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How do I know I'm being MECE when creating my own custom issue tree?

Someone asked on Aug 14, 2018 - 1 answer

I've been trying to build my own issue trees to adjust as much as possible to the particular case, my question is, when NOT following a standard framework, how can I be sure I'm being MECE? Especially when talking about concepts, for instance, "Technology"... or "Legal restrictions"...

Vlad replied on Aug 14, 2018
McKinsey / Accenture / Got all BIG3 offers / More than 300 real MBB cases / Harvard Business School

Hi,

First of all - not all issue trees can and should be MECE. Very often it's not the case.

Secondly - there is a number of ways how you can approach in a MECE way:

  1. If your structure works mathematically (e.g. Total time spent on cleaning operation = # of people x Frequency x Hours per cleaning per person)
  2. If your structure comes from a formula (e.g. output rate = total number of people being served / time to serve one person)
  3. If you are using the common industry drivers (e.g. revenues = # of customers x av. check) (e.g Passengers on the plane = capacity x Load Factor) or the industry revenue streams (Fuel revenues / non-fuel revenues for the gas station) or the functional drivers (e.g. for the problems in sales : Sales strategy / sales people and allocation / motivation / sales process)
  4. If your issue tree is a real framework used by the consultants (e.g. the famous Bain Cap framework for PE due dills: Market / Competitors / Company / Feasibility of exit) (e.g. People / Process / Technology) (e.g. The famous McKinsey framework - People don't want to do smth / they can't do smth / smth prevents them from doing that)
  5. If your structure is a well-known academically MESE framework (e.g. Product / Distribution / Price / Marketing (Also known as 4P))

There is no magic pill how you can learn to build the MESE issue trees. !!!! It comes with a lot of Practice and reflection and building proper industry and functional knowledge. !!!!

Focus on the most common industries in the following priority (sorted by probability of getting a case): 1-retail and CPG; 2-airlines; 3-Telecom; 4-banking; 5-natural resources; 6-tech

There are several sources of information that will help you develop the business sense:

1) Cases - you simply solve 50-70 cases and get a broad knowledge of different industries, common pitfalls and questions. The key here - find good partners who already had case interviews with MBB companies

2) Company reports, equity reports, IB roadshow docs - usually have a good overview of company and industries.

3) HBS cases - quite useful, but not sure if lot's of them available publically. Probably worth buying

4) Industry Books - one good book about airlines with numbers and industry analysis can give you all needed industry knowledge

5) News, Industry blogs

For each industry, you should understand:

  • Revenue streams
  • Cost structure
  • Margins
  • Key performance indicators
  • Key revenue drivers
  • Industry trends

I strongly recommend drawing the typical structures for each industry - profitability, value chain, etc

Then I will switch to getting functional knowledge:

  • Marketing (Brand and trade marketing tools, etc)
  • Supply chain (Ops metrics like cycle time and throughput time, distribution and delivery specifics, etc)
  • Operations (Process optimization basics)
  • Finance (Very basic Finance and Valuation)

Good Luck

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