Additional Resources

Identify the Problem or Requirement

Whenever there is a lack of efficiency in work or the company’s set goals are not reached, there is a problem (or a requirement that needs to be filled). It is most effective to work on problems that occur day-to-day, as they systematically cause things to break down. Before beginning to solve a problem, you must understand the situation in which it has arisen. Toyota recommends that problem analysts: * Make their own observations of the environment in which the problem is occurring and gather data * Create a visual organization system like a diagram to represent the way work is currently done * Translate the measured effect of the problem into easily quantifiable values and, if possible, graphical representations.

Root Cause Analysis

After obtaining insight into the way the problematic process currently works, it will be much easier to get to the source of the inefficiency or constant shortfall. To begin, simply list the most apparent problem(s). Now, remind yourself why these are problems for the process, the quality of the work, and your company. Every time that you ask yourself “why?”, you will reach a new layer to the problem. Picture yourself digging through progressive layers of an onion to extract its rotten core and then pulling it out. Once you have arrived at a problem’s cause, don’t stop - analyze it along with other possible origins of the problem, as there is hardly ever just a single one. The explanatory fishbone diagram below visually represents the flow of thinking ideal for this stage of the A3 Root Cause Analysis.

Countermeasures

Once the situation has been fully analyzed and the root cause for the problem(s) on your list is apparent, the next step is to take action. To take a countermeasure against a problem is to make the actual changes necessary to increase efficiency, improve progress toward goals, or hopefully eliminate the problems all together. This is done by dealing with the causes of the problem. Steven Spear and Kent Bowen designed three rules identifying successful countermeasures, which are borrowed here: * Specify the goal, process, content and final outcome of work activities * Create and maintain a clear line of communication between the requestors of goods and services and the suppliers * Eliminate obstacles that lower efficiency, such as loops, temporary workarounds and any unnecessary delays

Developing the Target State

Now that A3 Root Cause analysis has helped to develop countermeasures, which have addressed the source(s) of the problem and improved the workflow, the problem solver can move into the target state, completing work goals with excellence and maximum efficiency. The target state is the state of the once-problematic process when the countermeasures are in effect. The A3 report should show the target condition in relation to the current condition with a diagram, illustrating in quantities, how much the countermeasures should improve the quality of the process. The countermeasures used should be explained clearly and specifically.

Implementation Plan

One should not attempt to attain the target state without a fully realized, logical and practical implementation plan. This plan must list, step by step, the actions that are required to put the countermeasures into use and reach the target condition, and individuals responsible for carrying out these actions must be identified and given deadlines. It would be helpful to factor in other relative variables, such as the financial and time cost of implementation.

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Carol Bartz terminated as CEO of Yahoo

To all,

I am very sad to tell you that I’ve just been fired over the phone by Yahoo’s Chairman of the Board. It has been my pleasure to work with all of you and I wish you only the best going forward.

Carol

Sent from my iPad

Let’s do some root cause analysis of this situation leveraging the 5 Why’s technique shall we and see if we can’t get a better idea of what led up to this situation?

Why was Carol Bartz terminated?

According to BusinessInsider, Bartz “checked out” last week and was not really participating in the day-to-day management any more.

Why did Carol Bartz act “check out” for her last week on the job?

Purely theorizing, of course, perhaps conversations with the board of directors left her seeing the writing on the wall where she felt it was best not to further invest herself into a company that will soon be without her.

Why did Carol Bartz see the “writing on the wall” that she was going to be terminated soon?

You can’t get to a position of respect like Bartz, having led Autodesk into a leader of computer-aided design software from an aimless maker of PC software (according to Forbes) without having some sense and being able to read your environment.  As an example, an investor openly called her a lame duck during Yahoo’s 23 July 11 2Q11 earnings announcement and called for her termination while industry insiders rumored that Yahoo’s board was talking to potential CEO replacements.

Why was there such a negative perspective of Carol Bartz’s performance?

