PROBLEM SOLVING

PART 1 How to make the most of your data

Welcome to "The McKinsey Publishing Guide to problem solving." In this first email, we'll
dive into the importance of data and data analysis as an informative step of the problem-
solving process. Read on to learn how to make the most of your data to solve even the most
complex challenges.

Companies that harness the power of data have the upper hand when it comes to problem
solving. Rather than defaulting to solving problems by developing lengthy—sometimes
multiyear—road maps, they’re empowered to ask how innovative data techniques could
resolve challenges in hours, days or weeks, write senior partner Kayvaun Rowshankish and
coauthors.

But when organizations have more data than ever at their disposal, which data should they
leverage? Before jumping in, it’s crucial to plan the analysis, decide which analytical tools to
use, and ensure rigor. Uncover ways data can take your problem-solving techniques to the
next level.

1. Be prepared for the evolution of data

Data will be embedded in every decision, interaction, and

process. Today, many business problems still get solved
through traditional approaches and take months or years to
resolve. But by 2025, employees will be empowered to ask
how innovative data techniques could resolve challenges in
hours, days or weeks. Organizations will be capable of better
decision making as well as automating basic day-to-day
activities and regularly occurring decisions.

Read: The data-driven enterprise of 2025

2. Understand what data you have at your disposal

People think that you just have data, when actually, they’re
produced. What we have and what we don’t have is
constructed by the decisions that are made on what data to
collect, and what data not to collect. To have a data-informed
environment is incredibly important, but that requires us to
make decisions about what we’re collecting, what we’re
interpreting, and how we’re interpreting it.

Read: Author Talks: Think digital

3. Generative AI (gen AI) can help speed up analysis—if the

right structures are in place

The lifeblood of gen AI is fluid access to data honed for a

specific business context or problem. Companies that have not
yet found ways to effectively harmonize and provide ready
access to their data will be unable to fine-tune gen AI to unlock
more of its potentially transformative uses. Equally important
is to design a scalable data architecture that includes data
governance and security procedures.

Read: What every CEO should know about generative AI -Test

 4. Manage your data like a product

When companies manage data like a consumer product—be it

digital or physical—they can realize near-term value from their
data investments and pave the way for quickly getting more
value tomorrow. A data product delivers a high-quality, ready-
to-use set of data that people across an organization can easily
access and apply to different business challenges.

Read: How to unlock the full value of data? Manage it like a

product

5. Standardize data for a complete view of an organization

Master data management (MDM) cleans, enriches, and

streamlines data across business functions and systems to
support processes, analyses, and smarter decision making.
Successful MDM requires not only a willingness to consider
technological solutions and tools, but also a commitment to
change management.

Read: Master data management: The key to getting more

from your data

6. Leverage third-party data

Organizations that stay abreast of the expanding external-data ecosystem and successfully
integrate a broad spectrum of external data into their operations can outperform other
companies by unlocking improvements in growth, productivity, and risk management.

Read: Harnessing the power of external data

PART 2
Prioritize holistic health in the workplace to
unlock growth
In the previous session, we explored how companies and individuals can break
through stagnant thinking and drive innovation by being more creative. In this email,
we’ll delve into the crucial connection between holistic well-being and the ability to
escape feeling stuck. Often, we focus on external challenges, but neglecting our
health—physical, mental, and spiritual—can create unseen barriers.

Burnout can affect anyone, but it’s particularly common in high-pressure work
environments. If you’re personally experiencing signs of burnout, or observing them
within your team, it’s crucial to address this issue proactively. Consider the profound
effects of prioritizing both your own and your team’s physical, mental, and spiritual
well-being.

The imperative to act extends beyond personal health. Employee disengagement

and attrition, both significantly correlated with diminished well-being, can impose
substantial financial burdens on organizations. According to a McKinsey Health
Institute survey by Jacqueline Brassey, Barbara Jeffery, and Drew Ungerman, a
median-size S&P company could incur annual productivity losses ranging from $228
million to $355 million.

Here are five ways employees and organizations can follow a “complementary
approach” to enhance employee well-being, innovation, and job performance.

1. Recognize the root cause

If you’re feeling stuck, consider if burnout might be a contributing
factor. Are you chronically stressed, exhausted, or feeling
detached from your work? Addressing the underlying burnout is
crucial before you can effectively get unstuck.

Read: What is burnout?

2. Prioritize holistic well-being to regain
momentum
Employees with good holistic health are more likely to indicate
that they are innovative at work, have better work performance,
and experience better work–life balance.

