How to Make Better Decisions

This decision-making guide is designed to give you a better understanding of what problem-
solving, and critical thinking entail. Not only will you learn about how to make better
decisions in business, these ideas can make you a better problem solver at school or in your
personal life when faced with challenges. Additionally, throughout this guide, we will
provide you amazing online tools, videos, and resources to help you continue to learn how to
make decisions better into your daily activities.

 Chapter 1 – The Importance of Problem Solving

 Chapter 2 – Critical Thinking in the Decision Making Process
 Chapter 3 – Are You Asking the right Questions?
 Chapter 4 – 6 Effective Methods for Problem Solving

The Importance of Creative Problem Solving in Business

and Life
Problem-solving is one of the leadership skills that successful business professionals and
entrepreneurs are expected to have, yet many struggle with the simplest of decisions. What
makes solving daily problems so natural for one person and such a struggle for the next?

The truth is, even experienced decision makers continually hone and perfect their creative
problem-solving skills. And, there are many compelling reasons to do so. Not only do those
who make better decisions have more job opportunities, get promoted more often, and
increase their work productivity, but they are generally happier. In a recent study from the
University of Chicago School of Business, research found that happiness depends more on
opportunities to make decisions (i.e, freedom) rather than money or connections. This means
that the ability to make decisions leads to more and better opportunities for success, which
improves your quality of life. In other words, the better a decision maker you are, the happier
and more successful you’ll be.

This concept goes against what many business leaders believe – that it’s what and who you
know that makes you successful. In fact, how you understand and solve problems that is the
key to success.

Fortunately, problem-solving and decision making are skills that can be improved upon,
studied, and mastered. By learning specific problem solving and decision-making techniques,
you can see problems sooner and make decisions faster. This allows you to make more
confident decisions in your job, and gives you more control over the happiness and
productivity in every part of your life.

Critical Thinking in the Decision Making Process

Critical thinking is the practice of methodically gathering, analyzing, and evaluating
information. It is one of the most vital parts of the problem solving and decision-making
process, as it is the act of clearly thinking through options that will lead to a final choice.
While decision making is the process that leads to actionable conclusions, critical thinking is
the element that defines whether the choice is sound. Think about it this way: If problem
solving is the car that gets your business to its goals, critical thinking skills are the gas.

Although humans have been thinking critically since the first Homo Habilis picked up a stone
tool, critical thinking as a process has only become one of the most valuable business skills in
the last century. John F. Dewey, the inventor of the Dewey library system and a noted
educational philosopher, began touting the importance of teaching critical thinking skills in
his 1938 paper, Logic: The Theory of Inquiry. This educational reform may have inspired the
rising generation to explore the concepts more, as a resurgence of interest in the subject
presented itself between 1950-1970. Many new decision-making strategies (relying heavily
on critical thinking career skills), were created over this time period, including CATWOE,
PEST, and the Cause and Effect Analysis model.

Since that time, critical thinking and decision making are synonymous business skills that are
expected of corporate leaders. Still, many people don’t truly understand exactly the
underlying concepts that make critical thinking an effective process. There are four key
structures that all critical thinking is based on:

Logic – An individual’s ability to see direct relationships between causes and effects. This is
one of the most important decision-making skills, as logic provides accurate predictions
about what kinds of effects a potential solution will have on individuals and systems.

Truth – The unbiased data of an event. Unbiased and unemotional facts are an important part
of the problem-solving process. Good critical thinking culls out these biases and focuses on
the historical and documented data that will support the final conclusion.

Context – A list of extenuating pressures and factors that will or should be impacted by the
final solution. Critical thinking must take into account the historical efficacy of similar
solutions, the physical and abstract stressors of the decision maker, and the assumptions or
agendas of different shareholders. All of these outside elements must be considered in order
to truly engage in a critical decision-making process.

Alternatives – Potential solutions not currently in use. In effective critical thinking, the
individual is able to consider new ways of approaching problems that meet real-world goals
and are based on accurate, unbiased data. This is the case, even if alternative solutions are not
used, or when outside determinants are unexpected.

When you understand each of these underlying factors, you will become more aware personal
biases and be more engaged in the critical thinking process. In addition, improving your
critical thinking skills leads to faster, more confident, and more productive decision making.
The fuel of critical thinking is the secret ingredient that will drive your business’s success.

Are You Asking the right Questions?

