The first explanation is often the easiest one. That doesn’t make it the right one.
Something changes in your business. Sales are down. Employees are leaving. Costs are climbing. Customers aren’t coming back as often. Productivity isn’t what it used to be. Naturally, you want to know why.
And if you’ve been running the business for any length of time, there’s a good chance you already have a theory. You know your customers. You know your employees. You know your industry. You’ve seen problems come and go before, and experience gives you instincts about what might be happening.
Those instincts matter. But they’re also where we can get ourselves into trouble.
Suppose sales have fallen 15% over the past year and you recently raised your prices. The conclusion seems pretty obvious: customers don’t like the new prices. So what do you do? Lower them? Run a promotion? Increase advertising to make up for the lost business?
Maybe.
But before we start fixing anything, I’d like to know what else happened during those twelve months.
What changed?
Let’s say two experienced salespeople left shortly after the price increase and were replaced by people who are still learning the business. A new competitor opened nearby. One of your larger customers reduced its orders. Your website hasn’t been touched in three years. Marketing spending stayed roughly the same, but the number of incoming leads changed.
Now we have a different conversation.
Did the price increase cause the decline? It certainly could have. But we’ve just discovered that several other things changed during roughly the same period, and any one of them could be contributing to what we’re seeing.
“Our customers think we’re too expensive.”
Hmmmm, are we sure about that?
Maybe customers have actually told us. Perhaps we’ve lost a significant number of quotes specifically because of price. If sales dropped immediately after the increase while everything else remained relatively stable, we’re beginning to build a pretty convincing case.
But if none of that has been established, what we actually have is a theory. And theories aren’t bad; they’re where investigations begin.
The trouble starts when we forget they’re theories.
The symptom isn’t necessarily the problem
If sales are down 15%, that’s something we know. Why they’re down is a different question entirely, and the distinction matters because whatever explanation we accept is going to influence what we do next.
Blame the price increase and we might lower prices. Blame the new competitor and we might spend more on marketing. Blame the sales team and we may start changing people, training, or compensation.
Each decision sends the business in a different direction.
So before choosing one, I’d want to know more. When did sales actually begin to decline? Did we lose customers or are existing customers simply buying less? Are leads down, or are we converting fewer of them? How are the new salespeople performing compared with the people they replaced? And what are customers actually telling us?
We don’t have to investigate every conceivable possibility. We’re trying to identify the explanations that are reasonably supported by what we know and test the ones that matter.
This is where a simple distinction becomes useful: What do we know? What are we inferring? What still needs to be verified?
There’s a much bigger conversation to be had about those three questions, but for now their purpose is pretty simple. They stop an assumption from quietly getting promoted to fact.
We do the same thing with solutions
There’s another way this happens. Instead of deciding too quickly what caused the problem, we decide too quickly what will fix it.
“We need a new CRM.”
Fine. Why?
Suppose your staff is spending hours every week manually entering the same customer information into several different places. Someone suggests replacing the company’s software. That might solve it. Or perhaps the software you already own can automate the entire process and nobody knew the feature existed.
Same symptom. Very different diagnosis.
One solution could involve months of implementation, data migration, training, and thousands of dollars. The other might involve changing a setting and showing six people how to use it. The question isn’t whether a new CRM is a good idea. The question is whether a new CRM solves the problem you actually have.
And that’s an important difference.
How much investigating is enough?
At this point, I can hear the objection. If we stop to investigate everything before making a decision, aren’t we just creating another problem?
Absolutely.
A business can’t operate like a crime lab. Owners make decisions with incomplete information every day, and there comes a point when more research isn’t going to materially change the decision. The objective isn’t certainty. It’s confidence. And the evidence you need may be surprisingly ordinary. It could be sitting in sales reports, invoices, customer emails, website analytics, or conversations with employees. You might need to call a supplier, compare a few competitors, or spend an afternoon watching how something actually works instead of relying on how everyone says it works. In other words, we gather enough information to understand what we’re dealing with.
Then you decide.
And what if you were right all along?
Great.
The purpose of investigating a problem isn’t to prove your original instinct wrong. If the evidence supports it, you’ve replaced an assumption with something much more useful: a reason to act with confidence.
If it points somewhere else, you’ve learned that before spending money fixing the wrong thing.
And occasionally, you may discover that nothing needs to be fixed at all. The problem might be temporary, the proposed solution could cost more than the problem, or the business may be perfectly capable of living with it while attention is better spent elsewhere. Doing nothing isn’t always indecision. Sometimes it’s the decision.
Slow down the diagnosis, not the business
There’s a natural urge to solve problems quickly, particularly when you’re responsible for the business and everyone is looking to you for the answer. Action feels productive. Decisions create momentum. Nobody gets much satisfaction from saying, “Before we do anything, I’d like to understand this better.”
But solving the wrong problem quickly isn’t efficiency. It’s just a faster way to waste time and money. So before you lower the price, replace the software, hire another employee, increase your advertising, or reorganize the department, spend a little time making sure the solution is attached to the right problem.
Ask what you know. Challenge what you’re assuming. Figure out what still needs to be verified.
Then fix it.