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What stays with me is the rigorous standard of information and analysis, the proving and double-proving of every recommendation, combined with the high standard of communication both to clients and within the Firm.”– Former associate in the Boston and New York offices Simon London: You do hear these ideas—that if you have a big enough data set and enough algorithms, they’re going to find things that you just wouldn’t have spotted, find solutions that maybe you wouldn’t have thought of. Does machine learning sort of revolutionize the problem-solving process? Or are these actually just other tools in the toolbox for structured problem solving? Charles Conn: Maybe the easiest one is the classic profit tree. Almost in every business that I would take a look at, I would start with a profit or return-on-assets tree. In its simplest form, you have the components of revenue, which are price and quantity, and the components of cost, which are cost and quantity. Each of those can be broken out. Cost can be broken into variable cost and fixed cost. The components of price can be broken into what your pricing scheme is. That simple tree often provides insight into what’s going on in a business or what the difference is between that business and the competitors.
The most brilliant solution is useless without proper implementation. So know your client’s weaknesses, strengths, and capabilities and tailor your solutions accordingly. This is Consulting 101 for new and aspiring consultants to read. My first half year in consulting went in understanding the aspects mentioned in the book and the anxiety associated with navingating a firm. While there are definitely no silver bullets, there are indeed some cardinal sins as consultants which any good org drills into it's consultants from day 1.Be prepared. Know exactly what you want to get out of it. Know as much as you can about the interviewee. Writing an interview brief for yourself is not a bad idea. We subconsciously admire the people who talk in sophisticated language, so we make complex charts. However, simple and easy-to-follow charts go a long way in consulting. Charts are just a means of getting your messages across, not a Ph.D. project. Real meaning: We’re so busy in meetings we really want to economize on the amount of actual analysis have to do. Charles Conn: Absolutely. The third step, which we also emphasize, along with good problem definition, is rigorous prioritization—we ask the questions “How important is this lever or this branch of the tree in the overall outcome that we seek to achieve? How much can I move that lever?” Obviously, we try and focus our efforts on ones that have a big impact on the problem and the ones that we have the ability to change. With salmon, ocean conditions turned out to be a big lever, but not one that we could adjust. We focused our attention on fish habitats and fish-harvesting practices, which were big levers that we could affect. Example: “We need to initiate a robust conversation with our stakeholders and gatekeepers that’s structured to fine tune our approach.”
If we add the leg, which is “What’s the asset base or investment element?”—so profit divided by assets—then we can ask the question “Is the business using its investments sensibly?” whether that’s in stores or in manufacturing or in transportation assets. I hope we can see just how simple this is, even though we’re describing it in words.Simon London: Let’s move swiftly on to step four. You’ve defined your problem, you disaggregate it, you prioritize where you want to analyze—what you want to really look at hard. Then you got to the work plan. Now, what does that mean in practice? Charles Conn: I love the way you’ve described that, because, again, some people think of problem solving as a linear thing, but of course what’s critical is that it’s iterative. As you say, you can solve the problem in one day or even one hour. of the wealth is owned by just 20% of the population. 80% of the output can be produced by 20% of the effort. 20% of the problems can cause 80% of the trouble. You are looking for an intellectually stimulating and exhaustive book on strategy and consulting ideologies. The Lords of Strategy would be a better book for that. Charles Conn: My favorite step is step two, which is to use logic trees to disaggregate the problem. Every problem we’re solving has some complexity and some uncertainty in it. The only way that we can really get our team working on the problem is to take the problem apart into logical pieces.
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