Five Levels of Why

Originally circulated on 29 November 2019

Hi fellow Ruminants

Forgive me ruminants and groupies it has been two weeks since my last ruminations. I have a fascinating stock of ideas from participants and today’s idea came from one of you.

Over (good) coffee  a few weeks ago a colleague and I and I were discussing why companies often find themselves in difficult positions with a depressed share price and he suggested we look at the Five Whys approach. https://en.wikipedia.org/wiki/Five_whys.

Five whys (or 5 whys) is an iterative interrogative technique used to explore the cause-and-effect relationships underlying a particular problem. The primary goal of the technique is to determine the root cause of a defect or problem by repeating the question “Why?”. Each answer forms the basis of the next question. The “five” in the name derives from an anecdotal observation on the number of iterations needed to resolve the problem.

I think this idea is very interesting. It particularly appeals to me because it is based on the scientific method and causality.

An example of a problem is: The vehicle will not start.

Why? – The battery is dead. (First why)

Why? – The alternator is not functioning. (Second why)

Why? – The alternator belt has broken. (Third why)

Why? – The alternator belt was well beyond its useful service life and not replaced. (Fourth why)

Why? – The vehicle was not maintained according to the recommended service schedule. (Fifth why, a root cause)

A related concept is the fishbone or Ishikawa diagram and here is an Ishikawa diagram for “bad coffee”. https://en.wikipedia.org/wiki/Ishikawa_diagram. Bad coffee is a serious matter and it is important to know what to do to avoid bad coffee.

Instead of “bad coffee” let’s have “bad share price”!

This week I wish to leave some homework for the reader.  Pick your favourite company whose share price is at a long term historic low. I ask you, dear reader, to do a proper 5 why’s analysis on this problem. For those of you who have an abundance of enthusiasm you could even create an Ishikawa diagram.

First Why: Why is the company share price at a 10 year low?

……………

• Second Why: ……
• Third Why: ……
• Fourth Why: …..
• Fifth Why: …..

I suspect that not all the answers from different people will look the same but that a discussion along these lines could be….. well interesting!

Please keep the submission ideas flowing

Regards

Bruce