A foundational strategy pattern for analysis: MECE

MECE, pronounced “mee-see,” is a tool created by the leading business strategy firm McKinsey. It stands for “mutually exclusive, collectively exhaustive,” and dictates the relation of the content, but not the format, of your lists. Because of the vital importance of lists, this is one of the most useful tools you can have in your tool box.

The single most important thing you can do to improve your chances of making a winning technology is to become quite good at making lists.

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Lists are the raw material of strategy and technology architecture. They are the building blocks, the lifeblood. They are the foundation of your strategy work. And they are everywhere. Therefore, if they are weak, your strategy will crumble. You can be a strong technologist, have a good idea, and care about it passionately. But if you aren’t practically perfect at list-making, your strategy will flounder and your efforts will fail.

That’s because everything you do as you create your technology strategy starts its life as a list, and then blossoms into something else. Your strategy is, at heart, a list of lists. Thinking of your work from this perspective is maybe the best trick to creating a sane, organized, productive context for your work. Let’s talk about lists for a moment.

There are two parts to a practically perfect list: it must be conceived properly, and it must be MECE, which we will define in a moment.

In a properly conceived list, two things are crystal clear:

• Who the audience is

• Why they care

You can determine who your audience is by asking the following key questions:

• Upon reading this list, can the audience make a decision they could not make before having the information in the list?

• Upon reading the list, can the audience now go do something they could not have known to do before?

These are the two reasons to bother creating any kind of information in a strategy. In this context, there is little point, time, or patience for a document that merely helps a general audience “understand” something. Your lists must be lean. That means making them directive toward work that someone will go and do, or providing the data that allows a decision-maker to decide the best course of action. The RACI (responsible, accountable, consulted, and informed) chart is a list. It answers the question for the project team of who is assigned to what role so that everyone knows who is in charge of what, who is the decision-maker for what, and who is doing the work, and if someone sees his name on the list with an “R” by an item, he can go do that work. The stakeholder list is primarily for the project manager. It lets him decide whom to include in what meetings and whom to contact for certain questions. But if these, and all the many other lists you create as part of your technology strategy, are not MECE, your building blocks will be weak and your strategic efforts will crumble. Let’s look at some examples to make this clear.

This formula is MECE:

Opportunity Cost = Return of Most Lucrative Option – Return of Chosen Option

This formula is MECE:

Profit = Revenue – Cost

Revenue – Cost = Profit is MECE. That’s because together those three items make a complete thought, divide across lines that don’t overlap, and nothing is left out. All of the parts of the money are accounted for within the same level of discourse. It is nonsense to leave out “Revenue” and simply state “– Cost = Profit.” There are only two ways to increase profit: increase revenue or decrease costs. Recognizing the formula as MECE can help remind you to address both the cost and the revenue aspects in your strategy.

This list is MECE:

Spades, Diamonds, Hearts, Clubs

This list is MECE:

Winter, Spring, Summer, Fall

Each entry in the list is mutually exclusive of every other one. There is no overlap in their content. Winter ends on a specific day of the year, and then the next day is the start of spring. Every date on the calendar is, with certainty, part of one and only one season. There is no card in the deck that is part Spades and part Diamonds.

The elements in the list, when taken together as a collection, entirely define the category. No item is left out, leaving an incomplete definition. Thus, the list is collectively exhaustive.

This is not MECE:

North, South, West

It’s not collectively exhaustive. It fails to include East, and is therefore an improperly structured list.

Consider the following list:

Revenue – Cost = Profit. Free Cash Flow.

This is not MECE because “free cash flow” is not at the same level of discourse as the other items. It is true that free cash flow is an important part of any public company’s earnings statements. But that is unrelated to this equation, even though they appear to all be in the category of “stuff about money in a company.” That’s a weak category for a list because it’s not sufficiently directed to an audience for a goal.

What about this one:

Internal Stakeholders, External Stakeholders, Development Teams

This isn’t MECE because “internal” and “external” divide the world between them. Development teams are a subcategory of internal stakeholders for a technology strategy.

Elements that are subcategories of other elements must not be included. Consider this list:

North, South, Southwest, East

This is not MECE because it leaves out one of the elements, West, and so is not collectively exhaustive. It also includes Southwest, which is not topologically on the same plane as the other elements. It dips into a lower level of distinction, as in the “free cash flow” example. Southwest is contained within the higher level of abstraction of South. So, the elements on this list are not mutually exclusive.

These examples are straightforward (obvious) in order to illustrate the point. But they share an attribute that precious few lists in the world have: they are enums by definition. It is clear what goes on the list and what doesn’t. Most things in life are not this simple.

Consider the following list of departments or job roles in a dev shop:

• Software Developers

• Architects

• Analysts

It’s not exhaustive: we left out testers, and other roles depending on your organization, such as release engineers, database administrators, project managers, and so on. To test if our list is MECE, we must ensure we have pushed ourselves to think of all the relevant components that make up that category.

Remember the first rule: know your audience. Your longer, more detailed lists should be kept for your private analysis to help you reach your conclusion, or reserved for lists of things to be done in the project, such as a work breakdown structure. But you don’t want long lists when working with executives because they have executive ADD. Even though you’ll worry that you’re leaving out crucial things, just give them the summary, but make it MECE. Then you can reveal only the headline: the impactful conclusion that makes a difference to your audience.

Consider this list of age groups:

• 0–5
• 6–10
• 11–15
• 16–25
• 26–35
• 36–45
• 46–54
• 55–65
• 66–75
• 76 and above

This list is technically MECE. None of the categories overlap, and the sum of the subcategories equals the whole category. It might be OK for a data scientist doing customer segmentation. But probably not even then. It’s too fine-grained and low-level, so it’s not very good for strategy work. You need to keep your visor higher; look more broadly to horizons to distill the few things that really make an impact and drive change. It’s more analysis and art than science. So, even though the list is technically correct, you will lose your audience with details like this, and you can find ways to cluster and consolidate them better, along the contours of a real difference or divergence, depending on your own organization’s products, services, and markets.

Let’s look at a quick example of how to apply this idea of MECE lists.