Top Strategy Consultant Approach to Problem Solving

 

By Omodiaogbe Samuel

February 8, 2024

Introduction

Problem solving requires a methodological approach to unearthing the root cause in order to obtain a satisfactory solution. Complex problem solving is the core skill in 21st century, as it’s the only way to keep up with rapid change. Winning organizations now rely on nimble, iterative problem solving, rather than the traditional planning processes. Based on the QS 2019 Global Skills Gap Report,  problem solving is the topmost important skill in employers’ eyes, followed by communication and teamwork. Also, the World Economic Forum publication in 2020 ranked complex problem solving as number 3 (below analytical thinking & innovation (1), and active learning and learning strategies (2)) as top skills in 2025. Indeed, problem-solving skills are important in every career at every level, and they’re the main function of organizations. Specifically, problem-solving ability is essential to perform well in any role where issues must be dealt with quickly, such as management consulting. A consultant who fails to provide an appropriate solution within the required timeframe will look bad in the eyes of the client. On the other hand, a consultant with excellent problem-solving ability will most certainly provide effective solutions to the clients’ problems satisfactorily     

      McKinsey Approach to Problem Solving

Finding an optimal solution to a given opportunity or challenge is at the of heart of how consultants create client impact, and that is considered as the most important skill for success in management consulting. The best problem solvers use a methodological process to continually develop innovative and impactful insights and solutions that are comprehensive, fact-based, creative, and pragmatic. McKinsey & Co. has built a reputation as one of the most respected management consulting firms in the world based on the strength of its approach to solving problems. The characteristic McKinsey method of problem solving is a structured, inductive approach that can be used to solve any problem. By using a standardized process, you’ll prevent reinventing the wheel, and it allows for greater focus on distinctiveness in the solution.

There are four fundamental disciplines of the McKinsey method:

Problem definition: To deliver the right solution, there is need to have a thorough understanding and clear definition of the problem. Also, to provide effective solution to a problem, there is need to work with the client to develop a shared understanding of the true nature and scope of the problem.

The problem-solving process: Once the problem is defined, the next stage is to proceed sequentially with structuring the problem, prioritizing the issues, planning analyses, conducting analyses, synthesizing findings, and developing recommendations.

Distinctiveness practices: Method alone is not sufficient. Great problem solvers deploy creativity and insightfulness to problem solving. Such ingenuity leads to constructing alternative perspectives to the problem; identifying relationships; and distilling the essence of the problem, or recommendation

Collaboration: Lastly, there is need to deploy speed, agility, and innovativeness of the problem solving when the problem solver actively seeks out client, customer, and supplier perspectives. Indeed, internal and external expert insight, knowledge and perspective of the problem is crucial to finding a solution

The McKinsey 7-Step Problem-Solving Process is a proven method that can help you approach problems systematically and efficiently. The 7-Step Problem-Solving Process involves steps that guide you through the problem-solving process. It’s important to note that not all problems require strict adherence to the process. Some steps may be truncated. Nonetheless, it remains important to be capable of executing every step in the basic process. As a matter of fact, the process enables you to ensure nothing is left out. Also, adhering to the process gives the client clear steps to follow, and that builds confidence, and credibility. The 7-steps are:

  1. Define the problem
  2. Structure the problem
  3. Prioritize issues
  4. Plan analysis
  5. Conduct analysis
  6. Synthesize findings
  7. Develop recommendations

Define the Problem

The most important step in the entire process is to first carefully define the problem. The problem definition will guide the team’s work. Therefore, it is critical to ensure that all key stakeholders agree that it is the right problem to be solving. Great problem solvers take time before doing anything else, to establish a precise, comprehensive, well-articulated definition of the real problem that needs to be solved and to ensure that the definition is understood and agreed upon by the key stakeholders including the client. It is important to consider the full nature when defining the problem. For example, what does delivering client impact require in terms of analysis, capability building, changing mindsets, and implementation across businesses, functions, etc.?

