In his book, The Lean Startup, Eric Ries puts forth a entrepreneur’s playbook inspired by the Japanese lean manufacturing model: Start small with a 'minimum viable product,' gauge customers’ reactions regularly and often, make improvements efficiently, and eventually scale up to a profitable business. The following is an excerpt from the book—Ed.
To accelerate, lean startups need a process that provides a natural feedback loop. When you’re going too fast, you cause more problems. Adaptive processes force you to slow down and invest in preventing the kinds of problems that are currently wasting time. As those preventive efforts pay off, you naturally speed up again.
Let’s return to the question of having a training program for new employees. Without a program, new employees will make mistakes while in their learning curve that will require assistance and intervention from other team members, slowing everyone down. How do you decide if the investment in training is worth the benefit of speed due to reduced interruptions? Figuring this out from a top-down perspective is challenging, because it requires estimating two completely unknown quantities: how much it will cost to build an unknown program against an unknown benefit you might reap. Even worse, the traditional way to make these kinds of decisions is decidedly large-batch thinking. A company either has an elaborate training program or it does not. Until they can justify the return on investment from building a full program, most companies generally do nothing.
The alternative is to use a system called the Five Whys to make incremental investments and evolve a startup’s processes gradually. The core idea of Five Whys is to tie investments directly to the prevention of the most problematic symptoms. The system takes its name from the investigative method of asking the question "Why?" five times to understand what has happened (the root cause). If you’ve ever had to answer a precocious child who wants to know "Why is the sky blue?" and keeps asking "Why?" after each answer, you’re familiar with it. This technique was developed as a systematic problem-solving tool by Taiichi Ohno, the father of the Toyota Production System. I have adapted it for use in the Lean Startup model with a few changes designed specifically for startups.
At the root of every seemingly technical problem is a human problem. Five Whys provides an opportunity to discover what that human problem might be. Taiichi Ohno gives the following example:
When confronted with a problem, have you ever stopped and asked why five times? It is difficult to do even though it sounds easy. For example, suppose a machine stopped functioning:
- 1. Why did the machine stop? (There was an overload and the fuse blew.)
- 2. Why was there an overload? (The bearing was not sufficiently lubricated.)
- 3. Why was it not lubricated sufficiently? (The lubrication pump was not pumping sufficiently.)
- 4. Why was it not pumping sufficiently? (The shaft of the pump was worn and rattling.)
- 5. Why was the shaft worn out? (There was no strainer attached and metal scrap got in.)
Repeating "why" five times, like this, can help uncover the root problem and correct it. If this procedure were not carried through, one might simply replace the fuse or the pump shaft. In that case, the problem would recur within a few months. The Toyota production system has been built on the practice and evolution of this scientific approach. By asking and answering "why" five times, we can get to the real cause of the problem, which is often hidden behind more obvious symptoms.
Note that even in Ohno’s relatively simple example the root cause moves away from a technical fault (a blown fuse) and toward a human error (someone forgot to attach a strainer). This is completely typical of most problems that startups face no matter what industry they are in. Going back to our service business example, most problems that at first appear to be individual mistakes can be traced back to problems in training or the original playbook for how the service is to be delivered.
Let me demonstrate how using the Five Whys allowed us to build the employee training system that was mentioned earlier. Imagine that at [my startup] IMVU we suddenly start receiving complaints from customers about a new version of the product that we have just released.
- 1. A new release disabled a feature for customers. Why? Because a particular server failed.
- 2. Why did the server fail? Because an obscure subsystem was used in the wrong way.
- 3. Why was it used in the wrong way? The engineer who used it didn’t know how to use it properly.
- 4. Why didn’t he know? Because he was never trained.
- 5. Why wasn’t he trained? Because his manager doesn’t believe in training new engineers because he and his team are "too busy."
What began as a purely technical fault is revealed quickly to be a very human managerial issue.
Here’s how to use Five Whys analysis to build an adaptive organization: consistently make a proportional investment at each of the five levels of the hierarchy. In other words, the investment should be smaller when the symptom is minor and larger when the symptom is more painful. We don’t make large investments in prevention unless we’re coping with large problems.
In the example above, the answer is to fix the server, change the subsystem to make it less error-prone, educate the engineer, and, yes, have a conversation with the engineer’s manager.
This latter piece, the conversation with the manager, is always hard, especially in a startup. When I was a startup manager, if you told me I needed to invest in training my people, I would have told you it was a waste of time. There were always too many other things to do. I’d probably have said something sarcastic like "Sure, I’d be happy to do that—if you can spare my time for the eight weeks it’ll take to set up." That’s manager-speak for "No way in hell."
That’s why the proportional investment approach is so important. If the outage is a minor glitch, it’s essential that we make only a minor investment in fixing it. Let’s do the first hour of the eight-week plan. That may not sound like much, but it’s a start. If the problem recurs, asking the Five Whys will require that we continue to make progress on it. If the problem does not occur again, an hour isn’t a big loss.
I used the example of engineering training because that was something I was reluctant to invest in at IMVU. At the outset of our venture, I thought we needed to focus all of our energies on building and marketing our product. Yet once we entered a period of rapid hiring, repeated Five Whys sessions revealed that problems caused by lack of training were slowing down product development. At no point did we drop everything to focus solely on training. Instead, we made incremental improvements to the process constantly, each time reaping incremental benefits. Over time, those changes compounded, freeing up time and energy that previously had been lost to firefighting and crisis management.
The Five Whys approach acts as a natural speed regulator. The more problems you have, the more you invest in solutions to those problems. As the investments in infrastructure or process pay off, the severity and number of crises are reduced and the team speeds up again. With startups in particular, there is a danger that teams will work too fast, trading quality for time in a way that causes sloppy mistakes. Five Whys prevents that, allowing teams to find their optimal pace.
The Five Whys ties the rate of progress to learning, not just execution. Startup teams should go through the Five Whys whenever they encounter any kind of failure, including technical faults, failures to achieve business results, or unexpected changes in customer behavior.
Five Whys is a powerful organizational technique. Some of the engineers I have trained to use it believe that you can derive all the other Lean Startup techniques from the Five Whys. Coupled with working in small batches, it provides the foundation a company needs to respond quickly to problems as they appear, without overinvesting or overengineering.
Reprinted from THE LEAN STARTUP: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses Copyright © 2011 by Eric Ries. Published by Crown Business, a division of Random House, Inc.