The McKinsey Engagement

by Paul N. Friga

  RULE 3: TELL A GOOD STORY

  Now, at the end of the project, it's time to craft the final argument, right? Wrong! As we have discussed, you and your team should have been working on the overall argument and support since the beginning of the process (as described in Chapter 5). The story is iterative, and by the end of the project, it will have developed and morphed into findings, conclusions, and ultimately recommendations based upon the testing described in Chapters 6 through 8.

  The "story" concept is common nomenclature within McKinsey—every project has a story (or overall "argument"), and it starts with the basic components that all stories share: situation, complication, and resolution. The team has to figure out the situation and complication (suggested in part by the engagement letter), then develop and test hypotheses to determine the resolution. More thinking up front in terms of strategic framing and organizing leads to more efficient data collection (as you are more focused and gather less irrelevant data). The original intention of the story (and the manner in which Barbara Minto teaches the concept) refers only to the introduction. The reader is likely to know the situation and complication in advance, and the resolution is the answer to the key question.

  Barbara Minto's teaching within McKinsey has created a strong culture of professionals who are extremely adept at doing efficient analysis by constantly thinking in a pyramid manner. She also emphasizes how important it is to communicate carefully with the client. One of the key tenets of her philosophy (and McKinsey's) is to begin with the recommendations (there are times when buildup is necessary because of the sensitivity of the conclusions, but those are rare), followed by supporting findings, data, and tactics. This contrasts with the way in which many consultants, executives, and students traditionally present, which is more along the lines of situation, analysis, findings, and recommendations. If you keep your audience in mind, McKinsey's approach makes sense; as an audience member, you would appreciate the reverse order, which gets right to the main point, supported by conclusions and facts. This presentation format is easier to digest and thus creates a better product.

  One of my favorite (and very simple) examples that makes this point is taken from Barbara Minto's bestselling book, The Minto Pyramid Principle: Logic in Writing, Thinking and Problem Solving, which she has graciously agreed to allow me to reproduce here:

  Have you ever received or even written a message like this?

  "John Collins telephoned to say that he can't make the meeting at 3:00. Hal Johnson says he doesn't mind making it later, or even tomorrow, but not before 10:30, and Don Clifford's secretary says that Clifford won't return from Frankfurt until tomorrow, late. The Conference Room is booked tomorrow, but free Thursday. Thursday at 11:00 looks to be a good time. Is that OK for you?"

  If you present the main point first followed by supporting data, it would look like the message shown below.

  "Could we reschedule today's meeting to Thursday at 11:00? This would be more convenient for Collins and Johnson, and would also permit Clifford to be present."

  Can you see (and appreciate) the difference? You can imagine how significant it becomes with a 50-page slide deck that follows a three-month, $3 million project.

  The magic of organizing the ideas in the pyramid properly takes work and is iterative. There are three rules to keep in mind as you work out the structure of your ideas (also reprinted with the permission of Barbara Minto):

  Ideas at any level must be summaries of the ideas grouped below them

  Ideas in each grouping must be logically the same

  Ideas in each grouping must be in logical order

  I have also found a few additional pieces of advice helpful for students and consultants who are learning to employ this approach:

  Always focus on your audience. Learn as much as you can about your client, including but not limited to his or her education, tenure in the organization, title, preferences, and possible reactions to the recommendations (negative, neutral, or positive). Adjust accordingly!

  Speak the language of the client. Many clients actually have a disdain for "consulting speak" and prefer outsiders who learn to speak the language of the host company. This includes very careful control over early drafts of the story and recommendations, and perhaps not using the term hypothesis too much. (I have seen clients react negatively to this term, as they sometimes think you are forcing an early answer to their problem without adequate analysis.)

  Utilize a flexible presentation approach. Presentations and meetings have heterogeneous audiences with different backgrounds and preferences. It is important to balance slide decks and presentations to offer something for everyone. The beauty of the pyramid principle is that it allows you to do just that by providing a high-level message and loads of detail at different levels as well.

  OPERATING TACTICS

  The Operating Tactics for the Synthesize element of the TEAM FOCUS model are:

  Tactic 37: Tell a story—use a very brief situation and complication followed by the resolution, which is the most important aspect of the project.

  Tactic 38: Share the story with the client and the team ahead of time to obtain input and ensure buy-in.

  Tactic 39: Keep the story simple, and focus on the original problem and specific recommendations for improvement; include the estimated impact on the organization.

  Tactic 40: Have fun!

  STORIES FROM THE FIELD

  STORY FROM THE FIELD—1

  Topic: Thinking through the end presentation leads to more efficient problem solving. Our first story comes from a friend of mine who was a partner at Deloitte and later at Infosys Consulting, where he encountered an engagement that was spiraling out of control until the pyramid principle saved the day.

