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Root Cause and Lessons Learned

A few months ago I published a post on how to address financial failure.  During that post I referenced the concept of evaluating your failure and using it as a learned lesson to improve your situation going forward. Today I am going to talk to you a bit about how to determine the root cause when evaluating failure and apply that learned lesson.

Culturally We Avoid Learned Lessons

People fail for a reason. There is always some underlying miscalculation or move that results in a failure. Sure, it might have been something that you never foresaw or couldn’t have stopped, but you always could have planned for it. And yet as a society we are loath to admit or face our mistakes. Instead it is human instinct to blame someone else or something out of your control. That being said, as long as we are not talking something illegal, usually admitting our mistakes (at very least to ourselves) is better for us in the long run. If you can get to the cause of why you failed you can apply those learned lessons the next time. The reality is, most situations that seem extraordinary are not. Most circumstances do repeat themselves and the next time around you can apply those learned lessons to avoid a repeated failure.

So take the original post about failing to achieve my blogging goals. Did you notice something? I was not particularly upset about missing my goals. Why? Because it gave me the opportunity to reflect and learn. It is actually easier to learn and improve in failure. The same applies to finance. For example, If you invest in stocks during an up market then you might be convinced you will always predict the market correctly. It usually takes a drastic fall in the market and a corresponding loss in principle to drive people towards a better investing plan.

How to get to the Root Cause

The reality is, to truly avoid a repeat failure you need to understand why it actually failed. It’s easy to assign a cause to something, but the key is getting to the root cause. Usually that first level of cause is just another symptom of what caused an issue. As such in the business world they train people in Lean and Six Sigma to ask why 5 times. In essence studies have shown that going down 5 levels will typically get you to the root cause. So first you ask why did I fail. Then you ask why the thing you believe caused you to fail occurred. Then you might ask if something else triggered that and so on. This will get you to a root cause, but is that enough.

In the real world there are often Multiple Root Causes

In my job I do a lot of failure analysis as part of my suggestions on how to improve processes and systems. As the resident Bob, it is my job to not only convince people to change, but get them to do it in a way such that they fix the root cause. You know what though. In 14 years of doing this I have never found just one root cause. Each situation is a combination of a number of root causes, some more important than others. To truly be successful you need to fix multiple root cause issues.

So say you failed to get a job you interviewed for as a goal. You could simply chalk it up to you being nervous during the interview. But being nervous in the interview is not the root cause. No, you were nervous because you were not sure what to say to certain questions during the interview. Still not the root cause but getting warmer. You did not know what to say in the interview for two reasons: 1) you had not practiced for the interview. 2) You had not interviewed in a long time so you were out of practice. Finally, you had not practiced perhaps because you didn’t believe you were qualified for the job. You had not interviewed recently because you had always thought you would be at your current company forever. In this case these are the root causes, in fact these were some of my root causes around the time I left my first company for my current one. It took that cause analysis a decade ago to determine what I needed to fix.

Choosing which Root Cause

Now let us be clear, you do not need to fix every cause. Some causes will influence a situation very little. This is not the butterfly effect, you are not worried about whether the waving of a butterfly in China caused a gust of wind that somehow caused your business to fail to meet it’s goals. No you want to know what were the primary root cause contributors to the less than desirable results. In business parlance they often refer to the Pareteo Principle. The idea here is that 80 percent of the effects (or failures in our cause) are caused by 20% of the causes. As such you want to define that 20% primarily causing you to fail and fix them. That should ensure you do not have a repeat performance based on that cause. To map out your causes you can use a diagram called a fishbone diagram.

Cause and Effect Diagram

In essence this diagram allows you to draw a pictorial as to why you have failed with all the potential causes. Then you simply evaluate each cause for overall impact. You can do this through data analysis or in the absence of data with gut feel. In my above example feeling like I was qualified for the job (see Imposter Syndrome) and feeling secure about leaving my current company were my 2 key root causes. After mapping them all out my gut just told me this was true.