The Problem Statement Worksheet

Much of the value of the Problem Statement Worksheet comes from the thought processes and discussions generated. To effectively define the problem, the following need to be considered:

Use a question: The problem statement should be phrased as a question, such that the answer will be the solution. Make the question SMART (specific, measurable, action-oriented, relevant, and time-bound)

Context: What are the internal and external situations and complications facing the client, such as industry trends, relative position within the industry, capability gaps, financial flexibility, and so on?

Success criteria: There is need to have a common understanding of how the client and the team define success or failure. Success criteria must be shared by client and team, and must include relevant qualitative and quantitative measures

Scope and constraints: You need to indicate what will and will not be included in the study. Scope covers the markets or segments of interest, whereas constraints govern restrictions on the nature of solutions within those markets or segments.

Stakeholders: This has to do with understanding who really makes the decisions — who decides, who can help, and who can block?

Key sources of insight: This is about providing answer to who, what, when, how, and why. For example. What best-practice expertise, knowledge, and engagement approaches already exist? What knowledge from the client, suppliers, and customers’ needs to be accessed?

Example of a problem statement: Dangote Cement

“How does Dangote Cement increase EBITDA by ₦50 billion (to ₦250 billion) by 2027?”

 

Note: The truth is that the first draft of the elements of the problem statement would be imperfect. The essence here is for the team to get something down on paper quickly. The next step is to refine it along with the client until the problem definition is robust, and most important, has been embraced. Also, sometimes, changes in the business environment or changes to any of the elements of the Problem Statement Worksheet could alter the initial assumptions. Therefore, it is important to revalidate the problem definition regularly throughout the process to ensure that the team’s focus is correct. Beware, taking for granted that you or the team understood the problem to be solved, and therefore neglecting to articulate it explicitly is a recipe for disaster

 

Stakeholder Analysis Worksheet

In completing the Problem Statement Worksheet, you are prompted to define the key stakeholders. As you become involved in the problem-solving process, you should expand the question of key stakeholders to include what the team wants from them and what they want from the team, including their values and motivations, and the communication mechanisms that will be most effective for them.

Using the Stakeholder Analysis Worksheet allows you to comprehensively identify:

  • Stakeholders
  • What you need from them
  • Where they are
  • What they need from you

Stakeholder

  • Who will be affected?
  • Whom do we need to engage?
  • Whom do we need to inform?

Impact on Stakeholder

  • How might recommendations impact this stakeholder, either positively or negatively?
  • What issues do they have regarding the project/ business?
  • What values and motivations can we build on?
  • What values and motivations may cause conflict?

Actions of Stakeholder

  • Which stakeholder will likely support, object, or be indifferent to recommendations?
  • What do we want this group or individual to think or do?
  • What can they do to support our objectives?
  • How might they block our objectives?
  • How can we minimize any potentially negative impac

Structure the problem

Disaggregation helps break down the problem into smaller pieces that can be analyzed individually. This step is crucial in understanding the root cause of the problem and identifying the most effective solutions. Disaggregation can be achieved by breaking down the problem into sub-problems, identifying the factors contributing to the problem, and analyzing the relationships between these factors. There are two main techniques to structuring any problem in strategy consulting, and they are hypothesis trees and issue trees. Each of the methods help disaggregate the primary question into a cascade of issues or hypotheses that, when addressed, will together answer the primary problem. Essentially, by disaggregating the problem, decision-makers can focus on the most vital areas, leading to more effective solutions. Let’s take a deeper dive into hypothesis trees and issue trees

 

Hypothesis trees

A hypothesis tree is a tool used by management consultants to tackle complex problems. It helps in organizing potential insights around a central hypothesis. The tool provides a structured framework to further probe a problem by creating sub-hypotheses that will be eventually used to prove or disprove the initial assumptions. The framework enables you to showcase your problem-solving skills and critical thinking ability by presenting insights and hypotheses in a concise and organized manner.

