INTRODUCTION
In the December, 2018 issue of the Journal, Nitin Shingala wrote an
article that highlighted the need to read a number of books on management of
professional services firms and also curated a list of must-read books on the
subject. He summarised key lessons from The Trusted Advisor by David
H. Maister, Charles H. Green and Robert M. Galford.
This article seeks
to summarise and highlight key learnings from another classic — The McKinsey
Way by Ethan M Rasiel.
THE McKINSEY WAY
The McKinsey Way is
one of the most recommended, read and referred books on consulting as it
delivers crisp insights into the working of one of the most successful
consulting firms in the world. The book is teeming with amusing anecdotes which
make it quite different from the usual dry management literature on similar
subjects. The book provides an honest account of how one can be a successful
consultant and how can consulting firms grow themselves in the footsteps of
McKinsey & Co.
Ethan M. Rasiel was
a consultant in McKinsey & Co.’s New York office. His clients included
major companies in the 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.
THEME
McKinsey & Co,
(“the firm”) is arguably the most celebrated consulting firm in the world.
Since its founding in 1923, it has now grown to 65+ offices in 130+ countries
and employs 4,500+ top minds. The book provides the reader a keyhole view of
how the firm thinks about business problems and the process through which it
solves them. The book also provides insight into how the firm markets its
services without “selling”. The final section of the book helps the reader
reflect on how to survive at McKinsey and how is life after working with the
firm.
The most important
learnings from each of these parts in the book are highlighted in this article.
PART ONE: THE McKINSEY WAY OF THINKING ABOUT BUSINESS PROBLEMS
When team members
meet for the first time to discuss their client’s problem, they know that their
solution will be:
Fact-based
The firm loves facts for two key reasons. First, facts compensate for
lack of knowledge since most McKinsey-ites are generalists rather than industry
specialists. They bridge this industry knowledge gap through extensive
research. Second, facts bridge the credibility gap. The CEO of a Fortune 50
company will not give much credence to what some newly-minted, 27-year-old MBA
has to say.
Rigidly structured
Further, the
section explains a sine qua non for problem-solving at McKinsey –
“MECE”.
MECE stands for
mutually exclusive collectively exhaustive. Every list that the firm comes up
with in the process – problems with client, possible solutions or probable
outcomes – needs to be MECE. This ensures that while all possible items are
covered, none of them overlaps any other to add just redundant pointers to a
list.
Hypotheses-driven
The initial
hypotheses (IH) is an important pillar to McKinsey problem-solving which
involves 3 steps:
Defining the IH
The essence of the
IH is “Figure out the solution to the problem before you start”. While it may
sound counter-intuitive, IH is not the answer – it is just a theory which needs
to be proved or disproved. If IH is proved to be correct, it will become the
first slide of the presentation to be delivered a few months later. If proved
wrong, however, the process will give enough information to move on towards the
right answer.
Generating the
IH
The hypothesis is
then broken down into key drivers. Next, making an actionable recommendation
regarding each driver. For the next step, each top line recommendation is
broken down to the level of issues. If a given recommendation is correct, what
issue does it raise?
Testing the IH
Finally, the
hypothesis is tested to check whether anything is being missed out or any
issues are being ignored or all drivers of the problem have been considered?
Don’t reinvent the wheel and don’t boil the
ocean
McKinsey, like many
other firms, has developed a number of problem-solving methods. These
techniques are immensely powerful and allow the consultants to quickly fit in
raw data into frameworks and quickly begin to work towards the solution.
Further, the firm has a database of cases they have solved in what they call PD.net.
Here, the consultants can often tap into solutions to similar problems and
sometimes save days of effort. Further, sometimes it’s good to take a break
from the problem and resume later rather than sitting at a place and trying to
“boil the ocean”.
80/20 and other rules
80/20 is a rule
that has wide applicability and is one of the greatest truths of management.
80% of sales come from 20% of customers, 80% of the wealth is owned by 20%
people and 20% of a secretary’s job will take 80% of her time. The 80/20 rule
can provide the much-needed jumpstart in solving a problem as one can focus on
the few items that create maximum impact on the business and work on them
rather than going through a sea of data which has little impact.
The elevator test
Know your solution
(or your product or business) so thoroughly that you can explain it clearly and
precisely to your client (or customer or investor) in 30 seconds. If you can do
that, then you understand what you’re doing well enough to sell your solution.
You never know how long you might have with the CEO or a top investor to tell
him about your idea and keep them interested enough that they will come back to
know more.
Pluck the low hanging fruit
Clients can get
impatient during longer assignments. In such cases, rather than waiting to
present all findings and solutions in that final presentation, it is better to
present easy initial victories to the client. They boost team and client morale
and give the firm added credibility by showing anybody who may be watching that
you are on the ball and mean business. This rule is really about satisfying the
client in a long-term relationship.
