A detailed summary of all the insights from Ethan M. Rasiel
The McKinsey Way is a book by Ethan M. Rasiel, published in 1999, about what McKinsey&Company does, how McKinsey organizes and what working at McKinsey is like.
20 years after publication, the book still holds significant value, offering timeless insights into the world’s most prestigious management consulting firm: McKinsey&Company. In this article, we’ll provide a detailed summary of all the lessons and insights from The McKinsey way. We’ll re-organize the content and occasionally insert supporting insights to make it more friendly to the reader.
The McKinsey Way has 5 Parts (Sections) with 180 pages:
•Part 1: The Problem Solving Methodology of McKinsey
•Part 2: Logistics of how a McKinsey project works
•Part 3: Insights into the actual works of consultants
•Part 4: How to excel as a junior consultant
•Part 5: Exit opportunities and life after McKinsey
Part 1: The McKinsey problem-solving methodology
The McKinsey problem-solving process can be summarized in the 5 steps: define the problems, find the root cause, use “hypothesis-driven” process, analyze with “issue tree” and propose solutions.
1
Define the problem: Every consulting project revolves around a “problem”. But the “problem” is NOT always the problem!
One symptom may have different causes and we as doctors should never rely on the patient to diagnose.
So, always dig deeper. Get facts. Asks questions. Poke around. Challenge the client… until you find the real problem.
2
Find the root cause: Don’t jump straight to the solution, because you might just be fixing the symptoms. The problem will come back if the root cause is not properly dealt with.
3
Use “hypothesis-driven” process: Make educated guesses of possible root-cause A B C and test with data (a.k.a: facts). We’ll sometimes call this a fact-based process.
4
Break down and structure the analysis with the “issue tree” framework: A “hypothesis-driven” process may take forever as there are millions of possible root-causes. We need to test hypotheses from the top to the bottom of the issue tree – a top-down fashion. These issue trees need to be MECE.
5
Propose solutions: When the root causes are identified, consultants propose solutions targeting them directly.
A few notes when using this methodology
No.1: Don’t force the facts to say what you want.
When you propose or work extensively with a running hypothesis, it’s easy to get emotionally attached and turn the problem-solving process into a proving exercise. So keep an open mind and listen to what the data have to say.
No.2: Let the hypothesis come to you naturally.
You will not be able to form an initial hypothesis every time. The clients may not even know their problems. The scope of the project is often large and vague. So, dive in, gather facts, conduct analyses, and the hypotheses will show themselves.
No.3: Don’t reinvent the wheel.
Business problems often resemble each other more than they differ. With suitable techniques, you can apply what you and the firm learned from other projects. After all, one of the values consulting firms bring is to provide the “best practice” – what the top players in the game are doing
No.4: Make sure your solution fits your client.
The most brilliant solution is useless without proper implementation. So know your client’s weaknesses, strengths, and capabilities and tailor your solutions accordingly.
No.5: Be mindful of politics.
There are always politics in projects. Many times, McKinsey gets involved in fights between corporate factions. This creates friction that prevents you from doing your job (late data; rejected interviews, etc.).
So think about how your solutions affect the players in an organization and always build a consensus along the way. If consensus requires you to change your solution, try to compromise. It’s no good devising the ideal solution if the client refuses to accept it.
Part 2: Logistics of how a McKinsey project works
It’s highly recommended that you refer to the following video for a general view on how McKinsey organizes and a better understanding of the insights from this part.
There is a whole system behind how McKinsey solve a business problem. In this part of The McKinsey Way, Ethan Rasiel describes how the company sells their projects, builds a team and manages its hierarchy.
Selling a study/project
McKinsey typically does not sell. The firm does marketing through a constant stream of books, articles, and scholarly journals like the McKinsey Quarterly, etc. The Firm also invites organize press releases and generates quite some coverage by journalists.
These publications help McKinsey Partners build and nurture a vast network of informal contacts with potential clients. And when a problem arises, the client knows who to contact.
Assembling a team
Almost all projects need a full-time team of consultants. Typically, the process goes like this:
The ED (a.k.a: Project Owner) signs a contract with the client
The ED hires an EM from within the McKinsey network, from any offices (a.k.a: Project CEO)
The EM then hires a group of staff, consisting of BAs (a.k.a: Business Analyst) and Associates.
It’s solely the EM’s responsibility to keep the team happy and functional. McKinsey projects have a few common practices to do so:
The chain of command in McKinsey is very clear and strict. So is the responsibility funnel. In the ED’s eyes, the EM is responsible for everything in the project. In the EM eyes, the BA is responsible for everything within the assigned workstream. Even when a BA messes things up, to the ED, it’s not the BA’s fault, but the EM.
