Michael Zipursky, Consulting Success (11 October 2023). "The McKinsey Way in 19 Minutes: Key Lessons & Insights for Consultants"
https://www.youtube.com/embed/Ip-t9L48Gcs
Transcription! Transcript:"I'm going to share with you the advantage small consulting firms have over giants like McKenzie. https://en.wikipedia.org/wiki/McKinsey_%26_Company Ethan Rasiel wrote The McKenzie Way. I'm sure you're all familiar with who McKenzie is, often known as 'The Firm'. Now, the author says that most McKenzieites are generalists. And I believe this is actually a big opportunity for boutiques and smaller firms because you shouldn't try to compete with a company like McKenzie uh by being a generalist or by trying to uh offer many different capabilities and tons of different services and try and appeal to you know all industries and all kinds of people. The opportunity for the small firm is to do the exact opposite which is to specialise. Again remember what the author wrote. Most McKenzieites are generalists. So don't try and compete by being just another generalist. Your opportunity is to be a specialist. So now let's get into some of the key lessons and ideas inside of this book. The author says problem solving isn't a thing that you do at McKenzie. It's what you do at McKenzie. And you'll see that this kind of theme runs throughout uh a lot of uh or say you know a lot of the book or uh quite a bit of the overall theme which again so I'll read this because it's it's really important. Problem solving isn't a thing you do at McKenzie. It's what you do at McKenzie. And I think this will become quite apparent as we continue to go through uh this book together. So he then says that the big focus uh at the beginning of every engagement even the conversation before paid work begins it's all about finding facts. It's not just about sharing your opinions even if you have you know your own opinions because you may have a gut reaction that's great but you want to find the facts to support it. He says, quote, "Gut instinct might tell the solution to an inventory management problem in 10 seconds, but McKenzie will go to the facts first." He explains that one of the best ways to create value and impress a buyer is using facts. He says, quote, "On her first engagement, she may have to present her analysis," this is talking about a um consultant, right? uh so to present her analysis to the CEO of a Fortune50 company who will not give much credence to what some newly minted 27year-old MBA has to say unless and this is the key right unless she has an overwhelming weight of facts to back her up. He goes on to say hiding from the facts is a prescription for failure. eventually truth will win out. And I think this is just really important for all consultants. It doesn't matter whether you're an earlier stage consultant or you know you've been in the game for for many years. It's one thing to have a perspective and to have an opinion and these are certainly important. Um and as you develop in your career, people will just naturally because you are recognised in the industry, right? Recognised as an expert, people will listen uh and put a lot more value and weight to your opinions. But it doesn't change the value and power and how compelling bringing facts and data is to a conversation to your content. And that's really what this author is talking about that uh and as you get into the book you can see the u the people at McKenzie right spend a lot of time collecting uh data and and trying to identify the facts the quote-unquote kind of truth inside of of situations. Another powerful concept in the book is MECE, maximum clarity, maximum completeness. The idea is to boil down the issue and key points into ideally just three. If you have too many ideas running wild, you need to condense them, organise them because there's power in structured thinking. Uh the author says, quote, overlap represents muddy thinking by the writer and leads to confusion for the reader. And this is the power of clarity. Uh the way that the author describes how this is applied inside of McKenzie is with the kind of at the beginning of every engagement what the consultant will do is look to develop an issues list. And an issues list is where you're identifying or trying to identify and kind of get to the core like the root cause of the issues the the problems. you know, what is having a really big impact or holding back the growth or what are the the levers that we need to pull that will likely have the the biggest outcome or benefit or create the most value for the client. And as you start to develop this issues list, you'll likely have many different issues that kind of come to mind, right? You'll have a lot of different ideas, but if you throw all those ideas to a buyer, to a client, you're actually doing them a disservice. Uh, and so your job as a consultant is to distil that, right? In this case, it's not more better. It's less is more. And therefore, the ideal is to try and get somewhere between two to five issues. Three being a very solid number. The other thing that this book talks about is every project starts with developing a hypothesis. But again, you must have data to develop and support the hypothesis. They refer to this as having the an IH or an 'initial hypothesis'. And uh he goes on to talk about how IH's produced by teams are much stronger than those produced by individuals. Right? The initial hypothesis created when ideas are bouncing back and forth and you know you're coming at it from different angles are almost always going to be superior to the ideas that might come from just a solo consultant. And I I think it's not just about whether you are a solo consultant in your own firm or you're part of a bigger team. The main concept here, I think the real um, you know, area that you should pay attention to, and you've probably likely kind of, you know, you've seen this, which is that you might develop some really great ideas inside of your mind when you're by yourself. You write them down. You feel all excited about them. But when you bring them to somebody else, whether that is a business partner, uh a coach, somebody in a community that you're in, or you're talking to a client, whatever it might be, when you start to kind of throw those ideas against the wall, you start to actually see that not all of them are as good as you initially thought. You end up finding even better ideas or or maybe you had an idea that you thought was okay, but or could be great, but you don't actually know how to make it work. Well, when you start throwing those ideas back and forth, they're bouncing