cut an organization's costs was to reorganize all of its divisions into one location, ask yourself whether or not you can get access to enough hard data to thoroughly prove or disprove your solution. If not, ask for a project extension, break your key driver down into smaller pieces, or pick another key driver to focus on.

Two Data Analysis Tips From McKinsey

A common challenge when problem solving complex issues is knowing where to start and when to stop.

Here are two problem solving tips straight from McKinsey:

Problem Solving Tip #1 – Start With The Outliers:

A great problem solving technique when analyzing large sets of data is to calculate a performance metric around your key drivers and focus on the outliers.

For example, costs per unit per region:

• Positive outliers (low cost per unit) will surface potential best practices you can mimic.
• Negative outliers (high cost per unit) will give you something to immediately figure out and fix.

Problem Solving Tip #2 - Don’t Boil The Ocean:

It’s important to realize that when figuring out how to solve a problem, there is always an enormous amount of research and data analysis you could potentially do.

Instead of trying to perform all of it, which is the equivalent of trying to boil the ocean, McKinsey consultants focus on doing enough research and analysis to thoroughly prove or disprove their key drivers and ignore everything else.

Further Reading from Skills You Need

The Skills You Need Guide to Interpersonal Skills eBooks.

Develop your interpersonal skills with our series of eBooks. Learn about and improve your communication skills, tackle conflict resolution, mediate in difficult situations, and develop your emotional intelligence.

Although there are many other problem solving skills and techniques you can apply to your problems, these two strategies from the consulting world will help you quickly break down your problems into their core components and more effectively come up with a credible and fact-based solution.

About the Author

Taylor Croonquist is the co-founder of Nuts & Bolts Speed Training which delivers actionable PowerPoint training courses for working professionals who spend hundreds, if not thousands, of hours a year using the program.

Continue to: Problem Solving Decision Making

See also: Action Planning Harnessing Creativity in Problem-Solving: Innovations for Overcoming Challenges 5 Reasons Why Business Advisors Are So Important

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How to Problem-Solve Like a Management Consultant

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How to Problem-Solve Like a Management Consultant was originally published on Vault .

Traditionally, the art of problem-solving has been the professional domain of management consultants. However, you don't have to be pursuing a management consulting career in order to be an adept problem-solver. Below are four mental models for effectively solving business problems like a consultant.

1. Start with a hypothesis.

First, it's important to define the problem you're trying to solve by making a hypothesis. Doing so offers clarity in terms of the next steps and the information needed to move forward.

For example, say you're given the problem of trying to determine why a company is losing market share. You suspect the cause is poor customer experience, so this becomes your hypothesis. You start with that, and then you collect data and perform research that either proves or disproves this hypothesis.

Hypothesis testing is not a new model. Its earliest dates to the early 1700s, when the model was used to understand whether male and female births were equally likely. However, if you're new to setting up a hypothesis, it might feel unnatural starting out. Eventually, though, you'll likely come to appreciate the simplicity and clarity with which it allows you to navigate a complex problem.

2. Understand the difference between causation and correlation.

It's important to differentiate between causation and correlation. Just because two data points move together in the same or opposite direction (correlation), it doesn't mean that one causes the other (causation).

Using the example above, market share and the quality of customer experience might both be declining at the same time, but poor customer experience might not be causing the decline in the market share. Having the insight to differentiate between causation and correlation will allow you to course correct if necessary. If you find that there's no causation, then you'll be able to redefine your hypothesis and begin the process of problem-solving all over again

3. Think “Mutually Exclusive Collectively Exhaustive.”

The underlying idea behind Mutually Exclusive Collectively Exhaustive (MECE) was developed by McKinsey & Company in the 1960s to help management consultants structure and frame business problems. The roots of MECE, however, date back to around 40 B.C., when Aristotle's work on logic and syllogism was compiled into six collections of Organon .

MECE, in its simplest form, represents an approach to decomposing or segmenting a problem into a collection of ideas that are mutually exclusive to each other but when considered holistically are collectively exhaustive. For example, building upon the business problem above, what are the potential drivers that can cause the company's market share to decline? You might be tempted to offer a laundry list of plausible drivers, such as customer experience, new market entrants, product quality, and new regulation.

As opposed to just creating a laundry list, MECE breaks out drivers into two categories: internal and external. Internal drivers (such as customer experience and product quality) and external drivers (such as new market entrants and new regulation) are mutually exclusive to each other and together encapsulate all the plausible drivers, and so are considered collectively exhaustive.

4. Use the 80/20 rule.

The 80/20 rule states that, in any business problem, 80 percent of the outcomes stem from 20 percent of the causes. Widely considered as an aphorism, the 80/20 rule does have an academic foundation in the Pareto Principle from the early 1900s, when it was first used to observe the distribution of wealth in Italy in the early twentieth century.

The 80/20 rule, as a model, helps to prioritize actions and focus on drivers that matter the most. Using the example above, there might be five potential drivers causing the decline in the market share: (1) poor customer experience, (2) new market entrants, (3) decline in quality of the product, (4) customers' evolved preference, and (5) new regulatory requirements. However, new market entrants might be causing 80 percent (or most) of the decline. Consequently, the 80/20 rule helps with identifying and developing a succinct narrative around the crux of the problem.

A final note

While these mental models will help you solve business problems, you can't solely rely on them under all circumstances. For example, certain problems require focusing on correlation more than causation. Also, redundancy, which MECE strives to eliminate, is sometimes needed. Nevertheless, these models will serve you well as building blocks for structuring even the most complex business problems.

Recipient of the Presidential Award from The White House, Vibhu Sinha is an intrapreneurial and bottom-line driven senior management professional with experience in leadership roles across banking and capital markets, advising institutional clients on corporate strategy, idea generation and pitching, financial planning and analysis, M&A, investor relations, and ESG. Vibhu developed his acumen in Behavioral Psychology at Harvard University as part of the master’s degree program, and also earned an M.B.A. from UCLA Anderson.