MECE Framework

MECE stands for “mutually exclusive” and “collectively exhaustive”

MECE

1. Background

MECE stands for “mutually exclusive and collectively exhaustive” and is one of the hallmarks of problem solving at McKinsey (The McKinsey Way by Ethan M. Rasiel).

2. Benefit of the MECE framework

You can use the MECE framework to help you think clearly about a business problem.  The framework aids clear thinking in two ways:

  1. No overlap: categories of information should be grouped so that there are no overlaps, which helps to avoid double counting; and
  2. No gaps: all categories of information taken together should cover all possible options, which helps to avoid overlooking information.

3. MECE explained

MECE is a framework used to organise information which is:

  1. Mutually exclusive: information should be grouped into categories so that each category is separate and distinct without any overlap; and
  2. Collectively exhaustive: all categories taken together should deal with all possible options without leaving any gaps.

4. MECE tree diagram

The MECE tree diagram is a way of graphically organising information into categories which are mutually exclusive and collectively exhaustive. The diagram as a whole represents the problem at hand; each branch stemming from the starting node of the tree represents a major issue that needs to be considered; each branch stemming from one of these major issues represents a sub-issue that needs to be considered; and so on.

A major issues list should not contain more than five issues, with three being the ideal number (see Rule of Three). If you are not able to categorise a problem in 5 major issues there is always the option of creating a category of “other issues”.

The MECE framework can be applied to a lot of different business problems, for example, “what is the source of Coca-Cola’s declining global profitability?”.  Coca-Cola could tackle this business problem by using a MECE tree diagram to help it locate the source of declining profitability.

MECE tree diagram v2

5. Resources

Victor Cheng, former McKinsey consultant and creator of CaseInterview.com, indicates that:

The definitive book on this subject is the Pyramid Principle by Barbara Minto. It’s a book that describes an approach to communicating complex ideas in easy to understand ways. It is based on the MECE Principles and was a book often referred to and used while I was at McKinsey.

[For more information on consulting concepts and frameworks, please download “The Little Blue Consulting Handbook“.]

Dick Smith: The Power of Viral Marketing

Happy Australia Day to Dick Smith, a true blue Aussie legend

TODAY is Australia Day, a day to spend time with the family, stand around the barbecue, and go for a swim at the local pool or nearest beach.

However, while most Australian’s are doing what Australian’s do best, one Aussie veteran is promoting a new range of Australian owned products to support Australian farmers, and is donating 100% of the profits to charity.

Dick Smith’s cheeky sense of humour is unashamedly pro-Australian, and the ad campaign has already gone viral on Youtube!

But hold on a second, you might be thinking, this ad is nothing more than a cheap gimmick.  Well, putting that thought to one side, you need to remember that Dick Smith is 68 years old.  Through this Australia Day marketing campaign, he is using viral marketing (i.e. word of mouth and the power of the internet) more effectively than most entrepreneurs half his age.

Food for thought?

How are you using word of mouth to promote your brand?

How to Achieve Your Audacious Goals

Hint: taking audacious action is not the answer

THERE are many things worth having. What do you want?  You may want to work for McKinsey, start your own firm, or fly to the moon. Be specific. What exactly is your audacious goal?

If nothing comes to mind, then don’t worry. The reason that most people have never achieved an audacious goal is because they have never set one. The first step to achieving your audacious goals is to set them. To help you think about goal setting, you may want to review the post on Setting SMART Goals.

After you have set your goal, move towards it. Do not be discouraged if your progress is slow, the important thing is to keep moving. A gentle wind that blows consistently in the same direction will eventually disperse storm clouds.  Whereas, a wind that continually changes direction, even a very powerful one, will disperse nothing, only stirring up the sky. In the same way, you need to have perseverance with your goals. High levels of energy and enthusiasm will not compensate for a lack of perseverance with your goals.

