Just like that, a Profitability Tree is useful for so many things that it becomes THE ONE problem-solving tool you must master if you want to learn to think like a McKinsey, Bain or BCG consultant and excel in your case interviews and your career. It’s a multipurpose tool every chef uses every day. It can be used for mincing, slicing, and chopping vegetables, slicing meat, and disjointing large cuts.” “A modern chef’s knife is a multi-purpose knife designed to perform well at many differing kitchen tasks, rather than excelling at any one in particular. Well, here’s a passage from Wikipedia’s article on the Chef’s Knife: If you’re not into cooking, you might be wondering why I’m making this analogy… But they’re always useful because in any business situation that affects profits (which is pretty much all of them) you’ll want to know how that affects profits.Īnd because profitability trees are so ubiquitous, and yet so nuanced, I call them the “chef’s knife” of management consulting and business strategy. Sometimes they may be the primary tool, other times just a secondary one. (Or, get them wrong and you will seem like a fool.)Ģ) Profitability Trees can be used to solve pretty much any business problem. Get these nuances right and you’ll see insights faster than any person in the room. Continued abuse of our services will cause your IP address to be blocked indefinitely.Profitability trees are a special kind of issue tree, that is created with the sole intent of analyzing the profits of a company.Īnd skillfully using Profitability Trees is the most efficient, direct way to understanding how a business makes profits and why it’s not making more of them.īefore we dive in, let me clear up the main objection people have against using Profitability Trees: that they’re too simple (and, so the logic implies, too simplistic).Īnd yes, a lot of people know about them.īut that doesn’t mean you should underestimate them.ġ) There are many, many nuances in how you can and should use Profit Trees to solve different problems. Please fill out the CAPTCHA below and then click the button to indicate that you agree to these terms. If you wish to be unblocked, you must agree that you will take immediate steps to rectify this issue. If you do not understand what is causing this behavior, please contact us here. If you promise to stop (by clicking the Agree button below), we'll unblock your connection for now, but we will immediately re-block it if we detect additional bad behavior.
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