Read: Reframing employee health: Moving beyond burnout

to holistic health

3. Connect to meaning and purpose to fuel

motivation and resilience
When people feel disconnected from their work’s purpose, they
can easily become demotivated and “stuck.” By fostering a sense
of spiritual health, organizations can help employees rediscover
their “why,” leading to renewed energy and drive.

Read: In search of self and something bigger: A spiritual

health exploration

4. Reframe your perception of stress

First, determine if you’re experiencing distress or eustress.
Distress often feels overwhelming and uncontrollable, while
eustress feels challenging but manageable. If you’re experiencing
distress, challenge negative thought patterns. Instead of thinking,
“I can’t handle this,” try thinking, “This is challenging, but I can
learn and grow from it.”

Read: How to turn everyday stress into ‘optimal stress’

5. Implement micro-breaks and stress-reduction

techniques
Don’t wait until you’re feeling overwhelmed to take a break.
Incorporate short breaks throughout the day to recharge your mental
batteries. Simple techniques like deep breathing, stretching, or a brief
walk can make a big difference.

Read: Author Talks: How minor stresses add up to epic fails

PART 3

How to solve problems with design thinking

In the previous session, we looked at the critical first task of defining the problem
through steps, mindsets, languages, and frameworks. In this third email, we’ll look at
why design thinking—a human-centered, iterative process—can be especially
helpful in solving problems.

Defining the problem and analyzing data are commonly known tasks in problem
solving, but how does design factor into the equation? Companies that strategically
tap into design thinking—a systemic, intuitive, customer-focused problem-solving
approach that can be used to create maximum impact—are better able to respond to
shifting landscapes and generate improved performance, write McKinsey’s Michael
Birshan and coauthors. The proof is in the pudding: from 2013 to 2018, companies
that embraced the business value of design had TSR that were 56 percentage
points higher than those of their industry peers.

Uniquely challenging times call for unique approaches, and design thinking offers a
much-needed fresh perspective for leaders navigating volatility. Learn more about
design thinking to enhance your problem-solving team’s efforts.

1. Put design on the priority agenda

In times of volatility and crisis, organizations that embraced the
business value of design generated more growth than industry
peers. For this reason, design should join topics such as finance,
strategy, and talent on the CEO’s agenda. Executives can use the
design function to unleash the power of creativity in strategy and
problem solving in at least five important areas, including cash
flow preservation, supply chain risk, and sustainability.

Read: Designing out of difficult times

2. Make the connection between design and
financial performance
Strong design correlates with higher revenue growth and, in some
cases, higher returns to shareholders. Four areas of design-
related action—analytical leadership, cross-functional talent,
continuous iteration, and user experience—must be considered to
create business value through design.

Read: The business value of design

3. Don’t be shy, measure design

Design leaders often lack clarity on what’s expected of them in
their role and how their impact will be tangibly measured. To be
sure, design-related metrics are challenging to get right. They
require a balance of empathy, qualitative insights, and
quantitative awareness. Design leaders can craft an effective
design-metric system by using a three-tiered framework.

Read: Made to measure: Getting design leadership metrics

right

4. Let designers help design the business, not just

the product
Despite preconceived notions about the siloed role of a design
department, building a modern and successful design function
can contribute to overall revenue growth. See insights produced
from surveying three million designers from more than 100,000
design departments, 250 business and design leaders, and 30
senior executives leading design-driven companies.

Read: Redesigning the design department

 5. Consider designing a shift to an ecosystem
model
An ecosystem business model provides an interconnected set of
services through which consumers can fulfill a variety of needs.
By 2030, the integrated network economy could account for 25
percent of the total economy, with global revenues of $70 trillion.
Twelve distinct ecosystems have started to form—including digital
content, housing, and education—and teams might consider the
model in their problem solving.

Read: A design-led approach to embracing an ecosystem

strategy

6. Realize that design can serve as a ‘hope multiplier’

Design thinking can creatively seek to address some of the world’s most challenging problems,
such as the climate crisis, inequity, economic volatility, and other critical community needs. In
the face of the most difficult issues, design can promote resilience and well-being, helping
people feel optimistic about the future.

Read: Author Talks: Design as a force for good

PART 4

How to collaborate with your team and stakeholders

In the previous session, we looked at how design thinking can offer much-needed
perspective when solving uniquely challenging problems. In this fourth email, we talk about
collaboration. When done right, collaboration fosters diverse perspectives, expertise, and
collective intelligence, enhancing problem-solving effectiveness.

In fast-moving, complex times, decision makers can’t effectively act alone when it comes to
solving complicated workplace problems; diverse perspectives and rigorous collaboration
are crucial to determining the best steps to take. What’s missing in many companies is the
use of “contributory dissent,” or the capabilities required to engage in healthy, if divergent,
discussions about critical business problems, write McKinsey senior partner Dana Maor and
coauthors. Contributory dissent allows individuals and groups to air their differences in a
productive way that moves the needle toward a positive outcome.

