Page 33 - The McKinsey Mind

01 (001-030B) chapter 01 1/29/02 4:48 PM Page 11

Framing the Problem 11

This technique works not only for business problems, but also
for complex problems in other realms, such as politics. For
instance, Francesco Grillo, formerly with McKinsey’s Rome office,
is now a public-sector consultant and policy adviser to the Italian
government. He used these same techniques with great success on
problems such as unemployment in the European Union, reform of
the Italian electoral system, and the evaluation of the economic
impact of programs funded by the European Commission.
The most common tool McKinsey-ites use to break problems
apart is the logic tree, a hierarchical listing of all the components of
a problem, starting at the “20,000-foot view” and moving pro-
gressively downward. As an illustration, let’s look at that fine old
blue-chip firm Acme Widgets. Let’s suppose that Acme’s board has
called your team in to help answer the basic question “How can
we increase our profits?” The first question that might pop into
your head upon hearing this is, “Where do your profits come
from?” The board answers, “From our three core business units:
widgets, grommets, and thrum-mats.”
“Aha!” you think to yourself, “that is the first level of our logic
tree for this problem.” You could then proceed down another level
by breaking apart the income streams of each business unit, most
basically into “Revenues” and “Expenses,” and then into progres-
sively smaller components as you move further down the tree. By
the time you’ve finished, you should have a detailed, MECE map
of Acme Widgets’ business system, along the lines of Figure 1-1
(page 12).
Remember, when you are drawing a logic tree, there may be
several ways to break apart a problem. Which one you choose will
affect the way you view the problem and can either reveal or
obscure critical issues for your team. For instance, instead of draw-
ing your logic tree of Acme Widgets with an organizational hier-
archy (by business unit), you might want to look at it from a
functional perspective (production, sales, marketing, research, ful-