Characteristics of a good hypothesis:

  • Is it testable – can you prove or disprove it?
  • It is open to debate? If it cannot be wrong, it is simply a statement of fact and unlikely to produce keen insight.
  • If you reversed your hypothesis – literally, hypothesized that the exact opposite was true – would you care about the difference it would make to your overall logic?
  • If you shared your hypothesis with your boss, would it sound naive or obvious?
  • Does it point directly to an action or actions that the client might take?

Example of Hypothesis tree: Dangote Cement

Issue Trees

Issue trees are used to break down problems into their component parts. As a result, it helps you focus your efforts on more manageable smaller problems that can be tackled one by one. An issue tree is simply the laying out of issues and sub-issues into a MECE (Mutually Exclusive, Collectively Exhaustive) visual progression. Ultimately, the solutions for each smaller piece leads to solving the larger whole. An issue tree is best set out as a series of open questions in sentence form. For example, “How can the client minimize operations cost?” Ideally, Open questions, i.e. questions that begin with “what,” “how,” or “why”– produce deeper insights than closed ones, which typically start with “can” or “does.”

Issue trees are useful for the following reasons:

  •  Without being able to break down the problem its smaller components, the alternative would mean trying to solve everything at once, and that is difficult to achieve
  • It allows you to focus on one topic rather than juggle around, leading to a more efficient work process.
  •  Issue trees force you to think about the smaller sub-issues within a larger problem.
  • Issue trees are great for both brainstorming sessions within teams as well as explaining problems to clients.

Characteristics of an issue tree:

  • Each element is an open question, often in the form of “What?” or “How?”
  • Sub-branches break down each issue into sub-elements
  • Elements should be mutually exclusive and collectively exhaustive (MECE)

Example of Issue trees: Dangote Cement

Hypothesis tree vs. Issue tree

The main difference between hypothesis trees and issue trees is their purpose. Hypothesis trees are used to test a specific hypothesis, while issue trees are used to identify all the potential issues related to a problem. A hypothesis tree is less flexible as it is based on a predetermined hypothesis or set of hypotheses. In contrast, an issue tree can be more flexible in its approach to breaking down a problem and identifying potential solutions. Although, articulating the problem as hypotheses, rather than issues, is the preferred approach because it leads to a more focused analysis of the problem. However, when the team has insufficient knowledge to build a complete hypothesis tree at the start of an engagement, in that case, it is better to begin by structuring the problem using an issue tree. In some cases, an issue tree can be sharpened by toggling between issue and hypothesis – working forward from an issue to identify the hypothesis, and back from the hypothesis to sharpen the relevant open question

Prioritize issues

Once the problem has been structured, the next step is to prioritize the issues or hypotheses on which the team will focus its work. When prioritizing, it is common to use a two-by-two matrix – e.g., a matrix featuring “potential impact” and “level of uncertainty” as the two axes. Applying some of these prioritization criteria will knock out portions of the hypothesis or issue tree altogether. Once the criteria are defined, prioritizing should be straightforward: Simply map the issues to the framework and focus on those that score highest against the criteria. Organizations can allocate resources more effectively and make better decisions by focusing on the most pressing issues Essentially, prioritizing helps to focus on the most pressing issues and allocate resources more effectively.

How to prioritize hypothesis and issue trees

  • Urgency: Prioritize issues based on how urgent they are. Problems that require immediate attention should be dealt with first.
  • Impact: Prioritize issues based on their impact on the organization or stakeholders. Problems that have a high effect should be given priority. Apply 80/20 principle
  • Resources: Prioritize issues based on the resources required to address them. Problems that require fewer resources should be dealt with first.
  • Take reasonably quick, informal approach to get started. If new information emerges, you can always reprioritize and switch your efforts to another part of the tree
  • Use reasonable data available whenever possible
  • Don’t create massive spreadsheets if you can move forward with less complete information
  • Understand what the goal of the organization is. Use that high level goal as metrics to drive your analysis

Note: It is important to involve stakeholders in the prioritization process to consider their concerns and needs

Example of prioritization: Dangote Cement

In our example of Dangote Cement, remember our problem statement was “How does Dangote Cement increase EBITDA by ₦50 billion (to ₦250 billion) by 2027?” 5

Given the problem statement, our prioritization on the hypothesis and issue trees should be:

Hypothesis tree: Dangote can add ₦70 billion in revenue in other African countries

Issue tree: How can Dangote Cement expand to serve customers in new geographies?

