The value of a Root Cause Analysis and Corrective Action Plan process to a business
If the critique process is effective and an organization successfully determines why the event occurred, the appropriate corrective action can be achieved. The avoided cost associated with recurrence and improvement in performance is the organization’s dividend.
Failure to identify or implement effectively the appropriate corrective actions results in a tax. This tax will be the cost of the wasted resources from attempting to prevent recurrence and the cost of recurrence. The magnitude of both the dividend and the tax is larger than a first-blush analysis would indicate. The critique process can be an invaluable method for revealing aspects of an organization’s culture that would otherwise go unnoticed by the organization’s leadership. Attempts to quantify this benefit are futile. A robust program that allows leaders to get to the core of their organization’s culture is a perennial annuity that cannot be quantified. The flip side is true as well. If the critique process results in a program that yields no benefit to the organization, the associated tax is amplified by the negative impact that executing such an ineffective program can have on an organization’s morale.
EXTREME OPERATIONAL EXCELLENCE, MATTHEW DIGERONIMO and BOB KOONCE, 2016