Planning and Executing Improvements

You take this list of causes and then you develop a plan to mitigate those causes. If you are unable to determine a way to avoid the issue, then can you reduce it’s impact. If you can do neither, then it is probably time to consider a new path. I typically use a mixture of benchmarking others and simulations to nail down potential solutions. Then if possible I run a controlled pilot to see if I’ve truly solved the issue. I might force the bad situation to happen on a small segregated scale and then see if my plans solve for the issue.

To return to my job change example one more time, ultimately I came up with 2 actions: The first and more important of the two was to come to an internal acceptance of my choice to change companies and that I was worthy of a better opportunity. The second was to practice interviewing with family and friends until I was blue in the face. The practice not only removed some of the nerves, but it also allowed me to simulate if finding acceptance of a job change and practicing was enough to fix my issues. Feedback from my peers helped me to further adjust my approach until ultimately I found the right job and ended up at my current employer.

Continuous Improvement

The final step after determining the solution is to continue to watch for improvement opportunities. Usually anything worth doing is a case for continuous improvement. In the aftermath of my company change I have periodically gone on interviews simply to keep myself in good interview form. These continue to this day, and each time I am sure to ask the interviewer for feedback to help me to continuously revise my approach.

Analyzing Root Cause takes Continuous Improvement

A disclosure about the above post. The description above is essentially the boiling down of what I do every day of my career. As such I realize I might make it sound easy, but rest assured just like anything else this takes practice. Ironically learning to apply these techniques is also a case of continuous improvement.

Have you ever applied root cause analysis to missed milestones or failed goals? What were the learned lessons?

10 Comments

  1. Leo T. Ly
    Leo T. Ly July 19, 2017

    Earlier this year, I started a campaign to promote my blog by giving away money to readers and trying to buy my readership. Suffice to say, I was overly confident about my plan and underestimated the power of my brand. The root cause of my failure was the lack of an established reputation in the PF space as I have just started blogging.

    With this lesson, I learned how to expand my reach by connecting with other bloggers, my readers on social media platforms, optimizing my post with great key words. Without that failure I would not have learned all these new skills.

    • fulltimefinance
      fulltimefinance July 19, 2017

      Sounds like you’ve put those lessons to great use Leo.

  2. Great post! Brings me back to my days in public accounting. One of the things we used to do was test a businesses process and controls. If a control failed we would do a root cause analysis to drill down and identify the true underlying issue which led to the failure. I never really stopped to think about applying the same logic to my own failures. I also really like the part about continuous improvement, the more work and effort we put in to improve the better we will all be in the long run. Thanks for sharing!

    • fulltimefinance
      fulltimefinance July 20, 2017

      Thanks Courtney. Those skills have a lot of uses in your every day life as well as your career.

  3. Mustard Seed Money
    Mustard Seed Money July 20, 2017

    For the longest time i couldn’t understand why exercise alone wasn’t cutting it. It wasn’t until i started eating that I started to see a major difference in the results. Now if only I had more time to do both 🙂

    • fulltimefinance
      fulltimefinance July 20, 2017

      There never seems to be enough time in the day with kids.

  4. Cubert
    Cubert July 21, 2017

    Reminds me of some process engineering we try in my office space world: ask “why?” five times to get to the true root. Fascinating subject here. I intend to beat down the root cause behind my lax publishing of late!

    • fulltimefinance
      fulltimefinance July 21, 2017

      Exactly. Let us know what you learn!

  5. Zed
    Zed July 23, 2017

    Love posts like these. A little heavy, but so many good concepts. Maybe it’s because I am familiar with these since I use them daily, but problem solving is a universal skill.

    This line really sticks to me:
    “It is actually easier to learn and improve in failure.” I do a lot of talking, thinking – but I really need to increase my # of actions. Can’t be afraid of failure, judge the risk, and go.

    Thanks for the good read.

    • fulltimefinance
      fulltimefinance July 23, 2017

      Thanks Zed. Now is as good a time as any to start putting those lessons into action.

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