around. you end up being able to find more creative ways of actually making them a reality. And so I think the reminder here is to get out of the building and have more conversations, right? Get feedback, talk to more people. This is where great ideas or where I should say an average idea can become a very good idea and a good idea can become a great idea when you have more opportunity to to have some feedback and or or get feedback on that idea and bounce those ideas back and forth. Now, uh, McKenzie is is known for challenging their clients. And this is, I think, true not just a McKenzie, but really any, um, established firm um, and really any established savvy, you know, consultant that knows what they're doing is going to challenge their clients. But there's a quote in the book that I thought is uh, does a good way of kind of bringing this up. And it says, "At McKenzie, we found that clients were often no better at diagnosing themselves than a doctor's patients." And that's again an important quote to remember. And he then goes on to say, "The only way to figure out if the problem you have been given is the real problem is to dig deeper, get facts, ask questions, and poke around." An earlier stage consultant, when a client asks them to do something or a client says, "This is what we need. This is the problem." an earlier stage consultant might hesitate to say, "Well, I don't know if that's actually the case or let's back up here or let's let's just go a little bit deeper before we move forward on that." Right? An early stage consultant is often just ready to jump at at anything that a client says because they don't want to disappoint. They don't want to ruffle feathers. But again, that's not why you're being brought in. That's not why you've been hired. That's not why you've been put into kind of the position or trusted as a partner. Because ultimately, even though you might think that's what the client wants, the client truly wants the outcome. And that outcome is usually not going to come from just following what the client tells you to do. Because if it was just as simple as the client telling you what to do, the client could just do it themselves or get somebody internally to do it. And so they really do need, you know, um a solution or a path that is different than the one that they likely already know exists because they're if they knew the right optimal path, right, they would likely have already gotten it done. So this is important to remember because again, as a consultant, you're you're being brought in for your expertise. And if you simply accept what your client tells you they want, uh, then and do that without getting all the facts and asking questions and digging, you're actually doing a disservice to your client. And ultimately, you could also be doing a very serious disservice to your reputation. Because if you are known as somebody who just says yes to everything and cannot deliver the outcome that both you and the client desire, uh, that's not going to be very good for your reputation. that's not going to lead to successful outcomes and projects and therefore you won't be getting referrals. It's hard to build case studies, testimonials, right? It's kind of like this this whole um wheel and cycle that right ends up not producing what you want over and over again. So then the question is how do you respond when a client is pushing you in the wrong direction? And there's some really great um examples of language in this book. It says you ask me to look at problem X but the real impact on your performance will come from solving problem Y. Now, I can solve problem X if that's what you really want, but I think it's in our interest to focus on why. You can hit the um rewind button on on that, listen to it again if you'd like, but I think it's uh especially important that the way this is positioned is that it's not you're not saying, "No, I can't do that." you're uh talking to the client and saying, "I understand what you're saying. Uh but here's what I'm seeing, and if we're still aligned as as partners on this outcome that we've initially decided on together, this path, which is not the initial path that you might be thinking, is going to actually be is going to produce the the results that we both want." Um, another great quote is, "Don't let a strong initial hypothesis become an excuse for mental inflexibility." He says, 'N no matter how brilliant, insightful, and original you may feel your initial hypothesis to be, you must always be prepared to accept that the facts may prove you wrong. This book gives uh examples that highlight the importance of asking questions, getting data, uh, and the power of 80:20. https://en.wikipedia.org/wiki/Pareto_principle For example, when McKenzie worked with an investment firm uh and their trading desk, they found that 80% of sales came from 20% of brokers. They also found that 80% of orders came from 20% of customers. And they found that 80% of profit came from 20% of the traders who were trading stocks, you know, equities and so forth in the markets. This kind of 8020 shows up uh in every aspect of life and business if you know how to look for it. And both Richard Koch and Perry Marshall have done great work to expand on this concept. The author says don't boil the ocean. And what he means by that is that you will be gathering a ton of data, right? Um and this is something that they do a lot at at McKenzie and uh larger firms, they will have internal databases or or databases they pay for that give their teams access to all kinds of facts and statistics and data and case studies and examples. And it'd be very easy to take all that and throw it at your client, but that's not going to produce the outcome that you or they want. Uh, a story that I share with our clients sometimes is that we had a client in our clarity coaching program that used to deliver their clients with 150 page report. Beautifully designed, all the details. Uh, but the question is, what do you think a client does when they get 150 page report? Nothing, right? It's just it's too much to consume. It's too hard to take 150 pages and turn it into an actionable plan like something you can really move forward with. And so instead we worked with that client and helped them to turn that 150 page report into a 15 or 20 page report that became much more actionable. The result was that the client implemented more of it and therefore was more successful which was a win for both sides and our client end up ended up being able to you know uh see significant ongoing business as a result of that initial project because the client took