Revenues were at $1.076 billion versus the expected $1.11 billion for the quarter.

Why were earnings below expectations?

During their earnings call, Bartz identified poor display ad sales by the sales team as the reason.  A reorganization of the sales team resulted in fewer sales people in front of YHOO’s big clients.

Why was the sales team reorganized?

Bartz was cutting costs, setting new goals and rearranging senior leadership in the sales organization since as early as November 2010.  In the wake of the various terminations from paring down 8 regional teams down to 3 and the aggressive goals for these teams, other senior sales staff have resigned, leaving gaps that needed to filled with additional hires and training.

Why did the team need new goals and rearrangement?

Yahoo has long considered themselves a media outlet, and has focused on brand building messages, while competition has evolved with context-driven placement in emails, on mobile devices, and in social media outlets.  Yahoo didn’t have the team set up to make that happen and Bartz was adjusting the infrastructure to those ends.

And so we reach the end of our tale…

ROOT CAUSE: Why was Carol Bartz fired from Yahoo?

The root cause appears to be that stockholders and investors are merciless.  As the highest paid CEO of the S&P 500, if you fail to bring in solid quarterly earnings, they want to swap out players even if you have plans in place to make Yahoo a stronger company overall.  Bartz just failed to execute her plan quickly enough to satisfy a marketplace hungry for returns amidst a flailing economy overall.  Trying to recover from the failed Microsoft buyout, then the subsequent acquisition of the Huffington Post properties, she failed to keep strong talent to handle the organizational changes.  And the board was being grumped at by the shareholders about the dropping stock price, and so the proverbial ball of defecation rolls downhill.

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The process of finding out the fundamental flaw or “root cause” as to why a problem or defect has occurred is called Root Cause Analysis. Once such an event is pinned down, it can be planned for probabilistically in the future, and hopefully prevented from reoccurring, or at least have its effects minimized. This is an important component of Design Theory.

All sorts of root cause analysis software and tools have been created in order to perform root cause analysis.  Some of these tools are the Pareto chart, failure mode and effects analysis (FMEA), and the fishbone diagram.  While all of of these tools are useful, in this article, the fishbone diagram will be looked at more closely.

Root Cause and Effect

Root Cause Diagram

The fishbone diagram has few other names such as the cause and effect diagram, 5-Whys chart, and the why-why diagram.  These names are appropriate because this tool seeks to find the reasons why a particular event (the effect) was caused.

The general process for completing the analysis is to begin by identifying the end effect and working backward, toward the ultimate, or “root” cause.  Typically this is the event or defect for which one is trying to determine the cause.  The next step in the process is to identify the cause of that effect.  This is often accomplished by asking the question, “Why did this effect happen?”  Several different answers may be generated and such a list should be anticipated.  Once these answers are discovered, you ask the question, “Why did this cause happen?” for each of the causes generated in the previous step.

5 Why’s Technique

Using the “5 Whys” technique will lead to the root cause of a condition. To document what this technique looks like, the condition being investigated is listed on the right side of a piece of paper or on a display. Draw a horizontal line to the left. Ask “why” the condition occurred and note on a line coming off the horizontal line at a tangent the answer to “why”. Continue doing this until 5 Whys are asked. The tangent lines will resemble a fishbone which is what this process is frequently called.

An example of the 5-why chain for a company which has just lost a customer follows.  The company lost its customer because the price was too high.  The price was too high because the assembly process took longer than it should have.  The assembly took too long because the workers didn’t have the correct tools.  They didn’t have the correct tools because the tools weren’t ordered.  The tools weren’t ordered because upper management was hoping to cut costs for the quarter.

After the root cause is uncovered, measures may be taken either to either guarantee that the root cause can be prevented in the future if the end result was a negative one, or else that it occurs again if there was a positive result. Only the symptoms of the problem get treated, as opposed to the cause, if the core of the problem is not correctly identified. Practices such as these could bring on extra costs, slower delivery, lesser quality, or all three.

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