How to Be Creative

I recently read McKinsey Staff Paper 66: The McKinsey Approach to Problem Solving by Ian Davis (the Managing Director of the firm from 2003 – 2009).

One of the main takeaways from the paper was how to be creative in problem solving. Being creative is pretty important — it can turn a good case performance into a great case performance.

The paper has four main suggestions:

1. Expand: Construct Multiple Perspectives

2. Link: Identify Relationships

3. Distill: Find the Essence

4. Lead: Stay Ahead / Step Back

Let’s talk about them in detail! (Note: I suggest you read the original paper as well).

Construct Multiple Perspectives

What they mean by constructing multiple perspectives is considering the problem from many angles. In particular:

1. Looking at the problem from the perspective of all the key stakeholders.

2. Bring in solutions from other industries.

3. Relaxing the constraints of the problem to test extreme situations.

Let’s start with perspective. I once did a very interesting case about a company that wanted to relocate its factory to another state. The case begins with a financial analysis of the cost savings, but then asked me to consider the problem from the perspective of the factory workers, the town the factory was based in, and the governor of the state.

We eventually realized that moving the factory or not was a win / win situation for the client, because not only were there cost savings, but we could potentially use this as leverage to get tax breaks or better treatment from the state that we were in.

Now, imagine if I was doing the case and I came up with that line of reasoning without prompting. That would be extremely impressive, right? That’s the power of perspective.

Next, let’s consider solutions from other industries. One example of this would be my article on rate limiting steps — every time I have an operations case, I can use what I know about rate limiting steps to search for bottlenecks and crack the case immediately.

You probably have a repertoire of solutions from your education / previous job experience that can be applied to some of these cases. This is one of the things that make you stand out, so I would actually spend some time thinking about this.

Lastly, let’s talk about relaxing the constraints of the problem. In the problem definition and over the course of the case you will be given certain constraints, such as: the client has a payback period of x years, the client’s budget is this, the client doesn’t want to enter a new industry, etc.

You should always question these constraints (in a nice way). They’re often built on certain premises that may or may not hold anymore or in this particular situation. It’s always helpful to flesh those out, and it shows that you’re willing to think deeply and challenge errant assumptions.

Link: Identify Relationships

What they mean by identifying relationships is seeing how different parts of the problem / analysis fit together, and related solutions. To be more specific:

1. Seeing hierarchy or groupings between different parts of the analysis.

2. Using analogies to make problem solving more efficient and creative.

First, let’s consider hierarchy / groupings. This refers to how different topics in an analysis fit together. For example, you may classify the market size and market growth as both being important considerations that fall under the area of market attractiveness.

On the surface, this seems like a trivial point, but it’s highly related to being creative. The most creative people are the ones that see different relationships between things than everyone else.

For example, let’s consider mobile phones. Up until 6-7 years ago most people would have (unconsciously) categorized a mobile phone as a communication device. It would thus fall under the subset of things such as walkie-talkies.

However, innovators in the tech space such as BlackBerry and Apple reclassified mobile phones as mobile computing devices. Now everyone thinks of mobile phones as more than just phones — they are mini computers, music players, and the like. They’ve triggered a revolution where almost everything is being reclassified as mobile computing device: watches, glasses, even thermostats.

As you can see, it really pays if you are able to see different relationships between things than others — show it off!

Next, let’s consider analogies. One of the best things you can do is bring in your own knowledge of related problems in other industries. Let’s take the following interesting example from one of Victor Cheng’s articles as an example.

Basically, the situation he talks about is that you’re looking at the sales for the original cell phone in the 1980s. The sales figures don’t look all that good, but it’s hard to tell because it’s a new technology.

What he does is use the sales data for other new technology (TVs, microwaves, etc.) as an analogy, and figures out that for a new technology, the sales of the cell phones are actually quite good. That’s the power of analogy.

Distill: Find the Essence

What they mean by distilling to the essence is:

1. Eliminating parts of the problem / analysis that are irrelevant.

2. Ranking the relative priority of each element of the analysis.

Let’s start with eliminating unnecessary detail. When given a complex situation, the most creative problem solvers are able to eliminate all unnecessary details, and propose a series of hypotheses that explain all potential situations.

The simplest example of this is any profit decline case. There are always four sets of possibilities:

1. Prices are dropping.

2. Product mix is changing.

3. Volume is dropping.

4. Costs are increasing.

And now it’s pretty easy to isolate what’s going on because we aren’t looking at the details anymore. We’re just focusing on the essence of the problem, and can eliminate each hypothesis one by one.

Creative problem solvers also know what information matters, what doesn’t, and the relative importance of information. A simple example might be, if a company is introducing a new product the most important information might be if there is a market for it, if it is profitable, if it is unique, etc.

You may get conflicting information — the product may not be profitable, however it may be unique and there is a market for it.

Because profitability has higher relative important than the other two so it would be hard to introduce the product based on this information.

Of course, you could go deeper into profitability and looks at the drivers of price and cost to see if the product will continue to be unprofitable after its introduction. We’ll get to that in the next section.

As for prioritizing elements of the analysis, we discussed it in yesterday’s article about decision points in cases. Part of being creative is working through a problem in a unique / more efficient way than other people.

This would include things such as knowing what information to ask for to eliminate hypotheses quickly, in what order to approach a problem, and how much time to spend on each area in the case.

Lead: Stay Ahead / Step Back

And lastly what they mean by staying ahead / stepping back is:

1. Staying a few steps ahead of the client / your team.

2. Checking the rigor of the data, the analysis, and each element of the proposed solution / hypothesis.

3. Stress test the emerging recommendation to see if it meets the problem definition, the client’s capabilities, and if it is comprehensive.

4. Asses the proposed solution to see if it meets the client’s initial objective for the engagement, is creative, innovative, and impactful.

By staying ahead of the client and the team, we’re basically talking about driving the case. You need to go where you’re going, and why you’re going there at all times. You won’t be able to achieve a creative solution if you never get all the information.

Checking the rigor of the data and knowing its limits is also an excellent way to show your creativity. I was once given a case where I was given a graph that showed that my client’s industry was in decline and asked what I thought about it.

On the one hand, I could’ve said “It looks bad” but that would be a standard answer. Instead, I said something more creative — “It looks like the client’s industry is in decline, but we need to segment this data further. I know that the client serves the small and medium segment of this market and it’s unclear to me how that segment is doing from this graph. I can’t draw a conclusion yet.”

That, my interviewer remembered.

As for stress testing your explanation and solution, I find that not enough people do this. It really helps to set up to ask yourself if your explanation / solution is definitive, if it is the only explanation, and if any further data or tests would be necessary to validate your explanation / solution.

Sometimes, there are more than one problems in a case. Most people find one issue and end the case there. Or, their solution would fall outside the client’s capabilities. These are always interesting things to discuss and can make your conclusion even stronger.

Conclusion 

Again, today we’ve talked about four ways to be creative (though there are many more):

1. Expand: Construct Multiple Perspectives

2. Link: Identify Relationships

3. Distill: Find the Essence

4. Lead: Stay Ahead / Step Back

Good luck!

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