We understand that Dangote Cement has presence in some African countries already. Now, our focus is to expand to more countries. Expanding to other countries is highly uncertain but has high impact. We ignore the other branches, for example expanding to Asian market, because of the high uncertainty, but low impact. We also ignore new product development and other branches because they didn’t fit into our criteria of selection

Plan analysis

After defining the problem, disaggregating, and prioritizing the issues, the next step in the 7-step problem-solving process is to develop a work plan. This step involves creating a roadmap that outlines the steps needed to solve the problem. If the prioritization has been carried out effectively, the team will have clarified the key issues or hypotheses that must be subjected to analysis. As a result, the aim of these analyses is to prove or disprove the hypotheses developed. Essentially, creating a work plan can help keep the team on track and ensure everyone is working towards the same goal. It can also help to identify potential challenges that may arise during the problem-solving process, and therefore develop contingency plans to address them.

Transforming the prioritized problem structure into a workplan involves two main tasks:

  • Define the blocks of work that need to be undertaken. Here, you articulate as clearly as possible the desired end products and the analysis necessary to produce the products, including estimating the resources and time required to get them produced.
  • Sequence the work blocks in a way that matches the available resources to the need to deliver against key engagement milestones. This includes important meetings, progress reviews, as well as to the overall pacing of the engagement

Several tools and techniques can be used to develop a work plan, including Gantt charts, flowcharts, and mind maps. These tools can help to visualize the steps needed to solve the problem and identify dependencies between tasks. A good workplan will detail the following for each issue or hypothesis: analyses, end products, sources, and timing and responsibility. Below is an overview of a workplan

Developing a work plan is a critical step in the problem-solving process. It provides a clear roadmap for solving the problem and ensures everyone involved is aligned and working towards the same goal.

Workplan Horizons

It’s useful to match the workplan to three horizons:

  • What is expected at the end of the engagement
  • What is expected at key progress reviews
  • What is due at daily and/or weekly team meetings

Ideally, the detail in the workplan will typically be greater for the near term than for the long term, especially early in a new engagement when considerable ambiguity about the end state remains.

Note: Because of the many considerations involved, developing the workplan takes time. Doing it well requires working through the definition of each element of the workplan in a rigorous and methodical approach

 

Conduct analysis

The bulk of the consulting engagement generally consists of gathering facts and conducting analyses to solve the problem. This step involves examining the data, identifying patterns, and determining the root cause of the problem

Several methods can be used during the analysis phase. Bellow are strategy toolkits that can help you conduct proper analysis of the problem.

SWOT analysis

The 3 C’s

Product Life Cycle

Porter’s Five Forces

The 4 Ps

PESTEL Analysis

BCG Growth Share Matrix

Profitability Framework

Porter’s Generic Strategies

Lafley Strategy

SIPOC model

Roger’s Five Factors

Value Disciplines Model

Three Horizons

Root cause analysis

McKinsey 7-S Framework

Porter’s Value Chain

Pareto analysis

Ansoff Matrix

GE McKinsey Matrix

Force Field Analysis

VRIO Analysis

Scenario Planning

Gap Analysis

7s Model

Stakeholder analysis

Risk analysis

Finance Diagnostic

Core Competence Analysis

Critical Success Factors (CFS)

Business Model Canvas

Strategy Canvas

Balanced Scorecard

MOST Analysis

Galbraith Star Model

…And more

Overall, the analysis phase is critical to identifying the root cause of the problem and developing practical solutions. You can gain a deeper understanding of the issue and make informed decisions by using a combination of methods.

Looking at our example, Dangote Cement, we stated:

 Problem statement: “How does Dangote Cement increase EBITDA by ₦50 billion (to ₦250 billion) by 2027?”.

