The MECE rule

The MECE rule is one of the key pillars of consulting communication. It describes how factors (or facts, hypotheses and everything else that consultants communicate) should be categorized in order to minimize confusion and maximize effectiveness. 

the rule

There are two essential MECEness rules:

  • Information should be categorized into distinct categories with no overlap between themselves (Mutually Exclusive).
  • All the categories added together should cover all possible options (Collectively Exhaustive).

THE LONG WAY TO MECENESS

The concept looks pretty straightforward, but sometimes its application may be harder than you think. Let's consider the following statement:

We classify European countries into two groups:
  • NATO members
  • European Union members

The above grouping is clearly not MECE. A single country could potentially belong to the two groups, thus the Mutually Exclusive test is failed. In other words, the intersection between the three sets is not empty as it should be in order for it to pass the Mutually Exclusive test. Let's consider another example:

 We classify students according to hobbies:
  • Cricket
  • Football
  • Chess

The above grouping is not MECE, this time failing the “Collectively Exhaustive” test. There could be a student not belonging to any of those groups and therefore not represented by the breakdown. In other words, there are elements not included in any of the defined sets. One more example: 

The potential set of actions to fix the issue of declining profitability is made up of:
  • Increasing total customers sales
  • Encouraging customers to spend more
  • Reducing the fixed cost base

The statement above looks well-thought out and sophisticated. However it fails the Mutually Exclusive test. The second point is actually a subset of the first one:

 Total sales = number of customers x average sale per customer

Increasing total sales entails working on the above equation, which includes boosting average sale per customer, which is in turn a key driver of the second statement. The two statements are not mutually exclusive. A mutually exclusive version could be created by adding an additional layer:

The potential set of actions to fix the issue of declining profitability is made up of:
  • Boosting revenue by
    • Increasing average spending per customer
    • Growing number of customers
  • Reducing the fixed cost base

The above statement is again not MECE, this time because it fails the “Collectively Exhaustive”, essentially because variable costs are not included in the equation. The statement may be correct if and only if you have already assessed the variable cost base and concluded that no action can be taken on those. Otherwise, you should adopt the correct MECE version below:

 The potential set of actions to fix the issue of declining profitability is made up of:
  • Boosting revenue by
    • Increasing average spending per customer
    • Growing number of customers
  • Acting on costs by:
    • Reducing the fixed cost base
    •  Managing variable costs

Unless you already ruled out that e.g. anything can be done on variable costs, you should adopt the above comprehensive statement. 

MECEness is an asset you should manage very well, especially when brainstorming about potential ideas. Showing that you can structure your thinking in a MECE way will give the interviewer the impression that your communication tool kit is close enough to the consulting standard.

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