Put aggressive or audacious actions to one side. Although it is possible to achieve temporary results by these means, you are likely to block your own progress. When ambitious desires lead you to act improperly, or to aggressively pursue your own interests at the expense of others, then people are likely to react against you, and anyone with the power to help you will be unlikely to do so.

Through gentle perseverance, you can achieve your audacious goals.

Believe In Yourself

It ain’t about how hard you hit, it’s about how hard you can get hit and keep moving forward

YOU have what it takes to be successful, but unless you believe in yourself, you’re not going to have the life you want, or the life that you know you deserve.

Keep fighting.  Don’t let anybody keep you down.

3 Lessons from Steve Jobs

Believe that the dots will connect down the road, love what you do, and remember that you are going to die

STEVE JOBS was one of the world’s great visionaries, entrepreneurs and businessmen.

On October 5th 2011, he departed.

People knew that he was sick, but nobody expected him to leave so soon. I remember exactly where I was when I heard the news. I was busy working on an urgent assignment, and dropped everything. I immediately started writing a farewell tribute, and I held back the tears as I wrote.

Do you remember where you were when you heard the news?

Steve and I never met in person. So, why did his death evoke such a response?

Steve was famous. It is normal to feel sad when famous people die.  However, this explanation does not capture the outpouring of grief or the sense of loss that many people felt that day.

Steve was a visionary. He understood how technology was evolving, and how the new technology could be used to create super amazing products to delight his customers.

Steve was a perfectionist. Malcolm Gladwell argued in his New Yorker article that this was Steve’s real genius.  Steve saw things that kind of worked and then relentlessly tweaked them until they were perfect.

Most of all, however, Steve was passionate. And, his passion for design changed our lives for the better. If you have ever used a Mac, an iPod, iPhone, or iPad, then you have been personally touched by Steve’s personality and his passion for incredible design. It is the passion that we miss.

We can learn a lot from such a man and, in his Stanford Commencement address, he leaves us with three lessons:

  1. Believe that the dots will connect down the road: this will give you the confidence to follow your heart, even when it leads you off the well worn path, and that will make all the difference.
  2. Love what you do: set backs are inevitable. The only way to do great work is to love what you do. If you haven’t found it yet, keep looking.  As with all matters of the heart, you’ll know when you find it.  And like any great relationship, it just gets better and better as the years role on. So don’t settle.
  3. Remember that you are going to die: Nobody wants to die, even people who want to go to heaven don’t want to die to get there. Death is the destination that we all share, nobody has ever escaped it. Death is very likely the very best invention of life, it clears out the old to make way for the new. Your time is limited, so don’t waste it living someone else’s life. Have the courage to follow your heart and intuition, as they somehow already know what you truly want to become.

“Stay hungry stay foolish.”

People vs. Machines: Technology and the Future of Work

This guest post is by a PhD student in philosophy from the Australian National University.

THE FUTURE presents a paradox: no one can predict it but we are told to plan for it anyway. It is a tricky problem for individuals wanting to make provision for their retirement and for the vicissitudes of their health and personal lives. It is a diabolical problem for institutions which must contend with the vagaries of politics, economics and now of a changing climate. So it is a bold man who thinks he can predict the future but a fool who makes no attempt.

Amid the swirling uncertainty of the future, one trend looks likely to persist: advances in technology. Commerce, entertainment, our social lives are moving online; personal communications and access to the Internet are available on handheld devices. Driverless cars are just around the corner – but they will never convey passengers to the shops and libraries which are moving to the web. Maps and databases are located in clouds; the specialist knowledge of renowned experts is just a Google away. We read from tablets and will soon manufacture goods with 3-D printers. Augmented reality may change the way we see the world (quite literally) and the line between virtual and reality may blur. The ‘e’ in e-commerce has become superfluous – and one doubts this development is nearing a plateau.