Hypothesis tree: Dangote can add ₦70 billion in revenue in other African countries

Issue tree: How can Dangote Cement expand to serve customers in new geographies?

 

 Given the above, we can use a combination of the above tools to drill down our analysis. For example, we can use:

  • Porter’s Five Forces: a framework that helps us understand the competitive dynamics of an industry
  • Profitability Framework: a tool used to analyze and improve the profitability of a company.
  • PESTEL Analysis: a strategic framework used by organizations to assess the external macro-environmental factors that could impact their operations.
  • Porter’s Generic Strategies: describes three generic strategies that businesses can use to gain competitive advantage and achieve long-term profitability in their industry
  • VRIO Analysis: A four-question framework used to evaluate the resources and capabilities of an organization.
  • Scenario Planning: helps businesses anticipate future events and changes in their business environment, and that allows them to make informed strategic decisions.

 

Synthesize findings

Once the analysis phase is complete, the next step is to synthesize the information gathered to arrive at a solution. At this stage, the focus is on identifying the most viable solution that addresses the problem. This involves examining the analysis results and combining them to lead to a clear and concise conclusion. So, as you have completed the other parts, it’s time to communicate what you have done in the previous sections. In communicating, you don’t want to be detailed or general. Also, you don’t want to be too high level. Therefore, you want to find the right balance to ensure that your client or stakeholders understands your work. Essentially, distinctive problem solvers seek the essence of the story that will underpin a clear recommendation for action. During the synthesis phase, remaining open-minded and considering all potential solutions is vital. It is also essential to involve all key stakeholders in the decision-making process to ensure that everyone’s perspectives are considered

One way to synthesize the information is to use a decision matrix. This involves creating a table that lists the potential solutions and the essential criteria in making a decision. Another approach to synthesizing the information is to use a mind map. This involves creating a visual representation of the problem and the potential solutions. However, the most popular tool is called Pyramid Principle, developed by Barbara Minto, a former McKinsey consultant. Pyramid principle asserts that every synthesis should explain a single concept. The supporting ideas in the synthesis form a thought hierarchy proceeding in a logical structure from the most detailed facts to the governing thought.

How to use pyramid structure to group arguments

  • Focus on action: Articulate the thoughts at each level of the pyramid as declarative sentences, not as topics. For example, “growth” is a topic; “We need to expand into the other African market” is a declarative sentence.
  • Use storylines: A storyline will clarify elements that may be ambiguous in the PowerPoint presentation.
  • Keep the emerging storyline visible: It helps in bringing the client along.
  • Use the situation-complication-resolution structure (SCR): The situation is the reason there is action to be taken. The complication is why the situation needs thinking through. The resolution is the answer.
  • Test the pyramid: You can assess the rigor of your pyramid using three simple tests:
  • Down the pyramid: does each governing thought pose a single question that is answered completely by the group of boxes below it?
  • Across: is each level within the pyramid MECE?
  • Up: does each group of boxes, taken together, provide one answer – one “so what?” – that is essentially the governing thought above it?
  • Test the solution: What would it mean if your hypotheses all came true?

 

An example of a pyramid structure

Note: Synthesis of findings is one of the most difficult elements of the problem-solving process. Although synthesis appears, formally speaking, as the penultimate step in the process, it should happen throughout. You need to continue to synthesize as you go along. With that approach, it would remind the team of the question you are trying to answer, assist in prioritization, highlight the logical links of the emerging solution, and ensure that you have a story ready to articulate at all times during the studies

Develop recommendations

It is at this point that we address the client’s questions: “What do I do, and how do I do it?” The essence of this step is to translate the overall solution into the actions required to deliver sustained impact. Therefore, a pragmatic action plan should include:

  • Relevant initiatives, along with a clear sequence, timing, and mapping of activities required
  • Clear owners for each initiative
  • Key success factors and the challenges involved in delivering on the initiatives

 

One effective way to communicate the findings is through a well-organized report. The report should include the problem statement, the analysis, the synthesis, and the recommended solution. In addition to the report, it is also essential to have a presentation that explains the findings. The presentation should be tailored to the audience and highlight the report’s key points. Visual aids such as tables, graphs, and charts can make the presentation more engaging. During the presentation, it is essential to be open to feedback and questions from the audience. This helps ensure everyone is on board with the recommended solution and addresses any concerns or objections.

