How to use McKinsey's SCR framework (with examples)

Almost every professional needs to give a presentation from time to time. But many people are terrible at it, wasting the opportunity to make an impact. 

How do you easily turn a business presentation into a clear, compelling story?

The Situation-Complication-Resolution (SCR) Framework provides a structure for clearly defining business challenges and outlining strategies and solutions. The SCR Framework, developed by McKinsey, offers a simple and effective reasoning approach. Although designed for consultants, the SCR framework can easily be applied to other roles and industries. 

In this article, you will learn about the SCR framework and how to use it. You will also see how McKinsey has applied this framework to several real-life strategy presentations. 

What is the SCR Framework?

Every Hollywood film, every book, and essentially every memorable tale you've ever heard follows the so-called 'classical story arc':

Take Disney's "The Lion King" as an example:

If you simplify this further, every story has three parts: Situation, Complication, and Resolution.
 

At its core, SCR is simply this three-act story structure:

• Situation: Fact-based description of the current situation. 
• Complication: The reason the situation requires action. What is the problem (or opportunity)?
• Resolution: What we need to do to resolve this complication (or capture the opportunity)?

An example:

• Situation: The Enterprise Cyber Security market in the US is rapidly growing at a 20% CAGR.
• Complication: Norton is poorly positioned to get a share in this growing profit pool.
• Resolution: Norton must acquire a leading competitor and invest $200 million in building capabilities to establish a winning position.

When crafting a presentation storyline, first outline the Situation, followed by the Complication(s), and then present your suggested Resolution(s). This is the SCR framework.

In a business setting, unlike a Hollywood screenplay, you should keep the Situation and Complication sections as clear and short as possible. Your audience is more interested in solutions than extended narratives, so the Resolution section should account for most of your slides (ideally structured according to the Pyramid Principle). 
 

What is an example of a SCR framework?

Example 1: McKinsey x USPS

Back in 2010, McKinsey applied the SCR framework to the United States Postal Service (see the full deck here). The story elements are as follows: 
 

Situation: USPS is experiencing unprecedented losses due to (1) volume declines, (2) growing retirement funding requirements, and (3) lower-than-expected effect of cost savings. 

Complication: Unless we do something, things will worsen due to market trends, growing costs, regulations, and competitive forces. 

Resolution: USPS must do four things: (1) Grow volume through new products and services, (2) Find aggressive productivity improvements, (3) Increase workforce flexibility, and (4) Reduce costs by improving efficiency and procurement. 

Example 2: McKinsey x Global Steel Industry

In 2014, McKinsey applied the SCR framework to the global steel industry (see the full deck here). 
 

Situation: The global steel industry is not financially sustainable, as evidenced by (1) negative cash flows among market operators, (2) increasing debt levels, and (3) deteriorating EBITDA margins.

Complication: Unless we do something, EBITDA margins are expected to be even lower going forward, which is unsustainable for the industry.  

Resolution: An extensive restructuring is required. Global capacity needs to be reduced by 300 million tons.

A few final notes:

• A frequent adjustment to the SCR structure is to position the Resolution at the beginning of the presentation so that it becomes Resolution-Situation-Complication (RSC) instead of SCR. 
  Pro tip: Use SCR to craft your storyline when the audience is unlikely to accept your resolution immediately. Go with the RSC structure when the audience is generally inclined to agree with your resolution but require further reinforcement for their conviction. 
   
• SCR is sometimes called SCA, SCQA, or 'approach-findings-implications,' as BCG has named it. Different words, same story. 
   
• Is SCR the same as The Pyramid Principle? When using the consulting method to solve a problem, you'll use both the SCR approach and the Pyramid Principle. The SCR framework provides an overall structure for the entire presentation, while the Pyramid Principle should be used to structure and communicate your Resolution.
   
• At Slideworks, we have applied the SCR framework across many of our most popular presentation templates - e.g., our Business Strategy and Business Case templates. Take a look for more inspiration on how to apply the SCR framework in specific use cases.