Causal Structures

Series 2: Episode 6 | 19 February 2023

Show notes | Transcript

Cause and effect is something that affects every area of our lives, even if we aren’t aware of it. This is particularly true in innovation. On today’s episode of the Circuit Breaker Show, Bob and Greg dive into a subject covered in Bob’s book, “Learning to Build,” namely causal structures, and why they represent one of the five bedrock skills every innovator must possess. They discuss correlation versus causation, as well as the differences between iterating, innovating, and inventing.

They also discuss what’s coming next for Bob’s book, including a course based off the training in the book coming in 2023.

 

Join Bob and Greg for this thought-provoking and timely discussion.

 

Enjoy!

 

What You’ll Learn in this Show:

  • Why causal structures are one of the bedrock skills that an innovator should have.
  • The importance of thinking about cause and effect in relation to a product?
  • Understanding the interdependence between inputs and outputs.
  • The primary difference between innovating and iterating.
  • And so much more…

 

Resources:

Learning to Build book

Hosts

 

Causal Structures – Transcript

Greg Engle  

Hey Bob, today I want to do a deep dive into one of the chapters of the book learn learning to build. I’m going to give you some ground rules. Try not to go into tangents, I know you get excited. I know you want to dispute everything out at one time, but we’re going to try to take this systematically, because we’re going to do causal structures. So, the first thing I want you to talk about is why was this put in one of the five skills? Why are causal structures, one of the bad right five skills that an innovator should have?

 

Bob Moesta

Yep. So when reflecting on the people I’ve worked with over the years, and being able to kind of understand how they innovate, all of them had some form of a causal structure, meaning something where cause and effect was in play, they had some mental model of how something worked. And they continually honed and refined it. The aspect here is that they’re not looking at things as static or an attribute, but more through space and time.

 

Greg Engle

Okay. The reason why I said I want to do this systematically is because there’s three, (there’s more than three) but there’s three big sub skills I want to talk about. The first one is, correlation versus causation. What is correlation?

 

Bob Moesta

Correlation, to me, is the aspect of two variables, they are related in some way, and they can be positively correlated, meaning when one goes up, the other goes up, or negatively correlated, when one goes up, the other one goes down. But it assumes causation most of the time. 

 

Greg Engle 

Do you have an example of what would be correlated? 

 

Bob Moesta

I was told by Dr Taguchi, for hundreds of years in Japan, they believed that the trees caused the wind. Because when the wind was there it moved, so, they assumed that the trees caused the wind, and so they wouldn’t cut trees down, until they understood that that the wind was caused from something else, and that the trees happened to move from it. By understanding the true causation behind it, they were able to kind of then use trees for something else.

 

Greg Engle  

What is your definition of causation?

 

Bob Moesta

Causation is about sequence in time, when one thing changes, it affects something else, it causes something else to change. For example, as the temperature goes up, water turns from a solid to a liquid, temperature causes it to change faces.

 

Greg Engle 

If we were talking about tires, because as it gets cold here in Michigan, suddenly all of our warning lights come on and say your tire pressures are low. What causes that?

 

Bob Moesta

In colder temperatures, gasses constrict as opposed to expand. The same area so PV equals NRT, 

‘PV’ – pressure and volume equals temperature times the gas constant and the gas. The reality is that there’s a relationship between these things and that they cause each other to happen. And so ultimately, as the temperature goes down, the pressure goes down. 

 

Greg Engle

As a designer, I could have said, “Hey, correlation is when it gets cold tires lose air”. But as a designer of a tire, I need to understand what’s causing it. Because I must be robust to the heat, cold, as you start driving, it’s heating up the rubber, which is heating up everything else so am I low? Am I not low? Taking all that if I look at causation, other than just throwing my hands up and saying, oh, when it gets cold, tyres lose air.

 

Bob Moesta

To build a system or to build something to compensate, or to overcome some of those things, you have to build and prototype. So you have to have some notion of how things work so ultimately, causal structures is about the curiosity of being able to understand how things work and building a mental model of how things work.

