7 step problem solving process mckinsey

Master the 7-Step Problem-Solving Process for Better Decision-Making

Discover the powerful 7-Step Problem-Solving Process to make better decisions and achieve better outcomes. Master the art of problem-solving in this comprehensive guide. Download the Free PowerPoint and PDF Template.

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Introduction

Mastering the art of problem-solving is crucial for making better decisions. Whether you're a student, a business owner, or an employee, problem-solving skills can help you tackle complex issues and find practical solutions. The 7-Step Problem-Solving Process is a proven method that can help you approach problems systematically and efficiently.

The 7-Step Problem-Solving Process involves steps that guide you through the problem-solving process. The first step is to define the problem, followed by disaggregating the problem into smaller, more manageable parts. Next, you prioritize the features and create a work plan to address each. Then, you analyze each piece, synthesize the information, and communicate your findings to others.

By following this process, you can avoid jumping to conclusions, overlooking important details, or making hasty decisions. Instead, you can approach problems with a clear and structured mindset, which can help you make better decisions and achieve better outcomes.

In this article, we'll explore each step of the 7-Step Problem-Solving Process in detail so you can start mastering this valuable skill. You can download the process's free PowerPoint and PDF templates at the end of the blog post .

Step 1: Define the Problem

The first step in the problem-solving process is to define the problem. This step is crucial because finding a solution is only accessible if the problem is clearly defined. The problem must be specific, measurable, and achievable.

One way to define the problem is to ask the right questions. Questions like "What is the problem?" and "What are the causes of the problem?" can help. Gathering data and information about the issue to assist in the definition process is also essential.

Another critical aspect of defining the problem is identifying the stakeholders. Who is affected by it? Who has a stake in finding a solution? Identifying the stakeholders can help ensure that the problem is defined in a way that considers the needs and concerns of all those affected by it.

Once the problem is defined, it is essential to communicate the definition to all stakeholders. This helps to ensure that everyone is on the same page and that there is a shared understanding of the problem.

Step 2: Disaggregate

After defining the problem, the next step in the 7-step problem-solving process is to disaggregate the problem into smaller, more manageable parts. Disaggregation helps break down the problem into smaller pieces that can be analyzed individually. This step is crucial in understanding the root cause of the problem and identifying the most effective solutions.

Disaggregation can be achieved by breaking down the problem into sub-problems, identifying the contributing factors, and analyzing the relationships between these factors. This step helps identify the most critical factors that must be addressed to solve the problem.

A tree or fishbone diagram is one effective way to disaggregate a problem. These diagrams help identify the different factors contributing to the problem and how they are related. Another way is to use a table to list the other factors contributing to the situation and their corresponding impact on the issue.

Disaggregation helps in breaking down complex problems into smaller, more manageable parts. It helps understand the relationships between different factors contributing to the problem and identify the most critical factors that must be addressed. By disaggregating the problem, decision-makers can focus on the most vital areas, leading to more effective solutions.

Step 3: Prioritize

After defining the problem and disaggregating it into smaller parts, the next step in the 7-step problem-solving process is prioritizing the issues that need addressing. Prioritizing helps to focus on the most pressing issues and allocate resources more effectively.

There are several ways to prioritize issues, including:

• Urgency: Prioritize issues based on their urgency. Problems that require immediate attention should be addressed first.
• Impact: Prioritize issues based on their impact on the organization or stakeholders. Problems with a high impact should be given priority.
• Resources: Prioritize issues based on the resources required to address them. Problems that require fewer resources should be dealt with first.

Considering their concerns and needs, it is important to involve stakeholders in the prioritization process. This can be done through surveys, focus groups, or other forms of engagement.

Once the issues have been prioritized, developing a plan of action to address them is essential. This involves identifying the resources required, setting timelines, and assigning responsibilities.

Prioritizing issues is a critical step in problem-solving. By focusing on the most pressing problems, organizations can allocate resources more effectively and make better decisions.

Step 4: Workplan

After defining the problem, disaggregating, and prioritizing the issues, the next step in the 7-step problem-solving process is to develop a work plan. This step involves creating a roadmap that outlines the steps needed to solve the problem.

The work plan should include a list of tasks, deadlines, and responsibilities for each team member involved in the problem-solving process. Assigning tasks based on each team member's strengths and expertise ensures the work is completed efficiently and effectively.

