problem solving management consulting

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

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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.

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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.

Tonya Morva

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Learn about effective management and leadership techniques to enhance team dynamics, strategic planning, and organizational development for your business. Discover the power of project management and leadership skills to drive your business forward.

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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 :

Scoring in the McKinsey PSG/Digital Assessment

The scoring mechanism in the McKinsey Digital Assessment

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Case Interview End-to-End Secrets Program

Elevate your case interview skills with a well-rounded preparation package

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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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

Editorial Reviews

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
• #200 in Consulting
• #3,357 in Business Management (Books)
• #4,404 in Leadership & Motivation

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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.

Problem Solving Definition

Problem solving skills, problem solving steps, application to business problem solving, problem solving: essential consulting skills.

Problem solving is at the root of what management consultants do. Clients hire consultants to help overcome or eliminate obstacles to the clients’ goals - that is, to solve problems. Sometimes the work of a consultant involves “solving” problems that haven’t even materialized yet. And yet, even though problem solving forms the core of the management consultant’s function, it can be difficult to talk about the broad role problem solving plays from a zoomed-out perspective.

In this article, we plan to do just that. We’ll break down what, exactly, problem solving means in a business context, and we’ll look at what you can do to improve your problem solving abilities in a professional capacity.

Before we get into any specific problem solving strategies, let’s stop and ask: what is problem solving? It’s not as obvious as it might seem, even if there is something self-explanatory about the name. There are many different problem solving definitions, most of which vary according to context.

For the purpose of this article, we’ll borrow the Center for Management & Organization Effectiveness’ problem solving definition : “implementing processes that reduce or remove obstacles that are preventing you or others from accomplishing operational and strategic business goals.” Now that we have that out of the way, let’s dive into problem solving skills.

Enhancing your problem solving skills isn’t the same as other forms of “upskilling,” like learning a new programming language. Problem solving is at the core of just about everything you do in your professional life. Deficient problem solving skills lead to poor performance and damage to relationships (personal and professional). All relationships have problems, of course, and resolving them relies on communications skills, empathy, cooperation, and more.

After you have used all your education, competencies, and analytical skills to fully understand a problem, you will need to use creativity to come up with a solution. Creativity involves connecting input (i.e. what you learn & experience) with intuition (the intelligence that underlays even your thinking mind) to bring about something new. Cultivating your creativity in other areas can help you strengthen the connections between cognition and intuition. This will help you tap into your creative energy when a job is on the line.

Interpersonal skills, such as emotional intelligence, empathy, teamwork, communication skills, and even mood management/mindfulness are all necessary components of professional problem solving. A significant share of professional problems that need solving involve human relationships. If you’re unable to consider others’ perspectives, to collaborate with others toward shared goals, and to practice purposeful communication, you will have difficulty resolving problems.

Of course, there are more conventional problem solving skills necessary for practicing effective problem solving. Developing your risk management and decision making skills is a necessity for improving your problem solving abilities. This can involve a delicate balance between intuition and analysis. And finally, there’s no way to improve as a problem solver if you don’t improve your ability to learn & synthesize new information. Be sure to improve your research skills!

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While every problem is unique and demands its own solution, there are some commonalities to the ways most or all problems are solved. We’ll take a look at these problem solving steps here.

Identify the Problem

This may seem self-explanatory, but this step is more involved than it appears at first glance. Problems are often like icebergs - only a small fraction shows above the surface. Identifying the problem involves a careful definition of just what the nature of the problem is. This is crucial, because it will also define how the problem can/must be solved.

Structure the Problem

This means taking a deep dive into the problem to understand what, exactly, is going wrong and why. Structuring the problem begins with careful observation, inspection, fact-gathering, and analysis to help illustrate a complete picture of the problem. This granular look at the inner workings of a problem will help define goals for the solution.

Imagine Solutions

This step can be a bit hard to define, since any act of creativity involves some innate element of mystery. But what’s transferable about this step to any problem is that, after fully understanding a problem, a temporary retreat for deep contemplation can help bring powerful ideas to the surface.

Make a Decision

Many problems have no perfect solution, only many imperfect solutions. One of the more difficult stages will be deciding which course of action to pursue. This involves carefully considering the pros and cons of the various possible solutions and deciding how they fit with your goals.

Implement the Solution

This is where the decided course of action is put into play. Implementing a solution is seldom straightforward. It often involves many steps and a great deal of coordination among different actors.

Monitor Implementation Along the Way

This is crucial, since almost no problem is solved immediately. Solutions are processes that require evaluation to ensure success.

Virtually every business is united in the essential struggle of pursuing long-term goals while managing short term problems, obstacles, and contingencies. Indeed, many business owners will tell you that owning and operating a business can feel like one long problem. Business owners seek help from management consultants to solve problems. Improving your problem solving skills will, by definition, make you a better consultant.

On some level, we can look at a great deal of the modern business education - statistics, economics, marketing - as being specific, granular forms of problem solving. Perhaps for this reason, it’s easy to hear the concept of “problem solving” fuzzily through the gauze of corporate speak. But it really is worth taking a step back to appreciate how central your skills & characteristics as a problem solver define your professional life. If you’re an aspiring or current management consultant, consider this your invitation to take a deeper look at the ways you can make yourself the best possible problem solver.

Additional Reading:

• Leadership: Where Everything Rises and Falls
• Key Leadership Competencies For Consulting & Management
• Communication Skills
• Mental Models: What Are They?
• Pyramid Principle Applied