Thought leader Clayton M. Christensen observed that business leaders often think so much
about action that they fail to consider why they are acting in the first place. Unfortunately,
good action isn’t possible without considering the right critical thinking questions. Critical
questioning allows you to clearly distinguish facts from biases, stakeholders from observers,
and solutions from potential solutions. If critical thinking is the lens by which you see
solutions, questioning is the telescope that gives that lens shape, structure, and purpose.

Since questioning is the means by which critical thinking and decision making is
accomplished, consider whether you truly understand what a good question looks like. A
good question will result in an actionable answer, usually one that provides additional
information that is helpful in reaching a final solution. But, how can you formulate questions
that do this?

There are a few ways to know whether the question you’re asking is a good one. If you don’t
have good question-asking instincts, interrogate your initial question with a few of these.

1. Is Your Purpose Clear?

A good question is carefully designed to meet a particular goal. For example, instead of
asking, “When can I meet with you?” a clearer questioner would ask, “Would you prefer to
meet on Monday morning or Wednesday morning?” The narrower range of options
encourages a quicker, more decisive answer, which can in turn be acted upon. In order to get
the most actionable information possible, you need to have a distinct idea of the kinds of
information you are looking for. You can then make your questions more intentional and
directed as you come closer to what you are looking to know. Specific purposes of questions
may include:

 Definition: What does “work ethic” look like in our organization?

 Comparative: What parts of our marketing strategy are different from our
competitor?
 Causal: If we invest in this new technology, what are some potential positive and
negative outcomes?
 Evaluative: What about this product is working for our consumer? What isn’t?

By knowing which types of questions to ask in each situation, you’ll have a more targeted
discussion that leads to actionable answers.

2. Is The Question Framed Correctly?

Even with a clearly defined purpose, the framing of the question can still help or hinder its
overall effectiveness. For example, asking “Why should we invest in a Halloween party when
clown costumes are so expensive?” will not be as effective as “Why should we invest in a
Halloween party when, historically, they have not improved business culture?” The first
question suffers from its poor framing, as it assumes that a Halloween party must include the
investment in a clown costume. Poorly framed questions can be identified through various
smaller issues, including false comparisons, false dilemmas, and ambiguity. A good question
deals with only one issue at a time, and avoids bundling disparate concerns into a single
blanket assessment.

3. Is Your Question Closed or Open?

One of the biggest pitfalls of the questioning process is asking questions with a predefined, or
“closed,” set of answers. These yes or no questions don’t require synthesis, analysis, or
evaluation of facts. They are often asked by leaders who already have an idea of what the
answer should be, and have no interest in additional information. While these can be useful
when only a handful of acceptable answers exist, they don’t lead to creative thinking or better
decision making in management.

In contrast, an open question requires thought and evaluation to answer. These questions can
open the door to outside ideas and collaboration and ultimately lead to much more productive
conversations than closed questions. These questions are designed to bring additional
information to light, and often lead to more in-depth understanding about the problem and
potential solutions.

4. Are You Following Up?

Initial questions offer a vital starting point for any critical thinking and decision-making
discussion. Unfortunately, some people stop there, and that can be the death knell of
effectiveness and efficiency. In order to get the best answers, you must engage in a series of
follow-up questions to support your initial inquiry.

Consider this question: “What are some areas we can cut in order to meet our yearly budget?”
On its own, it will get you some information, but may miss crucial further discussion.
Questions like “Who will be affected if we cut that department?” or “What will the impact of
that departmental cut be on our production processes?” will provide additional actionable
information and lead to smarter, safer cuts. In fact, the highly effective Five Whys system of
problem solving is built solely upon the idea of targeted follow-up questioning.

By incorporating effective questioning into your critical thinking equation, you will get clear
answers that will help you to create actionable solutions. And, as you continue to evaluate
your progress, effective questioning will become one of your

6 Methods and Techniques for Problem Solving and

Decision Making
Even with good critical thinking and questioning skills in place, it can be difficult to maintain
consistency when it comes to problem-solving. Organizations aren’t individuals, but instead
employ an array of people with different personalities, skill sets, and strengths, which can
make solving group problems virtually impossible without a clearly defined framework. For
that reason, many top-level organizations choose to incorporate a standardized problem-
solving methodology. Not only does this provide the consistency a business needs, but it
often leads to more focused and productive discussions. This newfound productiveness in
turn leads to more actionable plans and clearly defined goals for success.