Creating a work plan can help keep the team on track and ensure everyone is working towards the same goal. It can also help to identify potential roadblocks or challenges that may arise during the problem-solving process and develop contingency plans to address them.

Several tools and techniques can be used to develop a work plan, including Gantt charts, flowcharts, and mind maps. These tools can help to visualize the steps needed to solve the problem and identify dependencies between tasks.

Developing a work plan is a critical step in the problem-solving process. It provides a clear roadmap for solving the problem and ensures everyone involved is aligned and working towards the same goal.

Step 5: Analysis

Once the problem has been defined and disaggregated, the next step is to analyze the information gathered. This step involves examining the data, identifying patterns, and determining the root cause of the problem.

Several methods can be used during the analysis phase, including:

• Root cause analysis
• Pareto analysis
• SWOT analysis

Root cause analysis is a popular method used to identify the underlying cause of a problem. This method involves asking a series of "why" questions to get to the root cause of the issue.

Pareto analysis is another method that can be used during the analysis phase. This method involves identifying the 20% of causes responsible for 80% of the problems. By focusing on these critical causes, organizations can make significant improvements.

Finally, SWOT analysis is a valuable tool for analyzing the internal and external factors that may impact the problem. This method involves identifying the strengths, weaknesses, opportunities, and threats related to the issue.

Overall, the analysis phase is critical for identifying the root cause of the problem and developing practical solutions. Organizations can gain a deeper understanding of the issue and make informed decisions by using a combination of methods.

Step 6: Synthesize

Once the analysis phase is complete, it is time to synthesize the information gathered to arrive at a solution. During this step, the focus is on identifying the most viable solution that addresses the problem. This involves examining and combining the analysis results for a clear and concise conclusion.

One way to synthesize the information is to use a decision matrix. This involves creating a table that lists the potential solutions and the essential criteria for making a decision. Each answer is then rated against each standard, and the scores are tallied to arrive at a final decision.

Another approach to synthesizing the information is to use a mind map. This involves creating a visual representation of the problem and the potential solutions. The mind map can identify the relationships between the different pieces of information and help prioritize the solutions.

During the synthesis phase, remaining open-minded and considering all potential solutions is vital. To ensure everyone's perspectives are considered, it is also essential to involve all stakeholders in the decision-making process.

Step 7: Communicate

After synthesizing the information, the next step is communicating the findings to the relevant stakeholders. This is a crucial step because it helps to ensure that everyone is on the same page and that the decision-making process is transparent.

One effective way to communicate the findings is through a well-organized report. The report should include the problem statement, the analysis, the synthesis, and the recommended solution. It should be clear, concise, and easy to understand.

In addition to the report, a presentation explaining the findings is essential. The presentation should be tailored to the audience and highlight the report's key points. Visual aids such as tables, graphs, and charts can make the presentation more engaging.

During the presentation, it is essential to be open to feedback and questions from the audience. This helps ensure everyone agrees with the recommended solution and addresses concerns or objections.

Effective communication is vital to ensuring the decision-making process is successful. Stakeholders can make informed decisions and work towards a common goal by communicating the findings clearly and concisely.

The 7-step problem-solving process is a powerful tool for helping individuals and organizations make better decisions. By following these steps, individuals can identify the root cause of a problem, prioritize potential solutions, and develop a clear plan of action. This process can be applied to various scenarios, from personal challenges to complex business problems.

Through disaggregation, individuals can break down complex problems into smaller, more manageable parts. By prioritizing potential solutions, individuals can focus their efforts on the most impactful actions. The work step allows individuals to develop a clear action plan, while the analysis step provides a framework for evaluating possible solutions.

The synthesis step combines all the information gathered to develop a comprehensive solution. Finally, the communication step allows individuals to share their answers with others and gather feedback.

By mastering the 7-step problem-solving process, individuals can become more effective decision-makers and problem-solvers. This process can help individuals and organizations save time and resources while improving outcomes. With practice, individuals can develop the skills to apply this process to a wide range of scenarios and make better decisions in all areas of life.

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The 7-Step Problem-Solving Process is a robust and systematic method to help individuals and organizations make better decisions by tackling complex issues and finding practical solutions. This process comprises defining the problem, disaggregating it into smaller parts, prioritizing the issues, creating a work plan, analyzing the data, synthesizing the information, and communicating the findings.

