As previously discussed, the Law of Cause and Effect says that everything happens for a reason; for every effect, there is a specific cause. Outcomes in a business organization—good or bad—are traceable to a series of identifiable causes.
Six Sources of Business Problems
When looking at your operations, nearly all frustrations and problems stem from six basic sources that you should be able to spot and remedy.
- Human – A person is not a good fit for the job, not skilled or properly trained, not motivated, or perhaps doesn’t get along with their supervisor or peers.
- Process – The business system or process is poorly designed, communicated, or executed. Half-baked systems always produce inferior results until they eventually fail.
- Policy – You have a company policy that hinders performance. For example, over-ambitious production goals cause hurry and sloppiness. A policy not to take checks or credit cards causes a loss of sales.
- Equipment – Machinery or equipment is outdated, slow, or worn-out, causing downtime or excessive waste.
- Materials – Low-quality materials cause inefficiency, rework, or customer complaints.
- Environment – The work environment is not conducive to high-productivity—too hot or cold, dangerous, cluttered and disorganized, stressful, and so forth.
Each of these general causes of poor performance provides a starting point for getting to the root cause. Identify your problem. Ask employees or customers for their perspective. Then fix the step or component in the business system that will correct the problem.
Common Sense
A few years ago, I tried to help a struggling family get a past-due mortgage payment made. I told the bank representative that I wanted to make a payment on their behalf over the phone. The representative said she couldn’t take the money because my name was not on the loan. I won’t judge the bank because there may be issues I don’t understand, but can you imagine a company policy that won’t let you take past-due money?
A water faucet leaking one drop per second wastes over 2000 gallons in a year. In the same way, a bad policy, a faulty piece of equipment, a messy work environment, an ineffective business system, low-quality materials, or the wrong person in a job can also waste many dollars.
Sometimes your business problems are easy to spot, but often they require a little digging. A 5-Whys Analysis can be very useful to uncover less-obvious root causes.
And keep this in mind: the good results in your business also have specific causes. Identify your reasons for success and apply them to other areas of your operation. As they say, “run with your strengths.”
