Root Cause Analysis: A Guide to Business Problem-Solving Success

Every business encounters obstacles, but only a few know how to effectively identify the real cause and resolve the issue for good. This is where Root Cause Analysis (RCA) plays a critical role.

Understanding how to identify the causes of a problem in business can be the difference between being constantly applying ‘band-aid solutions’ and finding definitive long-term solutions.

Root Cause Analysis isn’t just about fixing what’s on the surface, the things you can see are usually symptoms; it’s about digging deeper to uncover the underlying issues. Is not about looking at what is wrong but investing time and burning some neurones to find why that problem exists.

Enough with what Root Cause Analysis is not. Let’s look at what it is and the best techniques available for you.

What is Root Cause Analysis?

Root Cause Analysis is a systematic method that helps business owners and leaders identify the underlying causes of problems rather than just treating the symptoms. In fact, it’s like being a business detective – you’re looking for clues that lead to the real culprit behind your challenges.

For instance, consider a company struggling with excessive waste. Applying RCA would help identify whether the waste is due to poor quality of materials, poor production planning, accidents, or perhaps something deeper in the company’s culture like a ‘devil-may-care’ attitude or a lack of accountability.

Why Your Business Needs Root Cause Analysis

First and foremost, RCA helps you save time and money by preventing problems from recurring. As long as it’s done properly, of course. And here is where experts in the field play an important role. Moreover, RCA enables you to:

• Make informed decisions based on data
• Prevent similar issues in the future
• Improve business processes efficiently
• Build a more resilient organisation

How to Identify the Causes of a Problem in Business

While there are several RCA methods, these are some common steps you can follow to get started:

Step 1: Define the Problem

Start by clearly stating what’s going wrong. This is probably the most important step, because if you’re inaccurate at this point, it will mislead the rest of the process in a domino effect. Be specific about what the problem is. For instance, instead of saying “sales are down,” specify “monthly sales have decreased by 25% over the last quarter.”

Step 2: Collect Data

Gather relevant information. Once you know the specifics of your problem, you’ll likely have a good sense of what is or isn’t relevant. For instance:

• Customer feedback
• Employee interviews
• Process documentation
• Performance metrics
• Market data

Step 3: Identify Possible Causes

Use proven techniques like:

The 5 Whys method:
A questioning technique developed by Toyota, this technique is straightforward and highly accessible, making it ideal for quickly uncovering root causes without the need for complex tools. By repeatedly asking “Why?”, teams drill down to the underlying issue, helping uncover insights that might be missed with surface-level analysis. Best suited for: Service-based industries, retail, small businesses, and healthcare, where issues often require quick resolutions with limited resources.

Fishbone diagrams:
Also known as Ishikawa or cause-and-effect diagrams, fishbone diagrams visually organise potential causes of a problem, grouping them into categories like people, process, and equipment. This method is effective for identifying a wide range of factors and understanding the relationships between different types of causes. Best suited for: Manufacturing, engineering, healthcare, and education, where it’s crucial to dissect various factors that impact complex processes.

Cause Mapping:
A visual root cause analysis method, this method builds a visual map of causes leading to the problem, showing the relationships between contributing factors. Cause Mapping is especially useful for complex issues with multiple interconnected causes, helping teams gain a clear overview of all influencing elements and their interactions. Best suited for: Construction, utilities, government, and large-scale project management, where issues often involve multiple stakeholders and interconnected causes.

Failure Mode and Effects Analysis (FMEA):
A step-by-step approach to identifying all possible failures. FMEA systematically identifies potential failure modes within a process, evaluating the severity, likelihood, and detectability of each. This technique is valuable for proactive risk management, allowing teams to anticipate issues and prioritise preventive actions to minimise potential impacts. Best suited for: Aerospace, automotive, pharmaceuticals, and electronics industries, where safety, reliability, and precision are critical, and preemptive risk identification is essential.

Pareto analysis:
Based on the 80/20 rule, Pareto analysis helps teams focus on the most significant causes contributing to a problem. By prioritising these issues, organisations can achieve impactful improvements efficiently, addressing the largest contributors first for better resource allocation. Best suited for: Quality control, logistics, supply chain management, and finance sectors, where prioritising issues can drive resource efficiency and reduce high-impact problems.

Step 4: Find the Root Cause

Once potential causes are identified, verify the findings through testing or additional data collection. This helps ensure you’re pinpointing the actual root cause. For instance, if your RCA suggests that poor training is the cause of a problem, consider closely observing the processes or conducting a skills assessment. Another helpful tip is to reverse the logic of what’s been identified – try a “whatever you think, think the opposite” approach – and see if the issue still stands.

Step 5: Implement and Monitor Solutions

After identifying the root cause, implement a solution. However, monitoring is essential. Track the results to ensure that the issue doesn’t resurface. For example, if you address a machinery problem with improved maintenance schedules, monitor breakdown incidents to verify the solution’s effectiveness.

Root Cause Analysis Case Studies

AusPost
A well-documented example of RCA in Australia comes from Australia Post. Facing significant delays and inefficiencies in mail sorting and delivery, Australia Post used RCA to identify root causes across various processes. By employing lean management principles and RCA tools like the 5 Whys, they found that inefficient sorting practices and outdated equipment were core issues. Once identified, Australia Post revamped their processes, invested in modern equipment, and saw a remarkable reduction in delays. This change not only improved efficiency but also customer satisfaction across Australia. The initiative also highlighted the value of RCA in managing complex logistics.

Visy Industries
Visy Industries, one of Australia’s largest packaging and recycling companies, implemented Root Cause Analysis to address workplace safety incidents. Through systematic analysis, they discovered that most accidents occurred during specific shift changeover periods. By implementing new communication protocols and standardised handover procedures, they reduced workplace incidents by 50% in 12 months. This case study was published in the Australian Institute of Health and Safety’s OHS Professional magazine.

Australian Fresh Produce Alliance
The Australian Fresh Produce Alliance (AFPA) used RCA to address significant food waste issues in the supply chain. Their analysis revealed that temperature variations during transport were the primary cause of produce spoilage. After implementing IoT-based temperature monitoring systems, member companies reduced waste by 30%. This success story was featured in Food & Beverage Industry News.

Seek Professional Advice

We strongly encourage you to seek expert advice. Trying to run an RCA yourself will likely add more tasks to your busy day – leading to frustration, stress, and, worst of all, failing to uncover the real causes of your business challenges.

On the other hand, having a professional properly conduct a Root Cause Analysis is a pathway to business excellence. With effective implementation, you can clear the way for improvement and growth. Talk to one of BridgePoint Group’s experts – we’ll be happy to help your business thrive.