By following these steps, individuals can identify the root cause of a problem, break it down into manageable components, and prioritize the most impactful actions. The work plan, analysis, and synthesis steps provide a framework for developing comprehensive solutions, while the communication step ensures transparency and stakeholder engagement.

Mastering this process can improve decision-making and problem-solving capabilities, save time and resources, and improve outcomes in personal and professional contexts.

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Resources >

Mckinsey approach to problem solving.

McKinsey and Company is recognized for its rigorous approach to problem solving. They train their consultants on their seven-step process that anyone can learn.

This resource guides you through that process, largely informed by the McKinsey Staff Paper 66. It also includes a PowerPoint Toolkit with slide templates of each step of the process that you can download and customize for your own use.

You can click any section to go directly there:

Overview of the McKinsey Approach to Problem Solving

Problem solving process.

• Problem Definition & Problem Statement Worksheet

Stakeholder Analysis Worksheet

Hypothesis trees, issue trees, analyses and workplan, synthesize findings, craft recommendations, distinctiveness practices, harness the power of collaboration, sources and additional reading, download the umbrex toolkit on the mckinsey approach to problem solving.

Problem solving — finding the optimal solution to a given business opportunity or challenge — is the very heart of how consultants create client impact, and considered the most important skill for success at McKinsey.

The characteristic “McKinsey method” of problem solving is a structured, inductive approach that can be used to solve any problem. Using this standardized process saves us from reinventing the problem-solving wheel, and allows for greater focus on distinctiveness in the solution. Every new McKinsey associate must learn this method on his or her first day with the firm.

There are four fundamental disciplines of the McKinsey method:

1. Problem definition

A thorough understanding and crisp definition of the problem.

2. The problem-solving process

Structuring the problem, prioritizing the issues, planning analyses, conducting analyses, synthesizing findings, and developing recommendations.

3. Distinctiveness practices

Constructing alternative perspectives; identifying relationships; distilling the essence of an issue, analysis, or recommendation; and staying ahead of others in the problem-solving process.

4. Collaboratio n

Actively seeking out client, customer, and supplier perspectives, as well as internal and external expert insight and knowledge.

Once the problem has been defined, the problem-solving process proceeds with a series of steps:

• Structure the problem
• Prioritize the issues
• Plan analyses
• Conduct analyses
• Synthesize findings
• Develop recommendations

Not all problems require strict adherence to the process. Some steps may be truncated, such as when specific knowledge or analogies from other industries make it possible to construct hypotheses and associated workplans earlier than their formal place in the process. Nonetheless, it remains important to be capable of executing every step in the basic process.

When confronted with a new and complex problem, this process establishes a path to defining and disaggregating the problem in a way that will allow the team to move to a solution. The process also ensures nothing is missed and concentrates efforts on the highest-impact areas. Adhering to the process gives the client clear steps to follow, building confidence, credibility, and long-term capability.

Problem Definition & Problem Statement Worksheet

The most important step in your entire project is to first carefully define the problem. The problem definition will serve the guide all of the team’s work, so it is critical to ensure that all key stakeholders agree that it is the right problem to be solving.

Problem Statement Worksheet

This is a helpful tool to use to clearly define the problem. There are often dozens of issues that a team could focus on, and it is often not obvious how to define the problem. In any real-life situation, there are many possible problem statements. Your choice of problem statement will serve to constrain the range of possible solutions.

• Use a question . The problem statement should be phrased as a question, such that the answer will be the solution. Make the question SMART: specific, measurable, action-oriented, relevant, and time-bound. Example: “How can XYZ Bank close the $100 million profitability gap in two years?”
• Context . What are the internal and external situations and complications facing the client, such as industry trends, relative position within the industry, capability gaps, financial flexibility, and so on?
• Success criteria . Understand how the client and the team define success and failure. In addition to any quantitative measures identified in the basic question, identify other important quantitative or qualitative measures of success, including timing of impact, visibility of improvement, client capability building required, necessary mindset shifts, and so on.
• Scope and constraints . Scope most commonly covers the markets or segments of interest, whereas constraints govern restrictions on the nature of solutions within those markets or segments.
• Stakeholders . Explore who really makes the decisions — who decides, who can help, and who can block.
• Key sources of insight . What best-practice expertise, knowledge, and engagement approaches already exist? What knowledge from the client, suppliers, and customers needs to be accessed? Be as specific as possible: who, what, when, how, and why.

