Which is bigger, a $29 problem or a $100,000 problem? It seems rather obvious that $100,000 is a larger problem than a $29 problem. But how often does each occur? A complete problem definition has to account for the total impact of the problem, which should always include the frequency.
One of the most common answers people give when you ask, "How often does it occur?" is, "A lot," or, "A bunch," but you need a specific frequency. Is it once a month, once a year, once a quarter, once a week or once a day? If you have a $29 problem and a $100,000 problem in a manufacturing facility that operates 24/7, that's 8,760 hours in a year, $29 is not a lot of money. But, if the $29 problem happens every hour, it's costing more than $250,000 a year. If the $100,000 problem happens every two years, then it works out to less than $50,000 per year. When you look at it that way and you annualize the impact, the $29 problem is five times larger than the $100,000 problem. But that's not clear until you understand the frequency of the issue.
Organizations frequently make a list of all their problems, which is good, except often, the $100,000 problem stands out and the $29 problem looks relatively small. That's one of the reasons our Cause Mapping® problem outline asks:
- what's the problem,
- when did it happen,
- where did it happen, and then
- how did it impact each one of the goals?
Within the question about the goals, we ask about frequency. It's the last question in the goals because it's a multiplier, so you are able to see the full impact and quantify it. What may seem like a small problem may be a much more significant issue for your organization.
Incorporating Frontline Insights
Capturing frequency will require you to measure what you’re doing. It will also require you to involve the frontline people. Those on the frontline in your organization are the ones who have good insight about frequency. It's not uncommon that in an incident investigation, they’ll say things like, "Oh yeah, that's been going on for a while," or, "I could have told you that. It's been going on for about 18 months." Those employees see the frequency of problem occurrence, but sometimes they just deal with it because it's a normal part of their day-to-day work. The frontline needs be involved in every step of the problem-solving process in your company because you need their input to understand the full impact of a problem to your organization’s goals.
Make a Better Business Case for Solutions
Here, I'm using a financial example to illustrate how counterintuitive it can be that the $29 issue is five times larger than a $100,000 problem. Understanding frequency allows you to prioritize solutions appropriately. A $29 problem may seem too small to invest in fixing, but it may be reconsidered if the problem actually costs $250,000 annually. Of course, it doesn't mean you need to spend $250,000 to fix it, it just means that's how much the problem is worth.
Tying your problems to your goals and understanding their total impact to those goals gives you leverage in the solution step. If there's something you want to change in your organization, you’ll be able to justify and make a business case to implement the solution by tying it to the goals and quantifying its impact. A business case is not just financial but includes the impact and risk to the organization’s overall goals. It involves safety, compliance, production, service, equipment and labor. This information needs to be quantified in the first step of the Cause Mapping method, so you can select appropriate solutions in the third step.
It would seem strange to have a $3,000 solution to a $29 problem, but if it’s actually a $250,000 problem annually, then that $3,000 solution looks great. To do that, you must provide the context and quantify issues on their total impact to the goals.
