The Five Whys

Credit crunch cost cutting is the easy option. Re-engineering, re-engaging and re-incentivising provides a bolder strategic solution to the recession.

“The Five Why’s” was a cause and effect questioning methodology developed by Toyota to establish the root issue behind a particular problem.  By continuing to ask “why” to each response, it is possible to peel back the layers to get to the nub of the problem and then build an enduring solution to overcome it.  The problem we all face now is how to increase performance when sales are falling and budgets are squeezed.

 As the recession takes hold, organisations have responded by tightening their collective belts in a drive to cut their overhead and minimise their exposure to the less sympathetic banks. Consequently, there is less money around and sales have fallen with sectors fighting for what business there is by cutting margins, discounting and doing whatever they can to persuade the customer to put their hands into their not so deep pockets. 

 The inevitable result is that organisations reorganise, and spending is scrutinised with budgetary autonomy reduced as FDs exert tighter controls.  Easy money saving cuts include experiential marketing,internal communications and team development as discretionary spend is challenged and the enrichment of the message eroded. Additionally, organisations are reconfigured to the changed environment and that means job losses, merged teams and changed teams.

 So let’s ask “The Five Whys” around this hypothetical statement: “The performance of my team has dropped.” 

• Why:  Our regular customers aren’t buying from us like they used to and we’re finding it difficult to find new customers.
• Why: Our people aren’t engaged, giving it 100%. Individual targets are being missed.
• Why: Morale is low, were not communicating effectively, relationships aren’t as strong as they used to be and that’s effecting customer interaction and relationships.
• Why: We’ve re organised, less people, smaller budgets, same work load.
• Why: The focus is on cutting costs rather than optimising sales.

 I run my own business and am keenly aware of the need in these recessionary times to keep cost down and reduce overheads to match the economic cycle.  Indeed, we have reorganised our own business and realigned ourselves towards new opportunities which have now emerged.    But to avoid symptoms of PTCD (post traumatic change disorder), there are some quick wins to get the performance curves pointing back in an upwards direction:

• Re-engineer your teams addressing team effectiveness andleadership
• Re-engage with the customers with experiential marketing
• Re-incentivise your team with a meaningful reward scheme

Toyota’s “Five Whys” is not a panacea but it will help crystallise an issue and effectively diagnose the problem.  By having a clear understanding of what you want to achieve (your objective) you can then begin the building of a solution (your plan).  Both need contribution and buy in from your people.

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