How to find root causes

- The final thing you should think about as you're trying to define your problem is causality. I've mentioned thinking about causes and consequences, that applies to thinking through how you're going to define the problem in the first place. You should understand, are some elements of the problem you're trying to solve derived from other problems or other related elements? How does this problem tie to other issues in your organization? What's the real root cause of the problem? Remember, we don't want to solve symptoms, this is about solving the right problem the first time around. Does solving this really means solving that much deeper or proceeding problem? The more you can get to the root, the more effective you're going to be in preventing future problems in the organization. Once you've solved it and you come up with that recommendation, think forward about these consequences. Are there organizational, customer, competitor repercussions to anticipate? If you make this change, how will everybody else behave? Are you really clear about chronology and what causes what causes what? Laying out that path that says, if I do this, then this might happen, then this might happen is going to help you predict some of the outcomes that you could face. And if those might be bad outcomes, it can impact the type of recommendation you make in the first place to be able to avoid those issues down the road. Understanding those causes, and then the effects of your recommendation is going to help you solve the real problem and avoid unintended consequences. Tying to my example when we were changing agency commissions as a collections organization, we understood that the real issue was incentives weren't aligned. We had two teams working on this issue. One team was my team and we were trying to drive overall collections performance. The other team that was involved was the agency management team. What that team was trying to drive was a very different set of metrics in terms of reducing the amount of money that we were spending with those particular agencies. Those goals were in conflict. So a way that we got past that was we created one single team with one clear objective that would help both of our organizations succeed. Now, our recommendation was to change the commissions, we were going to pay these agencies. By paying them more money, we were going to get them to focus more on our work versus our competitor's work that they were also being outsourced. Now, this would be great in the short term. Those agencies would change their performance, dedicate more of their efforts to our work, and a side benefit was they would ignore our competitor's. But let's think about the repercussions. And we said, if we make that change, well, I'm pretty sure our competitors are going to make similar changes as soon as they find out what we've done. And then it really became a race to the bottom on pricing. So if we raise the commissions, our competitors would raise the commissions, and we'd have to raise them and they'd raise them. So we needed to make sure whatever solution we came up with we'd be able to avoid those types of consequences. This critical thinking time helped us come up with a better recommendation that met the needs of all the stakeholders involved and helped us avoid some downstream negative consequences. For a problem you're solving, spend that time thinking about causality. What's the real cause of the issue? What are the consequences you might face? And then document those thoughts in your problem statement so you keep them top of mind as you're coming up with your recommendations.