more action which means they got better results which means they want to do more and more right with that consulting firm. uh consultants, right, can be long-winded when you are gathering a lot of information, when you have many years of experience and expertise. Uh it's it's just easy to have a lot to share, right? And many consultants, we've certainly seen this with many of our clients, uh are like teachers, right? They they want to make an impact. They love helping people. They want to teach. They want to share. They want to educate. But you need to pull that back a little bit. Uh and Proctor and Gamble is a great example of this, right? P&G uh has in the past, may still today, tell its managers to write one-page memos. So, the idea is not to write something up that might be 10 pages, but condense it into a one-page memo. And when you're sharing recommendations with clients, right, give them like three ideas tops. Start with the highest priority uh and the ones that are going to have the biggest payoff. Don't share all the details underneath each of those ideas. You can do that when there's more time, but get right to the point. Say, "Here's the top three ideas. Here's the first one we we believe will have the biggest impact." Right? One, two, three. and then see what resonates with your client and go deeper and explain more, right? Have a conversation, but don't draw things out too long. Get right to the point. It's impossible to do everything yourself all the time. If you don't leverage the other members of your team to solve these problems, you are wasting valuable resources. Here the author is talking about uh leveraging and working with other members of of your team and specifically what they do inside of McKenzie. But I think the idea here for any solo consultant or small firm owner is to focus on where you create the most value. It's easy to get kind of drowned um or or pulled down or or weighted um trying to do too many things yourself. And if you're spending too much time doing all kinds of things, it likely means that many of those things are going to be lower value activities. They're not creating or producing uh the highest value that you have the potential to do. And this is why it becomes so important not to try and do everything yourself. Delegate. Whether it means you are bringing on some freelancers, contractors, part-time, full-time, whatever structure that might be in, don't try and do everything yourself. It's really going to slow down your progress. figure out what where you create the highest value and lean into that and then work to delegate the rest. The book also has several good points for those working in larger firms and who are on the career track. However, I found fewer for the solo or small consulting firm owner. Now, how does McKenzie build its brand? Because when I say McKenzie, you know, you're probably right away you know who I'm talking about. And it's not just you. Most people know who McKenzie is. uh they've heard about it, right? At least if they're in the business world or uh they've, you know, gotten an MBA or they've been through education like a lot of people have heard of McKenzie. But what's interesting is that the author explains that McKenzie doesn't sell, it markets. He says the firm, which is kind of how Mackenzie is known, waits for the phone to ring and ring it does not because McKenzie sells, but because McKenzie markets. The firm produces a steady stream of books and articles and publishes its own scholarly journal https://en.wikipedia.org/wiki/McKinsey_Quarterly which it sends gratis to its clients. What does that mean for you? It means that your IP, your intellectual property, your insights, your experience, your expertise, this will actually do the selling for you, but only if you get it in front of your ideal clients and the marketplace consistently and share it. [perhaps a scaled-down/media equivalent would be the approach used by producers sharing their insight via podcasts e.g. https://newpractices.co.uk/employment/#O3iIIAxppPo ] As the firm spends time within a client organization, it almost always uncovers new problems that could benefit from McKenzie's expertise. These problems, however, must be addressed at another time and in another engagement. Consequently, McKenzie engagements tend to generate new business of their own accord. This is so important because many consultants will find that when they are in an engagement with a client, the client will have either a request for them uh or the consultant will find something that they could add, you know, an additional way uh that they could add value. And so whether it's the consultant initiating it or the client initiating it, very often it's the client, right? You start to experience scope creep, https://en.wikipedia.org/wiki/Scope_creep right? You start to find that you're doing more work. you're saying yes to something that was not part of the scope of work, wasn't part of the initial engagement, the agreement, the plan, yet you're doing it. And that's again a real disservice to both you and to the client. It means that in most cases, you're not going to get compensated for that work. You're also teaching the client that's that you're okay with that. But the other reason why it's not a good idea is because it means that now you're going to be spending less time on the initial priority project because you're splitting your time, you know, working on this other stuff. And so it's much better to carve that out, create a new proposal for it, and talk about that as work that we'll do at the next stage rather than trying to do it all at once. I really like the concept uh and power of pre-wire that the author shares in the book. He said, "Mackenzie consultants engage in pre-wiring. before they hold a presentation or uh a uh a progress review, a McKenzie team will take all the relevant players in the client organisation through their findings in private. That way there are few if any surprises on the big day. A great way to make sure that everybody is aligned, you get feedback, you can make adjustments, right? Talk to all the people, hear all the voices, uh potentially deal with objections before they come up, right? And before you actually get to that official presentation." Bibliography: Rasiel, E. M. (1999). "The McKinsey way : using the techniques of the world's top strategic consultants to help you and your business". McGraw-Hill. http://site.ebrary.com/id/5002158 https://search.worldcat.org/title/The-McKinsey-way-:-using-the-techniques-of-the-world%27s-top-strategic-consultants-to-help-you-and-your-business/oclc/42417814
