Why did that happen? How can we make that happen? These two questions, both of them critically important in business settings, are essentially the same.
How can two such different questions be identical? After all, one involves analyzing a past event while the other involves planning for the future. The answer is simple: in both cases you’re asking the same basic question—that is: “what chain of events causes a particular outcome?” Whether you’re looking forward to plan a chain of events, or looking backward to better understand one, you can use the same tool: Cause and Effect Analysis.
Cause and Effect: Looking Back
Cause and Effect analysis is typically used to figure out why something went wrong. Your product is failing, your clients are frustrated, and you’re losing money. But why? After all, everything was fine up until three months ago. By analyzing the production process, you may be able to pinpoint the issues that are to blame. Once you’ve determined where the issues lie, you can address them—and institute policies to ensure that those same issues don’t arise again.
Cause and Effect analysis can also help you to replicate a positive outcome. For example, this month—for the first time ever—your team exceeded its sales goals. What went right? It’s easy to say “we got lucky,” but most of the time we make or at least encourage our own luck. So what were the elements that went into making this month’s sales calls so much more effective than before?
Cause and Effect: Planning for the Future
While Cause and Effect Analysis is typically used to understand what has happened (usually in order to avoid having it happen again), it can also be used to help plan for the future. How? Rather than attempting to explain an existing outcome, it is possible to set up a hoped-for outcome, and then analyze the elements required to bring the outcome about. Once you have a clear idea of what’s needed, it’s much easier to create a plan of action that is likely to succeed.
Because the process of analysis involves breaking down the whole into a set of individual parts, you can also use the chart created through Cause and Effect Analysis to determine who should take responsibility for which aspects of the project. If you spent a good deal of time on the process, you may even have the start of a to-do list for various members of the project team.
How to Conduct Cause and Effect Analysis
Cause and Effect Analysis, as it’s conducted in business today, is one of several Japanese innovations intended to improve quality and quality control. The process is conducted using a fishbone chart (so named because it looks like a fish skeleton)—otherwise known as an Ishikawa diagram. Ishikawa diagrams were designed during the 1960’s by Kaoru Ishikawa, who managed quality control of processes in the Kawasaki Shipyard.
The fishbone chart approach to cause and effect analysis uses a standard chart to encourage brainstorming and to visually present findings. When the chart is complete, it is possible to analyze findings together, and to determine the most important factors involved in either solving a problem or achieving success. There are four steps involved with cause and effect analysis. They include identification of the problem or goal, brainstorming, analysis, and development of an action plan.
Step 1: Identify the Problem or Goal
The entire team must agree in order for the process to be successful. The goal or problem is then written on the “head” of the fish. Let’s say that the team’s goal is to ensure that sales reports are completed in a timely manner at the end of each month. Once the team agrees to this, the facilitator draws a line with a box or “fish head” at the end. The goal is written in the box.
Step 2: Brainstorm
What will it take to get your sales team, your managers, and your report writer to work together and produce the needed reports in a timely manner? Often, it’s helpful to start with the six general areas that are most likely to impact almost any business project; these become the primary bones of the fish.
Those six areas, however, are not mandatory; many organizations come up with their own categories, selected to reflect their real-world situation.
Step two continues with additional brainstorming details based on general categories. Which people are needed to meet the goal? Each new detail is indicated by a new line drawn perpendicular to the bone before it. As details are added through the brainstorming process, more “bones” are added to the chart; in some cases the chart can wind up looking very complex, because there are so many levels of detail to be considered.
Step 3: Chart Analysis
Spend some time reviewing the chart. Do you see the same needs or concerns popping up in different places? What are the most critical items, without which you are certain to fail?
As you and your team look at the chart, it is very likely that major themes will begin to emerge. You’ll circle those themes on the fishbone chart, and then organize them on a separate page. You might want to organize major themes by their importance, or in chronological order.
Step 4: Develop an Action Plan
Based on your fish bone chart and your analysis, a clear set of priorities should emerge. These priorities will help you to put together a plan that can be implemented immediately.
Does Cause and Effect Analysis Work?
Like any other business tool, Cause and Effect Analysis is just as effective as the people involved in the process. It’s easy to do a poor job of identifying the problem and the causes—and if the first part of the process is done incorrectly, the outcomes will be less useful. That’s why it’s critical to have a leader who is familiar with the process, and why it’s so important that the people involved with the analysis fully understand the problem and can think realistically about solutions.
An article in Nursing Times describes the use of a fish bone chart in Cause and Effect Analysis to determine the causes of problems with long waiting lines at a clinic. The process was very effective for the group, and resulted in some innovative ideas including “scoping the requirement for a patient notes tracking system and considering moving the outpatient clinic to a clinic with more space.” Once they’d come up with these general ideas, they put together a specific plan of action, complete with tasks and deadlines. You can see a simplified version of the chart they created:
Why did this process work so well? The author says, “Having a facilitator was key to progressing discussions as it let the group focus on the problem at hand, while someone else facilitated the session.” She also describes some tools the group used during the brainstorming process, including the Six Sigma tool called the “Five Whys,” which involves drilling down from apparent causes to deep-rooted issues.
Is Cause and Effect Analysis Right for Our Team?
Cause and Effect Analysis may be a good tool for your organization—or it may create more troubles than it solves. Bottom line, if your team doesn’t have the time, authority, insight, or leadership to undertake meaningful Cause and Effect Analysis, you could find yourself wasting time while also creating negative interactions and frustration among your team members.
To determine whether this tool is likely to be useful to you, go through this checklist; if you find that you are answering most of the questions with a “yes,” then Cause and Effect Analysis may be a good choice.
- Do you have a concrete problem or goal upon which your team can agree?
- Can you put together a group of people who understand and have the authority to take action on the problem or goal you’re considering?
- Does your group have the time available (at least a few hours) to take part in a Cause and Effect Analysis?
- Do you have a facilitator (or have access to a facilitator) who has experience in leading this type of brainstorming process and who also understands your organization’s particular needs and parameters?
- Do you have dedicated space to use for a Cause and Effect Analysis?
If you feel you’re ready to undertake a Cause and Effect Analysis, congratulations! You’re well on your way to a better process for achieving your goals.
Editorial Note: This content was originally published in 2014. We're sharing it again because our editors have determined that this information is still accurate and relevant.
Subscribe below and we’ll send you a weekly email summary of all new Business tutorials. Never miss out on learning about the next big thing.Update me weekly
Envato Tuts+ tutorials are translated into other languages by our community members—you can be involved too!Translate this post