  I was the partner for an IT cost-effectiveness engagement for a large, global auto supplier based in Europe. Our objective was to assess the client's information technology costs and to recommend changes. As you can imagine, this was a very sensitive assignment in a company with a decentralized management organization. The consulting team quickly got into the weeds by reviewing a ton of cost information in multiple spreadsheets, reports, and online databases before we had really organized our thinking. We needed to step back and get focused!

  We began to organize our thinking along the lines of what we would ultimately present to the client. We employed the situation-complication-resolution approach. The situation was a client with a strong business model. With a little industry research, we found that the complication was that the client spent significantly more than its competitors on information technology as a percentage of revenue. The key question was how better to align its spending with competitors', and our recommendation was that the client reduce IT spending by 30 percent while maintaining or improving service levels to the organization.

  Expanding this structure led to defining multiple subquestions, each of which had multiple hypotheses regarding recommendations to accomplish the goal. Our data collection either proved or disproved these hypotheses, and the proven ones became recommendations for action. The benefit of using this logical breakdown was twofold. First, it organized our thinking, focused our data collection on testing the hypotheses, and ensured that we covered the issues in a mutually exclusive, collectively exhaustive manner. Second, in presenting the results to the client's management team, the logic of our approach clearly explained our conclusions in a way that was more acceptable given the controversial nature of some of our recommendations.

  STORY FROM THE FIELD—2

  Topic: Identifying and involving the right client constituents during the engagement process helps an engagement run smoothly. Arnaud Beernaert recalls how important buy-in is from an early study during his days at McKinsey.

  As you're working toward an extremely tight deadline and refining your analysis or adding a few more exhibits to back up your thesis, you run the risk of forgetting that this next progress review, for which you are putting together an impressive deck, can end up being a co
mplete failure if you haven't taken the time to achieve some prior buy-in. It's a bit like imagining that you could make your way through a minefield without a map. This is the type of material step that is easily overlooked by a junior consultant. It becomes more and more critical the larger the number of people attending and the larger the number of hidden agendas.

  I remember one of my first engagements as a manager, where we had been mandated to reassess the product mix and go-to-market approach for a corporate banking division of a major European financial player. Not only was that project particularly difficult to structure, as it covered many different issues, but it was also a real challenge to manage, as there were so many constituents. It wasn't too difficult to convince the division head, who had asked us to come in the first place, but there were many key employees under him who proved much more difficult to win over and who could have completely derailed the process if they had wanted to do so.

  The up-front identification of these employees was not obvious, as they included not only the key people in the hierarchy, but also some regular salespeople who were extremely influential (something that we were not aware of initially). I ended up putting an incredible amount of my time into talking to some of these guys, making sure that I understood exactly where they came from, what their vision was, and on what basis it had been formed. The associate partner and I had to keep them in the loop constantly in order to make sure that they were aligned with our thinking, and we frequently sat down with them in one-on-one meetings between progress reviews to make sure that we had ironed everything out beforehand. As time-intensive as this was, it was the only way to achieve buy-in and to avoid explosions and uncontrolled debate during the reviews.

  STORY FROM THE FIELD—3

  Topic: Application of the pyramid structure is a key takeaway from one consultant's career at McKinsey. Ken Shachmut, who is now implementing many lessons from McKinsey as the senior vice president in charge of strategic initiatives at Safeway, shows just how much impact Barbara Minto's theories had on him.

  I recall three very important lessons that the firm taught and reinforced: (1) analytical rigor, (2) intense focus on what is important to the business and the CEO, and (3) intellectual honesty. In addition, I have to say that perhaps the most significant takeaway for me was a result of the value the firm places on high-quality written and oral communications. The pyramid structure, as taught in the gospel according to Barbara Minto, is the backbone of good analysis and presentations at McKinsey. I use pyramid structure routinely today and expect it from my staff.

  STORY FROM THE FIELD—BUSINESS SCHOOL EXAMPLE

  Topic: Buy-in from a key member of the client team drives efficient engagement work and ensures positive client reception of the recommendation. Our last story from the field comes from a very special student with whom I worked at the Kelley School of Business at Indiana University. Peter Kuo was my research assistant and an amazing leader during his MBA program. He was a star in the program (especially on case competitions and field studies), and he is headed for great things with McKinsey in Atlanta after graduation.