Perhaps surprisingly, advances in technology throughout history have not tended to reduce the amount of work which falls for humans to do. The wheel, the yoke, the sail, the engine, the achievements of the industrial revolution and of the first part of the technological revolution of our time – these have all eventually created more work rather than less. They have made burdensome and routine tasks trivial; they have made previously unattainable tasks routine. But this has always meant that yet loftier, previously unimagined goals were now within sight – could be reached with just a little more innovation and a little more labour. For there was always the promise of enhancing and extending. The wheel and the yoke together could make a wagon; the engine fixed upon the right type of wing would give us flight.

There is reason, however, to think the story might be different this time. Consider the activities which consume your day. The mundane tasks of household management are slowly but inevitably becoming the province of machines. Washing-machines, tumble-dryers and dishwashers are old-hat; autonomous vacuum cleaners and lawn-mowers and gutter sweepers already on the market point to the possibility of homes without chores. The administration of offices can already be delegated mostly to computers. Insofar as this opportunity has not been taken up, the deficit has surely been sociological rather than technological: a reluctance on the part of humans to abandon trusted methods in favour of untried ones. And we already have the communication systems necessary for remote education. An equilibrium between the opportunities this presents and the necessity for classroom learning will doubtless be reached sometime in the mid-term. There will be ever fewer reasons to leave our automated houses and apartments.

Of course, these developments (like earlier ones) will open up more possibilities – now not yet even thought of – which we will not be able to resist exploring. What could be different this time, though, is that the new possibilities which beckon will not just be more efficient ways of meeting our existing basic needs, for it appears that we may be nearing a point at which technology attends to these without any regular intervention on our part. The rewarding opportunities of learning and thinking, of building human relationships and of leisure would be ours to pursue with more energy and vigour. What, in a little more detail, would this mean? Those who are interested and able would have more scope to investigate the mysteries of philosophy and science and mathematics, to explore the potential of literature and music and art. For others, there would be the promise of more time with family and friends, of cultivating interests and pursuing hobbies. Some (indeed, many) might squander their new-found freedom – but then freedom is always open to abuse.

If this prediction is right, then it is a cause for celebration. Humanity’s achievement in lifting itself so far out of its survivalist natural state – in which each urgent need which is satisfied is immediately replaced by another – would be a triumph. It would be a victory for the human mind and for humanity’s capacity for innovation. It would also put us in a situation, perhaps for the first time in history, in which there would be less rather than more work for humans to do.

There are a number of observations to be made here, both about how such a situation could arise and about what it might mean. First, recalling that businesses succeed by providing means of satisfying people’s needs and desires, it is perhaps surprising that businesses should have been the primary drivers in developing the technology which may make the fulfilment of so many needs and desires automatic. The achievements of technology companies would jeopardise their own (and many other companies’) futures: there would simply be less and less work for businesses to do. It gives us reason to believe that business – essentially, the exchange of goods and services for value – operates to serve human interests.

Secondly, the picture painted here invites the following question: once we have the technology which would allow people to live without working, how could people then afford to pay for anything? The current situation, in which people’s needs are not met automatically, is what creates demand for goods and services; the provision of goods and services is what allows people to earn a living. If these needs are met automatically, then opportunities for employment will also vanish. Washing and cleaning and cooking might be automated but how would anyone earn money to pay for the power for their machines, for the clothes they wear, even for the food they eat? Will it be possible to continue with an economic system where people earn a living by exchanging labour for remuneration if almost no labour is actually required? This issue is a serious one and not as fanciful as it might initially seem. One reason that employment has been slow to recover after the economic turmoil of recent years is that businesses have found ways to make better use of the technology available to them instead of hiring people.

Finally, we might wonder how happy our lives would actually be without the need for regular work. It is not unusual for people to find satisfaction even in mundane work and to be frustrated when no work is available. Some may be horrified by the thought of a future without the need for work. Indeed, if we had no work to do, what would we replace it with? Work gives many people purpose and a sense of identity. Is a future without the need for work actually desirable?

In the end, there is cause for both hope and caution. The future, albeit uncertain, has the potential to be better than the present. We just have to keep up with it, and to prepare for its surprises.