Learn how to establish cultures and structures where individuals and teams feel free to
bring innovative—and often better—alternative solutions to the table, and dive into the best
ways to master collaboration in problem solving.

1. Embrace ‘contributory dissent’

Productive dissent can help strengthen employee engagement,

unlock hidden insights, and help organizations solve tough
challenges. But putting it into practice takes courage and
humility, and it won’t just happen by accident. Leaders need to
be intentional about welcoming challenges to their plans and
opinions, and individuals and teams should remember that the
very act of dissent can be valuable, even if the contribution
itself isn’t 100 percent baked.

Read: Into all problem-solving, a little dissent must fall

2. Have high-quality discussions and debates

Research indicates that having leaders who can generate

rigorous discussion in team meetings is what sets the best-
performing companies apart from competitors. Colleagues at
these companies challenge one another, listen to minority
views, and scrutinize assumptions. Encourage all members to
speak and to represent opposing opinions during problem-
solving sessions.

Read: Bias Busters: Getting both sides of the story

3. Attend to the psychological needs of your team

Collaboration best happens in environments where people feel

encouraged to share ideas, opinions, or feedback without fear
of personal judgment, stepping on toes, or potential
repercussions. Develop three types of leadership—
consultative, supportive, and challenging—to foster a culture
where team members feel creative and motivated to work
together toward fresh solutions.

Read: What is psychological safety?

4. Shift perceptions of yourself and others

To facilitate collaborative problem solving, break down silos

that have been created by otherness. The forging team
inclusiveness loop (FTIL) was created to do just that; it is
represented structurally as an infinity sign to symbolize the
flexible and adaptable nature of the synergistic process. It
encourages continuous and spontaneous exploration of
multiple identities, individually and as a team, to create shifts
in perception.

Read: Countering otherness: Fostering integration within

teams
 5. Be agile when speed is required

When the problem at hand requires immediate collaborative

action, create a network of teams empowered to operate
outside of the existing hierarchy and bureaucratic structures. A
network helps infuse the team with a common purpose that
allows it to respond more quickly. It is important to launch two
groups: an intelligence team, which makes sure the network
has a high level of situational awareness, and a planning-ahead
team, which thinks through future scenarios.

Read: To weather a crisis, build a network of teams

6. Invest in empathetic behavior

A little empathy can go a long way at work. In fact, it’s good for
business and productivity. Thankfully, empathy is a skill that
can be built and worked on. Turn a vicious cycle, in which
psychologically unsafe environments feed into less expressed
and less perceived empathy, into a virtuous cycle, in which
people feel safe, are more willing to be creative, express care
for each other, and collaborate well.

Read: It’s cool to be kind: The value of empathy at work

PART 5

How to communicate your findings and

decisions
In the previous session, we looked at how healthy, productive collaboration can
appear in the form of diverse perspectives and contributory dissent. In this fifth
email, we discuss the best approaches to communicating findings, decisions, and
actions resulting from problem solving.
Communication is key in problem solving. From working with a diverse team to
sharing proposals with stakeholders, teams that leverage clear communication skills
can reap the ongoing benefits of their problem-solving efforts. But when the solution
to a complex, multifaceted problem affects individuals across departments, how can
companies get their decision across? Organizations can keep their message clear
by communicating with one voice both internally and externally, write McKinsey
senior partner Scott Keller and coauthors.

Dive into communication tactics and frameworks to ensure your hard work gets
conveyed effectively.

1. Communicate your message broadly and

consistently
Once the compelling strategic direction is set, it needs to be made
readily understandable and communicated broadly throughout the
organization. Some leaders hesitate at this point, as they worry
that stakeholders who are accustomed to operating differently will
be discontented. But successful companies are typically frank,
honest, and ask for listeners to get on board to help collectively
make things happen.

Read: Capturing the value of ‘one firm’

2. Tell a good story

Connect with the audience by communicating in the form of an
innovation story. Leverage one of six story lines to convey a
compelling argument. One such story line is “best beats first,”
which draws on themes of novelty and distinctiveness. Another,
called “serendipitous discovery,” appeals to the element of
surprise and chance; it involves having the foresight to capitalize
on something unusual and new.

Read: Telling a good innovation story

3. Don’t assume everyone knows what you
know
While the audience may have some perspective already, they
won’t be able to “follow the plot” when a story jumps straight to a
niche analysis and fails to explain the context of the problem,
contours of the organization’s industry, or other essential details
that management may assume everyone knows. Communicate
these five essential elements.