Even though these processes have mainly been designed for large organizations,
organizations of any size can adapt these concepts to suit their needs. Large businesses, small
businesses and individuals can all benefit from these simple problem-solving and decision-
making methods. They have proven to be effective at maintaining a structured problem-
solving process regardless of the structures in which they see use.

6 Step Problem Solving Method

Although many have made variations on the 6-Step Problem Solving Method, the only
research-based version of this methodology was invented by Dr. Sidney J. Parnes and Alex
Osborn in the 1950s. After working with and observing high-level advertising employees
throughout the brainstorming and implementation process, Parnes and Osborn recognized
that creative people go through a series of stages as they create, organize, and choose good
solutions for problems. Their findings were published in 1979 under the title, Applied
Imagination: Principles and Procedures of Creative Thinking. In their original work, the 6-
Step model was termed, “The Creative Problem Solving (CPS) Method,” and included these
key segments:

1. Objective Finding
2. Fact Finding
3. Problem Finding
4. Idea Finding
5. Solution Finding
6. Acceptance Finding

These six segments were further organized into three key phases of problem solving:
Exploring the Challenge, Generating Ideas, and Preparing for Action.

After Parnes and Osborn released these creative problem solving techniques, many different
groups and businesses adapted them to fit their needs and organizational culture, providing a
consistent framework for making daily decisions. One of these popular adaptations was
created by Yale University, and includes an evaluative segment that provides for continual
optimization of the final decision. This model also incorporates some elements from the Soft
Stage Management model (SSM), which provides a seven-stage approach to problem solving.
The Yale adaptation has been adopted by businesses and organizations worldwide, and
includes these six steps of action:

1. Define the Problem

2. Determine the Root Cause of the Problem
3. Develop Alternative Solutions
4. Select a Solution
5. Implement the Solution
6. Evaluate the Outcome

In the updated version of the CPS model, more emphasis is placed on implementation and
evaluation rather than simply accepting the results of the inquiry. This provides
organizational leaders with an action-based problem-solving method that has been proven
through research to be consistent and adaptable for virtually any need. Still, some aspects of
business work present better opportunities to use this method than others.

Large Group Decisions – One of the core features of the 6-Step Model is that it relies
heavily on brainstorming and group problem solving, which in turn means large groups will
benefit the most from the system as presented. The more suggestions, definitions, and root
cause determinations offered by participants, the wider the view of the potential problems
that need to be solved becomes. In addition, when a group is the impetus for identifying and
analyzing the problem at hand, members attain heightened motivation as the process reaches
its final step, “Preparing for Action.”

Comparative Decision Making – Another situation in which the 6-Step Model shows its
strength comes when comparing the efficacy of your organization’s ideas against a
competitor. The group-think structure of the method allows for a logical discussion of
potential best-case and worst-case scenarios resulting from each potential course of action.
Not only is this a good thing when formulating new ideas or action plans, but it works
magnificently when determining strategies to take in a competitive marketplace. The
evaluative phase of the method allows for research and comparison with outside ideas and
models, such as those of major competitors, which eventually will lead to a better product or
idea.

Long-Term Restructuring – This model deals particularly well with long-term changes or
processes in need of consistent evaluation and restructuring. Since the evaluation process
leads back into the initial phases of defining problems and developing solutions, the method
develops a circular flow that allows the user to tackle even the most daunting decision-
making projects. It also adapts to the size of the project or system in which it is use, so as a
small project or system gets larger and more complex, the 6-Step model remains effective,
and can even be applied to individual components and subsystems as necessary.

PEST – Analysis Political Economic Social Technological

Noted as one of the most widely-used decision-making techniques, the PEST model derives
from the concept that several influencing factors can affect an organization, namely Political,
Economic, Social, and Technological factors. By carefully analyzing and evaluating these
factors, organizations can make more informed decisions and have a better understanding of
the long-term implications of those choices.

The PEST model of decision making was introduced by Francis J. Aguilar, a Harvard
Business professor. In 1967, he published a book including the PEST model (originally the
EPST model) entitled, Scanning the Business Environment. Arnold Brown reorganized the
acronym as STEP (Strategic Trend Evaluation Process) sometime after the book’s
publication, and it was adapted further by a number of authors in the 1980s into acronyms
including PEST, PESTLE and STEEPLE. It is still well-known by some of these alternative
nomenclatures, and each retains the core elements of the system introduced by Aguilar.