 

Greg Engle 

And then that brings us to our next one, which is a subset of this, which is cause and effect. You talk about that in the book. So tell us a little bit more about cause and effect.

 

Bob Moesta

Cause and effect is the foundation. One of the things that I think has evolved over time was, I always thought of almost very linear cause and effect like this causes that. But then I learned about an Ishikawa diagram or a fishbone diagram, which means there are a lot of things that contribute to some output. It’s understanding what are the causes that create an effect? In a lot of cases, even when we’re doing jobs to be done interviews, I’m listening for, is this an input? Is this the cause? Is this an output? What are they talking about when they’re talking about things? Being able to understand what is a cause? What is an effect? And typically, the way I would always spot it is what comes before what? And so typically, time and space are the things that help us lead to what is really causing something to happen. 

 

Greg Engle 

Why is it important as an entrepreneur, as a developer, as somebody that’s responsible for a product to think about the cause and effect? Why should I map that out? Why should I pay attention to it?

 

Bob Moesta

That’s how we build things, building things is about assembling sets of things together to get some effect. We tend to build, and I think about it from the left-hand side to the right-hand side. But when we design, we have to think about things from the right-hand side. 

 

Greg Engle 

Okay, w’re going to get to that, that’s what I said don’t go too far off. But what I hear from you is in this one is by taking the time to break things down into, am I really getting to causation and not correlating my data? I really wanted to get that. And then once I get to that, I want to say, which one’s cause? which one’s effect? Because as I start developing, trying to build products, we don’t want to build off aspiration. So, we have to understand what’s from a customer perspective, what is causing someone to want to get an effect out? So we have to understand that from a technical standpoint, why is it important to understand which ones cause and which ones effect?

 

Bob Moesta

Because in the end, I usually cannot control effects. But I can control causes, causes have this element to it as a designer, I’m supposed to put these things in to cause this effect.

 

Greg Engle

Well, let’s pretend we were making soap. And I put different ingredients into soap, each one is supposed to give me an effect.

 

Bob Moesta

Yeah, each one is there for a primary purpose, each ingredient.

 

Greg Engle  

But if I really and truly do these causal structures, and think about the system, I have to think how those different things interact with each other? How do those things change the effect?

 

Bob Moesta

That’s correct. For example, some people put a fragrance into a dish soap, but depending on the type of fragrance, it could be oil based. Suddenly this effect is used to attack the fragrance. You start to realize that there’s interdependence between these systems. Ultimately what we want to be able to do is design systems to be as independent as possible. But that interdependence then becomes, something we have to know about, but we also have to then figure out how to design around.

 

Greg Engle 

But if I don’t know what my inputs are causing and what they affect, and all those different things. I can’t think about that, I’m doing one factor at a time if I do that.

 

Bob Moesta

That’s right. The other thing is that we end up confusing inputs and outputs, so we make things work, but then we don’t know when they don’t work. So we don’t know how to push things far enough to know when they don’t work. I always say form follows function so if we understand how things work, then we know how to put them together.

 

Greg Engle

Okay. And then the last one you hinted to is right to left thinking, and most people want to start on the left, because it’s how we read right? That’s the most comfortable, they want to start with what they have now? What are they doing? But we want to start from the right. Why do we want to start from the right? Why don’t we want to start with the output? And everybody says, keep the end in mind and all that stuff but right to left thinking is a little bit different than that.

 

Bob Moesta

Yeah. So ultimately, part of it is realizing that when, at least for me, when I start on the right with inputs, I then look at all the things I can possibly do. It becomes very divergent in terms of all possibilities. But if I start with the end in mind, I start with the outcome I’m looking for, and then what are the outputs I need to generate to get to those outcomes. There’s then a focused, and it helps me develop much quicker. My experience says that if I think about what can I build given these inputs? It will take me twice as long to build something than if I start the other way, which is what is the outcome I’m really trying to get to? And how do I decided to get to it?