Read: The equity story you need for the long-term investors
you want

4. Get out of your own way

Persuading and influencing team members and stakeholders is
required in problem solving, but individuals often feel invisible or
ineffective. Contrary to popular belief, however, research
suggests that people pay more attention to and are more willing to
help others than might be expected. Learn science-based
strategies about the fear of rejection, the effect people have on
others, and when to pull back and influence less.

Read: Vanessa Bohns on our hidden potential to persuade

5. Make it sound like you

Harness the power of authenticity in communication to improve
interactions, build trust, and create meaningful outcomes. To
ensure explanations or proposals sound genuine, individuals
should check if the language truly reflects their personal speaking
style. While it is important to calibrate speech based on the
context and audience, it should not be so finely tuned that it
strikes listeners as inauthentic.

Read: Am I making myself clear?

 6. Be okay with a little spontaneity
Not all conversation and public speaking happen in a planned
manner. Creating an Anxiety Management Plan (AMP) can help
individuals manage both the symptoms and sources of anxiety
while engaging in live group problem solving scenarios or
presentations. The author provides examples from his own AMP,
including cooling down, saying tongue twisters, and shifting focus
from self to others.

Read: How to speak confidently when you’re put on the spot

PART 6

How to seek continuous improvement and innovation

In the previous session, we looked at how teams can leverage clear communication skills to
reap the ongoing benefits of their problem-solving efforts. In this sixth email, we emphasize
the importance of innovation and continued improvement when faced with obstacles,
change, and uncertainty.

You’ve solved your problem. You’ve presented results and suggestions for implementation.
Chances are, you’re faced with pushback, requests to consider new factors in the equation,
or an ask to solve something else entirely. At all stages of problem solving, it’s critical to
practice “dual awareness,” or the integrated awareness of external and internal
environments and how they affect each other. Senior partner Aaron De Smet and
coauthors write that, with this awareness, team leaders can act with intention and perform
at their best no matter what is going on.

Discover insights about innovation, continuous improvement, and resilience, all of which are
key factors to problem solving while navigating significant change.
1. Build deliberate calm through five awareness levels

Today, corporate resilience is challenged by what many

management teams consider the most difficult operating
environment they have ever encountered. Practice dual
awareness to weather challenges in problem solving. It’s no
surprise that at levels of high awareness, individuals can access
the resilience and adaptability required to re-innovate.

Read: Developing dual awareness

2. Leverage tools to model continuous improvement

For a culture of improvement to permeate an organization, it

must be a daily habit modeled by management. Digital tools
can help maintain a disciplined approach to continuous
improvement by integrating problem-solving behaviors and
coaching sessions into work routines, providing insight into
how effective leaders are, and creating more time by
streamlining low-value activities.

Read: Continuous improvement—make good management

every leader’s daily habit

3. Define your ‘green box’

Innovation, at its heart, is a resource-allocation problem; it’s

not just about creativity and generating ideas. In order to
innovate, decisions must be made to shift people, assets, and
attention to support good ideas. The green box quantifies the
amount of growth that innovation needs to produce within a
given timeframe. .

Read: The innovation commitment

4. Innovate your way through tough times

As disruption increases, business as usual becomes riskier than

innovation. Therefore, problem solving as a strategy is critical
for organizations navigating uncertain environments.
Innovation doesn’t always look like evolving a business model
or diversifying into new products and services. It can come in
the form of alliances and joint ventures.

Read: Innovation: Your solution for weathering uncertainty

5. Be ambidextrous

In ambiguous and volatile situations, the best leaders can

deploy both defensive and offensive strategies by focusing on
resilience and scenario planning and embracing the volatility to
seize new opportunities and drive innovation. Successful
leaders harness insights, show commitment, and execute with
precision to turn challenges into strategic advantages.

Read: Strategic courage in an age of volatility

6. Understand the biggest moving pieces and be agile

Building individual and institutional resilience takes a keen

understanding of the organizational shifts affecting the way we
work. These include complex questions about finding the right
balance between in-person and remote work models,
addressing employees’ declining mental health, and building
new capabilities at a time of rapid technological change,
among others.

Read: The State of Organizations 2023: Ten shifts

transforming organizations

PART 7

Now that you’ve completed “The McKinsey Publishing Guide to problem solving,”
test what you’ve learned with our six-question quiz—one for each email in the guide
—starting with the one below. If you get any answers wrong, simply follow the article
links to brush up on the material.

Make the most of your data

Which of the following will not be a responsibility of Chief data officers (CDOs) by
2025?

a) Streamlining old sources of revenue by monetizing data services and data

sharing

b) Ideating new ways to use data

c) Developing a holistic enterprise data

strategy