Ultimately the goal of the study in to bring about change. Without change that status quo remains, and that make all the efforts fruitless. Below are key questions on the recommendation leading to change:

  • Does each person who needs to change understand what they need to change and why they should be committed to it?
  • Are key leaders in the organization personally committed to behaving differently?
  • Has the client set in place the necessary formal mechanisms to reinforce the desired change?
  • Does the client have the skills and confidence to behave in the desired new way?

Two Other Parts

Distinctiveness Practices

Great problem solvers identify unique disruptions and discontinuities, novel insights, and step-out opportunities that lead to truly distinctive impact. This is done by applying a number of practices throughout the problem-solving process to help develop these insights, and these include:

  • Expand: Identifying alternative ways of looking at the problem by expanding the range of possibilities, as that could open you up to innovative ideas
  • Link: Strong problem solvers discern connections and recognize patterns in two different ways: They seek out the ways in which different problem elements relate to one another. And they use these relationships throughout the problem-solving process to identify solution
  • Distill: Cutting through complexity to identify the heart of the problem and its solution is a critical skill.
  • Lead: Without getting ahead of the client, you cannot be distinctive

Power of Collaboration

No matter how skilled, knowledgeable, or experienced you are, you will never create the most distinctive solution on your own. Seeking the right expertise at the right time, and leveraging it in the right way, are ultimately how you bring distinctiveness to the work, how you maximize efficiency, and how you learn. The best problem solvers know how to leverage the power of their stakeholders including team, clients, and outside parties

When solving a problem, it is important to ask, “Have I accessed all the sources of insight that are available?” Here are the sources you should consider:

  • Your core team
  • The client
  • The client’s suppliers and customers
  • Internal experts and knowledge
  • External sources of knowledge
  • Communications specialists

The key here is to be open-minded. Opening up to varied sources of data and perspectives to develop truly innovative and distinctive solutions for clients.

Conclusion

The importance of problem-solving skills in the workplace can’t be overstated. Every business and job role has its problems. From entry-level hires to senior executives, every one of your employees will face challenges that can’t be answered by doing a quick Google search. As a result, mastering problem solving skills is important for everyone. The 7-step problem-solving process is a powerful tool that can help individuals and organizations make better decisions. By following these steps, you can identify the root cause of a problem, prioritize potential solutions, and develop a clear plan of action. This process can be applied to various scenarios, from personal challenges to complex business. By mastering the 7-step problem-solving process, you can become more effective decision-makers and problem-solvers. This process can help you or your organizations save time and resources while improving outcomes. Also, no matter how skilled, knowledgeable, or experienced you are, you will never create the most distinctive solution on your own. The best problem solvers know how to leverage the power of their team, clients, the firm, and outside stakeholders to arrive at effective solution

Omodiaogbe Samuel, MSc. CMC, ChMC, FIMC

Omodiaogbe is a Strategic Management Consultant, and he the Principal Consultant/CEO at Vast Thinking Consults Ltd where he help organizations and business leaders to create superior value. Omodiaogbe holds BSc. and MSc. in Economics. Also, he is a Certified Management Consultant (CMC), a Chartered Management Consultant (ChMC), and a Fellow, Institute of Management Consultants, Nigeria. He is an Instructor on Coursera, where he teaches 25 courses in Strategic Management. Omodiaogbe is one of the world’s leading learners on Coursera and Edx with over 500 Certificates from top-ranked Universities, Business Schools, and Organizations.

Contact him:
Email; somodiaogbe@vastthinking.com.ng
Visit: www.vastthinking.com.ng 

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