This Podcast Is Episode Number 0242, And It Will Be About How Can Cause and Effect Analysis Help You Solve Business Problems Today's Guest Article Is From Lori Wade Content Writer And Career Specialist For College Students  ----------------------------------------------------------------- Problems happen in any business. When it comes to small businesses, about two-thirds of them actually survive 2 years, half of them survive 5 years, and only one-third survives 10, according to data provided by Fundera website. The statistics for large businesses is probably as saddening as this one. The problems are what causes businesses to fail. At the same time, fearing problems is not the way out. Instead, business owners need to learn from them as well as learn how to solve them. The challenge lies in how do you solve them. There are plenty of people, who start brainstorming all the possible solutions - and do it until it’s too late. While brainstorming can work for many, it needs to be followed by actions in order to deliver the result. But if you were told that it’s possible to find a quick and effective solution using a certain methodology, would you prefer it to brainstorming? If the answer is «yes», you should try cause and effect analysis, also known as a Fishbone Diagram. Why is a Fishbone Diagram effective? In order to find a solution to a certain problem, you need to analyze it thoroughly, identifying all the causes that led to a certain situation and trying to build a solution for each of the cause and for the problem in general. Using a diagram not only requires you to come up with a list of these causes - it also helps you to visualize the situation better, seeing it as a whole and noticing all the weak spots. It also allows breaking big problems into smaller ones, solving them bit by bit. On top of that, it enables creative thinking, which is a great skill to build and strengthen. How is a Fishbone Diagram used? 1. Identify the problem. What is the problem you’re facing? Identify it in details, not only briefly describing the problem but also outlining the situation in general, possible reasons and consequences, departments or employees who are either responsible for the problem or for its solution. You might be facing a couple of problems at the moment. If these problems are a part of a bigger one, describe this biggest problem. If they aren’t, use a different diagram for each problem. Once a problem is defined, place it in the «head» of a Fishbone Diagram. 2. Identify the causes of the problem. Now it’s time to add some «bones» to the «head». Ask yourself or (and) your team, what exactly did cause this problem to appear? Maybe it’s the people that did something wrong. Maybe your business processes didn’t go well. Maybe you received a bad supply or experienced a malfunctioning of a sort. Maybe it’s the finances. Find all the reasons that can be there, but be sure to focus on the main ones only. Once you do so, add them to your Fishbone Diagram. 3. Identify the smaller causes. Now when you have the main causes of the problem, you probably can divide them into smaller ones (assuming you aimed for the big reasons from the start). Why did each of the causes happen in the first place? For example, you produce something - and your last products didn’t sell well enough. One of the causes is a poor promotion. You can come up with the following sub-causes for this case: not enough people responsible for promotion; not enough investments into the promotional process; the marketing team did something wrong; the design and the description of the product didn’t impress the target audience and so the promotion failed; and so on. Or you can come up with the totally different sub-causes. But once you do, add them to your Fishbone Diagram like shown below: Now you have the whole picture ahead of you. If you did everything right, you also see it in details, easily spotting all the...