Management Training – Page 31 – STL

What’s really causing the problem?

You solved a problem at work – well done you! But, a few days or weeks later, the problem rears its ugly head again – how?

Turns out your time and efforts were misplaced, and what you thought was the problem was in fact merely a symptom or knock-on effect of the real underlying issue. In medical parlance, you applied a sticking plaster to a gaping wound!

Solving problems

When attempting to resolve an issue, the hardest part can be defining the real problem and the root cause. If you don’t deal with the problem at its source, then don’t be surprised when it keeps coming back to haunt you. Think of the gardener who pulls up a weed, but only gets 90% of the plant – most of the root is still in the ground. One week later, the weed has grown back!

So, we need a way to ‘drill-down’ into the problem to discover what’s really driving it. Here are a couple of useful techniques:

The 5 Whys

This technique was originally developed by the Toyota Motor Corporation during the evolution of its manufacturing processes. Its primary aim is to determine the root cause of a problem or defect by simply repeating the question ‘why?’ Each answer provided leads to the next ‘why?’ question.

There are 5 whys because it was observed that this was the average number of why questions that usually needed to be asked, in order to resolve the problem. You may need more than 5 to get to the root cause, or possibly fewer!

Here’s an example – my car won’t start:

Why? The battery is dead.
Why? The alternator isn’t working.
Why? The alternator belt has broken.
Why? The belt was well beyond its useful service life and hasn’t been replaced.
Why? The car hasn’t been maintained according to the recommended service schedule (a root cause).

The Ishikawa diagram (or ‘fishbone’ analysis)

Developed by Kaoru Ishikawa, the fishbone diagram allows us to graphically depict the problem and the factors which may be causing it.

All you need is a flipchart, pens and your team (or anybody affected by the problem). On the right-hand side, draw a box and write in it what you think is the problem, e.g. low staff morale. Draw a horizontal line across the page (the backbone of the fish) and add diagonal lines (ribs).

Now ask the group – what do they think is causing this? Record their answers on the diagram along the ribs. Add more ribs if you’re getting lots of answers. If you’re not getting much from the group, prompt them for ideas using the default 4 M’s: manpower, machinery, materials or methods? Do they think the problem is linked to any of these areas?

Hopefully, you now have lots of potential causes recorded on the diagram. But which ones are causing the problem? Now you need to gather evidence, by monitoring the different areas over time, perhaps weeks or months – this is not an overnight solution! Eventually, you should have a good idea of the root cause(s) of the problem.

Conclusion

When trying to solve a problem, we must make sure we’re focusing our time and energy in the right place. If the same problem keeps happening again and again, then we probably haven’t identified the real problem yet. Instead, we’re just trying to fix the knock-on effects of the underlying root cause. The techniques described above enable us to ‘drill-down’ into the problem to understand its origins. Now we know what we’re looking at, we can sort it out!

Real Strategy: 3 Case Studies.

Strategy confuses most people. Perhaps that’s why there are a lot of confusing articles out there in cyberspace, championing “killer” strategies that, in fact, do doing nothing more than list taglines or explain successful tactics.

STL takes a look at three strategies that will demystify strategy and inspire your leadership.

Tesla: Take the High Road

Elon Musk first articulated Tesla’s strategy in his Master Plan:

“Almost any new technology initially has high unit cost before it can be optimised and this is no less true for electric cars… The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model.”

Tesla won market share from other luxury gas-fuelled models. It achieved stellar reviews with the press. The Car and Driver publication wrote that the roadster model was “not just a car, but one of the strongest automotive statements on the road.” Building on the successes of other models, the Model S sedan launched in 2013.

Besides that, Tesla was able to manage its costs by designing and assembling the cars in-house. By early 2018, nearly 225,000 Model S sedans had been sold. In 2017, Model S sales approached the combined sales of the BMW 6 and 7 series and the Mercedes-Benz CLS and S class.

Singapore Airlines: Service Excellence & Low Cost

In the turbulent airline industry, Singapore Airlines performance is peerless. The carrier rarely reports a negative return: just twice in 47 years, and since its last loss in 2017 it recovered to report its highest profit in seven years. Singapore Airlines consistently outperforms its competition and has won hundreds of industry awards and plaudits for the quality of its service.

How does it achieve all of this so consistently?

Through the successful execution of a dual strategy: service excellence and innovation combined with cost effectiveness. Between 2001 – 2009, Singapore Airlines – a full-service carrier — had lower costs than most European and American budget carriers.

Most importantly, Singapore Airlines makes these two often incompatible strategies work together by running a fleet of relatively new planes. In 2009, the average age of its aircraft was just over 6 years old, which is less than half the industry average. The benefit of this is:

less mechanical problems and therefore a more reliable fleet with fewer cancellations
higher fuel efficiency and less repair mean more planes flying around in the air instead of sitting on the tarmac or in hangers, and money spent on maintenance
happy customers who prefer newer planes.

Hornby Railways: A Change of Direction

At the beginning of the century, the future of Hornby — the historic British model railway — brand looked uncertain. In order to turn the tide, the CEO at the time, Frank Martin, decided that a change of direction was required. Rather than continue to focus on a young audience he took aim at collectors and hobbyists.

Therefore, Hornby’s strategy was to make perfect scale models (instead of toys), which would appeal to a sense of nostalgia amongst the new target audience. The strategy was hugely successful and Hornby’s share price rocketed up from £35 to £250 in the next five years.

Conclusion

Give your strategy every chance of success by ensuring you put in place something worth implementing. These three case studies give you a clear understanding of what great strategy looks like.

If you want to learn how to successfully develop and implement a strategy, sign up for our Intro to Strategy course.

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