Page 114 - The McKinsey Mind

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Interpreting the Results 89

we presented in Chapter 1, a sanity check lets you swiftly ascertain
whether a particular analysis is at least within the bounds of prob-
ability. A sanity check consists of a few pointed questions,
the answers to which will show whether a recommendation is
feasible and whether it will have a noticeable impact on the
organization.

The exact question will vary with every situation, but here are
TEAMFLY
some examples, courtesy of our alumni:
I can use an off-the-shelf, easy-to-use program like MS

Access to disprove a stupid theory very fast. For example, an
employee had a hypothesis that we should request that mer-
chandise be returned to the warehouse based on minimum
rather than maximum inventory levels. I was able to test that
idea in two minutes to determine that it would result in only
$4,000 of a projected return of $400,000. Not worth the
loss of a week to reprint and send procedures for the stores

to follow.
—Bob Buchsbaum, CEO, Dick Blick Holdings

I like to use scenario analysis. I’ll ask, “What would it take
to have this matter?” For example, how many leads would
we have to generate off the website for it to show up as any-
thing more than a rounding error? If the answer is 10 gazil-
lion, well, I doubt we’ll get that many. If the answer is 50,
then I’ll say, “Oh, OK.” If the assumptions behind the analy-

sis don’t make sense, then you can move on to the next idea.
—Dan Veto, Senior Vice President, Conseco

®
Team-Fly