The problem definition should not be vague, without clear measures of success. Rather, it should be a SMART definition:

• Action-oriented

Example situation – A family on Friday evening

Scenario: A mother, a father, and their two teenage children have all arrived home on a Friday at 6 p.m. The family has not prepared dinner for Friday evening. The daughter has lacrosse practice on Saturday and an essay to write for English class due on Monday. The son has theatre rehearsal on both Saturday and Sunday and will need one parent to drive him to the high school both days, though he can get a ride home with a friend. The family dog, a poodle, must be taken to the groomer on Saturday morning. The mother will need to spend time this weekend working on assignments for her finance class she is taking as part of her Executive MBA. The father plans to go on a 100-mile bike ride, which he can do either Saturday or Sunday. The family has two cars, but one is at the body shop. They are trying to save money to pay for an addition to their house.

What is the problem definition?

A statement of facts does not focus the problem solving:

It is 6 p.m. The family has not made plans for dinner, and they are hungry.

A question guides the team towards a solution:

1. What should the family do for dinner on Friday night?

2. Should the family cook dinner or order delivery?

3. What should the family cook for dinner?

4. What should the family cook for dinner that will not require spending more than $40 on groceries?

5. To cook dinner, what do they need to pick up from the supermarket?

6. How can the family prepare dinner within the next hour using ingredients they already have in the house?

In completing the Problem Statement Worksheet, you are prompted to define the key stakeholders.

As you become involved in the problem-solving process, you should expand the question of key stakeholders to include what the team wants from them and what they want from the team, their values and motivations (helpful and unhelpful), and the communications mechanisms that will be most effective for each of them.

Using the Stakeholder Analysis Worksheet allows you to comprehensively identify:

• Stakeholders
• What you need from them
• Where they are
• What they need from you

The two most helpful techniques for rigorously structuring any problem are hypothesis trees and issue trees. Each of these techniques disaggregates the primary question into a cascade of issues or hypotheses that, when addressed, will together answer the primary question.

A hypothesis tree might break down the same question into two or more hypotheses. 

Example: Alpha Manufacturing, Inc.

Problem Statement: How can Alpha increase EBITDA by $13M (to $50M) by 2025?

The hypotheses might be:

• Alpha can add $125M revenues by expanding to new customers, adding $8M of EBITDA
• Alpha can reduce costs to improve EBITDA by $5M

These hypotheses will be further disaggregated into subsidiary hypotheses at the next level of the tree.

The aim at this stage is to structure the problem into discrete, mutually exclusive pieces that are small enough to yield to analysis and that, taken together, are collectively exhaustive.

Articulating the problem as hypotheses, rather than issues, is the preferred approach because it leads to a more focused analysis of the problem. Questions to ask include:

• Is it testable – can you prove or disprove it?
• It is open to debate? If it cannot be wrong, it is simply a statement of fact and unlikely to produce keen insight.
• If you reversed your hypothesis – literally, hypothesized that the exact opposite were true – would you care about the difference it would make to your overall logic?
• If you shared your hypothesis with the CEO, would it sound naive or obvious?
• Does it point directly to an action or actions that the client might take?

Quickly developing a powerful hypothesis tree enables us to develop solutions more rapidly that will have real impact. This can sometimes seem premature to clients, who might find the “solution” reached too quickly and want to see the analysis behind it.

Take care to explain the approach (most important, that a hypothesis is not an answer) and its benefits (that a good hypothesis is the basis of a proven means of successful problem solving and avoids “boiling the ocean”).

Often, the team has insufficient knowledge to build a complete hypothesis tree at the start of an engagement. In these cases, it is best to begin by structuring the problem using an issue tree.

An issue tree is best set out as a series of open questions in sentence form. For example, “How can the client minimize its tax burden?” is more useful than “Tax.” Open questions – those that begin with what, how, or why– produce deeper insights than closed ones. In some cases, an issue tree can be sharpened by toggling between issue and hypothesis – working forward from an issue to identify the hypothesis, and back from the hypothesis to sharpen the relevant open question.

Once the problem has been structured, the next step is to prioritize the issues or hypotheses on which the team will focus its work. When prioritizing, it is common to use a two-by-two matrix – e.g., a matrix featuring “impact” and “ease of impact” as the two axes.

Applying some of these prioritization criteria will knock out portions of the issue tree altogether. Consider testing the issues against them all, albeit quickly, to help drive the prioritization process.