Although it was originally designed as a method for understanding the unique layout of the
business arena, PEST quickly became a consistent way for leaders to understand both the
internal and external pressures that affected their organizational processes and products. It
can also be easily adapted for use with acquisitions and mergers, potential investments, and
marketing campaigns. After decades of its use, the PEST model has proven to be especially
effective in these specific situations:

Surveying Business Markets – Since this was its initial function, PEST functions best as a
market surveying tool. The four key elements of the model can easily be adapted to any
market, regardless of size or scope. In addition, permutations of the model like PESTLE
include additional pressures that help to further understand the potential marketplace, such as
legal and environmental factors. This makes the PEST model perfect for political ventures,
building projects, or even human resource concerns.

Evaluating Strategies or Markets – Another area in which the PEST model shines is the
evaluation of current strategies for flaws and inconsistencies. Because the model structures
itself around rigorous evaluation, it allows all members of the decision-making team to have
a clear idea of the potential impacts of the chosen course of action. By adding a weighting
system to each of these elements, those in the discussion can clearly see which strategies have
the greatest potential for success and will meet the organization’s goals. Such a system also
figures in strongly when comparing markets or courses of action, as it results in data points to
illustrate the projected gains and losses for each potential solution.

Large-Scale Change Including Complex Elements – Finally, the model allows for a
methodical consideration of various influences, so that large-scale change can be managed in
advanced and intricate detail. The PEST method highlights weaknesses in potential mergers
or campaigns, allows for detailed speculation about future partnerships or markets, and gives
insight into the regulatory or political drawbacks for each course of action. Through applying
the PEST model, it is relatively easy to create a concise checklist of items to be addressed.
This makes it one of the most actionable decision-making tools for corporate-level change.

SWOT Analysis – Strengths Weakness Opportunity Threats

The SWOT model of analysis sets out to help businesses analyze their company and better
understand the arenas in which they operate. In this method, the Strengths, Weaknesses,
Opportunities, and Threats of a company are outlined in a grid fashion, allowing the
leadership to quickly identify toxic processes and behaviors.

Albert S. Humphrey usually receives the credit for the creation of the SWOT framework, as
he presented it during his work with Stanford. In reality, the concept may have originated
earlier than his 1960s presentation of the concept. Several researchers, including George
Albert Smith, Jr., C. Roland Christiensen, and Kenneth Andrews of the Harvard Business
School, reportedly worked with a prototype of the concept during the 1950s. Their model,
published in 1965 as Business Policy, Text and Cases, had a slightly different set of values:
Opportunities, Risks, Environment, and Competition. This research likely held some sway
over the Stanford research model, which Humphrey initially referred to as SOFT Analysis
(Satisfactory, Opportunity, Fault, and Threat). Researchers Urick and Orr changed this to
SWOT by 1964, and the name stuck.

SWOT lets users evaluate potential business risks as well as rewards for business ventures on
the basis of environmental pressures. Like other models, SWOT also lends itself to discourse
that leads to making better decisions. Though it doesn’t work very well as a standalone
decision-making model, it makes an excellent supplement to another more action-based
system. Some of the situations where SWOT really shines include:

Brainstorming and Strategy Building – SWOT lends itself to sharing and discussing
potential benefits and drawbacks of a single idea or course of action. Its simple format also
plays well for situations involving big picture ideas and concepts. At the planning stage, it
makes large issues readily obvious, as well as illustrating key benefits for each idea. When
deciding on the strategy for a particular product, plan, or business, SWOT can make an
organization’s position and the benefits of each situation acutely obvious. A plan that has a
strong strengths-opportunities correlation will support an aggressive strategy, while a plan
that has a strong weaknesses-threats connection should be approached defensively.

Business and Product Development – The simplicity of the SWOT matrix is perfect for
easily identifying strengths and weaknesses of a business or product. This model helps
encourage discussion about the competitive advantages or gaps in capabilities of a specific
idea. It also helps bring to light clear threats for a course of action, such as political,
technological, or environmental pressures that must be overcome before progress can be
made. And, because it is such an adaptable model, it can be used for both large-scale and
small-scale problems. This flexibility makes SWOT a good choice as a standardized
decision-making tool.

Gathering and Organizing Data – SWOT can be a good choice at the brainstorming level
of creative problem solving, but can also prove itself an excellent tool during the researching
phase of a task. The simple matrix can help present and organize data in preparation for
action. In addition, it can easily show where research is lacking, or where more information
needs to be gathered.

