This mainly records analysis methods.
1. Strategic Analysis
McKinsey’s Seven-Step Problem-Solving Method
- State the problem
- Analyze the problem
- Prioritize
- Lay out a detailed work plan
- Perform key analyses
- Synthesize results and build a structured conclusion
- Tell the story
2. Recognizing the Problem
Most problems are a failure to recognize the problem β unknown unknowns. Being able to recognize and state the problem is the key step in solving it.
3. The Logic Tree Method and MECE for Analyzing Problems
The MECE principle
- Each part is mutually exclusive from the others (Mutually Exclusive)
- All parts together are completely exhaustive (Collectively Exhaustive
3.1 Building a Logic Tree
When analyzing a problem, break it apart. The sub-problems must satisfy the MECE principle, split level by level, and finally form a logic tree. For example:
Profit decline -> (Revenue decline, Cost increase)
Revenue decline can be broken down further.
Revenue decline -> (Sales volume decline, Unit selling price decline)
During this breakdown you may also run into blind spots in your own or your team’s knowledge, and at that point you need to fill in the knowledge.
If a problem can be decomposed by a mathematical formula, then it will fit the MECE principle fairly well. It is also a fairly common decomposition method. For example, in the case above, Profit = Revenue - Cost.
4. Telling the Story
| Answer first | Answer later | |
|---|---|---|
| Purpose | For satisfying decision-makers who lack patience | Ensures that every step can reach agreement |
| Advantage | - The audience can quickly grasp the key strategic direction - The key points and logic can be introduced up front in a brief introduction | Deriving step by step to the conclusion; if the process guarantees agreement, the result is self-evident |
| When to use | - The audience clearly understands the current situation and the line of reasoning - It is likely everyone already agrees on the conclusion - The audience has limited time and little patience | - The audience is not very familiar with the facts - The conclusion is fairly likely to be contentious and needs to be derived and argued in detail - The audience is detail-oriented |
4.1 The SCQM Storytelling Method
S - Background
C - Conflict
Q - Core question
M - Conclusion
SCQM and pyramid thinking, building a Storyline
5. Clarity of Thinking Matters Most
- Talk about the problem and the solution, do not just list the main branches
- When you surface a problem, you must have a clear solution; when you ask for resources, you must have clear logical analysis and an execution path
- Storyline is king, please always remember MECE
- The core argument and the Storyline are the management responsibility of the leader/owner and cannot be delegated or outsourced
- Learn to use the ’executive summary’, and use the ’elevator scenario’ to test and refine the precision and accuracy of your reporting
6. About Data, Presenting with Data
- Let data speak; managers must have a clear understanding of the overall business data view
- Data serves the argument and the Storyline; the presentation form does not match reading habits
- Be sure to avoid piling it on; keep non-core data as backup for reference, and do not let it disrupt the main line of the report
