My favorite exercise for getting to the root of a problem:
The Five Whys.
Each answer becomes your next question.
Let’s run it on Applebee’s.
Their business is falling apart.
Over the last 8 years, Applebee's has lost a quarter of its locations, their biggest franchisee went bankrupt, and they’ve basically vanished from the culture.
Why are they failing? (#1)
Well, first off the menu isn’t competitive and the deals aren’t good.
Why isn’t the menu competitive? (#2)
Because when corporate wanted to make changes, the franchisees balked. They were so strapped for cash, they refused to reinvest.
Why are the franchises so weak? (#3)
Because they’d just been squeezed for expensive upgrades in 2017, and they’re still financially fragile.
Why can’t corporate just force the changes? (#4)
Because when IHOP bought Applebee’s in 2007, they loaded up on so much debt they had to sell off the company-owned locations to service it.
Why did IHOP have to take on so much debt? (#5)
Because a woman named Julia Stewart wanted to run Applebee’s. She’d worked there for years, wanted the CEO job, but got passed over. The board said she wasn’t ready.
So she left, became CEO of IHOP, and leveraged it to the hilt to buy the company that had rejected her.
One board decision in the 90s. That’s the root.
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Why ask why?
Now, obviously you could keep going. “Why did the board pass her over?” etc.
The point isn’t the number of questions.
The point is this:
When you keep asking why, you get past symptoms and start finding causes.
Because if you just fix the symptom, the problem comes back.
The fifth why is where you find the thing that's actually broken.
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By the way: the 5 Why technique was invented by a Toyota engineer.
The Toyota Production System is worth a read — it’ll take you maybe 5 minutes, and it’s a masterclass in clear business thinking.
Thanks,
Michael
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