The 5 WHYs

Description

Five whys (or 5 whys) is an iterative interrogative technique used to explore the cause-and-effect relationships underlying a particular problem.

The primary goal of the technique is to determine the root cause of a defect or problem by repeating the question “Why?”. Each answer forms the basis of the next question. The “five” in the name derives from an anecdotal observation on the number of iterations needed to resolve the problem.

The method provides no hard and fast rules about what lines of questions to explore, or how long to continue the search for additional root causes. Thus, even when the method is closely followed, the outcome still depends upon the knowledge and persistence of the people involved.

Origin

Sakichi Toyoda, the Japanese industrialist, inventor, and founder of Toyota Industries, developed the 5 Whys technique in the 1930s. It became popular in the 1970s, and Toyota still uses it to solve problems today.

Toyota has a “go and see” philosophy. This means that its decision making is based on an in-depth understanding of what’s actually happening on the shop floor , rather than on what someone in a boardroom thinks might be happening.

The 5 Whys technique is true to this tradition, and it is most effective when the answers come from people who have hands-on experience of the process or problem in question.

The method is remarkably simple: when a problem occurs, you drill down to its root cause by asking “Why?” five times. Then, when a counter-measure becomes apparent, you follow it through to prevent the issue from recurring.

Example

Delays in sales in a production company:

  1. Why is the turnover lower by 20% compared with budget?

Because we have delays on 2 major projects.

  1. Why?

Because it takes more time to build the product as normally.

  1. Why?

Because it is a new product and there are new technical requirements which needed to be modified once we moved into production. 

  1. Why?

Because the feasibility of the new technical requirements were not validated beforehand with the production

  1. Why?

Because to reduce the price and satisfy the client’s demand, we changed the design at the last minute without following the normal process of validating these design changes with the production.


Check also this article “The 12 FP&A Principles”.

10 tips for Excel charts to make your life easier! 📈

👉 Get the tutorial Excel file by clicking here: 10 tips for Excel charts
and start training yourself to improve making charts in Excel!

Today I found a simple but excellent tutorial from Microsoft.
You get 10 tips to make charts in a faster and simpler way.

I particularly like the tips number 4 and 9.

This tutorial trains you with the following tips:

1. Quickly make a chart with ALT+F1 shortcut

2. Select specific columns, before creating a chart to show only what you need

3. Expand graph automatically as you add additional columns/row

4. Quickly filter data from a chart.

5. Use PivotCharts when your data isn’t summarized.

6. Create multi-level labels

7. Use a secondary axis to create a combo chart.

8. Hook up a chart title to a cell.

9. Split off slices into a second pie

10. Hover over Chart Elements to get a preview.

Share your other tips in the comment section!

👉 Get the tutorial Excel file by clicking here: 10 tips for Excel charts

 

Power Query Academy

Top qualities for Finance Professionals

Few weeks ago, I participated in a Q&A session with students from my business school about jobs in Finance. One of the most asked questions was about the qualities needed to be a good finance professional.

In this article, I share my view on the key skills and qualities to have when you want to work in Finance and how they bring value to your organization:

  • Accounting knowledge: knowing how to read financial statements and how the business activity is translated in the general ledger of a company, should be mandatory for every individual wanting to have a career in finance. This is even true for people wanting to go in the direction of financial planning and controlling. For example, one needs to understand how the capitalization of assets like WIP or a change in a provision can have a direct impact on the P&L.
  • Business acumen: finance is involved with many different departments and through different types of operation. Being able to understand these transactions and their financial treatment is what is expected from you by your business partners. For example, you need to be able to evaluate how delays of deliveries to a client can affect your revenues (this is the case if you have a liquidated damages clause in your terms and conditions with your client).
  • Analytical skills: the amount of data and information is constantly increasing. As a finance professional, this translates into a need for you to be better at understanding the big picture and identify what this information means for your organization. The better you can digest it and the faster you can communicate actionable knowledge to your peers and partners the more valuable you are for your company.
  • Business partnering: in a company, finance is a support function. What does it mean for you? You should see yourself as a service provider and you should see your business partners from other departments as your (internal) clients. Ask for feedback and put yourself in your business partner’s shoes to optimize the way your provide the best service you can.
  • IT and Data literacy: transformation is everywhere and digitalization plays a significant role to achieve this transformation. Today mastering Excel and knowing how to use an ERP is a minimum… but being able to program RPA (robotic process automation) software or create an automated report from a BI tool will give you much more opportunities and will help you to secure a position in innovative finance teams.

Let me know in the comments which qualities do you think are the most important for finance professionals.

Do not hesitate to share this article to somebody starting his career in finance.

Thank you for reading

Nicolas Boucher