How 5 Why’s Can Help Any Business

Posted: May 11, 2010 in Uncategorized
Tags: , , , , , , , ,

I read a great article last week on how start-ups can use 5 Why analysis to make sure their endeavors are on track.  It reminded me of how powerful the 5 Why technique is and why business professionals need to use it.

I hear a lot of people talking about selling solutions.  Yet, if you actually ask them what they mean by a “solution,” many struggle to provide a concise answer.  Simply put, a solution is a combination of products and/or services that help solve a customer’s problem.

If you’ve read my bio or spent any time working with me, you probably know that I am a big proponent of consultative selling.  If you are selling any kind of solution it’s a must.  After all, how can you determine a solution if you don’t use some method to understand the customer’s problem?

When practicing consultative sales, you start by asking a lot of questions.  SPIN selling, originally created for Xerox Corporation by Huthwaite focused around four distinct types of questions:  Situation, Problem, Implication, and Needs payoff.  A typical SPIN conversation might go something like this:

Mr. Customer, what kind of feedback have your customers given regarding your equipment service guide?  A significant number have said they don’t find it helpful. What seems to be the problem?  The book won’t stay open when they’re trying to diagnose their equipment. What do they do about that?  Instead of fixing the problem themselves, they call our service department. What kind of impact does that have on your service department?  Manpower and travel costs go up. Mr. Customer, if I could show you a way to produce a service guide that would lay flat without affecting cost, how might that benefit your organization?

The goal is to identify problems that are intrinsic and make them extrinsic.  While SPIN accomplishes the goal, in my mind the Needs payoff questions always come off as a little cheesy.

For that reason, I prefer 5 Why analysis.  While this concept was popularized by Japanese companies like Toyota, it’s actually been around a long time.  For Want of a Nail is a great example.  Versions of this proverb have been referenced by historical luminaries including William Shakespeare and Ben Franklin.

The premise behind 5 Why analysis is that by repeatedly asking the question “why” one can discover the root problem.  Using the example above 5 Why might work something like this:

Ms. Customer,what’s the biggest problem your department is dealing with right now?  Our service manpower and travel costs are through the roof. Why?  Because customers call for service for issues for things they could fix themselves. Why?  Because they don’t use the equipment service guide. Why?  Because they say its too difficult. Why?  Because they can’t look at it while they are diagnosing their equipment. Why?  Because it won’t stay flat.

In this scenario the answer is obvious and really doesn’t require a cheesy “if I can help you solve your issue, are you willing to buy today?” question.  The role of the consultant is to uncover as many of these root causes as possible and propose a solution that helps customers solve their problems.

The great thing about 5 Why analysis is that you can be your own consultant!  If you have a business problem, define it as concisely as possible and use 5 Why’s to determine the root cause.  Once you’ve found the real reason for your problem, you can go about the business of solving it.

If you’re interested in trying, but want a guide to help you along the path, CONTACT US TODAY! We’ll work with you and your staff to uncover the issue and recommend solutions that get results.

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