Once the criteria are defined, prioritizing should be straightforward: Simply map the issues to the framework and focus on those that score highest against the criteria.

As the team conducts analysis and learns more about the problem and the potential solution, make sure to revisit the prioritization matrix so as to remain focused on the highest-priority issues.

The issues might be:

• How can Alpha increase revenue?
• How can Alpha reduce cost?

Each of these issues is then further broken down into deeper insights to solutions.

If the prioritization has been carried out effectively, the team will have clarified the key issues or hypotheses that must be subjected to analysis. The aim of these analyses is to prove the hypotheses true or false, or to develop useful perspectives on each key issue. Now the task is to design an effective and efficient workplan for conducting the analyses.

Transforming the prioritized problem structure into a workplan involves two main tasks:

• Define the blocks of work that need to be undertaken. Articulate as clearly as possible the desired end products and the analysis necessary to produce them, and estimate the resources and time required.
• Sequence the work blocks in a way that matches the available resources to the need to deliver against key engagement milestones (e.g., important meetings, progress reviews), as well as to the overall pacing of the engagement (i.e., weekly or twice-weekly meetings, and so on).

A good workplan will detail the following for each issue or hypothesis: analyses, end products, sources, and timing and responsibility. Developing the workplan takes time; doing it well requires working through the definition of each element of the workplan in a rigorous and methodical fashion.

This is the most difficult element of the problem-solving process. After a period of being immersed in the details, it is crucial to step back and distinguish the important from the merely interesting. Distinctive problem solvers seek the essence of the story that will underpin a crisp recommendation for action.

Although synthesis appears, formally speaking, as the penultimate step in the process, it should happen throughout. Ideally, after you have made almost any analytical progress, you should attempt to articulate the “Day 1” or “Week 1” answer. Continue to synthesize as you go along. This will remind the team of the question you are trying to answer, assist prioritization, highlight the logical links of the emerging solution, and ensure that you have a story ready to articulate at all times during the study.

McKinsey’s primary tool for synthesizing is the pyramid principle. Essentially, this principle asserts that every synthesis should explain a single concept, per the “governing thought.” The supporting ideas in the synthesis form a thought hierarchy proceeding in a logical structure from the most detailed facts to the governing thought, ruthlessly excluding the interesting but irrelevant.

While this hierarchy can be laid out as a tree (like with issue and hypothesis trees), the best problem solvers capture it by creating dot-dash storylines — the Pyramid Structure for Grouping Arguments.

Pyramid Structure for Grouping Arguments

• Focus on action. Articulate the thoughts at each level of the pyramid as declarative sentences, not as topics. For example, “expansion” is a topic; “We need to expand into the European market” is a declarative sentence.
• Use storylines. PowerPoint is poor at highlighting logical connections, therefore is not a good tool for synthesis. A storyline will clarify elements that may be ambiguous in the PowerPoint presentation.
• Keep the emerging storyline visible. Many teams find that posting the storyline or story- board on the team-room wall helps keep the thinking focused. It also helps in bringing the client along.
• Use the situation-complication-resolution structure. The situation is the reason there is action to be taken. The com- plication is why the situation needs thinking through – typically an industry or client challenge. The resolution is the answer.
• Down the pyramid: does each governing thought pose a single question that is answered completely by the group of boxes below it?
• Across: is each level within the pyramid MECE?
• Up: does each group of boxes, taken together, provide one answer – one “so what?” – that is essentially the governing thought above it?
• Test the solution. What would it mean if your hypotheses all came true?

Three Horizons of Engagement Planning

It’s useful to match the workplan to three horizons:

• What is expected at the end of the engagement
• What is expected at key progress reviews
• What is due at daily and/or weekly team meetings

The detail in the workplan will typically be greater for the near term (the next week) than for the long term (the study horizon), especially early in a new engagement when considerable ambiguity about the end state remains.

It is at this point that we address the client’s questions: “What do I do, and how do I do it?” This means not offering actionable recommendations, along with a plan and client commitment for implementation.

The essence of this step is to translate the overall solution into the actions required to deliver sustained impact. A pragmatic action plan should include:

• Relevant initiatives, along with a clear sequence, timing, and mapping of activities required
• Clear owners for each initiative
• Key success factors and the challenges involved in delivering on the initiatives

Crucial questions to ask as you build recommendations for organizational change are:

• Does each person who needs to change (from the CEO to the front line) understand what he or she needs to change and why, and is he or she committed to it?
• Are key leaders and role models throughout the organization personally committed to behaving differently?
• Has the client set in place the necessary formal mechanisms to reinforce the desired change?
• Does the client have the skills and confidence to behave in the desired new way?

