The document summarizes McKinsey's 7S framework and approach to problem-solving. The 7S framework analyzes a company across seven elements - strategy, structure, systems, skills, shared values, staff, and style. McKinsey's approach involves not reinventing the wheel, focusing on key drivers, explaining solutions concisely, seizing opportunities, admitting what you don't know, and more. Examples are provided of logic trees and work plans used in McKinsey's problem-solving process.

1. MCKINSEY’S 7S FRAMEWORK

3. Strategy: the direction and scope of the company over the long
term.
Structure: the basic organization of the company, its
departments, reporting lines, areas of expertise and
responsibility (and how they inter-relate).
Systems: formal and informal procedures that govern everyday
activity, covering everything from management information
systems, through to the systems at the point of contact with the
customer (retail systems, call center systems, online systems,
etc).
THE HARD S’s

4. THE SOFT S’s
Skills: the capabilities and competencies that exist within the
company. What it does best.
Shared values: the values and beliefs of the company.
Ultimately they guide employees towards 'valued' behavior.
Staff: the company's people resources and how the are
developed, trained and motivated.
Style: the leadership approach of top management and the
company's overall operating approach.

5. MCKINSEY’S APPROACH TO
PROBLEM-SOLVING
•The problem is not always the problem
•Create structure through “M.E.C.E.”
•Don’t reinvent the wheel
•Every client is unique (no cookie cutter solutions)
•Don’t make the facts fit your solution
•Make sure your solution fits your client
•Sometimes let the solution come to you
•No problem is too tough to solve

6. THE 80/20 RULE
- 80% of an effect under study will be generated
by 20 of the examples analyzed
- A small fraction of elements account for a
large fraction of the effect
Examples:
• 80% of sales from 20% of sales force
• 80% of orders from 20% of customers

7. DON’T BOIL THE OCEAN
•Work smarter, not harder.
•There’s a lot of data out there relating to
your problem, and a lot of analyses you
could do. Ignore most of them.
Lesson: be selective and don’t try to
analyze everything.

8. FIND THE KEY DRIVERS
Many factors affect business.
Focus on the most important ones – the
key drivers

9. THE ELEVATOR TEST
Know your solution so thoroughly that you
can explain it clearly and precisely to your
client in 30 seconds.
If you can do that, then you understand
what you’re doing well enough to sell your
solution.

10. PLUCK THE LOW-HANGING
FRUIT
Sometimes in the middle of the problem-solving
process, opportunities arise to get an easy win,
to make immediate improvements, even before
the overall problem has been solved.
Seize those opportunities! They create little
victories for you and your team. They boost
morale and give you added credibility by
showing anybody who may be watching that
you’re on the ball and mean business.

11. MAKE A CHART EVERY DAY
During the problem-solving process, you
learn something new every day.
Put it down on paper. It will help you
push your thinking. You may use it, or
you may not, but once you have
crystallized it on the page, you won’t
forget it.

12. HIT SINGLES
You can’t do everything, so don’t try.
Just do what you’re supposed to do and
get it right.
It’s much better to get to first base
consistently than to try to hit a home run
– and strike out 9 times out of 10.

13. LOOK AT THE BIG PICTURE
Every now and then, take a mental step back
from whatever you’re doing. Ask yourself
some basic questions:
How does what you’re doing solve the
problems?
How does it advance your thinking?
Is it the most important thing you could be
doing right now?
If it’s not helping, why are you doing it?

14. JUST SAY, “I DON’T KNOW”
Professional integrity is of utmost importance
in consulting.
One aspect of professional integrity is
HONESTY – with your client, your team
members, (your professor), and yourself.
Honesty includes recognizing when you
haven’t got a clue. Admitting that is a lot
less costly than bluffing.

15. DON’T ACCEPT “I HAVE NO
IDEA”
People always have an idea if you
probe just a bit. Ask a few pointed
questions – you’ll be amazed at
what they know. Combine that with
some educated guessing, and you
can be well along the road to the
solution.

16. Strategic Problem-Solving Model
Data
Intuition
Managing
•Team
•Client
•Self
Leadership
•Vision
•Inspiration
•Delegation
Problem Solution
Implementation
•Dedication
•Reaction
•Completion
•Iteration
Business Need
•Competitive
•Organizational
•Financial
•Operational
Analyzing
•Framing
•Designing
•Gathering
•Interpreting
Presenting
•Structure
•Buy-in

17. Acme Widgets Logic Tree
Acme
Widgets
Grommets
Widgets
Widget
Sales
Revenue
Expenses
Thrum-mats
Widget
Leasing
Widget
Service
North
America
Europe
Asia

18. Issue Tree for Acme Widgets
S u b i s s u e :
C a n w e m a in t a in p r o d u c t
q u a lit y w h i le i m p le m e n ti n g
t h e p r o c e s s ?
S u b i s s u e :
C a n o u r o r g a n iz a t i o n
i m p le m e n t t h e
n e c e s s a r y c h a n g e s ?
S u b i s s u e :
W i ll i t r e d u c e
o u r c o s t?
I s s u e :
C a n w e i n c r e a s e t h r u m - m a t
p r o f it a b i l it y w it h t h e n e w
p r o d u c t i o n p r o c e s s ?

19. Issue Tree for Acme Widgets with
Subissues
Issue: Can we
increase thrum-mat
profitability with the
new production
process?
Subissue: Will it
reduce our costs?
Subissue: Can our
organization
implement the
necessary changes?
Subissue: Can we
maintain product
quality while
implementing the
process?
Does the process
require special
facilities?
Does the process
require special
skills?

20. Work Plan for Issue in Acme Widgets Issue Tree
Issue/Hypothesis Analyses Data Sources End Product Responsibility Due Date
Can we implement the
necessary changes to
the production
process? Yes
Does the new process
require special
facilities? No
Technical
Specifications
Articles,
interviews
Chart Tom 3-Jun
List of facilities
that meet new
criteria
Facilities
management,
interviews
List Tom 5-Jun
If it does require
special facilities, can
we acquire them? Yes
Map of “facilities
gap”
Facilities
management,
thrum-mat line
supervisors,
interviews
Chart Belinda 7-Jun
Source of required
facilities/equipmen
t
Operations, trade
publications
List Belinda 7-Jun
Costs to fill gaps Operations,
contractors,
interviews
Table Belinda 10-Jun
Effect on project
rate of return
Finance
department, prior
analysis
Spreadsheet Terry 12-Jun