Mistakes are an indispensable part of every business, big or small. Sometimes, a mistake in your business is a real setback and can lead to a total disaster. On the other hand, it can also be a great opportunity for your business to expand even further.

It all depends on how you take the mistakes and what necessary measures you take to solve the problem. Your task as an entrepreneur is to detect all the problems in your business and find their solutions before things get out of hand.

It is not enough to discover and remove problems only. It is equally important to find preventive measures for all the problems, so they would never reoccur.

In fact, problem solving is considered as one of the most important aspects of any business. Some companies even hire specialists whose only task is to solve problems that occur from time to time. They mostly consider various underline causes of the problems such as the interaction design, product design or service design to come up with a wide range of solutions.

However, it is also imperative to define the problem clearly to discover the right solution. The definition should include everything from its root causes to the ways it is affecting the business. There are many tools that allow entrepreneurs to target specific solution of any business problem.

One such tool is the Cause and Effect Analysis Method or Diagram (CEA). This particular method enables businessmen to fully explore and define a problem before start looking for its solutions and thus, it is a great tool to prevent similar complications in the future as well.

ISSUES WITH TRADITIONAL PROBLEM SOLVING METHODS

Before we discuss the Cause and Effect Analysis Method in detail, it is appropriate to discuss some of the reasons why traditional problem solving techniques in businesses do not produce the desired results. In this regard:

  • Most of these methodspartially solve the problems.
  • Or, they solve the problem without identifying the root causes and reasons why it occurred in the first place.
  • They solve the problem temporarily. In most cases, the problems reoccur and considerably harm your business.
  • Sometimes you end up identifying the reasons that are not causing the problems you are finding solutions for.
  • Most entrepreneurs do not see the problem solving process as a business improvement process. Therefore, they normally do not pay much attention to the critical problems harming their business and leave them to others to handle.

HOW CAUSE AND EFFECT ANALYSIS METHOD CAN HELP?

How you can prevent your business from suffering a horrible fate? You can avert the disaster through proper analyses of the situation, identifying main causes of the problem and preventing them from happening again and this is what Cause and Affect Analysis does for you.

Japanese Professor Kaoru Ishikawa first proposed the idea of Cause and Effect Analysis in his book “Introduction to Quality Control”, first published in 1990. Professor Ishikawa is also the pioneer in the field of Quality Management. There are many other names of the CEA such as Ishikawa Diagram, Herringbone Diagram and Fishbone Diagram because the final diagram drawn in the Cause and Effect Analysis looks exactly like a fish skeleton.

Professor Ishikawa originally introduced Fishbone Diagrams for the purpose of quality control only. However, businessmen started using it as a tool to analyze various business processes especially identification of bottlenecks in the production process and problem solving.

The Fishbone diagram not only enables you to identify the causes of any problem and how it is hindering business growth but also to take preventive measures to avoid any such occurrence in the future.

Cause and Effect Analysis is actually a two steps process. Firstly, you look back in the past and analyze what has gone wrong and secondly, you plan for things to come by looking into the future.

  • Looking Back in the Past. This step involves identifying all the areas in which you made mistakes. You actually look into the past, analyze your mistakes and try to find all possible causes. By identifying the most problematic areas, you actually take necessary measures to prevent mistakes and problems in the future. Similarly, if any area of your business performed brilliantly, you can be able to replicate the performance in the future by applying CEA.
  • Looking into the Future. This step involves anticipating any future scenarios and planning for them well in advance. In this step, you contemplate about future problems and find their workable solutions. Similarly, you also plan how to further build on your possible business success in the years to come. In fact, you plan what to do in the present and determine future outcome of your business based on the steps you are going to take.

IMPORTANCE OF CAUSE AND EFFECT ANALYSIS

Cause and Effect Analysis is one of the most popular and powerful tools for finding root causes of problems and their solutions.

In this regard, a cause is root if its removal prevents the problem from reoccurring any time in future. Similarly, the problem becomes casual if it only affects the outcome of a process or an event. Therefore, the removal of the casual cause improves a business process but does not prevent a problem from reoccurring.

Most business use Cause and Effect Analysis to improve their operational activities. However, there is no reason why this extremely useful tool cannot be used to identify and solve problems in projects. In fact, the project manager can successfully detect root cause of a problem that is adversely affecting the project and ultimately remove it if he manages to use Cause and Effect AnalysisMethod effectively. Unlike other popular tools, you can use CEA over and over again because it aims at continuous improvement in business processes.

As the CEA helps you understand the underlying causes of a failure or problem, it can also enable you to develop a system or actions to sustain the correction. Similarly, Fishbone diagrams cannot only assist you in detecting problems but it also categorizes these causes into useful groups for future reference.

Similarly, CEA is unique in a way that it ensures you don’t deviate of the right path and always seek solutions for the actual problems and their causes.

