Almost every pitch deck for a startup (or even a new corporate-funded initiative) starts with a customer problem. In some form or other, the entrepreneur/intrapreneur says: “Here is a customer problem. The customer’s problem is an opportunity for us because we know how to solve that problem.” And then they go on to ask for the money they need to bring their solution to life.
Having been on the receiving end of these pitches many times, I have often thought that the presenter too quickly jumped on the first problem they saw and it was not the real problem the potential customer had. So if they tried to fix the superficial problem, the entrepreneur/intrapreneur would not get the market traction they hoped for – and it wouldn’t be worth it for us to invest in an idea with no traction.
That’s why in my last post I reviewed the key points in Dan Heath’s book “Upstream: The Quest To Solve Problems Before They Happen”. In a nutshell, his message is that you have to go upstream beyond the first problem (downstream) you see and find the root cause of that problem.
An example of thinking about a root cause can be found in the 500-year-old poem that is supposed to have been about the English King Richard III’s loss in 1485 at the Battle of Bosworth Field to Henry Tudor who then became king:
For want of a nail the shoe was lost. For want of a shoe the horse was lost. For want of a horse the rider was lost. For want of a rider the message was lost. For want of a message the battle was lost. For want of a battle the kingdom was lost. And all for the want of a horseshoe nail.
It isn’t always easy to figure out where upstream the problem is. In post-mortems on fatal catastrophes, root cause analysis often starts with the Five Whys technique.
But you do not need a catastrophic failure to motivate you to use this method. Anytime you want to understand better the problems that customers or constituents are facing, you can use the method.
It is quite easy to explain, although much harder for most people to do. Here is a simple example.
Five Whys is especially useful in thinking about any new product or service you hope to bring into the world. If you identify the root cause of the problem, you’ll be able to come up with the right solution. If you identify a solution for the superficial complaint a customer has, you may well end up doing the right thing about the wrong thing.
A famous quote attributed to Henry Ford identifies how you can go astray: “If I had asked people what they wanted, they would have said faster horses.” There were several root causes of the problem that annoyed Ford’s customers, none of which could have been fixed by getting horses to go faster.
As you can see from the 5 Whys picture of a restaurant’s problem, people often think about causes in a linear fashion. Event A causes Event B, which causes Event C, etc. So all you need to do is go back from where you started, say Event C. This is sometimes called Event-Oriented thinking.
But life is more complicated than that. In his book, eventually Dan Heath introduces the necessity of Systems Thinking, since upstream you may well find not a linear series of causes, but a set of interrelated factors. This picture nicely summarizes the difference.
You may recognize the feeling of being caught in a loop, being in a “Catch-22” situation where you go in circles. Since Catch-22 was originally about absurdity in wars and not an everyday experience, perhaps this Dilbert cartoon provides a better simple example.
Properly assessing the forces and their mutual reinforcement – in other words, doing systems thinking – is even harder than struggling with the 5 Whys of a simple linear chain of causes. But it is necessary to really understand the world you are operating in.
Again, especially for those devising new products or services, it is that understanding which will help you avoid significant, strategic business errors.
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