What You Need to Know about Root Cause Analysis (RCA)

Root cause analysis is an effective way to resolve a problem and prevent it from happening again. It digs down the root cause by determining how and why it occurred in the first place. By identifying a problem’s core, business leaders can think of actual solutions instead of relying on quick fixes.

This beginner’s guide highlights the basic information you need to know about root cause analysis, including the top methods you can use to conduct this process within your organization. 

What is root cause analysis?

Root cause analysis (RCA) is the process of identifying the primary source of a problem. It’s grounded on the question, “Why and how does this problem happen” instead of “Who caused the problem”, making it an effective approach to eradicating the issue at its core. 

This process is often a reactive approach where a problem or situation must first emerge before you can use it. RCA becomes proactive after the actual process since the data you collected can be useful in predicting problems and determining solutions before they appear again. 

If you’re looking for ways to strengthen your business’s resilience, consider conducting SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis. We also recommend preparing an annual business plan to mitigate potential risks and be ready to handle possible growth opportunities.

Causal factor vs. root cause 

RCA is the repetition of asking “why” questions until you arrive at the root cause.  

When asking these questions, you can identify several causal factors. Causal factors are things that contribute to the problem, but they’re not the root cause. 

Without RCA, you might mistake causal factors as root causes. This misunderstanding is often the reason behind recurring problems. Addressing the causal factor can improve the situation at first. But despite numerous attempts to address an issue, it only keeps returning because you’re not targeting its source. 

To distinguish a root cause from a causal factor, ask this question: 

“If I get rid of this thing, will it remove the problem completely?” 

If it does, then you’ve probably found the root cause. But if it doesn’t, then chances are you’re dealing with a causal factor.

Where do root causes come from?

Root causes often emerge from: 

1. Human causes

It refers to problems caused by a person or several team members. While it's easy to point fingers at the actual personnel involved, RCA often uncovers deeper reasons behind the action, such as insufficient training, misinformation, misunderstanding or lack of clear directions. 

2. Physical causes

Physical errors occur when a tangible item such as a machine causes the problem. For example, a broken or outdated machine may be the reason for production delays.

3. Organizational causes

Organizational errors materialize when there’s something wrong with the system, policy or process used by your organization. Poor management, for instance, can be the root cause of low employee morale.

Goals of root cause analysis

In general, root cause analysis aims to prevent bigger problems in the future by eliminating the existing ones. In practice, it aims to achieve the following: 

• Find the root causes of recurring problems. 
• Understand the problem to determine the most appropriate solutions. 
• Think of evidence-based solutions instead of opinions and wild guesses. 
• Implement corrective and preventive actions within the organization. 

Finding the root cause is just as important as acting upon the data you acquired. Therefore the 4th goal of RCA — implementing corrective and preventive action — is the most important step since it’ll make the most impact in the long run.

Root cause analysis in practice

Initially, manufacturers developed RCA during the 1950s to understand industrial events. Since then, various other industries have adopted this process due to its effectiveness in problem resolution. Some of these industries are medicine, education, I.T. and Communications, environmental science and essentially any organizations with issues to resolve. 

Aside from being a problem-resolution tool, RCA also functions as a tool for developing prevention strategies, the U.S. Department of Veterans Affairs explained in an article. “It is a process that is part of the effort to build a culture of safety and move beyond the culture of blame.” 

Moreover, RCA can also be used for determining the root cause behind an extraordinary performance — a successful sales initiative, for instance — to determine what influenced such results and how you can emulate it.

Root cause analysis methods

There are different methods* to conduct root cause analysis. Depending on the problem you’re trying to solve, it may involve one or a combination of the methods below: 

*Other resources refer to RCA methods as root cause analysis tools, root cause analysis techniques or approaches to root cause analysis.

1. Five Whys (5 Whys)

Best for: moderately difficult problems (e.g., troubleshooting, simple to moderate problem solving, quality improvement) 

This problem-solving method is a quick way to drill down to the root cause of a problem. It originates from the RCA method developed by Sakichi Toyoda for Toyota factories which requires those involved to at least ask “why” five times to uncover the root cause. 

Of course, the number “five” is hypothetical. In most cases, asking why five times is enough to discover the core of a problem. However, there are instances where some problems require more than this number before you can get down to the bottom. Either way, you can ask why repeatedly until there’s no need to ask why again. By then, you might have reached the root cause. 

Each time you discover the answer to the question ‘why,’ the answer will take you to another question until you get down to the bottom. By doing so, you can unveil the cause-and-effect relationships behind the problem. It then allows you to focus on countermeasures to prevent the problem from recurring rather than solutions that only deal with symptoms.  

The five whys analysis is effective when people who have hands-on experience and extensive knowledge about the problem answers lead the process. Meanwhile, it’s not recommended for critical problems because it limits the track you pursue instead of showing other probable causes. 

2. Fishbone diagram 

 Best for: Troubleshooting, product development, brainstorming 

Also known as the Ishikawa diagram and cause-and-effect diagram, this visual technique helps in identifying possible causes and effects of a problem. The diagram looks like a fishbone, hence its name. The head part contains the problem statement, then each rib bone — from right to left — contains potential causes until it reaches the root cause (tail part).

3. Pareto analysis

Best for: organizations with multiple problems since the Pareto analysis helps determine which problems to prioritize and identify solutions with the most impact. 

Pareto analysis is a decision-making technique for assessing competing problems and measuring the impact of fixing them. It follows the Pareto Principle of 80/20 where 80% of the problems are attributed to 20% of causes. This tool helps its users prioritize problems with the biggest payoff, thus improving productivity and profitability.

4. Change analysis

Best for: organizations that underwent recent changes or restructuring efforts 

This root cause analysis method identifies potential risk impacts and risk management strategies whenever your organization undergoes change. Examples of changes include the revision of policies, amendments to operational practices, alterations in system configurations and new management that can impact organizational performance. 

5. Failure mode and effect analysis

Best for: evaluating new and existing processes, products or service 

Failure and mode effect analysis (FMEA) is a proactive RCA approach used to identify possible failures in a process, system or design. The data from this analysis can then be applied to correcting the processes rather than waiting for failures to occur.

In business, resorting to band-aid solutions is a big no. Sure, it can solve surface-level problems, but it cannot prevent similar issues from appearing again in the future. Worst, it can even exacerbate the issue which can leave a negative impact on your bottom line and organizational performance. 

By addressing the root cause of a problem, you can stop such occurrences from happening again. And by knowing why such problems emerge, you can create better risk mitigation strategies that would prepare you for events where you encounter similar concerns. 

Do you need reliable data to back up your root cause analysis process? D&V Philippines can provide you with accurate and evidence-based information that can help you better understand the root cause of business problems. Our accountants are skilled in using business intelligence and cloud accounting software to collate and assess numerical business data. Also, we can help you improve your accounting processes, so it won’t be an issue for your organization later. 

To learn more about our services, send us a message or get a free copy of our Business Analytics whitepaper.