How Do You Know?

It’s an interesting question.  How do you know?  It was a question my youngest son would ask me following my explaining something that I hoped his toddler mind could grasp.  He would nod approvingly, look at me with those big eyes and ask, “How do you know?”  I never took it as a challenge; it was a request to learn more.  So how did I know and more importantly, how do you know?

Many of us learn the old-fashioned way.  We go to school; we are presented with information or shown how to do something.  We then repeat, regurgitate or otherwise demonstrate our mastery of these new bits of knowledge or skill.  Some of us expand on that knowledge.  We conduct our research; we explore and experiment.  We aren’t afraid of mistakes or failure.  We like the experience of learning and after all of that, when asked “how do you know” we can demonstrate how.

Others learn or attempt to learn differently. For example,  Youtube is a popular method.  Many people I know use Youtube for learning, and that includes me.  I am very visual, and as a result, the videos are an exact match to my learning style.  However, even then I must do.  I must practice, demonstrate the task to myself and perfect it.  Sometimes I do it multiple times, other times the new skill is designed to be performed multiple times over years of doing it.  Not everything lends itself to learning via Youtube, however, which brings us to the message of that article.

When it comes to our businesses how we know is more dependent on the quality of information we receive.  Some look at spreadsheets giving them data.  Some look at financial documents giving them data.  These documents are reviewed, and a decision is made on the next steps for the business.  If revenue is not enough a decision may be made to increase the price.  If profit isn’t enough a decision may be made to reduce the number of employees.  All done by people looking at pieces of paper.  I would ask them; “How Do You Know?” and most would respond that the data told them.

I would counter that the data told them where to start and that decisions made strictly on data alone don’t benefit the business sustainably.  Understanding the why behind the numbers will answer the question, “How Do You Know?”

When I help my clients use data to understand why things are happening, I generally combine several processes.  Two of the more common are simple process mapping and a cause identification tool commonly called “The 5-Why’s”  Process mapping is the identification of every step in a process and can use a variety of tools to accomplish this.  Commonly these tools are either simple flow charts or fishbone diagrams.  The idea behind them is to show the process in a pictorial form to visualize and identify individual areas that impact on the outcome of the process.  Measurement and cost are integrated into these charts to help with the identification.  The 5-Why’s are a questioning technique that keeps asking the question why until it can no longer be answered (as opposed to you no longer want to answer – an important distinction.) An example:

Q: Why wasn’t the fence painted?

A: We ran out of paint.

Q: Why did we run out of paint?

A: Because we didn’t order enough.

Q: Why didn’t we order enough?

A: Because the budget didn’t allow for that.

Q: Why didn’t the budget not allow for that?

A: Because you didn’t plan the painting project accurately.

Q: Why didn’t I plan the project accurately?

A: Because I was multi-tasking and doing something else.

A simple act of asking why, in this instance five times, to determine that the cause had nothing to do with paint or painters and everything to do with a distracted planner.  The solution now involves the distracted planner and not paint, or painters  Had we simply looked at a report we would not have known that.

Effectively leading a business requires much more than sitting in an office reviewing financial statements, spreadsheets and holding meetings with others doing the same thing.  Leading a business means walking its floors, going into the production and service areas where you engage with those doing the work, talking to process owners and workers to truly understand what is impacting on the outcomes of the business.  You can’t do that from a desk or sitting in a conference room with a couple of consultants looking at spreadsheets that are recreated from the last spreadsheets you looked at.  Getting out into your business and seeing for yourself is How You Know.