When something breaks in your business, your brain hands you a culprit within seconds. Sales are down because the market is bad, work isn’t moving because the team is weak, we’re not profitable because a competitor dropped their prices. That first guess comes from a feeling rather than a number, which is why months of energy and money often go into a place that had nothing wrong with it. This piece gives you a step-by-step method for finding the real problem using a few numbers you already have.
Why is your first guess usually wrong?
Two things mislead you when you’re diagnosing. The first is that you aren’t looking at your business from the outside, you’re sitting inside it, so whatever bothers you most is what you notice most and you assume that’s the culprit. But the thing that bothers you most isn’t necessarily the thing that’s broken. The second is that the mind accepts an outside culprit more readily than an internal problem, because an outside culprit takes the responsibility off you.
In the latest national business environment survey, which the Iran Chamber of Commerce publishes every quarter, the overall index came in at around 6.2 out of 10, where 10 is the worst possible reading, and all three items that managers rated worst were external ones: raw material prices, the difficulty of getting a bank loan, and internet restrictions. Those pressures are real and you feel them daily, but they’re shared by nearly every business in the country. So they can’t explain why your competitor is growing in this same economy and these same conditions while you’re standing still. That difference is the internal part, and the internal part can be found and fixed.
What’s the difference between a symptom and a root?
Your business is a chain where each stage does one particular job, from getting seen and attracting customers through to selling, delivering and getting paid. In business anatomy I separate those stages out like organs of a body, with the mouth for marketing and sales, the heart for customer loyalty, the blood for money and cash flow, and the hands for execution. And as in a body, the pain from one organ usually shows up somewhere else. So when you say sales are down, that’s only a symptom, like a fever: it tells you something in the chain is broken but doesn’t give you the address.
The whole job of diagnosis is to start from that symptom and work backwards until you reach the organ that’s actually sick.
Step one: turn the symptom into a number
Sentences like “work isn’t moving” or “sales are down” are feelings, not diagnoses, and you can’t make a good decision on a feeling. The first step is turning the symptom into a specific number with a specific time range.
Say a salesperson comes to you and tells you their sales are down. Until they say which number and since when, no diagnosis is possible, because that one sentence can mean three completely separate things. Either the count of new customers has fallen, or each customer is buying less, or the old customers aren’t coming back. Each of those comes from a different organ and needs a different treatment. So instead of “sales are down” you say the number of new customers in the past three months is down this much compared to the three months before, and right there you’ve done a large part of the diagnosis, because now you have a specific point to follow.
Step two: follow that number back to the root
Now that you have a number, you go stage by stage asking where it comes from and where in the chain the break is. Picture an Instagram shop that sees its sales are down and whose first guess is that the algorithm changed and it’s getting less reach, so it goes and increases its advertising budget.
But if it follows the number back instead of guessing, it sees a chain. How many people saw the post, how many of those sent a DM, how many of those asked about price, and how many finally bought. If reach and DMs are the same as before but the drop-off after the price stage has grown, then the root isn’t in reach at all, it’s in closing the sale or in the pricing itself. Increasing the advertising then only pours more people up against that same broken point, without adding a single purchase. This is where diagnosing from a number saves your money, because it stops you spending on a healthy organ.
There’s a simple rule here too. Wherever the number drops sharply between two stages, that’s the root, not the place where you felt the pain. You see the fall in sales at the end, but the real drop happened at one of the stages before it.
Once you’ve found the root, don’t do these two things
Now that you think you’ve found the problem, there are two common mistakes that ruin the whole thing. The first is rushing off to buy a new tool. A tool is the last step, not the first, and if you’ve diagnosed it wrong you’ve only landed yourself with a new cost. The second is changing several things at once. Then if things improve, you won’t know which one worked.
What you should do is confirm that same point with a second number before you spend anything. If you suspect the root is in keeping customers, go and see what percentage of the people who bought three months ago have bought again, and if that number tells the same story, then spend with confidence. One last thing. If you find that a single slow stage has capped your entire output, so that the capacity of the whole business equals the capacity of that one point, that isn’t just a symptom any more, it’s a bottleneck, and finding it has a method of its own.
Wrapping up
You can’t find your business’s problem by feel and first guesses, because your mind goes both to whatever bothers you most and to the easiest option of pinning the blame on something external, and neither of those is necessarily the root. The reliable way is to turn the symptom into a specific number, follow that number stage by stage until you reach the organ that’s genuinely sick, and confirm it with a second number before you spend any money, so that your energy and capital go exactly where the real problem is.
If you want to run this diagnosis on your own business but don’t know where to start, the business bottleneck checklist shows you the suspect point with a handful of simple questions for each organ.