It’s human nature to be inquisitive. It’s natural to want some justification on things. It actually helps us to learn and be analytical to question why. I would like to share with you my spin on why I think the “five whys” analysis technique of problem solving is a great tool for entrepreneurs to employ when making a decision on a new venture. Why? It helps an entrepreneur to get to the root of their idea to ensure it’s legitimate, that’s why.
The “five whys” analysis.
Ask yourself why five times, making sure on each step, your next why question directly addresses the previous response as to why. This will allow you some confidence that you have dug down into the root of a reason for an entrepreneurial decision. This technique, credited first to management at Toyota, and later as part of Six Sigma Training, is very cool and very helpful.
Asking why over and over not only helps you to dig deep into an idea, but it also can illuminate for you areas where more or better research is needed and even open up avenues where new ideas are born.
To illustrate, you want to open a new restaurant in your town, so then ask why? Your response might be because there are too many franchise restaurants and there are very few private, independent restaurants. Again, ask why, but this time, why a private restaurant would work.
You respond with the fact your nephew just graduated culinary school, is quite gifted, and could develop a unique and fluid menu.
Again, ask why, now for the third time. Why might a unique, fluid menu work? You respond people like variety and many want to experiment or try dishes not normally available at a franchised restaurant.
Why do we like variety and experimenting? The response may be that it creates more of a lively lifestyle. For example a customer could say, “I was able to get some baby octopus as the catch of the day.”
Why, you ask for the fifth time, would a customer want to say that or like that? You surmise folks like to have some swag–some cultured capital to talk about–show off a little for friends and acquaintances–that’s why.
An idea is born, or a niche is developed. To provide novel menu offerings, with an ever-changing menu that has some social value.
Many ideas and extensions are born with this line of why inquiries– some examples:
- You might start a social media campaign around the unique offerings that simply just can’t be found at places that are franchises. Picture Instagram with photographs of exotic or hard to find cuisine.
- You advertise that the menu is chef-driven and changes week to week, or even day to day.
- You emphasize in all your promotions that the establishment is the place to be seen, and the talk of the town.
Now of course, this hypothetical example was flowery with some nice outcomes, but employing the five why technique can lead you in many directions, with many outcomes.
Including the killing of an idea.
For example, many years ago I was considering investing in cabins, specifically cabins with hot tubs where folks could camp out, hike and bike, have romantic getaways, and go hunting and fishing nearby.
I asked why I should do this, and the answer was to create a residual stream of income for me from renting these out. Again, I asked why this would create a residual stream of income, and I thought long term in my response– after initial investment and costs were covered, it would be all gravy.
I asked why it would be gravy, but I had not yet researched or thought clearly about ongoing long term expenses. I initially thought there would be little operating costs. This why question prompted research into hot tub maintenance/repair, energy to heat the tub, and energy costs to heat and cool the cabin, and sure enough the profits dwindled quickly.
My wife actually chimed in at this point “why do you want the hassle of maintenance, cleaning the cabins after each guest stay, and managing all this” I quickly responded I would hire a management company to do all that. Again, asking why a management company would help, I did more research and basically the revenues of the residual income were almost all sucked up by these total operational costs, which now included a management company.
I concluded wondering why I don’t listen more to my wife, and about how this entrepreneurial idea would suck up my time, and possibly my sanity.
The cabin idea died.
I recommend the five why analysis highly as a jumping board into idea generation and justification, as well as a guide to do more specific research. To answer some of your why questions, investigation may be needed, and this is an important value added aspect of the five why analysis. It illuminates the need for focused research, such as with the cabins. I was blinded by the idea of cabin rentals bringing in 100’s of dollars per day but the five whys and the research turned me off on the idea.
As always, in my mind, making these techniques more valid and enjoyable (so you actually use them) works well with others in a fun, social setting. Discuss five whys with family, friends, and co-workers– make it an engaging, dynamic activity. You could even have a dinner party at a cabin, with a hot tub, and serve braised octopus while you analyze.