2. Identify the Root Cause of Each Problem
Next, get to the root cause of each problem.
Pareto Analysis is a simple decision-making technique for assessing competing problems and measuring the impact of fixing them. This allows you to focus on solutions that will provide the most benefit. Pareto Analysis uses the Pareto Principle – also known as the "80/20 Rule"
Write out a list of all of the problems that you need to resolve.
Next, get to the root cause of each problem.
Now, score each problem that you've listed by importance. The scoring method that you use will depend on the sort of problem that you're trying to resolve. For example, if you want to improve profits, you could score problems by how much they cost. Or, if you're trying to improve customer satisfaction, you might score them based on the number of complaints that you've received about each.
Use the root cause analysis that you carried out in Step 3 to group problems together by common cause. For example, if three of your problems are caused by lack of staff, you could put these into the same group.
Now, add up the scores for each group that you've identified. The one with the top score should be your highest priority, and the group with the lowest score your lowest priority..
Finally, it's time to take action! Your highest scoring problem will likely have the biggest payoff once fixed, so start brainstorming ideas on how to solve this one first.