FMEA Analysis

As one of the first systematic techniques for observing weaknesses in organizations, the
Failure Mode and Effects Analysis (FMEA) system often sees use as a diagnostic tool for
companies and other large groups. FMEA puts forth the idea that all of the elements of a
structure have inevitable failure modes, which are points at which they will break down under
stress or over time. The goal of FMEA, then, is to identify the probable failure mode for each
component, and to project the impact that these failures will have on the overall success of
the plan.

The US military and surrounding industries began using this method as early as 1949 for the
purpose of identifying weaknesses in potential military equipment and weapons. Adopted in
the early 1960s by contractors working with the U.S. National Aeronautics and Space
Administration (NASA), FMEA helped these organizations produce parts and processes that
would guarantee a high success rate for the space shuttle program. In 1967, the Society for
Automotive Engineers (SAE) published a version of FMEA which, with revisions, has
remained the standard failure mode model for the public aviation industry. Versions of
FMEA have been used by the Automotive Industry Action Group, the U.S. Environmental
Protection Agency (EPA), and Food and Drug Administration (FDA).

Henry Ford was the first leader to widely incorporate the FMEA model to identify process
weaknesses within a business. He adapted the FMEA model into two main areas: Process
FMEA (PFMEA) and Design FMEA (DFMEA). PFMEA helps leaders to identify potential
breakdowns of production, supply, and market failure for an organization, while engineers
and other technical personnel use DFMEA to assess the ramifications of potential weaknesses
and safety issues in their designs. The areas in which these two types of FMEA are most
effective include:

Manufacturing and Assembly Processes – The initial goal of the FMEA model was to
identify problems and potential failures of elements within a manufacturing process. Because
of this, the FMEA model is a good choice for businesses that are heavily involved in
manufacturing and production. It guides the participant through each point of the production
cycle, and allows him or her to foresee potential risks associated with parts, labor, and
processes. Often, this results in fewer risks and elimination of unnecessary redundancies,
which leads to a safer work environment and a more cost-effective business.

Business Strategy – Another area in which FMEA is highly efficient is in the preparation
stages of any major change. This model focuses on potential risks at every point in the new
process, which motivates leaders to understand and overcome challenges long before they
arise. If a clear goal or emphasis is not established before beginning the FMEA process,
however, this can become overwhelming and even paralytic, encouraging stagnation within a
company. By assigning a Risk Priority Number (RPN) to each failure mode element, those
using this model can make it much more obvious which failure modes require immediate
attention.

Customer Satisfaction and Safety – Both PFMEA and DFMEA can assist in bolstering the
satisfaction and well-being of customers. As processes are analyzed and evaluated closely,
organizations become quicker and more cost-effective, often without sacrificing the quality of
the final product. Because process flaws are identified and eliminated before taking the
product or process to the customer, dissatisfaction becomes much less common. The DFMEA
portion of the process becomes more reliable and safer as the model is applied time and time
again, which can lead to higher employee retention and more loyal customers.

CATWOE

Soft Systems Methodology (SSM) is a decision-making process designed to tackle real-world

problems that have no formal definition or scope. In this system, users must consider six
areas in order to solve these kinds of soft system problems:

1. Clients
2. Actors
3. Transformation
4. Worldview
5. Owner
6. Environmental Constraints

CATWOE systematically incorporates these elements into a discussion about potential

actions, looking at how these actions will influence the major players in a transition or other
major problem. Originally developed by Peter Checkland and Brian Wilson, this problem-
solving system has been constantly assessed and improved through continuing action
research over the last 30 years. Initially, it was designed in response to the systems
engineering approach to management problems. In 1966, a team of researchers at Lancaster
University led by Gwilym Jenkins found that the systems engineering approach only worked
when a problem could be clearly and narrowly defined. In cases wherein no clear definition
was available, they found that the system was not effective for solving real and complex
management problems. With Checkland and Wilson taking the lead, the SSM model was
established. CATWOE was the problem-solving format that arose from their research.

CATWOE, by definition, works most effectively when it is being used to manage complex,
real-world management problems. This broad approach means it can assist in solving
virtually any issue that is not easily defined. Some organizational situations still lend
themselves more to CATWOE than other commonly accepted models, however, in spite of
this adaptability. Some common CATWOE-friendly issues include:

Identifying Problems – Since the purpose of the CATWOE problem-solving method is to

help define abstract problems, its ability to do so outstrips that of most other systems. Many
of the day-to-day problems a manager faces are not concrete, so CATWOE can help
significantly. When dealing with human resources, marketing, and workflow management,
getting a clear understanding of what the problem is or how to best solve it and make
decisions can feel like an impossible task. CATWOE allows leaders to consider all of the key
influencers, such as people, ideologies, and environments, being impacted by the potential
change or issue. This leads to a clearer understanding of the root causes that must be
addressed in order to make forward progress.