Part 3: Insights into the actual works of consultants
To provide the best solution for the clients, consultants need tons of skills in preparing presentations; conducting researchs and interviews; presenting the final products in a simple structure; communicating with clients; and brainstorming.
Making presentations, a.k.a: the final deliverable documents
Most consultants spend a big portion of their time making presentations (often in PowerPoint). Utilize the support team! Keep it structured, from top to bottom, from end to end.
Note that there are diminishing marginal returns to your effort, meaning that the last miles toward perfection are always much harder than the beginning. So, resist the temptation to tweak your presentation at the last minute. Try to assess its gains vs those of a good night’s sleep for you and the supporting cast.
Visualizing data with charts and exhibits
We subconsciously admire the people who talk in sophisticated language, so we make complex charts. However, simple and easy-to-follow charts go a long way in consulting. Charts are just a means of getting your messages across, not a Ph.D. project.
Also, don’t forget to:
•Write clear chart titles
•List out units of measurement in all axes
•Mark legends and side notes
•Provide data sources
Managing internal communications
•Over-communication is always better. Keep that information flowing. Make sure that your team is up to date with at least the broad outlines of your workstream and your boss up to date with your team’s progress. There are many channels for this: email, voicemail, messaging, small talks during cigarette breaks, meetings, etc.
•Keep your communication brief, yet comprehensive and structured.
•Look over your shoulder – always. You never know who is listening. Remember that your client’s confidentiality is a must.
Working with clients
This is a big one as the true hierarchy at McKinsey is “Client -> Firm -> and then You”. The client is your biggest boss.
There are many tips on client management, but the general principle is to bring the client to your side. You never win by opposing the client. Remind them about mutual benefits. Do it everyday!
Some of the client members can be “liabilities”. There are 2 types of them:
•the merely “useless”.
•the hostile ones.
With both types, the number 1 option is to subtly trade them out of your realm. When that is not possible, the next best option is to play ignorant. Leak out information only with the right “secret audience”.
No matter what, engage the client members in the process. The more they feel everybody is on the same boat, the more they would support you.
You should also get buy-ins throughout the organization along the process. Every important party has to agree with you. Ideally, the final document has already been discussed many times through many rounds with the client before the official presentation.
Doing research
Don’t reinvent the wheel! Whatever you are doing, chances are that someone, somewhere has done something similar. Building upon someone’s work is the best way to save time and energy while achieving the highest standard.
Besides, here are some research tips:
•Start with the annual report. All public companies have them available on their website.
•Look for abnormal patterns (things that are especially good or bad). That’s where all the insights lie.
•Last but not least, look for the best practice. Find out what the best performers in the field are doing and learn from them.
Conducting interviews
This is one of the most effective ways to gather qualitative facts during a project. You will find yourself interviewing multiple industry and function experts as well as key client leaders.
Here are a few tips:
•Be prepared. Know exactly what you want to get out of it. Know as much as you can about the interviewee. Writing an interview brief for yourself is not a bad idea.
•If possible, have the interviewee’s boss set up the meeting.
•Start with some general and open-ended questions then move on to specific ones. Let the content flow naturally.
•Sometimes, it’s useful to use the indirect style. Take time to make the interviewee comfortable with you and the interview process.
•Include some questions you know the answer to. This gives insights into the interviewee’s style, knowledge, and honesty.
•Don’t ask too much. Focus on what you really need (what you prioritize in the interview brief).
•Listen and let the interviewee know you are doing so.
•Paraphrase what you hear in your own words. Confirm whether you understand correctly. This also gives chances for the interviewee to add or amplify important points.
•Near the end, use this last trick to flush out any possible missing insights: “Is there anything else you would like to tell or any question I forgot to ask…?”.
•Adopt the Columbo tactic. Wait until a day or two passes, then drop by the interviewee’s office. “I was just passing by and remembered a question I forgot to ask”. This is a less threatening way to keep the conversation going.
•Lastly, always write a thank-you note. A short and sincerely one always does the work.
Brainstorming at McKinsey
In McKinsey, we often use the word “Problem-Solving” interchangeably with brainstorming sessions. It’s a very topic-focus meeting within the McKinsey team, consisting of the consultant in-charge, the EM, and sometimes even the ED and experts.
Before the session, prepare in advance as much supporting data as possible. It will come handy in the process.Inside the White room: Start with tabula rasa — a clean slate. When you get your team into the room, leave your preconceptions at the door. Bring in only the facts, and find new ways of looking at them.
