McKinsey Frameworks

The McKinsey frameworks have been used for decades to help organizations break down problems and make informed decisions about their future. In fact, the frameworks McKinsey helps its clients utilize have made the firm synonymous with “best of the best”. It’s the most prestigious consulting firm in the world for a reason.

Maybe your organization or client has a change management, profitability, or competitive advantage issue. If so, there’s a McKinsey framework that you can use to at least begin to tackle the problem.

GE McKinsey Matrix Framework

The GE McKinsey matrix framework was developed in the 1970s. It is still often used by companies to make investment decisions to optimize future profit. The GE McKinsey matrix framework is relatively simple because it is based on only two factors. One, “the attractiveness of the relevant industry”, and two, the “unit’s competitive strength within that industry”. Learn more about how to use the GE McKinsey matrix framework here.

McKinsey 7s Framework

It is management’s job to take the entirety of the business into account when thinking about either introducing a change or optimizing profitability. However, it can be difficult to understand how disparate parts of a company influence each other. The McKinsey 7s framework is a seminal concept in measuring organizational effectiveness. It shows how to assess the different parts of an organization and the role they play in influencing organizational change. The focus here is not on evaluating structure, but the role of coordination in change.

The McKinsey 7s framework examines seven components of an organization, all held together by shared values. Learn more about the seven components to the McKinsey 7s framework here.

The Business System Framework

The Business System framework is an iconic approach to product development and strategy. Its specific eye is to achieve and maintain competitive advantage. So why is it a “system”? Each step of the process should tie back into the company/product’s value proposition. Keep a clear-eyed focus on the value proposition as you go through the iterative process. Learn more about the business system framework here.

Industry Cost Curve Framework

Knowing how to price products for optimal profit is crucial. The industry cost curve framework is one valuable tool to help companies choose the best price point for their product. The industry cost curve framework takes price elasticity – as well as other factors – into account to help companies price their products effectively. Learn more about the industry cost curve framework here.

SPC Framework

The SPC framework suggests that business performance is dependent on structure and conduct. And, that this impact flows both ways (i.e. structure doesn’t just affect performance, but performance affects structure as well). More specifically, industry structure affects producer conduct, and vice versa. The SPC framework is an illuminating way to examine the interdependent relationship between producers and industry. Learn more about the SCP framework here.

Strategic Control Map Framework

Wall Street nerds rejoice! We’re finally talking about a framework that takes market capitalization into account – not usually a focus of consultants. Specifically, the Strategic Control Map framework plots a company’s market cap against its market-to-book value (what it delivers to shareholders). You may be asking – what’s the point? This framework is a useful tool to help organizations identify unique opportunities and threats. AKA, it shows how to become the acquirer instead of being an acquisition target. Learn more about the Strategic Control Map framework here.

The Three Horizons of Growth Framework

Mature companies from Amazon to Apple face a common problem – how to continue innovating while focusing on the core business. That’s where the Three Horizons of Growth framework comes in. It’s a helpful structure to assist organizations in assessing potential growth areas while not neglecting what they’re already focused on. If you need help plotting multiple horizons in your organization’s future, read more here.

Portfolio of Initiatives Framework

We live in a fluid, uncertain world. In this new world, diversification is the best way to ensure long-term success. There are two factors to consider when plotting your organization’s future: familiarity and time. If you can deploy distinctive knowledge relative to your competitors, you garner the potential of familiarity, which increases your risk appetite. Simultaneously, the Portfolio of Initiatives framework requires that you spend time gaining distinctive knowledge in multiple other areas. Some will prove unfruitful, but others will prove prescient medium- and long-term bets. As the old adage goes, there is safety in numbers. Learn more about the portfolio of initiatives framework here.

Consumer Decision Journey

Every consumer goes through a decision-making process when purchasing a product – this is called the consumer decision journey. However, this process has changed considerably in this new digital age. As consumer attention spans shorten and information is around every corner, marketers covet the “touch points” with consumers, where they are most malleable. Hit on these touch points, and you’ve built brand loyalty. Learn more about the consumer decision journey here.

Influence Model

Every organization goes through large changes in the course of its lifetime. These massive changes need to be managed as effectively as possible. The Influence Model is one of the best frameworks we’ve found to guide business leaders through the challenges of change management. Read more about the Influence Model here.

Pyramid Principle

Perhaps McKinsey’s most well-known framework – and one we train on here at Management Consulted – is the Pyramid Principle. It is essential to effective communication, powerful persuasion, and efficient workflows. We break it down here – and if your team or organization needs to implement the Pyramid Principle, engage with us on corporate training.

Conclusion

No matter your business challenge, there are McKinsey frameworks that can help you attack the problem from every angle. Don’t try to reinvent the wheel – start here!

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