Great problem solvers identify unique disruptions and discontinuities, novel insights, and step-out opportunities that lead to truly distinctive impact. This is done by applying a number of practices throughout the problem-solving process to help develop these insights.

Expand: Construct multiple perspectives

Identifying alternative ways of looking at the problem expands the range of possibilities, opens you up to innovative ideas, and allows you to formulate more powerful hypotheses. Questions that help here include:

• What changes if I think from the perspective of a customer, or a supplier, or a frontline employee, or a competitor?
• How have other industries viewed and addressed this same problem?
• What would it mean if the client sought to run the company like a low-cost airline or a cosmetics manufacturer?

Link: Identify relationships

Strong problem solvers discern connections and recognize patterns in two different ways:

• They seek out the ways in which different problem elements – issues, hypotheses, analyses, work elements, findings, answers, and recommendations – relate to one another.
• They use these relationships throughout the basic problem-solving process to identify efficient problem-solving approaches, novel solutions, and more powerful syntheses.

Distill: Find the essence

Cutting through complexity to identify the heart of the problem and its solution is a critical skill.

• Identify the critical problem elements. Are there some issues, approaches, or options that can be eliminated completely because they won’t make a significant difference to the solution?
• Consider how complex the different elements are and how long it will take to complete them. Wherever possible, quickly advance simpler parts of the problem that can inform more complex or time-consuming elements.

Lead: Stay ahead/step back

Without getting ahead of the client, you cannot be distinctive. Paradoxically, to get ahead – and stay ahead – it is often necessary to step back from the problem to validate or revalidate the approach and the solution.

• Spend time thinking one or more steps ahead of the client and team.
• Constantly check and challenge the rigor of the underlying data and analysis.
• Stress-test the whole emerging recommendation
• Challenge the solution against a set of hurdles. Does it satisfy the criteria for success as set out on the Problem Statement Worksheet?

No matter how skilled, knowledgeable, or experienced you are, you will never create the most distinctive solution on your own. The best problem solvers know how to leverage the power of their team, clients, the Firm, and outside parties. Seeking the right expertise at the right time, and leveraging it in the right way, are ultimately how we bring distinctiveness to our work, how we maximize efficiency, and how we learn.

When solving a problem, it is important to ask, “Have I accessed all the sources of insight that are available?” Here are the sources you should consider:

• Your core team
• The client’s suppliers and customers
• Internal experts and knowledge
• External sources of knowledge
• Communications specialists

The key here is to think open, not closed. Opening up to varied sources of data and perspectives furthers our mission to develop truly innovative and distinctive solutions for our clients.

• McKinsey Staff Paper 66 — not published by McKinsey but possibly found through an internet search
• The McKinsey Way , 1999, by Ethan M. Rasiel

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Skip Prichard | Leadership Insights

Ideas, Insight & Inspiration

7 Steps to Problem Solving

Bulletproof Problem Solving

Complex problem solving is the core skill for 21st century teams. It’s the only way to keep up with rapid change. Winning organizations now rely on nimble, iterative problem solving, rather than the traditional planning processes. I had the opportunity to speak with Charles Conn and Robert McLean, two McKinsey alums who share a seven-step systematic approach to creative problem solving that will work in any field or industry. Their new book is BULLETPROOF PROBLEM SOLVING: The One Skill That Changes Everything .

New Skills Required

Would you share a little about the evolution of managerial skills and what skills are needed in the current era?

This new era of focus on creative problem solving has been ushered in by massive disruption of the old order in business and society. New business models are rapidly emerging from revolutionary Internet, machine learning, and bioscience technologies that threaten the status quo in every field. Technology change is speeding business up and providing an edge for disruptive innovators.

As a consequence of accelerating change, the old model of managerial skill development and application is no longer effective.  It used to be that you could learn the core skills for a career in college and graduate school – think management, accounting, law – and then apply it over forty years.  Strategic planning in business assumed an existing playing field and known actors. Today savvy business leaders are prioritizing complex problem solving skills in hiring rather than old domain knowledge, and emphasizing agile team problem solving over traditional planning cycles. This approach rewards the ability to see and quickly respond to new opportunities and threats over the slower traditional big company departmental responses.