Implementing Solutions – The CATWOE method also presents some strong tools when
preparing to take action steps. Because CATWOE focuses on considering the influencing
factors, people, and environments that will be integral to a solution, this method ensures that
all of those elements are in place before the implementation. CATWOE also assesses the
roles each team member will play in the change, breaking individuals down into broad
categories such as client, actor, or owner. Since these roles are defined in the CATWOE
structure itself, each person has a better idea of how they contribute to the project’s success
and can in turn be easily held accountable for their responsibilities.

Organizing and Aligning Goals – When this problem-solving model is workshopped in a

group of diverse stakeholders that includes both clients and producers, it serves to inform
members about their role in the overall organization. It can also be very effective for aligning
disparate worldviews and ideologies, enabling the whole team to become more focused and
motivated towards a common goal. As with many of the other methodologies, CATWOE
does a great job of opening discourse, but differs in that resulting action steps can’t really be
taken unless the group has completed the initial steps of collectively defining the problem.
Unlike some other problem-solving models, CATWOE lends itself strongly to collaboration,
as it uses that collaboration to feed into further action.

Cause and Effect Analysis

In Cause and Effect Analysis,also called Fishbone Diagrams or Ishikawa Diagrams, thinkers
assess a single effect in an attempt to find its potential causes. During this four-step model,
participants identify a problem, work out the involved factors, identify potential causes, and
analyze the final diagram in preparation for action.
This problem-solving model was created in 1968 by University of Tokyo engineering
professor Kaoru Ishikawa, although the Cause and Effect Analysis framework dates back to
the 1920s. It was first included as one of the Seven Basic Tools of Quality Control which W.
Edwards Deming presented to post-war Japanese engineers, including Ishikawa himself. Of
these seven tools, Cause and Effect Analysis deals with critical thinking the most extensively,
and uses compartmentalization and categorization to define which influencers contribute to
the effect in question and how.

Each industry often develops its own unique set of categories that can be used with the
Ishikawa design. The manufacturing industry, for example, uses the six Ms (Manufacturing,
Method, Material, Man Power, Measurement, and Mother Nature), while the service industry
uses the five Ss (Surroundings, Suppliers, Systems, Skills, and Safety). These categories are
often used in conjunction with the Five Whys methodology for questioning, which can make
the root causes of any effect clearer.

The Cause and Effect Analysis model has held sway for a long time thanks to the instances in
which it outperforms many newer models. The most effective implementations include:

Group Decision Making – The Cause and Effect Analysis model works best with a key
group of invested stakeholders, preferably from each of the main categories that the diagram
will incorporate. This allows for the most in-depth analysis of the root causes of a problem
from the perspective of the people who are most familiar with that aspect of the business. The
Cause and Effect Analysis model also lends itself to discussion, and can uncover fine details
that may be closely connected with one another and in turn make analysis better. This
happens most often in a group setting, where multiple members can become aware of the
correlations of seemingly disparate parts of the business process.

Clearly Defined Problems – In complete opposition to decision-making models like

CATWOE, which deal with ill-defined, nebulous issues, this model works best with concrete,
tangible problems. This decision-making method starts by defining the problem, and without
defining a problem clearly, the Cause and Effect model begins to break down. If the effect is
vague or misunderstood by members of the team, analyzing its potential causes can be
difficult. Framing is essential to effective use of Cause and Effect Analysis, as problems like
“68% Employee Turnover” can be much more efficiently dissected than “Employees
Unhappy.”

Complex, Interrelated Effects – Where this method really shines is in arenas where effects
may have multiple, interrelated causes. This makes the Cause and Effect Analysis model
perfect for large institutional change like mergers and acquisitions. Even on a small scale, this
method does a stellar job of highlighting how seemingly unrelated processes or elements of
production affect one another. Much like the PEST model, the Cause and Effect Analysis
model assesses each segment of business operations that could change the outcome. This
gives each stakeholder insight into the small changes that can be made within their segment,
and in turn helps them to understand what might make the process or product more efficient
and productive.