Consulting toolkit root cause analysis

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Consulting toolkit root cause analysis

  1. 1. CONSULTING TOOLKIT Setting up the Problem Solving Root Cause Analysis© 2007-2012 IESIES Development Ltd. All Ltd. Reserved © 2007-2012 Development Rights All Rights Reserved
  2. 2. It is easy to stop at superficial understanding……..you need to push your thinking to get to root causes Root CauseWHAT IS ROOT CAUSE ANALYSIS PROBLEM Superficial If you stop here the problem will recur causes Root A cause that you can take action on cause that will prevent the problem recurring Ultimate a) There often is no “ultimate cause” cause © 2007-2012 IES Development Ltd. All Rights Reserved b) It may not be actionable
  3. 3. It is easy to stop at superficial understanding……..you need to push your thinking to get to root causes Root CauseASK 5 WHYS• e.g. A business missed budget this quarter What solutions• Why? will you recommend if• Because we lost customers to our competitor you stop here?• Why?• Because their product offers better value than ours• Why?• Because our new product is 6 months late in development• Why?• Because many of our top engineers left• Why?• Because good engineers don’t feel fulfilled in our culture• Why? © 2007-2012 IES Development Ltd. All Rights Reserved
  4. 4. Use “5 Whys” to probe beyond superficial causes to identify root causes Root Cause5 WHYS• 5 Whys is a question-asking technique used to explore the cause-and-effect relationships underlying a particular problem• The primary goal of the technique is to determine the root cause of a defect or problem• Developed by Toyota to address manufacturing issues in Lean Manufacturing• TIPS: - There can be several causes to a problem - Don’t stop before you reach root causes - Use hypotheses for your best guess, to be validated later © 2007-2012 IES Development Ltd. All Rights Reserved
  5. 5. It is easy to stop at superficial understanding……..you need to push your thinking to get to root causes Root CauseROOT CAUSE ANALYSIS How can a future US debt default be prevented? What is your first question in problem solving? Draw out the Root Cause Analysis, asking why at each level © 2007-2012 IES Development Ltd. All Rights Reserved
  6. 6. Without understanding root causes, your solutions will not stick Root Cause ROOT CAUSE ANALYSIS OF THE NEAR US DEBT DEFAULT IN 2011 Govt tax US Govt revenue High monthly expenses greater reduced cashflow deficit US than revenues AND Recession AND Govt social All easier funding expenses sources used up increased In Summer Decision to by August 2nd2011, the US default oncame within August 2nd if Decision to prioritise days of a the debt ceiling other paymentsdebt default was not raised (e.g. pensions) before Gerrymandering debt interest and migration Politicians make 98% of AND focused on incumbent seats “Brinksmanship” Polarised primaries safe by Republicans partisan AND Congress and Democrats politics Partisan groups delayed increasing increasingly Constitutional influential in debt ceiling limit to the debt © 2007-2012 IES Development Ltd. All Rights Reserved primaries

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