”There is always a well-known solution to every human problem — neat, plausible, and wrong.”
(H. L. Mencken, Prejudices: Second Series, 1920)
Often, managers apply solutions that fail because they do not really address the problem and its causes. Therefore, it’s worth asking ourselves, when confronted with a problem, what is the root cause. Let’s imagine the following situation: the kitchen is burning.
It is?? Quick, let’s get a bucket of water and put out the fire!
But wait! Why is it burning? Is it from the electrical panel? Because if it is, we shouldn’t throw water on it.
Oh, it’s from a gas leak. Okay, we can put out the fire with water, but first we have to turn off the gas.
And after we put out the fire, we’d better ask ourselves why did the pipe leak in the first place. Isn’t it because the pipes are old and we haven’t done the periodic check for about 10 years?! So then, to prevent further fires, we need to check and repair the whole system.
What is my point with this example? That, without a minimal diagnosis of the problem, applying a solution (putting out the fire with water) can do more harm than good (because you do not throw water on the electrical panel). That, without a minimal diagnosis of the problem, the solution (extinguishing the fire with water) is ineffective if it does not remedy the immediate cause (by closing the gas valve). And that, without a minimal diagnosis of the problem, applying a solution (extinguishing the fire with water) will solve only the immediate problem, but will not be able to prevent its recurrence until we identify and solve the root cause (old pipes).
Find the cause of the problem
Often, managers jump in with the solution before clearly understanding the problem (this harmful attitude is called plunging-in bias, I have written about it before). An important part of understanding the problem is finding its cause(s). In his book Principles: Life and Work, Ray Dalio says that managers often skip this very important phase, although a typical diagnosis only takes between 15 minutes and an hour. Without understanding the causes (immediate- and root-causes), finding the right solution is like shooting in the dark:
Have sales dropped?! Let’s lower the price! Or better, let’s give something away for free, I hear it works.
It didn’t? Then let’s increase the online marketing budget and improve SEO. And let’s get a micro-influencer.
Hmm…still nothing? Let’s hire an experienced sales manager from the competitors.
Doesn’t that increase sales either? It’s because the market is not educated and customers don’t understand our product.
Does this problem-solving approach sound familiar to you? It seems chaotic, but unfortunately it is the most used method. It is called trial-and-error: we try various solutions, one at a time, until one works or seems to work. And, because we go in blind, we often go through many wrong attempts before we come across something vaguely useful. Probably this is why the method is not called trial-and-success. Fortunately, trial-and-error is not the only way we can solve a problem; a structured approach to a problem can greatly increase the chances of success of the solution found.
The 5-Whys method
The most used methods of diagnosis are 5-Whys and Ishikawa (fishbone analysis). 5-Whys is probably the best-known method of diagnosis in business, however it is often misused and misunderstood. It starts from the immediate problem and asks a cascade of “why?”, each addressed to the answer to the previous question. How would a 5-Whys look like for the example of declining sales?
Immediate problem: Sales are falling.
Why are sales falling? Because we don’t have enough new customers and the old ones don’t want to extend their subscription.
Why has customer interest decreased? Because our main competitor has a better and cheaper solution.
Why is the competitor’s solution better and cheaper? Because, unlike what we offer, it is based on a new technology.
Why don’t we improve our services, as well, by adopting a new technology? Because we have not invested in research and innovation.
Why didn’t we invest? Because we have no long-term strategic vision.
Why is there no long-term strategic vision? The current management focuses exclusively on the immediate result because they are in conflict with the main shareholder and have a mandate that will end soon.
This example of 5-Whys identifies as a fundamental cause of the decrease in sales the lack of strategic thinking due to the conflict between management and shareholders. A few comments here. First of all, although it is called 5-Whys, the number of questions does not necessarily have to be 5, but how many it takes until we get to the root cause. How do we know that we got to the root cause? I have two criteria: first of all, the root cause is the one that, if resolved, the immediate problem will not reoccur.
Second of all, we somehow feel it in our stomach that we got to the most efficient lever (I know, it does not seem like a clear criterion, but intuition is a good management tool). This method requires a bit of experience in order not to deviate from the subject; this is done by articulating each answer careful to stay on the right track. For example, the fourth “why?” question would have been wrong to be “Why is the competitor’s solution based on a new technology?”, as this would have taken the diagnosis effort away from our own company.
The Ishikawa-Fishbone diagram
If 5-Whys looks like a hole that we dig to find oil, Ishikawa looks like an oil field in which we dig 4-6 parallel holes, to increase the chances of finding oil. It is done by identifying several areas where basic causes could be hidden (for example “product”, “people”, “marketing”, “competition”, etc.), areas on which we map the causal factors, and then, acting as detectives, armed with Occam’s principle, we choose the root cause(s).
Examples of Ishikawa trees can be found with a simple search and, although at first sight they seem complicated, the exercise itself is not so difficult, and the result is an extremely useful and easy-to-read graphical diagnosis. If the problem we are analyzing is of huge importance, we can split the team in two to do both 5-Whys and Ishikawa in parallel, and then bring the teams together and integrate the results.
Ok, let’s say we identified the immediate causes and the root cause(s). What now? We use them to articulate a set of objectives that solve both the immediate problem (extinguishes the fire), the immediate cause (turn off the gas), and the root cause (repair the installation). And then the process continues by looking for possible solutions that meet these objectives, alternatives from which we choose the right solution. It sounds complicated, but with a little practice it is actually a simple exercise and accessible to anyone. Shall we try?
Radu Atanasiu teaches Thinking and Deciding in Business at Bucharest International School of Management. Managers can train their managerial thinking in the MBA program (in partnership with the Maastricht School of Management), in the Fast Track program (mini-MBA) and in workshops customized for companies.
Bucharest International School of Management (BISM) launches in September 2021 three undergraduate programs (faculty) in partnership with Abertay University in the UK, so that young business enthusiasts can study in Romania following the program and with a diploma from Great Britain. Details and registration on bism.ro.
A version of this article appeared in Biz.