Saturday, February 1, 2014

What Does It Mean to be "MECE" at McKinsey?

Working at McKinsey (or for a McKinsey boss) often requires dealing with large amounts of information.  There is a strong preference for organizing that data in a manner that is "MECE".  Your McKinsey boss might also ask you to be "more MECE" in your problem solving approach.  If you're applying for a job at McKinsey, your interviewer will be looking for MECE frameworks during your case interview.  In this post, I'll explain what that means.


What is MECE?

The term "MECE" (pronounced "MEE-see") is an acronym for "Mutually Exclusive and Completely Exhaustive".  It usually refers to how information is organized - often in the context of issue trees, a topic that will be covered in a separate post.  Information - ideas, topics, issues, solutions, etc. - should be organized into MECE "buckets" or groupings of like items.

Mutually Exclusive

This means that any idea can be placed into one - and only one - bucket.  If you can come up with an idea that could potentially go into more than one bucket, your approach is not MECE. 

For example, let's suppose you are trying to organize pizza toppings.  You decide to try the following buckets or drawers in the refrigerator:  "meat", "vegetarian", and "vegan".  Those buckets will seem mutually exclusive for many ingredients, but you will soon come up with a topping that could fit into more than one bucket.
  • Pepperoni:  Meat - yes.  Vegetarian - no.  Vegan - no... OK!
  • Cheese:  Meat - no.  Vegetarian - yes.  Vegan - no... OK!
  • Mushrooms:  Meat - no.  Vegetarian - yes.  Vegan - yes... NOT OK!

So this would not be MECE organizing system because someone looking for mushrooms wouldn't know whether to look in the "vegetarian" or "vegan" drawer.

Completely exhaustive

This means that your buckets cover the entire universe of possible items.  If you can come up with an example that does not fit into any of your buckets, your approach is not MECE.

Let's continue with the pizza topping example.  Suppose after failing the test for mutual exclusivity, we've relabeled our refrigerator drawers as "meat", "vegetables", "dairy".  This system works better for our previous test items, but it could be missing a category...
  • Pepperoni:  Meat - yes.  Vegetables - no.  Dairy - no... OK!
  • Cheese:  Meat - no.  Vegetables - no.  Dairy - yes... OK!
  • Mushrooms:  Meat - no.  Vegetables - yes.  Dairy - no... OK!
  • Tomato sauce:  Meat - no.  Vegetables - sort of.  Dairy - no...  Maybe?
  • Pesto:  Meat - no.  Vegetables - sort of.  Dairy - no...  Maybe?

It is possible to make your current system MECE by specifying that "vegetables" includes all things veggie-based, like pesto and tomato sauces.  Similarly, a dairy-based sauce like Alfredo can go in the "dairy" drawer.  But are you comfortable splitting sauces across drawers?

We can also see from this test that there might be potential to add a "sauce" drawer.  Or do you think your users would expect to find all sauces together?

As you can see, even for the simplest lists, creating a MECE framework can be challenging!

EXAMPLE:  The easiest MECE framework

Anyone preparing for a consulting case interview should be familiar with at least the first level of this issue tree.  Your client wants to increase profits - where are the most promising areas to look?

The two MECE buckets for increasing profit are 1) increasing revenues and 2) decreasing costs.  Those two buckets have no overlap (ME) and cover all possible options (CE), so it's with good reason that this framework comes up over and over.

The first couple of levels of this issue tree are so obvious that these can be some of the most challenging case interview questions to do well on.  Because it's hard to set yourself apart in your initial framework, you need to really show some deep and quality insights in the rest of the case to differentiate your performance from others'.

Why is MECE important?

The pizza example is probably not the best way to illustrate this, but being MECE is critical to effective problem solving.  It reflects thinking that is:
  • Clear - Because mutual exclusivity means overlap is eliminated, it is easy to understand where things belong, making them easy to find and, if necessary, edit
  • Thorough - A completely exhaustive approach means every possible idea can be raised and considered
  • Logical - Ultimately, a MECE approach yields an elegant yet comprehensive solution that can be easily understood and followed.  It also highlights for your McKinsey boss or interviewer that you can organize information effectively and efficiently

These are all traits that Firms, teams, and clients look for in their consultants.

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