Picking apart a McKinsey consulting proposal
In this blog post, we’ll break down a McKinsey consulting proposal, look at what works and why, and discuss how to write a winning consulting proposal.
Oct 12, 2024
In the world of project management and business planning, anticipating and addressing potential risks is crucial. Enter the risk mitigation slide - a powerful tool for communicating your risk management strategy. But what exactly is a risk mitigation slide, how do you create one, and what are the best practices? In this article, we bring you real-life examples and best practices based on our years as McKinsey, BCG, and Bain consultants. Let's dive in.
In every project that ends in an implementation plan there will typically be some unknowns or risks associated with the proposed plan. This is especially true for radical new strategies or when launching new products or businesses. An important part of every project where this might be the case is therefore to identify, assess, prioritize, and plan for these potential risks. Once the implementation starts, you need to monitor and manage the risks according to your plan.
The high-level risk management strategy process
A risk mitigation slide is a visual representation of potential risks to a project or business venture and the strategies to address them. In other words, the risk mitigation slide sums up steps 1-4 in the risk management process.
The purpose of a risk management strategy is to:
In this context, the risk mitigation slide serves several important purposes:
When done well, the risk mitigation slide is an effective and efficient way to communicate your overall risk management strategy and crucial to ensure you have thought through and planned for the potential downfalls and barriers to implementing your proposed solution.
You can read an excellent McKinsey article on building resilience through better risk management here. Or check out a new approach to risk management from BCG here.
To create a risk mitigation slide you essentially need to run through steps 1-4 in the above figure. Once you have completed these steps, you summarize the findings in a visual representation in the risk mitigation slide(s).
Although you can of course never know what you don’t know and unexpected things will always happen, you can still list known risk factors.
A practical way to do this is to think through each type of risk and how they might apply to your particular project or plan. The typical risk categories are:
You can look up specific typical areas of risk for your industry or type of business to kickstart your brainstorm. See examples on types or categories of risks from BCG and McKinsey in the figures below.
An example from BCG of types of risks that businesses typically face from their 2017 article "The Art of Risk Management"
Different types of risks as classified by McKinsey in their 2019 article "Transforming risk efficiency and effectiveness"
Now that you have a list of risks you want a way to understand and compare the severity of each risk to the rest to later decide where and what to spend money mitigating and monitoring.
Therefore, you need to assess each risk on two dimensions:
The risk severity is then defined as:
You typically want to grade both the impact and probability dimensions on a simple scale, e.g., an impact scale that runs from negligible to catastrophic.
An example of a risk impact assessment scale
You can also simply assess each risk with a classic traffic light scale of green-yellow-red, depending on what level of depth you need. Then the colors often correspond to the following:
See an example of how this is done in real cases in the below slide from our Business Case PowerPoint template.
An example from a real-life case on simple color coding of risks from our Business Case PowerPoint template
Once each risk has been scored, you should create a simple visualization to understand the overall risk picture.
The most common way to do this is by plotting the risks in an impact-probability matrix where the most severe risks are in the upper righthand corner:
An example of what a risk assessment matrix can look like before each individual risk is plotted onto it
By using a matrix visualization you can quickly communicate how many risks are high-priority and prioritize which risks you need to put resources toward mitigating, if possible, or at the very least monitoring with early-warning indicators.
See some examples of risk severity matrices from McKinsey below.
An example of a simple but effective risk prioritization matrix from McKinsey
A second example of how the probability and impact dimensions can be used from McKinsey
You now have a complete picture of the potential risks to your implementation plan. The next step is then to outline possible mitigations strategies for each risk.
Common mitigation strategies include:
To optimize time, you should focus on high-probability, high-impact risks. For each risk, consider how this risk can be mitigated or potentially completely avoided. Write down the possible mitigation strategies, ideally with concrete actions that should be taken now or once the risk materializes. Consider naming an accountable person or team that “owns” that risk.
See an example of how BCG has outlined mitigation strategies below (the full deck can be found here).
An example from a BCG client project showing different mitigation strategies
See more on using risk mitigation slides in a commercial due diligence report in our article here.
The final step is creating the actual risk mitigation slide(s). Since you have done everything up until now, this step is simple. Just take everything and condense into a few simple slides like the example below from our Business Case PowerPoint template.
Real-life example of a risk mitigation slide from our Business Case template
A follow-up slide to the previous risk mitigation slide expanding on the mitigation strategies from our Business Case template
A well-crafted risk mitigation slide does more than just list potential problems - it demonstrates your team's proactive approach to challenges. By clearly communicating risks and strategies, you build confidence in your project's resilience and your team's capability.
Remember, the goal isn't to eliminate all risks (which is impossible), but to show that you've thought critically about potential obstacles and have solid plans to navigate them. With these tips and best practices, you're well-equipped to create a risk mitigation slide that will impress stakeholders and set your project up for success.
Ready-to-use slide templates from our Business Case PowerPoint template
Want to use a tried-and-tested template to creating your own risk mitigation slides? Check out our Business Case PowerPoint template with ready-to-use slides and real-life examples to inspire you.