WHAT IS A FISHBONE DIAGRAM?

A Fishbone diagram is the final outcome of any cause and effect analysis carried out for determining causes and finding solutions of a problem. In fact, it is a way to look at all these causes and their effect on business visually. Fishbone diagrams enable us to brainstorm causes of a mistake or problem more easily and effectively as compared to other tools such as Lessons Learned. It is a more structured approach of accomplishing this important task. Most often, it is used in conjunction with 5 Whys Analysis, another approach to carry out CEA.

The head of the fish displays the actual problem or mistake under discussion. Then there are smaller bones which list all the possible contributory causes in various categories. The right side of the “fish” actually lists all the problems whereas the left side denominates the possible root causes. Furthermore, you can group these causes into four distinct categories that are people, machines, materials and methods. These categories can have many further subcategories as well.

Now we discuss each of these categories in some detail.

People

All the causes created by human actions fall into this category. This category determines whether the employees are sufficiently experienced and trained? Are they good in communicating their needs and problems? Do they understand their tasks and assignments?

Machines

This category is related to the problems caused by issues with computers, machines, installations and tools etc. In this stage, you determine whether the workers used the right tools or machines? Do the machines meet minimum requirements to perform a task? Are they safe enough? Is there any problem with the installation of the machines? Are they reliable or not?

Material

The material you are using to develop your products can also cause a lot of problems for your business. You need to determine whether the material you used was of reasonable quality or not? Did you use substandard material which resulted in the failure of the final product? Was there any issue with semi-finished products and consumables?

Similarly, you can also find answers to the questions like how long a material will last or has it enough resistance against foreign elements.

Methods

This category investigates whether work methods were responsible for the problem or not?You need to ascertain how your departments and employees communicated with each other? Were the business processes or work methods adequate and capable enough to carry on a special task?

These categories are commonly referred to as 4M’s. However, it is not mandatory to use only these four categories or areas in your diagram. There are many other options available to you such as:

  • The 4 P’s: Place, Procedure, People, Policies.
  • The 4 S’s: Surroundings, Suppliers, Systems, Skills.
  • The 5 M’s: Machine, Method, Material, Man Power, and Measurement

Similarly, many organizations create their own categories or areas in the Fishbone Diagram depending upon their needs and objectives.

Fishbone diagrams distinctly differentiate between the causes and their effects. Following is one of the examples of a Fishbone Diagram.

A Typical Example of a Fishbone Diagram

HOW TO DO CAUSE AND EFFECT ANALYSIS?

After explaining the Fishbone Diagrams in detail, it is now time to discuss how to use them to do Cause and Effect Analysis. The purpose of the Fishbone Diagram in general and the CEA in the particular is to analyze all the findings together and determine the most important factors to solve a problem or attain a goal.

There are usually four steps in Cause and Effect Analysis that are identification of the problem, brainstorming or identifying major factors that are part of the problem, determining root causes and finally, development of an action plan to resolve these problems.

Step 1:  Identifying the Problem

Multiple causes can lead to a single problem. Therefore, it is your duty to clearly identify and address the problem in this stage if you want to find the right solutions.

For the sake of explanation, we take the example of a design studio. In the first step of CEA, they have determined that they are not getting much business due to lack of creativity among their designers.

Therefore, the main problem is the lack of creativity which will be displayed on the head of the Fishbone diagram as shown in the following figure.

Step 2: Identifying the Main Factors   

After determining the main problem, the second step is to identify the main causes why designers are lacking creativity. In this particular example, the four main causes are people, machines, material and manpower.In this example, we are using the 4 M’s method of categorizing causes.

You can drag a line from the cause side on the left for each of the four categories to connect them to effect or problem on the right side.

Step 3: Investigating Causes

The third step is to determine and investigate all of the causes responsible for the lack of creativity. You need to thoroughly explore your business processes. Similarly, you need to run system check of all your equipment and find if there is any fault with it.

Do the computers you have provided to your designers are able to run the latest designing software? Do you provide your employees with excellent work environment? Are the employees satisfied with their jobs and roles? Do they get enough compensation for their services? Do they really understand the design process? Do your project managers brief them about the projects?

Similarly, other causes include hiring people with wrong skills, fixed working hours, lack of necessary training, lack of motivation or skill and underappreciated or undervalued performances etc. These may be some of the reasons why designers do not exhibit much creativity in their work. In this stage, the Fishbone Diagram will look like as under.

Step 4: Analyze

Once you have organized all of the causes into their respective categories and the diagram is complete, you need to analyze and discuss each of the above problems with your managers and designers. It is even better if you further categorize the problems depending upon the level of their influence on the problem and priority.

You may also need to use various research methods such as surveys, focus groups and interviews to understand different causes. For instance, you can interview each designer to learn how much he understands the design processes. Subsequently, you can use the findings to develop relevant training programs or courses for your employees in order to address the problem of insufficient knowledge.