We are seeing growing awareness of this. David Brooks of the New York Times said recently, “It doesn’t matter if you are working in the cafeteria or the inspection line of a plant, companies will only hire people who can see problems and organize responses.” And The World Economic Forum in its Future of Jobs Report placed complex problem solving at #1 in its top 10 skills for jobs in 2020.

For those who feel ill-prepared for this era, what are the best ways to acquire the needed skills?

Unfortunately, despite an increasing recognition in the business press that problem solving is the core 21 st century skill, our universities and graduate schools rarely teach systematic problem solving or modern team decision making skills. This is starting to change, and we are seeing that in moves by the OECD and Council for Aid to Education (CAE) which administers the College Learning Assessment plus test.

The OECD Program for International Student Assessment (PISA) started testing individual problem solving skills in 2012 and added collaborative problem solving skills in the 2015 assessments. One of the interesting early findings is that to teach students to become better problem solvers involves other capabilities than simply teaching reading, mathematics, and science literacy well. Capabilities such as creativity, logic, and reasoning are essential contributors to students becoming better problem solvers. That is what this book is about.

You share seven steps in your bulletproof problem solving approach. How did you develop it?

The 7-steps approach to problem solving has its roots in the hypothesis-driven structure of the scientific method, but was developed into an approach for business problem solving at McKinsey & Company.  Charles wrote one of the early internal documents to systematic problem solving in McKinsey, and both of us have developed the approach further for application more broadly to personal, social and environmental problems at all scales in later work with the Nature Conservancy, the Gordon & Betty Moore Foundation, the Rhodes Trust and in start-up companies where we are investors.

1: Define the problem.

2: Disaggregate.

3: Prioritize.

4: Workplan.

5: Analyze.

6: Synthesize.

7. Communicate.

Is there one part of it normally missed or not focused on as much as it should be?

What are some of the best methods for overcoming biases in decision making?

The most important biases to address are confirmation bias, anchoring bias, and loss aversion.  These are deep seated in our psyches and often reinforced by traditional hierarchies. We use some simple team approaches to fight bias, including perspective-taking (the act of modeling another team member’s assertion or belief to the point that you can describe it as compellingly as the other), role playing (where you act out one side or the other of difficult choice, sometimes in a red team/blue team structure), team distributive voting on analyses and solution paths (one approach we have used is to assign each team member 10 votes, represented by sticky notes, and have each team member use them to vote on their favorite analysis, allowing cumulative or bullet voting, with the most senior person voting last, so as not to bias the choices of more junior members). The most important team norm to encourage is the obligation to dissent, which means every team member is required to verbally contest decisions when they disagree, regardless of seniority.

What do leadership teams most struggle with in the new environment?

The biggest challenge is the speed of change, which pressures all the management approaches we were taught in business school, particularly around planning cycles.  The leadership teams that get good at this typically form and re-form cross-functional teams to deploy on issues as they arise, rather than waiting for conventional departmental responses.  And they are comfortable using rapid design cycles to prototype and test products/services in the market, rather than depending on traditional marketing analysis.

How will AI impact the bulletproof approach?

We believe good organization problem solving will increasingly utilize advances in artificial intelligence to predict patterns in consumer behavior, disease, credit risk, and other complex phenomena.  Machine learning is getting better at pattern recognition than most humans. But that isn’t the whole story. To meet the challenges of the twenty-first century, mental muscle and machine muscle have to work together. Machine learning frees human problem solvers from computational drudgery and amplifies the pattern recognition required for faster organizational response to external challenges. For this partnership to work, twenty-first century organizations need staff who are quick on their feet, who learn new skills quickly, and who attack emerging problems with confidence.

For more information, see BULLETPROOF PROBLEM SOLVING: The One Skill That Changes Everything .

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How to master the seven-step problem-solving process The McKinsey Podcast

Structured problem solving can help address complex business challenges.

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"The McKinsey Way" Book: A Comprehensive Summary

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.

Table of Contents

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.

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:

• A monthly “team-bonding”. 
• A “team temperature” (a.k.a: morale) weekly survey.

The hierarchy

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.

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.

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

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.

“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

Scoring in the McKinsey PSG/Digital Assessment

The scoring mechanism in the McKinsey Digital Assessment

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