  At the start of my second year in the MBA program at the Kelley School of Business, Dr. Friga selected me to work with a student team for a weeklong pro bono project with McKinsey & Company and the Metro Atlanta YMCA. The YMCA gave us the task of developing a membership growth strategy that would capitalize on the cross-channel conversion of temporary program members to stable facility members. We wanted to make a difference for the YMCA, so we focused on delivering a solution that it could implement given its resources and constraints. Throughout the course of the week, we looked to several resources for direction.

  While primary research and data analysis were both important, perhaps the most valuable resource was the client—Betsy, the marketing director for the YMCA. Betsy knew the situation better than we did: who the key decision makers were, and what barriers we would face with any given recommendation. We worked with Betsy every step of the way, and she helped us access people and data, identify workable solutions, and devise the optimal package of solutions for the YMCA. In short, synthesis would not have been possible without obtaining the participation and buy-in of the client.

  As we prepared for the final presentation, we tailored our story to the expected audience. Betsy and our supervising manager at McKinsey both informed us that the audience would consist of various members at different levels of the YMCA organization (from facility management to the CEO) and of McKinsey (an engagement manager, an associate partner, and a director). Not having prior buy-in from many in the audience, we decided to build up to our recommendation by first providing the background information and context to get the audience up to speed.

  Our presentation was a success. The most compelling part of our story was Betsy and her incredible enthusiasm for our plan. By working with us closely throughout the process, she became a champion for our recommendations, giving our presentation greater credibility. What we learned was simple: buy-in is important. Ultimately, the YMCA took one of our recommendations and ran with it, and McKinsey started another pro bono study to follow up on that recommendation.

  Our last report out on the case study reveals several important lessons learned the "hard" way: (1) work on the overall argument earlier in the process; (2) document and share your slides on a regular basis; and (3) don't wait until the last minute to finalize your slide deck!

  CASE STUDY

  WHAT WE DID

  Even though we had been very organized throughout our research process, we still had to struggle to get everyone's relevant information into slide format, and then to get all those slides together in a timely fashion. Shalini and Rachita volunteered to put together a slide deck, gathering everybody's individual slides and compiling them into a logical, coherent, cohesive presentation. However, we were all somewhat reluctant to relinquish control and wanted to finalize our own slides—I remember Rachita saying it was "like pulling teeth" to get us to actually send her our slides. They eventually had to call us and tell us to just send them our slides, whether they were completely finished or not.

  Once we had finally sent our slides to Rachita and Shalini, they spent a lot of time wrestling with the flow of the story. Even though we had all been collectively refining our story throughout the research process, it still wasn't clear how to present the story so that it would flow best. One issue we had to consider was the receptiveness of the audience; as we thought the audience might be hostile, we wanted to build to our point, rather than attack people with it right off the bat. Dr. Friga expressed reservations about ending with bad news (higher taxes), but ultimately we decided to build to our recommendation and to its implications. Another decision we made was to present each of our bucket issues separately (rather than telling a more streamlined story that incorporated components of each bucket throughout). By presenting separate issues independently, the audience could more easily think about how incorporation or annexation would affect each category.

  Looking back at our Synthesize phase, I am immediately reminded of our hectic last-minute preparation. We were working right up to our deadline, not in the sense that our data were coming in late, but in the sense that we were putting the physical deliverables together right up until the very end. Dr. Friga wanted to review the slide deck we came up with, and he ended up changing a lot of the slides (both their content and their order). Since he received the final slide deck so late, he sent out the revised slides about an hour before the presentation, and so there was no time to practice at all. It seems funny now, but when we were driving to the presentation with Bhavin reading the slides to the driver while the other team members were compiling and organizing papers in the back, we were very stressed and less than amused. I guess this is one of the experiences Dr. Friga was referring to when he said that this would be "real life."

  Despite our last-minute preparation and our inability to even run through our final slides together, our presentation went remarkably well. H
owever, we were absolutely bombarded with questions from the audience. It was very hard for many members of the audience to separate their emotions from the facts—it was even more of a personal, emotionally charged issue than we had realized. One of my greatest learning experiences during the project came from watching how Dr. Friga defended our presentation while the audience was growing more and more emotional—he made his points, but he didn't argue, and he knew when to let go and move on. The ideas were supported by facts, and the clarity of the argument won many people over that day.

  WHAT I LEARNED

  During this project, I realized that even when you think you know the story you're going to tell, actually putting the slides in order and making them flow well can be a challenge. Conveying your story well in a slide deck really is an art, and it is an art that takes more time than you think. In the future, I'll definitely budget more time for the preparation of the final slide deck.

  I also learned (out of necessity, really) that it is possible to present well without practice and under stressful circumstances, but it is certainly not preferable! It can be exciting to work under a time crunch, and stress can be a great motivator, but in the future I will plan to be scrambling less at the end of a project.