In our example, the Cause and Effect Analysis will enable both the managers and designers to find the actual problem related to lack of creativity in the team and find the right solutions. CEA actually investigates the relation between the possible causes of a problem and its effect on the business. You get a better understanding of how each cause is contributing to the final problem. Similarly, you are able to address each problem based on its priority. This is exactly what you need to do as the owner of your design company to promote creativity within your team of designers.

It is also in this step that you develop a clear action plan for future. The action plan should contain clear priorities, goals and objectives and should be implemented as soon as possible. Similarly, the plan should describe in detail how you are going to solve all the problems and sub-problems for good. You also need to follow your plan vigorously for it to be effective.

You can also convert a sub-cause such as lack of motivation into a full-fledged action plan, the purpose of which is to promote staff motivation through various incentives. As a result, staff engagement and productivity will enhance and ultimately, the profitability will improve.

THE 5 WHYS?

You can also use another extremely useful tool that is the 5 Whys in conjunction with the Fishbone Diagram to carry out CEA. As the title suggests, you can ask 5 different questions or “Whys” to determine the root cause of any problem. Following is an example of how to use this particular technique.

  • Why are we not getting much business of late?
    • Because there is lack of creativity in our design team.
  • Whyis there lack of creativity in our team?
    • Because there is lack of motivation.
  • Why is there lack of motivation?
    • Because they do not have the latest equipment as designers in some other companies do.
  • Why don’t they have the latest equipment?
    • Because the project manager didn’t deem it necessary to purchase sophisticated laptops to run modern designing software.
  • Why he made the decision not to buy latest equipment?
    • Because he does not have enough knowledge of design process and its requirements. He is actually an accounts manager who was appointed as overall project manager because of his loyalty to the organization. All he does is to find the ways to save money.

You can reach to the root causeof every problem you face by asking 5 Whys. Furthermore, the 5 Whys technique also helps you find smaller problems and their causes and sub-causes quite easily.

SOME TIPS FOR USING CAUSE AND EFFECT ANALYSIS METHOD EFFECTIVELY

There are some really nice tips for effectively using CEA to find business problems and their exact causes. Some of these tips include but are not limited to the following.

  • Encourage all members of your team to participate.
  • Apply all the brainstorming rules because it is essentially a brainstorming session.
  • Only discuss one idea at a time. It will encourage your team members to come up with more creative ideas.
  • The person discussing the idea should also mention which bone of the fish it belongs to.
  • Pin a single idea to multiple bones if possible. For instance, the lack of motivation in above example can go to both machine and manpower bones.
  • Do not start analyzing problems and causes while you are drawing a diagram. Similarly, never criticize anyone while he is presenting his ideas. This also include non-verbal criticism such as leaving the meeting or shaking of your head.
  • Try to find new ideas from any idea being discussed.
  • You should always use the major bones to find sub-causes of the problem. For instance, think about how your business methods and procedures can cause the problem under discussion.
  • Return to each idea and cause that has already been discussed. Try to develop smaller bones or branches by asking questions like “Why does that happen?” or “How does that happen?”
  • Always be honest and open. You should have the courage to state the cause or idea which no one else wants to openly discuss.

SOME ADVANTAGES OF CAUSE AND EFFECT ANALYSIS METHOD

We have already discussed a lot of disadvantages of the CEA. Some more advantages of the method are as under.

  • It helps you define the relationship between problems and their causes.
  • The method works on the principle of joint brainstorming sessions.
  • CEA prevents you from adopting traditional thinking methods which distract you from the actual problems. On the other hand, brainstorming steers you towards attaining your actual goal.
  • You eventually reach to the root cause of every problem through brainstorming and asking 5 Whys repeatedly.
  • A fishbone diagram helps you identify both the root and casual causes of the problem. Subsequently, you can prioritize the causes and handle them accordingly.

SOME DISADVANTAGES OF DEA

There are certain demerits of everything and DEA is no exception. In this regard, following are some of the disadvantages of DEA.

  • Brainstorming can result in time and energy drain.
  • Brainstorming sometimes leads to irrelevant causes of problems as well.
  • Brainstorming does not consider facts and evidences and is only a bunch of different opinions.
  • If you are dealing with complex problems, you will have to draw a really big diagram with a lot of branches and smaller bones. This may take a lot of time, energy and space.
  • It is difficult to show complex interrelationship of multiple causes and factors on the diagram.

CONCLUSION

Cause and Effect Analysis Method is a great tool to solve both simple and complex business problems. It is easy to understand and simple to implement.

In most cases, it helps you reach the exact cause of the problem, enabling you to find the right and long lasting solutions as well.

How to Use Cause and Effect Analysis to Solve Any Problem

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