Concepts used in
Consulting
Week 2
RECAP:
The 7 step problem solving
approach
PROBLEM DEFINITION
DISAGGREGATE THE
PROBLEM
The 7-Step PRIORITISE ISSUES
Problem Solving
BUILD WORK PLAN
Approach*
RIGOROUS ANALYSIS
SYNTHESISE FINDINGS
RECOMMENDATIONS
*McKinsey
Some key tools and concepts across each step
PROBLEM DEFINITION
a. MECE
b. Issue trees
DISAGGREGATE THE c. Hypotheses / day 1 answer
PROBLEM
a. The Pareto principle
PRIORITISE ISSUES
b. 2 X 2 (BCG growth matrix)
a. Gantt charts
BUILD WORK PLAN
a. Top-down and bottom-up analysis
RIGOROUS ANALYSIS b. Benchmarking
c. Sensitivity and scenario analysis
d. Balanced scorecard
SYNTHESISE FINDINGS
a. Pyramid principle
RECOMMENDATIONS
Some key tools and concepts across each step
PROBLEM DEFINITION
a. MECE
b. Issue trees
DISAGGREGATE THE c. Hypotheses / day 1 answer
PROBLEM
a. The Pareto principle
PRIORITISE ISSUES
b. 2 X 2 (BCG growth matrix)
a. Gantt charts
BUILD WORK PLAN
a. Top-down and bottom-up analysis
RIGOROUS ANALYSIS b. Benchmarking
c. Sensitivity and scenario analysis
d. Balanced scorecard
SYNTHESISE FINDINGS
a. Pyramid principle
RECOMMENDATIONS
Solving a tough problem starts with
structuring it well..
Solving a tough problem starts with
structuring it well..
MECE is key!
Solving a tough problem starts with
structuring it well..
MECE is key!
Mutually Exclusive, Collectively Exhaustive
QUIZ TIME:
QUIZ TIME:
Which of the following sets is MECE?
How tall is Rohit?
QUIZ TIME:
Which of the following sets is MECE?
How tall is Rohit?
Option A : Option B :
● < 4 Feet ● < 4 Feet
● 4-5 Feet ● 4-6 Feet
● 5-6 Feet ● > 6 Feet
Mutually Exclusive Collectively Exhaustive
All elements put together
Between all the individual
should complete the
elements, there should be
picture, there should be
NO OVERLAP
NOTHING MISSING
Should I do an MBA?
Should I do an MBA?
Option A : Option B :
● Not this year ● Not in 2022
● Not at all ● Not in 2023
● Yes, in 2024 or beyond
● Yes ● Yes
There are delays in our supply chain and
manufactured goods aren’t reaching
distributors in time.
Where could the problem be?
OPTION 1 : OPTION 2 :
Delay in leaving the factory Drivers are inefficient
Delay en-route due to
Trucks are slow, old and
traffic, breakdown,
not up to the task
slow-driving, etc
The city infrastructure is
Delay at distributor in
choked ( traffic jams
off-loading
everywhere)
LOADING AT
FACTORY
LOADING AT EN-ROUTE
FACTORY TRAVEL TIME
LOADING AT EN-ROUTE OFF-LOADING AT
FACTORY TRAVEL TIME DISTRIBUTOR
LOADING AT EN-ROUTE OFF-LOADING AT
FACTORY TRAVEL TIME DISTRIBUTOR
TIP : Think chronologically.
STEP-BY-STEP
MECE = NO OVERLAP, NOTHING MISSING
Issue Trees
Let’s talk about Levels of Abstraction or
Levels of Granularity
What you can buy in a Supermarket
What you can buy in a Supermarket
Food Non-food
What you can buy in a Supermarket
Food Non-food
Perishable Long life Flowers Personal Care Miscellaneous
What you can buy in a Supermarket
Food Non-food
Perishable Long life Flowers Personal Care Miscellaneous
Fruits Vegetables Shelf-Stable Frozen
What you can buy in a Supermarket
Food Non-food
Perishable Long life Flowers Personal Care Miscellaneous
Fruits Vegetables Shelf-Stable Frozen
Fruits Vegetables Other Meat Fruits & Veg Other
What you can buy in a
Supermarket
Highest Level Food Non-food
Perishable Long life Flowers Personal Care Miscellaneous
Fruits Vegetables Shelf-Stable Frozen
Fruits Vegetables Other Meat Fruits & Veg Other
What you can buy in a
Supermarket
Highest Level Food Non-food
Perishable Long life Flowers Personal Care Miscellaneous
Lower Levels
Fruits Vegetables Shelf-Stable Frozen
Fruits Vegetables Other Meat Fruits & Veg Other
What you can buy in a
Supermarket
Highest Level Food Non-food
Perishable Long life Flowers Personal Care Miscellaneous
Lower Levels
Fruits Vegetables Shelf-Stable Frozen
Fruits Vegetables Other Meat Fruits & Veg Other
Lowest
Level?