Part 4: How to excel as a junior consultant
Management consulting is an interesting yet challenging job. To survive and thrive at McKinsey, here are some advices for you:
Tip 1: Find your own mentor
At McKinsey, every consultant is officially assigned a mentor, who may not be in the same office. How much you benefit from the official mentor is pretty much a matter of luck. If you want great guidance, you have to go out and get your own. Get a few too, don’t stick to just one.
Tip 2: Survive the road
Business travel can be exhausting and difficult, here are some note you can take to deal with it:
•Look at business travel as an adventure.
•Do proper planning. These simple logistics can make a big difference
•Treat everyone with tremendous respect
Tip 3: Have a list of items to bring when traveling
Here is the list:
•Clothing: extra shirts or blouses, spare ties, spare shoes, casual clothes, cashmere sweaters
•Tools: writing pad, copy of whatever you send to the client, calculator
•Personal care Items
•Things to keep you organized and in touch
•Diversions
Tip 4: Treat your assistant well
Having a good assistant is a lifeline. Treat them well. Be clear about what you want. Give them room to grow. Take time to train them well. Answering their questions and showing them the ropes.
Tip 5: Have boundaries to keep your life balance
Since you have a large amount of work to cover as a consultant, there is almost no work-life balance. However, if you want a life, lay down some rules. For example:
•Make one day a week to be completely free of work, both physically and mentally. Tell your boss about it! He/she will respect it. And so should you.
•Don’t take work home. When you are home, you are home!
•Plan long ahead, especially when you travel.
Tip 6: The 80 / 20 Rule
80% of the wealth is owned by just 20% of the population. 80% of the output can be produced by 20% of the effort. 20% of the problems can cause 80% of the trouble.
So if you wanna save time and effort. Always try to find those 20% and act upon them!
Tip 7: Don’t try to analyze everything
If you don’t take shortcuts, there is simply too much to do. Be selective. Find the key drivers. Focus on the core problem, then apply analysis. This helps avoid going down blind alleys and boiling the ocean.
Tip 8: The Elevator Test
Concise communication is crucial in consulting. Anytime the EM asks you for your workstream status, you have to be able to give him a 30 seconds summary. Short yet insightful. This skill takes practice. Try doing it every day in various contexts!
Tip 9: Pluck the Low-Hanging Fruit
Solving only part of the problem can still mean increased profits. Those little wins help you and your customers. Try to see such opportunities and grab them first.
Tip 10: Hit singles
Get your job and only your job done, don’t try to do the work of the whole team.
It’s impossible to do everything yourself all the time. Even if you manage to pull it off once, you raise unrealistic expectations and once you fail, it is difficult to get back credibility.
Tip 11: Look at the big picture
When you are feeling swamped, take a step back, figure out what you are trying to achieve, and then look at what you are doing. “Does this really matter?”
Probably not! All of these troubles will go away!
Tip 12: Just say “I don’t know”
The firm pounds the concept of professional integrity: Honesty. If you don’t know something, just say “I DON’T KNOW” in an empowering fashion. Admitting that is a lot less costly than bluffing.
Part 5: Exit opportunities and life after McKinsey
“Leaving McKinsey is never a question of whether—it’s a question of when”
There are not many people who stay with McKinsey for their whole career life. In the last part of The McKinsey Way, Ethan Rasiel and other ex-McKinsey consultants share their valuable lessons and memories from working at the company.
•“Structure, structure, structure. MECE, MECE, MECE. Hypothesis-driven, Hypothesis-driven, Hypothesis-driven.” – Former associate in Dusseldorf and San Francisco offices
•“The quality of the people. In the corporate world, the average-caliber employee is far below McKinsey’s least intelligent.” – Wesley Sand
•“What stays with me is the rigorous standard of information and analysis, the proving and double-proving of every recommendation, combined with the high standard of communication both to clients and within the Firm.” – Former associate in the Boston and New York offices
•“When faced with an amorphous situation, apply structure to it.” – Kristin Asleson, New York office, 1990-93; now working in Silicon Valley
•“Execution and implementation are the key. A blue book is just a blue book, unless you do something with it. Getting things done is the most important thing.” – Former EM in the New York office
Management consulting is an industry providing expensive and professional advice to organizations to improve their overall performance, through better “management”, which includes strategy, governance, operation, organization, finance, and marketing. The three most prestigious management consulting firms are McKinsey, BCG, and Bain (the Big Three).
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