Have you ever had a large, complex, and seemingly overwhelming problem that you initially had no idea how to solve? Chances are, it would have been helpful if you used an issue tree.
The issue tree is a tool that consultants use to break down big problems into smaller manageable ones. Firms like McKinsey, Boston Consulting Group, and Bain often look to see that their candidates use issue trees in interviews. In addition, consultants themselves use them frequently on the job.
What Are Issue Trees and Why Are They Useful?
Issue trees are used to break down problems into their component parts. As a result, issue trees help consultants focus their efforts on more manageable smaller problems that can be tackled one by one. Ultimately, the solutions for each smaller piece lead to solving the larger whole.
Issue trees are useful for the following reasons:
- Consulting projects present extremely challenging and complex problems. Without being able to break down the problem its smaller components, the alternative would mean trying to solve everything at once. Try achieving world peace without thinking about the smaller conflicts that contribute to such a large problem, and you understand how this approach is beneficial.
- They help consultants divide and conquer. After breaking down a problem, managers are then able to assign workstreams for each sub-issue to a consultant. This allows consultants to focus on one topic rather than juggle various ones, leading to a more efficient work process.
- They are conducive to brainstorming potential solutions. Issue trees force you to think about the smaller sub-issues within a larger problem. As a result, the process of limiting your focus usually heightens your creativity, and allows you to think outside the box to solve a smaller sub-issue. This creativity can then flow up to address the broader problem.
- They are a good visual communication tool for teams and clients. For most people (and especially clients) things are easier to understand visually. As a result, issue trees are great for both brainstorming sessions within teams as well as explaining problems to clients.
What Makes for an Effective Issue Tree?
Not all issue trees are created equally. There are a few rules and attributes that make some more effective than others.
The Issue Tree is MECE
MECE stands for Mutually Exclusive, Collectively Exhaustive. The best issue trees are mutually exclusive, meaning that there are no overlaps amongst the different smaller components. They are also collectively exhaustive, meaning that the components cover all potential root causes of the problem.
For instance, imagine your client has a profitability problem. Your issue true would be mutually exclusive by focusing on revenue and costs, as there are no overlaps between the two. The issue tree is also collectively exhaustive in that there are no other components that need to be added given that Profit = Revenue – Costs.
The 80/20 Rule
Finding a solution to a client’s overall problem doesn’t mean solving every little problem along the way. Instead, the best issue trees help consultants solve the most crucial and important problems. This feature of great issue trees follows the 80/20 rule, which states that roughly 80% of the effects of something comes from 20% of the causes.
Although the 80/20 rule is important, it may at first seem contradictory to being MECE. The important caveat is that the 80/20 rule is applicable to the smaller segments within the MECE issue tree.
For instance, if your client has a cost issue, it would be collectively exhaustive to look into fixed and variable costs. Within the variable costs, the company may have a small marketing budget that is 1% of total costs. Now that you’ve identified that marketing is not a key driver of costs (AKA you’ve been collectively exhaustive in quickly examining it), it would be okay for you to ignore this cost moving forward.
The Issue Tree is Tied Together by Logic
Great issue trees will have a logical flow throughout the smaller sub-issues. If the components of the issue tree seem random and unrelated, there is bound to be more confusion than solution.
For instance, imagine your client is creating a new product and wants to better understand the market. If your issue tree bounces around between looking at the product, competition, and management team, your interviewer will be lost.
While a strong team is important in creating a great product, it probably doesn’t make sense to make that a sub-issue unless there were strong indications in the case prompt that the team is a big factor. Instead, you may want to include a sub-issue like customers.
Issue trees are a useful tool to use during the case interview – just be sure that you remain structured, logical, and MECE. At the end of the day, the categories you use inside of your issue tree will determine whether you are successful or not.