Create an issue tree to break down your problem

- You're struggling with your mental health at work. A friend has suggested getting a work buddy to boost your outlook during the day. By the way, here's my work buddy, Cody. You look through hundreds of websites of different types of animals for days and you're stuck. Which pet should you choose? You can use an issue tree to solve this problem. The issue tree framework visually looks like a tree and ensures that all root causes are recognized in a structured way. To solve your work buddy issue you start by breaking down the problem into branches or factors such as allergies, budget, space available, and animal type preferences. By addressing each sub branch, you decide that the right work buddy is Gary the goldfish. Let's look at another real world example on how to solve declining profits for a pizza restaurant called Peter's Pizza Parlor. You'll notice that what I'm about to show you will include frameworks that we discussed in previous chapters such as the MECE principle and the 80/20 rule. We know that profit is made up of revenue minus cost so we start by creating two branches, one for increasing revenue and one for decreasing cost. You can see that these two buckets are MECE since they include no overlap or gaps. On the revenue branch we think about how we can increase revenue and we'll write down that more revenue will come from either selling more pizzas or increasing the price of pizzas. We then review our financial data and compare it to previous quarters, and the number of pizzas sold has not drastically changed. So we rule out the number of pizzas sold being the issue. We move into the other sub branch under revenue which is increasing pizza prices. Since pizza's a commodity and there are other competing parlors in the area our price is not very flexible and the price of our pizzas has stayed constant. So we have ruled out revenue being the main issue of our decreasing profitability. Okay, so we've addressed revenue. Let's shift our focus to the other sub-branch being cost. This can be broken out into fixed costs and variable costs. There are several fixed costs to consider but we will use the 80/20 rule to focus on the fixed costs that drive the highest collective amount. Fixed costs include the rent of the parlor, employee salaries, and monthly utilities. Those all seem unchangeable, so we will move to investigating the variable cost sub-branch. Variable costs include credit card fees as well as raw materials like cheese, tomato, and even bread. After chatting with our pizza chef, we learned that our supplier of raw pizza materials has increased by 20%. After further investigation, the supplier has been having issues with their farm and manufacturing plant and has not alerted customers. We've now found the root cause that we've been searching for. Peter's Pizza Parlor has been experiencing declining profits due to rising variable costs from their pizza supplier. Now it's your turn. Break down the original problem that you wrote down in the beginning of this course into smaller problems and create branches in your diagram. As you can see, issue trees provide a roadmap for easier problem solving, enabling you to prioritize, divide and conquer, and communicate more effectively with your team or client. Now that we've gone down the path to identify the root cause of the problem, we'll next discuss how to decide on the best solution.