FOCUS – Framing, Organizing, Collecting, Understanding, and Synthesizing
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Transcript of FOCUS – Framing, Organizing, Collecting, Understanding, and Synthesizing
FOCUS – Framing, Organizing, Collecting, Understanding, and Synthesizing
Paul Friga’s McKinsey Engagement
Rule 1: Identify the key question
This is the most important step in the consulting process
Most team members usually want to speed through this step to start collecting data – this is how consulting projects fail
The starting point is the client (or case study) and what it says the problem is
You need to FRAME the question
Strategy
What is our position in the market? What are our organizations priorities
(plus, what should we not do?) What are our organization’s payments
(and are they focused on priorities) What is our organization’s
performance? (compared to the competition)
Marketing
What is our unique selling proposition (and do our customers want it?)
How much should we charge for our products?
How do we best communicate our offerings?
How should we spend our media budget?
Operations
How do we deliver on our business model?
How do we reduce manufacturing costs?
How do we increase throughput? How do we add capacity?
Human resources
How much do we pay our employees? Do we have the right stuff? How do we increase employee
satisfaction? How do we ensure compliance with all
regulations?
Take-away
Your framing with the client makes or breaks the success of the project
Your framing helps you to identify the expertise you need to draw from to help the client
Your business school education goes a long way to help shape how you think about framing a problem
You need to be a strategic expert and have exceptional functional expertise in at least one of these areas
Rule 2: Develop the issue tree
Once the key question has been clearly articulated, the next step is to create an issue tree that will help organize the analysis of options.
There are essentially two types of issue trees: information trees and decision trees.
The information tree is used to quickly get a sense of the situation you are investigating.
Rule 2: Develop the issue tree
An important aspect of issues tree creation is the concept of MECE (Mutually exclusive and collectively exhaustive).
MECE is a way of organizing a list so that there are no gaps and no overlaps.
Frameworks
Frameworks are issue trees that have been created in the past.
First thing a consultant should do when assigned to a new engagement is to download past reports (which have their confidential information removed) to see how similar problems were framed and investigated.
Not cookie cutters, but topics for consideration based on past experiences with similar issues.
By-product of business school education
“One of the by-products of a business school education is the collection of frameworks and methodologies in all the major areas of business problem solving. Your professors are subject-matter experts who inform you of best practices and important thinking in their area of expertise. This includes providing students with frameworks that summarize key ideas and teaching them how to use the frameworks.”
Develop the issue tree
Once issue tree has been constructed, prioritize the issues for investigation.
This is the “breakdown” point for many teams – the easiest approach is to allocate resources (time, effort, and money) evenly across all the issues in the issue tree - This is a very bad idea.
Issue tree should be prioritized for analysis based on the key question and the decision criteria that would contribute to maximizing the impact of the ultimate recommendation to the client.
Common business scenarios for consultants
Revenue Growth Mergers & Acquisitions
New products Add-on services New markets
Strategic fit Synergies Financial implications
Cost Reduction Organizational Redesign Consolidation Exit of business line(s) Outsourcing
Structural complexity Redundancy Alignment with strategy
Geographic Expansion New Product Development Market size and conditions Government impact Resources and capabilities
Product mix line Potential market size Pricing
Rule 3: Formulate hypotheses
Hypotheses are potential answers to the key question.
The hypotheses become the starting point for the decision tee.
If the hypothesis is true, what else needs to be true?
A good example of a hypothesis is “The company should double its capacity, increase the annual employee bonus pool, and cut its product line by 33 percent.”
Rule 3: Formulate hypotheses
Intuition is also important in this process. Intuition is “ gut instinct tempered by
experience.” If you don’t have experience in a particular
problem area, it’s useful to interview who have worked on projects similar to yours.
Rule 3: Formulate hypotheses
About 5% of your total project time should be spent on framing the issue.
In a 24-hour business school case competition, for example, you should complete the framing in 1 to 2 hours.
Don’t be afraid to dismiss and change a hypothesis as you gain new insights into your project.
Don’t get too attached to them.
Framing: Operating tactics
Identify the key question that drives the project, which should be based upon specific discussions with the client
Document this question, the scope of the project, and the high-level plan of attack in an engagement letter.
Specifically identify the temporal (years under study), geographical, and functional areas for the project.
Framing: Operating tactics
Avoid “scope creep,” where additional work is added that is beyond the original scope of the engagement.
Develop a general hypothesis that is a potential answer to the problem at hand
Develop supporting hypotheses that must be true to support the general hypothesis (for testing).
Revisit and revise the hypotheses during the project as data are gathered
Organizing
All teams organize in one form or another, but the most n teams organize around the basis of potential answers to the key question under study.
The way you organize the team should be based on the paths your framing process produces.
Rule 1: Develop a high-level process map
What needs to be done at a high level?
Who will do what? What will the end result look like? When will it be done?
Rule 2: Create a content map to test the hypotheses
The first step is to create a process map The process map should be straightforward
and should answer only a few key questions: What needs to be done at a high level? Who will do what? What will the end result look like? When will it be done?
Rule 2: Create a content map to test the hypotheses
Use frameworks from business school and textbooks to generate ideas.
Examine past projects that had some similarity to this project (e.g., from the same industry, same function, same business issue, etc.) to see what has been used in the past.
Create a diverse team to participate actively in the brainstorming process.
Rule 3: Design the story line This rule answers the question “What’s the story?” The story line is the outline for the final presentation
at the end of the project. This is one of the secrets for efficient problem-solving: you begin working on the final presentation story very early in the project.
Right after the framing is finished and before systematic data gathering begins, the team should develop an initial story, brainstorming about both the actual story line and how to deliver it