Applying root cause analysis to your startup

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Root cause analysis is an approach to try and get to the ultimate ‘root cause’ of an issue. Rather than just addressing the most immediate surface problem, root cause analysis attempts to solve the underlying issues, that not only can avoid that specific problem happening again but a set of related issues that all have the same originating source. This article explores root cause analysis, and why it is important to consider when addressing inevitable problems that businesses face.

What is root cause analysis?

Root cause analysis recognizes that the most apparent cause of a problem may only be part of a must more underlying issue. Many problems have a chain of events that have ultimately lead to the problem. In many cases, the originating problem may be responsible for lots of separate issues – and tackling the underlying ‘root’ problem can go a long way in addressing the fundamental issue impacting the firm.

The practice is common in manufacturing – and is part of lean manufacturing principles. Toyota, who is credited with developing a lot of lean manufacturing principles, is one of the firms that emphasized the importance of addressing the root cause of defects in their products. Especially during the early period when they entered the American market, credited this mindset of getting to the bottom of the problem, with how they were able to achieve vehicles with substantially fewer defects than competitors.

Root cause analysis is also widely applied in safety settings – when an accident (or near-miss) occurs, it is important to ensure that not only the specific events that lead to this accident are not repeated, but also the underlying issues corrected that can avoid similar situations from occurring again. 

Why is root cause analysis important for startups?

Startups can run into a lot of issues. As a small firm doing things for the firm time it is inevitable that missteps will occur. Each misstep that occurs however prevents opportunities for learning, not only about how to avoid that specific problem again, but also how a whole set of related issues could be better tackled.

One of the real dangers when there are a lot of issues cropping up, is that firms going into a fire-fighting mode – spending most time dealing with the specific issues than preventing them from occurring again. Like with whack-a-mole, where no sooner is one ‘mole’ addressed, another one pops up, a failure to get a handle on the underlying issues means that there is a constant stream of problems that the company faces.

Adopting a mindset to identify the root cause of issues is important to developing processes that set the firm up for future growth. When a company is small it may be able to deal with a steady stream of problems – but as the company grows, if the underlying issues are not resolved, this stream of problems can exponentially increase. Getting to the bottom of the problems can help avoid this – investigating what not only lead to this specific issue but what was the cause of that problem.

Approach to applying root cause analysis: The "Five Whys" analysis

The Five Whys approach for root cause analysis is an approach developed by Toyota to identify and address root problems. The idea in the Five Why analysis is that for every problem there is the most apparent problem – the surface level one that is readily apparent – but also a series of underlying issues that lead to the specific event occurring. The idea is that for every cause identified, you ask the question ‘why did that happen’. Toyota’s logic is if you ask this five times, you will end up with the ultimate issues.

One of the real dangers when there are a lot of issues cropping up, is that firms going into a fire-fighting mode – spending most time dealing with the specific issues than preventing them from occurring again. Like with whack-a-mole, where no sooner is one ‘mole’ addressed, another one pops up, a failure to get a handle on the underlying issues means that there is a constant stream of problems that the company faces.

Adopting a mindset to identify the root cause of issues is important to developing processes that set the firm up for future growth. When a company is small it may be able to deal with a steady stream of problems – but as the company grows, if the underlying issues are not resolved, this stream of problems can exponentially increase. Getting to the bottom of the problems can help avoid this – investigating what not only lead to this specific issue but what was the cause of that problem.

Example of applying the Five Why’s Analysis

Problem: The customer’s use of the product results in it failing too soon

  • Why?: The customer is not using the product as intended
  • Why?: The customer did not know how that they should be operating it
  • Why?: Only limited training was provided to the customer as to how to use it
  • Why?: Our internal training team did not make a site visit
  • Why?: Due to rapid growth, the training team is now understaffed, and not able to devote as much time to each customer as originally envisioned.

As illustrated in the above example, the idea with Five Why analysis is not to stop at the most apparent problem. It would, for example, be possible to blame the reasons for an issue that the company is facing on the most immediate issues – the fact that the customers are not using the product right, and so that is why defects were occurring. This however is unlikely to address or prevent the underlying issues from occurring again – if you were to stop at that point in the analysis, at best you may be able to prevent that specific issue (potentially explaining to that one customer how to solve), but it is unlikely to solve other issues or the set of problems that may arise if the firm is no longer providing sufficient training on how to use the product to the customers.

The key insight with the Five Whys analysis is not that the problem is necessarily discovered on the 5th level – it may be the 3rd, 4th or event sever layers deeper. The key thing is to get into the mindset of attempting to find the underlying issues, and then by addressing them at that level, helping to avoid a whole set of related issues that can arise.

Final thoughts

The idea behind root cause analysis is simple – identify the underlying issues that are causing a particular problem, and address these underlying issues to prevent not only this but a set of related issues from occurring again. Putting it into practice though takes some persistence – the root cause may be in quite a different area of the firm, and it is often a lot easier to solve the immediate problem than it is to address the underlying issue.

As firms grow though, it becomes increasingly important to address the ultimate source of issues – unless these are addressed, the number of problems that the company faces is likely to substantially increase.

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