Just say “I don’t know”
As professionals,
we think we are expected to solve challenges and answer queries at the drop of
a hat. I observe many professionals falling prey to this delusion and often
offering shallow or incorrect advice just to save face. A much better approach
is to just accept that you do not know something and that you will get back on
it. This helps build trust in the long term as people see you as somebody who
will not comment without adequate facts and credence.
PART TWO: THE McKINSEY WAY OF WORKING TO SOLVE BUSINESS PROBLEMS
How to sell without selling?
McKinsey is one
firm that does not advertise itself or have a sales team to constantly call and
reach out to prospects to grow their practice. However, it has still been one
of the most successful consulting firms in history. So how does the firm sell
without selling? The secret is that McKinsey constantly produces high quality
reports and newsletters which make their way onto the desks of CXOs. So, when
they have a business problem, who do they think of? You guessed it right! This
is how McKinsey markets itself but without selling.
Conducting interviews
Interviewing the
employees and management of the client is one of the most important tasks of
the firm’s engagements. They ensure that they use the best of their client’s
knowledge to assimilate processes and provide the most apt solutions. The
author advises that interviews should begin on a broad note and graduate to
specific questions as it progresses. This helps the interviewee to be more
relaxed in the process. Further, the interview should be a two-way process for
sharing information so that it makes the most of the time of all parties to the
interview. The author has also given advise on how to conduct difficult
interviews where the interviewee refuses to participate and has recommended
escalation of the issue to managers as a final resort.
Brainstorming
The firm is known
to think and provide solutions as a team. The whole team may sometimes spend a
whole day together in a room brainstorming on the solution. They also ensure
that the discussion points are being noted by someone in the room or by use of
digital whiteboards. The firm’s strength lies in its teams and how its best
brains work together.
“My experience at
the firm (and that of the many McKinsey alumni I interviewed for this book)
taught me that IHs produced by teams is much stronger than that produced by
individuals. Why? Most of us are poor critics of our own thinking.”
PART THREE : THE McKINSEY WAY OF SELLING SOLUTIONS
Making presentations
Client
presentations are where the firm presents its solution. They also print their
study and solution in ‘blue books’ which are handed over to each person in the
board room as they take them through the presentation. The author recommends
the client should be kept abreast of developments and findings in the study so
that the final presentation does not come as a surprise but rather, the client
has already begun to buy into the solution by the time the final presentation
takes place.
Rigorous implementation
A strategy is only
as good as how it is implemented. The author has suggested that the person in
charge of implementing the strategy at the client level should be thorough,
precise and with the propensity to get things done by people. This will ensure
that the strategy gets implemented in a timely and effective manner. Rigorous
implementation ensures that the strategy is able to see the light of day.
PART FOUR: SURVIVING AT McKINSEY
Finding a mentor
The author has
suggested that every person in the firm should have a mentor who can provide
necessary guidance and feedback to help them grow in their career. The mentor
could be the manager in the team or some other person who has considerable
experience at the firm. The mentor helps them see a different perspective, find
their place in the firm and grow in the required direction.
Recruiting at McKinsey
McKinsey invests
considerable time, attention and resources to hire nothing but the best brains
across top schools around the globe. They also recruit people from varied
backgrounds and disciplines to add diversity to their teams. The author has
also given various examples of how the firm goes to different lengths (like
taking them to the best fine dines in town) so that who they recruit are
nothing short of the best.
PART FIVE : LIFE AFTER McKINSEY
“As one former
McKinsey-ite told me, leaving McKinsey is never a question of whether — it’s a
question of when. We used to say that the half-life of a class of new
associates is about two years — by the end of that time, half will have left
the firm. That was true in my time there and still is today. There is life
after McKinsey, however. In fact, there may be more life, since you are
unlikely to work the same hours at the same intensity in any other job. There
is no doubt, however, that the vast majority of former McKinsey-ites land on
their feet.
A quick scan
through the McKinsey Alumni Directory, which now contains some 5,000 names,
reveals any number of CEOs, CFOs, senior managers, professors, and
politicians.”
The drill that
consultants go through at the firm and their interactions with the best minds
of the world in absolutely unforgiving scenarios helps McKinsey-ites flourish
long after they have moved on from the firm.
CONCLUSION
The book is a rare,
honest and striking account of what consultants and firms can learn from “The
McKinsey Way” to grow their careers and practice. The anecdotes dotted across the
book keep the readers’ attention alive and also quickly endorse the opinions
presented by the author. The book runs across multiple vertical facets like
practice-building, presentations, marketing, client management, psychology and
productivity while still not coming across as generic. These directly
applicable tools and advices hit the nail on the head rather than beating
around the bush.
