The MECE principle, which stands for Mutually Exclusive and Collectively Exhaustive, can be used to improve decision-making processes by ensuring that all possible options or scenarios are considered without any overlap. This can be done by breaking down a problem or decision into smaller parts, similar to how a math formula breaks down a concept into smaller, manageable parts. For example, in the context of calculating company profits, the MECE principle can be applied by considering all sources of revenue and costs, ensuring that all possible factors are accounted for and none are double-counted.
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Using a math formula can work really well to break down a framework in a MECE way because math formulas are MECE by nature, the consultants say. For example, to calculate company profits, keep in mind that Profits = Revenue - Costs, where Revenue is Units sold and Price per unit and Costs is Fixed cost and Variable cost.