Root Cause Analysis, and the 5 Whys
Many have heard of root cause analysis. This is not the same as the “root doctors” in southern Louisiana or Haiti….
In health care, The Joint Commission, who is tasked with surveying member hospitals for quality and safety use the technique to assist in determining the cause of certain medical complications.
Yes, if a patient goes into the hospital, and the wrong limb gets cut off, then a “Root Cause Analysis” will be done. (As well as a call to their lawyer…)
The process originated in Japan (Root Cause Analysis, not wrong limb cutting) , in the auto industry as a way to get to the cause of quality problems in industry.
One of the more common methods in root cause analysis is asking “Why”- Five Times!
When I heard this, I remembered my kids asking,
Whyyy (#1)are you taking a nap? It’s Saturday afternoon, and I want to play outside!
Mommy and Daddy are tired!
WHY??? (photo by anolob)
Why #2? We had a busy week!
Why #3? We were working!
Why #4? To make money!
Why #5? ” So we can buy food at the grocery! Now go play in the street -so we can take a nap!!!!
(Of course, they probably learned the “real” reason for the nap as they got older, but that’s another story…See my earlier post on libido, if you have questions…)
The 5 Whys in Personal Finance:
I read in a post somewhere on the net in the past, about a personal finance counselor using the 5 why’s with his clients. I have no recollection where it was, or I would link to it.
If you read this, and you think “Dr Dean stole my idea!” then just leave a comment and I will give you full credit! (I did do a Google search and couldn’t find the reference!)
So how can the “5 Whys” help you in personal finance?
The first step, according to little ole me, in learning to control your money is goal setting!
So let’s listen to this conversation between a nurse couple taking my personal finance course and I (my questions/answers in red):
Many find goal setting difficult. Why do you think that is?
Because it takes thought and time-and we don’t have either?
Why a lot of thought? “I don’t want to write down a stupid goal-my wife may laugh at me.” She says “I laugh at him anyway…”
“If she loved you, WHY wouldn’t she support your goal?”
Cause I have done some dumb things with our money! “Isn’t that the truth!” She says out the side of her mouth…
Why does goal setting take so much time? “Cause I don’t really know WHAT I want.”
What would happen if this couple just said, “Our goal is to do better with our money?”
Do you think they will be successful? They don’t have a good enough relationship to even be honest with each other to freely discuss their goals, so they set non-specific, generic goals.
How bout this conversation with another couple:
Dr Dean again in red.
What are your goals?
We want to get out of debt and start saving money?
“Why?”
We are tired of working hard, and having nothing to show for it!
“Why are you working hard and having nothing to show for it?”
Because we spend more money each month than we have coming in!
“Why?”
Because we don’t have a clue how to do better, and have no plan.
These folks are starting to get it! They have identified the problem, and they are it! They know the problem and can start fixin’ it, as we say in the south.
And one more example, with the same couple:
What are your ultimate financial goals?
To save a million dollars!
Why?
So we can have a good retirement?
Why are you thinking so much about retirement, you are just 30 years old.
Everyone says you should plan for retirement, isn’t that why we signed up for your course? And besides that, I hate my job. I only went into nursing cause I read an article that said the pay was good, and you could always find a job. And my plant had closed down, and I got free tuition.
Then, why do you you have $30,000 in credit card debt, but you want to save $1,000,000 for retirement?
Shoulder shrug….
(I didn’t ask them why they had a new 4 wheel drive truck, that was also upside down. Why throw gas on the fire right off, I might get fired, before we even start….)
Why do you keep working in nursing if you hate it?
Cause the bills keep coming in!
Why don’t you consider working in some other area of nursing you might like better-like running your own medical supply company, selling pharmaceuticals, or starting a rehab or wound care business? There are other options for nurses than working on the floor.
Gosh, I never thought of that…. I would really love to run my own business, I have always dreamed of that!
Now we are getting somewhere. To be successful managing your money, you need a clear goal and purpose.
Who is more successful?
Who do you think will be more successful managing their money ( a couple with the same level of credit card debt, student loans etc)?
A: The couple that is tired of getting collection calls and one decided to drag the other kicking and screaming to this personal finance course…. or
B: The couple that gets super pumped up about the idea of opening their own business, not punching a clock, and not having a supervisor looking over their shoulder.
So, for the couple above, we now we had a few REAL goals and the motivation:
Goals:
- Get out of debt,
- save money for starting own business,
- learn how to operate a business
Action Steps to Reach Goals:
- Stop spending more than you make, emergency fund savings, begin to pay off the credit cards.
- Sell the big truck, and buy a smaller used one.
- Begin a savings account, when the cards are paid off, to build up money towards opening the dream business.
- Begin taking one course a semester in business at the local college, paid with cash, to learn about small business planning, and beginning accounting…..
You get the drift-as do they!
So, the next time you sit down to start your financial planning, remember the 5 Whys!
Reader Questions:
Have you had problems with goal setting?
Do you have any tips for what has worked for you?
Tags: how to set goals, root cause analysis and the 5 whys, setting goals with the 5 why method, the 5 whys
[...] This post was mentioned on Twitter by Dr. Dean Burke, Dr. Dean Burke. Dr. Dean Burke said: New Blog Post: The 5 Whys: And WHY You Should Read This! http://bit.ly/9l9n60 [...]
What has really worked for me is to set up accounts with Smarty Pig that I have money automatically deposited into to fund different things, like taxes, vacation, etc. It is great when my tax bill comes to just be able to pay it out of existing funds.
Yes, but you have to have decided on a goal to use something like smarty pig on. If you want to go on vacation, but your spouse wants a new “toy” then,who wins??? Usually no one!
I think doing this is great to dig down to the real motivation behind your actions. It’s not enough to set the same goals as everyone else around you, but you should have a concrete reason for them based on your own values!
No doubt your goals will be much more successful if you truly understand and are excited by them.
Excellent article, Dr. Dean!
In engineering, we do root cause analyses all the time although we use something colloquially called “fish-bone” diagrams (because they look like a fish skeleton).
I notice you also brought up the topic of libido. I used the five why’s on the Honeybee this evening, but it didn’t turn out so well for me…
1. Why don’t you want to get amorous tonight, Honeybee? Because I have a headache.
2. Why do you have a headache? Because I don’t feel amorous.
3. Why don’t you feel amorous? Because I have a headache.
4. Why do you have a headache? Because you’re a dork.
5. Why am I a dork? Because I said so.
That didn’t work out so well. Next time I’ll ask her to fill out a fish bone diagram instead.
All the best,
Len
Len Penzo dot Com
Len, in south Georgia, fish bones are what wimps don’t eat, when having a catfish fry. Your attempts with honeybee, lack any attempt at romance. Next time, begin with a massage, or a candlelit dinner, and you will have better luck!
And I can’t change your inner dork-ism!
But I don’t like getting massages, Dr. Dean.
Len, Len, Len, you must not like getting ……
[...] was claimed the same day Al Gore invented the Internet.) was talking about root cause analysis and using a method called “The 5 Why’s” to help zero-in on why your personal finances may not be in the greatest [...]
Interesting strategy. It’s a forced way to really get deeper. Most of us have a bit of trouble with TRUE introspection. This one’s going in my round up!
Thanks Barb. I agree that the idea here is to get deeper to true desires and goals and not superficial ones!
[...] The Millionaire Nurse: The 5 Whys and Why You Should Read This (Clever concept) [...]
[...] The 5 Whys: And WHY You Should Read This! (The Millionaire Nurse Blog) [...]
[...] Decide on your financial goals [...]