Barbara Minto invented the pyramid principle at McKinsey. She based her thinking on ideas ranging from Aristotle’s Rhetoric and other sources on logic throughout history. Her pyramid principle works really well with the consulting problem-solving process as it is a natural partner for hypothesis-driven thinking.
The best way
to understand the pyramid principle is in two parts:
Part 1: Bottom-up synthesis & sensemaking
Part 2: Communicate top-down
For now, we’re going to dig into part one:
The first part of the consulting process, once you have a clearly defined problem and hypotheses is to start digging into the research. You may have data from surveys, customer interviews, web research, expert interviews, and so on.
So what does this have to do with a pyramid?
The pyramid is a visual representation of your ideas and is a framework for thinking about how information fits together.
The pyramid has three levels:
Lower Level: This is the information, analysis, survey results and research
Middle Level: These are the synthesized arguments or takeaways of a group of arguments
Highest Level: The main overall takeaway from everything you’ve analyzed. The main “story”
Visually, it looks like this:
First Step: Start Gathering Information
Initial research is a “sanity check” on your problem definition and the hypotheses you’ve created. You’ll want to do some quick checks of public information, experts and other web research to see if you are heading in the right direction.
Usually if you’ve put enough time into the problem definition, you will find that the initial scan of information confirms you are headed in the right direction. As you start collecting information you’ll want to note to yourself whether or not you are confirming or falsifying any of the hypotheses you developed. It may make sense to abandon certain hypotheses before going deeper.
A tip: Use a Notes Document For Initial Research A good way to approach your research is to create a word or google document of all of your initial findings and research and start to label each statement with a few words of your own takeaway. This will help you return to findings you may forget a couple weeks down the road.
Next, Begin Grouping & Eliminate Irrelevant Information
As you go deeper in your research, you’ll have a much better understanding of what the key themes are. You’ll want to make sure that you are experimenting with different ways to organize the data in an overall argument.
A powerful story also comes from eliminating excess information rather than addition. While this can often be a hard thing to learn (especially if you are spending a large amount of information compiling data that eventually gets thrown out), it is one of the most powerful things you can do as you start to make sense of the data.
At the same time, you can start grouping the information
Next, Identify The “Insight”
As you start grouping the data, you will start to see common themes. You can label these groups simply with a noun or description or you can start experimenting with a more actionable title.
It could be “Data points about Squirrels” or “The Squirrel Population Is Shrinking”
Don’t worry about getting the messaging perfect at this point. The main concern is to start seeing the main ideas emerge from your research.
One important thing to remember as you identify your inisghts is that the insight should only be composed of the elements below it in the structure. As Barbara Minto says,
“The point above has to be a summary of those below, because it is derived from them. You can’t derive an idea from a grouping unless the ideas in the grouping are logically the same, and in logical order.”
As your key themes are emerging, you may also have a good sense of what the overall takeaway will be. I call this your “main insight.” While you’ll revisit this message over and over again throughout the consulting process, you should always have a good sense of what it is and if you are working in a team, make sure it is communicated and debated.
A Pause For Our Friend MECE
At each level, you want to use the MECE principle we learned in the previous lesson to make sure the ideas are grouped in a way that makes each easy-to-understand a separate and distinct insight.
This means that the blue dots that result in insight #1 will be MECE and insights number 1, 2 and 3 will each be MECE at that level as well.
Logically your arguments will form a pyramid which can also be shown like this:
Business Example: Using MECE & Synthesis Together
Let’s say your project team spends a couple of weeks investigating and finds several pieces of information:
Hourly wages are increasing faster than average
Managerial salaries are increasing faster than average
Increased attrition is driving up administrative costs
The biggest customer has decreased its orders by 40%
The second biggest customer decreased its orders by 30%
The number of customers has decreased by 20%
You might
take this information and summarize it in the following two MECE buckets
Labor Challenges: The company is facing increasing wages and attrition
Sales Challenges: The company is facing decreasing sales across the company
In more detail, these two categories would synthesize the following data:
#1 Labor Challenges: The company is facing increasing wages and attrition
Hourly wages are increasing faster than average
Managerial salaries are increasing faster than average
Increased attrition is driving up administrative costs
#2 Sales Challenges: The company is facing decreasing sales across the company
The biggest customer has decreased its orders by 40%
The second biggest customer decreased its orders by 30%
The number of customers has decreased by 20%
This example is oversimplified gives you an example of what the MECE and Pyramid Principle look like in action. given to show you what the process might be of simplifying a lot of information. Typically this process will be done in a team environment and continuously iterated over and over again.
The next step is to flip the pyramid on its head and “start with the answer”: Pyramid Principle Part 2
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