Think of concepts as if on a Pyramid
If I ask you to tell me what can you get in a Supermarket?
If I ask you to tell me what can you get in a Supermarket?
Fruits Food Perishable Food
Vegetables Non-Food Long-life Food
Non-Food Personal Care items Non-Food
A B C
If I ask you to tell me what can you get in a Supermarket?
Fruits Food Perishable Food
Vegetables Non-Food Long-life Food
Non-Food Personal Care items Non-Food
A B C
Which of the above options is MECE?
If I ask you to tell me what can you get in a Supermarket?
Fruits Food Perishable Food
Vegetables Non-Food Long-life Food
Non-Food Personal Care items Non-Food
A B C
Which of the above options is MECE?
An issue tree is an organised
classification of concepts (or things)
along multiple levels of abstraction
An issue tree is an organised
classification of concepts (or things)
along multiple levels of abstraction
It helps to simplify complex ideas
into Chunks or Buckets
An issue tree is an organised
classification of concepts (or things)
along multiple levels of abstraction
It helps to simplify complex ideas
into Chunks or Buckets
These Buckets need to be MECE
Simplest example of an Issue Tree in Business
Profit
Revenue Cost
Simplest example of an Issue Tree in Business
Profit Is this ME?
Revenue Cost
Simplest example of an Issue Tree in Business
Profit Is this ME? YES
Revenue Cost
Simplest example of an Issue Tree in Business
Profit Is this ME? YES
Is this CE?
Revenue Cost
Simplest example of an Issue Tree in Business
Profit Is this ME? YES
Is this CE? YES
Revenue Cost
Simplest example of an Issue Tree in Business
Profit Is this ME? YES
Is this CE? YES
Is this the
Revenue Cost lowest level of
abstraction?
Simplest example of an Issue Tree in Business
Profit Is this ME? YES
Is this CE? YES
Is this the
Revenue Cost lowest level of NO
abstraction?
What do the connected lines mean?
Profit Profit is driven by Revenue & Cost
Revenue Cost Lines indicate Dependency
What do the connected lines mean?
Profit Profit is driven by Revenue & Cost
Revenue Cost Lines indicate Dependency
In this case, there is a Clear
Question at the top of the issue
tree that is being answered in the
components
There are delays in our supply chain and
manufactured goods aren’t reaching
distributors in time.
Where could the problem be?
Potential drivers of delay in
Supply Chain
Off-loading at
Loading at factory En-route
distributor
External (traffic,
Internal TBD
weather, roads)
Trucks Drivers
Packaging & Travel to loading
Manufacturing Loading
Assembly dock
Hypothesis / Week 1 Answer
A Hypothesis is a proposed explanation based of early
(limited) evidence; as a starting point for further
investigation
How do you have a Hypothesis?
Evidence Based
(even if the evidence is limited)
Examples of evidence in this case:
Examples of evidence in this case:
Comparisons of company’s internal benchmarks compared to industry
average
Examples of evidence in this case:
Comparisons of company’s internal benchmarks compared to industry
average
Trendline of YoY Metrics
Examples of evidence in this case:
Comparisons of company’s internal benchmarks compared to industry
average
Trendline of YoY Metrics
Comparisons to other divisions in the company
Your Homework this week :)
Your client is a pharmaceutical company in Asia.
They are assessing their financials and realise their
profits in China are down over the past 5 years….
What could be the problem?
Instructions:
Instructions:
Build an Issue Tree (at least 3 levels of abstraction)
Instructions:
Build an Issue Tree (at least 3 levels of abstraction)
Make sure it is MECE
Instructions:
Build an Issue Tree (at least 3 levels of abstraction)
Make sure it is MECE
Have a Week 1 Hypothesis
Instructions:
Build an Issue Tree (at least 3 levels of abstraction)
Make sure it is MECE
Have a Week 1 Hypothesis
Write down what evidence you would collect
SEE YOU NEXT WEEK!
