Making sure you are solving the right problem is THE most important part of business model innovation. In terms of developing your value proposition, this means spending time discovering which jobs matter most to your customers, before you go looking for solutions that will offer effective pain relief and gain generation. This post is part 3 of my series on using creative thinking techniques to put the innovation back into business model innovation. In today’s post, I’ll be looking at how the Five Whys technique can be used to get to the heart of the problem your business model is trying to solve.
What is the Five Whys?
The Five Whys technique was introduced as part of the now famed Toyota Production System as a root cause analysis techniques designed to peel away symptoms and get to the underlying cause of a problem. In it’s complete form, the technique is also used to guide a proportional response to each symptom depending on it’s relative impact. Not bad for acting like a child and asking “why?” five times in a row.
So how does this help us to hone in on the real customer jobs that need to be solved as part of our value proposition? Here’s an example based on a common problem in online banking…not paying your bills on time despite getting several reminders.
- Why do students want something different from their online banking? Because they keep missing the deadline on bill payments and getting charged interest
- Why are they missing bill payment deadlines? Because they read the reminder and don’t act on it straight away
- Why don’t they act on it straight away? Because they are busy, and it takes too long to setup a new bill payment
- Why does it take too long to set up a new bill payment? Because you have to copy and paste a bunch of details from the biller to your bank
- Why do you have to copy and paste a bunch of details from the biller to your bank? Because billers and banks are not integrated very well
There are plenty more examples of 5 Whys as a root cause analysis tool, e.g. such as The 5 Whys for Start Ups by Eric Ries or the Lean Logistics Blog. As well as helping businesses apportion the right level of resources to fixing the right problems, the tool is a great way to explore your problem space and uncover details you might not have thought of otherwise. In the example above, I found it helpful to start with the question about what is wrong with existing workarounds or solutions. Extending the thought process to cover the rest of your value proposition might get you some place like this:
- Customer job: paying bills online
- Pain: pre-fill your payment details so your customers don’t have to
- Gain: say “yes” to paying bills on time
- Best Fit Product/Service: a bill broker that lets you review bills as they come in, then auto fills your payment details to ensure they get paid on time. Say “yes” to paying bills on time.
A Note on Resources
I read an HBR piece by Innocentive recently which talked about problem definition in existing businesses. Whilst the startup simply needs to identify the value proposition, an existing business also has to look at the resources needed to provide this value proposition and the resulting fit with business strategy. Would our online banking concept work for an engineering consultancy? Probably not. Would it work for someone like PayPal? Absolutely.
The other aspect of resourcing your business startups (whether launched by entrepreneurs or intrapreneurs) is in the opportunity cost against other ideas you could launch. This is where our complete version of the 5 Whys comes in handy. Let’s take another look at apportioning resources. When solving a process problem (e.g. fixing some operational problem) the 5 Whys is used to identify a multi-level problem, with resources assigned to solve each step of the way. For our online banking solution this could result in a value proposition that met every level of the 5 Whys including hitting bill deadlines and managing reminders as well as pre-filling your information.
This apparently simple technique can uncover a surprising amount of information in amazingly little time. It might take a while to get started, but once you’ve found your feet its another great creative thinking tool to use when super charging your business model innovation initiatives.