Friday, February 17, 2012

It's Not My Fault!

In a discussion about using five "why" questions to get to the root cause, one participant offered this scenario:

CEO: "Profits are down." Why? 
CFO: "Sales are down and expenses are up?" Why? 
EVP: "Sales are down because the economy is down." Why? 
COO: "Expenses are up because all suppliers raised prices?" Why? 
CEO: "I don't give a damn about why, get those sales up and those expenses down. Now!" 

At this point, everyone stopped asking Why?

My response was that this was a faulty conversation. In fact, it was so faulty that if the EVP's statement stands as the reason for low sales, this organization should die like the dinosaurs who also failed to adapt to changing conditions. Secondly, the COO's input is a whole different branch to solve.

There are more reasons for low revenues other than a down economy. Claiming a down economy is the reason is taking the victim role ("the bully took my lunch money"). It also doesn't put you in a response-able place (to use Covey's phrase for his first habit). The EVP's statement suggests you have no choices. A different answer would create a path that is actionable and influence-able.

What if you honestly answered why revenues were down? What would you discuss?

  • Price pressure or customers' expectations for deep discounts
  • People's preference for the competition and how you can't win them over with your current offerings thus limiting your ability to gain market share
  • Limitations for expansion into new areas, products, services
  • Obsolete technology
  • Customers' needs being met by other means than what you or your direct competitors provide
  • Sales people having trouble overcoming objections to buying from your company (poor service, poor quality, poor delivery schedules, etc.)
  • Trouble convincing people that this solves their need, and what the benefit is
  • Nearing the end of the product's or service's life cycle
There may be many more reasons too.

Eli Goldratt, the creator of the Theory of Constraints, would suggest you find what really is hindering them, figure out a solution and then make your customers an offer they can't refuse. Be response-able. Be responsible.

For an example, courtesy of Juran Institute, on how asking 5 Why questions can work, see the following:
 The statue of Jefferson in his DC memorial was cracking. Why? Because of frequent washings. Why? Because of a high population of birds. Why? Because they were attracted to the great number of midges (small flying insects). Why? Because the lights in the memorial came on when the midges were the most active at dusk. Delayed the lights by an hour and the problem of the cracking statue was arrested.

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