The Best Business Strategy: Fault Tree Analysis (FTA):

One of the people I study regularly is Frank Abagnale Jr. You might know the name from the movie, Catch Me If You Can, which built a narrative around victimless frauds Abagnale perpetuated as a young man.

In the 2002 film directed by Steven Spielberg, in which Abagnale was portrayed by actor Leonardo DiCaprio, Abagnale targeted individuals and small businesses. A convicted felon, Abagnale Jr. is one of the only people to be taken out of federal prison and put in charge of a sector of the FBI. I learned a lot from reading and watching videos of Frank.?One of the things that I learned from him that has totally transformed my work as an executive coach and business consultant is that the reason why people struggle and suffer unnecessarily is not a very complex affair problem. These problems are usually caused by one of two things.

• They did something that they weren't supposed to do,
• They didn't do what they were supposed to do.

The question then naturally arises, how are you supposed to know what you're supposed to do or what you're not supposed to do?

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Well, within my Harrison’s Applied Game Theory Method, and also in the game thinking strategies community of consultants, there's actually a system for isolating the cause of a failure. This system is called fault tree analysis.

FTA is a systematic and graphic approach to measuring and analyzing factors related to the failure of any system. This analysis uses deductive (top-down) reasoning and is an effective and important skill for any game theory strategist or decision-maker. FTA identifies, models, and evaluates the unique interrelationship of events leading to:

Failure

Undesired events states

Unintended events/states/consequences/Murphy's Law/Black Swans

FTA is a tool for:

• Root cause deductive analysis
• Computation of the probability of an undesired event
• Identification of event contributing to an undesired event
• ?Measure of the relative impact of a desired solution
• Creation of fault path diagrams for presentation

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Depending on whether a decision-maker maintains and constantly observes a system for any changes and maintains the system, there are some system characteristics that can be predicted or determined either by using analytical or Monte Carlo simulation approaches, these are important elements in game thinking strategies.

• System failure probability/hazard probability (used in the case of a non-repairable system)
• Mean time to system failure (used in the case of a non-repairable system)
• System unavailability (used in the case of a maintained system(s))
• Failure frequency (used in the case of a maintained system(s))

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I employ FTA to keep my organization and my client’s companies running smoothly. We also use it to isolate obstacles and constraints in any system (The Theory of Constraints).

FTA uses deductive reasoning and the isolation of variable facts in a top-down approach to problem predictions and solutions. Again, FTA involves graphical enumeration and analysis of the different ways in which a particular system failure can occur along with the probability of its occurrence. It starts with level event/failure and works backward (backward induction) to identify all possible causes and the origins of that failure.

FTA often offers insight into critical aspects of selected design during the very early stage of the system design process and in the absence of the information required to complete a “perfect” system.

Usually, a separate FTA is developed for each obstacle or constraint (critical failure mode) or undesired outcome (top-level event).

FTA is initiating primary events such as component failures, human errors, and external events that are traced through Boolean logic gates to an undesired top event such as a software crash or system crash. The target goal of FTA is to identify ways to make failure less probable and verify that safety goals have been achieved PEEPPASA (practically, effectively, efficiently, with precision, productively, with accuracy, and with self-awareness).

The thing to keep in mind is that fault or failure is just one place in a system (interval) not a final end unless you have lost enthusiasm to continue and reach the desired end or outcome.

The Takeaway

Fault (Failure) can be viewed from two angles.

1. competition with yourself
2. competition with others

Let’s explore these two angles.

1.???Measuring fault when competing with yourself is simple. You know what you want or need. You can review the process and know why you failed. Check your competence, effort, inputs, motivation, goals, and progress. If you know where you failed, you can correct yourself.

2.???Measuring fault when competing with others is much more difficult.?Here you don't know the strengths of your competitors; If they are more competent, hard-working, and motivated? If they have more input and their goal is higher than yours, you will lose. Utility (measurable benefits of a course of action)comes into play here as well. Let’s use the Olympic Games as an example. Some analysts claim that China, Japan, and America dominate the awards because it is a national effort. India, they say, lags behind because personal effort brings honor in different ways but less so on a national level.

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The Author: Hello, My name is Lewis Harrison and I created a game theory based Business Strategies Playbook and Mentoring Method. I use this system to move individuals and organizations to the next level. Applied game theory (which has won numerous Nobel Prizes) has been the basis of all my great successes in life (best-selling author, NPR Host, a great marriage, financial success, great friendships, etc.). Please reach out to me. I want to help you transcend your challenges by helping you to get clear on your intention, and your desired outcome by increasing effectiveness, efficiency, precision, productivity, accuracy, and self-awareness. Check out my Linkedin profile and let’s start a conversation…