Magic Words To Make Money Appear

The Avondale leadership team comes from a very diverse educational and professional background. When we are aligned on goals and a path forward, this diversity is a real asset. However, sometimes getting aligned can be a real challenge--especially as our leadership team has grown.

Like any small but growing business, we must decide how best to deploy our limited resources (including ourselves) against the large array of opportunities in front of us. We are in the great position of having many more opportunities than we can possibly execute. The challenge, as we have grown busier, is agreeing on which opportunities to pursue.

To solve this, we are in the early stages of moving to a "5 Whys" framework for gaining alignment.

5 Whys Defined

The "5 Whys" framework arose out of Toyota's lean manufacturing movement in the 1980s. Examples, created by VelAction, can be seen here. One example from their site looks like this:

The idea is that by digging past top-level problems--e.g., customers wait too long on the phone--we can identify the root causes creating the problem. Identifying the root cause makes it easier to resolve the problem. In the above example, we might want address root causes by:

Setting targets on a quarterly or rolling-monthly basis, to minimize the number of busy sales periods

Changing our customer incentives policy and re-training customers away from incentives-seeking behavior

Investigating the cause driving sales to perpetually run behind targets, with the goal of smoothing sales and avoiding catch-up behaviors

These actions are superior to the superficial action we might have taken, which is to hire (or contract for) additional phone representatives to address peak customer phone demand.

We came across the 5 Whys framework in the book The Lean Startup by author Eric Ries. In the book, Eric makes a key observation:

At the root of every seemingly technical problem is a human problem.

In a similar vein, our experience leads us to conclude:

At the root of every disagreement on the right path forward is a disagreement on our model.

(By model we mean the values, goals, means and/or constraints under which we operate.)

These observations inspire us to look beyond the obvious answer to a problem. Instead, we should understand more deeply the thinking of the people involved and whether there are systemic issues that must be addressed to keep the problem from resurfacing.

Getting Aligned With 5 Whys

For example, we recently have had a debate around a particular client and the level of resources we should devote to building a win-win partnership. Our 5 whys look like this:

We disagree on the number and quality of resources to assign to client X.

Why? Because we are not aligned on the specific model we should use to best serve them.
Why? Because we are not aligned on the value of our relationship with them.
Why? Because we are not aligned on how to judge the value of clients more generally.
Why? Because we disagree on the relative importance and value of the multiple overarching goals we have as an organization.
Why? Because we have different levels of risk appetite and caution.

It is important to address all of these misalignments, not just the initial one. If, for example, we cannot get aligned around our risk appetite, then we have little hope of getting aligned on the other issues. Instead, we would see a proliferating series of arguments and misalignments on issues large and small.

With the 5 Whys framework, we can have a structured set of discussions around each root cause. We are confident this structure will allow us to get to alignment, and ultimately reduce the number of disconnects and lost efforts we see amongst our team.

How do you get to the root cause of your biggest challenges? Send us your thoughts and questions at karlandbill@avondalestrategicpartners.com .