Root Cause Analysis: Lean Muppets Series Post 6

Bert Takes an Intellectual Short Cut and Winds Up Lost.

Solutions require experiments. Ernie wants to eat cookies in bed, but when crumbs become problematic he needs to find a solution.Bert was attempting the management role of problem solver. Bert could see the whole problem as well as the (obvious) solution, but was clearly missing the mark on his problem solving approach.Bert's first problem was allowing Ernie to engage in fundamental attribution error. Fundamental attribution error is when we personify a problem. By focusing on Ernie eating cookies and the crumbs getting in Ernie's pajamas, the solution domain became Ernie himself.The second problem with Bert's approach was that his application of the Socratic method was inconsistent. The structure is fairly simple: continue to ask "Why?" until assumptions are stripped away. So it's great when Bert asks, "What are you doing with those cookies in bed, huh?" But then he starts to lead Ernie through Bert's personal logic trail, and Ernie understands merely what Bert said about this particular application, not the underlying system.Ernie and Bert as well may have taken on Toyota's Five Whys. Bert approaches Ernie with a problem he noticed - as well as a potential solution - but Ernie needs to understand the problem's context and make sure the solution actually addresses the root cause. So when Bert said that Ernie should not eat cookies in bed, then we could have had this progression:Bert: Ernie, I believe we should have an official policy placing a moratorium on all biscuit-style baked goods in sleeping areas.Ernie: Why is that, Bert? (Why One)Bert: Because people aren't getting enough sleep.Ernie: Why is that, Bert? (Why Two)Bert: Because people are getting itchy.Ernie: Why is that, Bert?  (Why Three)Bert: Because there are crumbs in their pajamas.Ernie: Why is that, Bert? (Why Four)Bert: Ernie! Can't you see the logic here?Ernie: Just humor me Bert. Taiichi Ohno said, "Ask why five times in every endeavor." I'm just being lean.Bert: (sighs) Okay, because there was crumbs in the sheets.Ernie: Ahh! This makes sense, Bert! Why are there crumbs in the sheets? (Why Five)Bert: BECAUSE YOU'RE EATING COOKIES IN BED!!!! THAT'S WHAT I'VE BEEN TELLING YOU!!!!!Ernie: Yes, this makes sense Bert. But it's not just me. I see there's a system here that when one eats cookies in bed, one gets crumbs first in the sheets, then into their pajamas, and then they itch and can't get to sleep.Bert: Good, now that that's all understood, can we stop eating cookies in bed?Ernie: Are you kidding? Eating cookies in bed is my only perk working here! Perhaps we can all wear wetsuits to bed instead, that should keep the crumbs out.Bert: (sighs again)When we approach any problem, understanding how to frame it and investigate root causes is vital for finding a real solution...or a silly one.This is sixth in a series of Lean Muppet Posts: For a list of Lean Muppet posts and an explanation of why we did this, look here -> Lean Muppets Introduction 

Sunk Cost, Loss Aversion, and Cannibalism: Lean Muppet Series Post 3

After losing an “I” and his tie, this New York baker is ready for Cookie to leave.

I cannot count the number of times I, as a consultant, have been called in to diagnose an obvious problem.Cookie Monster...now he has an obvious problem.While we would all like to see many of our current television hosts eaten by monsters, it's clear to even little kids that Cookie Monster would be better served by eating pie than Guy Smiley.Pie is the optimal solution. But at least as far as we see, Cookie Monster has chosen Smileycide as the solution to his problem, and is committed to it.We often identify a solution, create a plan, then commit to a number of actions to achieve that plan. With each action we take, alternatives psychologically become more unpallatable.You can see in the future, Cookie Monster catching up and actually eating Guy Smiley and then saying, "Hmmmm, me no like eat Guy Smiley after all." But each time Cookie Monster chases Guy, he finds that he's invested more of his time and energy into Project EatGuy and is less likely to stop.Psychologists and economists call this the "sunk cost fallacy," and even though every MBA student in the world learns about it, we still see it happen.In lean manufacturing this is a specific type of waste called "muda," work that we do that adds no value.  In this case, chasing something considered inedible is not going to result in a delicious snack.But I'd like to focus on a different lesson - one more fudamental that, if we strive to solve it, we'll eliminate muda anyway.Lean teaches us to avoid inventory. Inventory is the stuff we create, are in the process of creating, or are the parts for the things we anticipate creating.I remember in 1979 my father was involved in creating a business incubator in our hometown called Triangle East. It was in the abandoned Geer Mobile Home plant. All my father's projects were family projects and so at one point I found myself going through the old plant cleaning up. The was inventory everywhere - desks, chairs, doors, bolts, and so forth. Tons of inventory that we either recycled (such that we could in 1979), threw away, or served as fascination for a 14 year old boy. All of it constituted waste because it would never be used to biuld a mobile home.In knowledge work we build up conceptual tons of inventory. Reports, files, software code, policies, processes, procedures, half explored ideas, concurrent tasks... all these things decrease our ability to complete work or to ship products.But the more conceptual inventory we create, the more sunk costs we perceive. The more sunk costs there are, the less likely we are to improve. Psychologists call this tendency "loss aversion."We can illustrate this idea with this ridiculous equation:

Y = Cookie Monster's hungerG = the perceived value of eating Guy SmileyCx = the number of times Cookie Monster chases Guy around the counter

Cx * Y = G

Note that while the actual value of eating Guy Smiley will be zero, the perceived value of eating him increases with every iteration.What's worse is that if Cookie's goal is partially achieved, he is unlikely to learn from it, but will actually become more entrenched. So, say he catches Guy Smiley and eats an arm (who knew the Muppets could be so dark?), he will work harder because loss aversion is telling him "you missed the tasty part."Our stakes may be higher in the non-felt world, but the scenarios are no less ridiculous. Pets.com is the classic example where free shipping of discounted cat litter attracted tens of millions in VC money and much more at IPO. Anyone not caught up in dot com fever could see that building a business model around shipping bags of clay (maybe the only thing worse would be bags of lead) was not likely to produce profits.Another quick point here is that while Cookie Monster was never the brightest bulb in the Muppet marquee, he was and remains a nice guy. By nature he does not cannibalize other muppets. He had simply bought into an idea and found himself in a sunk cost spiral.Always look for the pie.This is third in a series of Lean Muppet Posts: For a list of Lean Muppet posts and an explanation of why we did this... look here -> Lean Muppets Introduction