 

Greg Engle

I think would you start on the left, you’re actually starting on the side, it almost causes you to start on the supply side? 

 

Bob Moesta

That’s how that’s how I was taught to innovate; what do you got? What can you build? And then who’s going to buy it? 

 

Greg Engle

It’s just a difference between, are we innovating? Are we doing iteration? And there’s times for iteration? There’s absolutely time for line extensions, iteration on things we do, technology changes, we can do things a little bit different. There’s absolutely a time for that and no one’s saying there’s not. But when we are trying to figure out new ways for ourselves, as a company, or new ways for a customer or getting into new things. If you start from the supply side, or you start from the left, you can only see the world through what you can do today. If you start with the outcomes, you start with what people are going to be able to do, it allows that world to open up 10, 20 times. And then you start making the tradeoffs of what does it mean for you as the business? Because if we start from the left, we were always making the customer make the tradeoffs. And that’s never good.

 

Bob Moesta

That’s right. And ultimately, they don’t know how to make the tradeoffs as we’re experimenting. 

 

Greg Engle 

Well they do, it’s a bad decision. And that’s the problem, right? That;s what we talk about is if you use the five skills, if you talk to customers, and you do these things, you’re going to make them better consumers and that’s the ultimate goal of a really good innovator is to make better consumers not to be a better supply.

 

Bob Moesta

That’s right. And ultimately, progress is achieved by consumers, most people think that our product causes people to make progress, but they make crises and the question is, how do they use our input to help them get to their outcome?

 

Greg Engle

Well, that sounds like correlation. We think our product makes people better.

 

Bob Moesta

But they don’t make themselves better through our product. That’s really about being able to understand what’s the role our product plays and helping them make that progress. It’s not just that they buy the product, it’s the using of the product that enables progress.

 

Greg Engle

So this has been kind of a quick one. Are there other aspects of the causal structures piece that you want people to take away? If they take away those three big things that we just talked about? They get a pretty good start. But what is it other like? So that secret sauce? 

 

Bob Moesta

There are two other parts. One is you can go deep into systems and systems thinking, and there’s a big body of work around that. What’s interesting is that it comes from both a mathematical perspective, as well as from, an engineering perspective, the way I was taught, it was more like a perspective, to look at anything. Even when we’re having conversations, it’s trying to understand, as we’re talking, you know, what I usually talk about is trust. Is trust an input? 

 

Or is trust an output? Do we need trust coming in? Or do we have to cause trust in the process of how we’re doing something, and you start to realize like, depending on when you use the word and where it sits in terms of the system, it then has an impact on what we have to do. Part of it is really being able to understand and see both inputs, actions, outputs, out measurements and outcomes, right. The other aspect here is Dr. Taguchi influence on this whole aspect of robustness and that most people, (the way I was taught at school was), to find the root cause of something and eliminate it. Taguchi has talked about that there’s ways in which to design your system to be robust to or at least sensitive to those noise factors you can’t control and so that’s that to me is the other part of this is defining my sphere of influence and determining what is really control for me and what is noise. And in by having those two aspects to it, it really helps then decide what I’m going to build or how I’m going to build.

 

Greg Engle 

So I think the homework we want people to do today is a tough concept to do homework with, but I think there’s a couple different things people can do. And it depends on where you’re at in your career, it depends on where you’re at, in your product, all those types of things. But the first one is, is just for correlation versus causation, I want you to take a situation and just unpack it and say, Am I making the decision off of correlation? Or am I making a decision off of causation? And the difference there is, do you have the right data? Do you have the right views of it? 

 

Can you prove at some level that this is why it’s happening? And you can do that with your product, you can do that with decisions amongst your life. Cause and Effect is going to be related to right to left thinking, which is, if you have a product, I want you to look at what you’re designing, what are those outcomes that the customer will get? And do you have things in there that will cause that effect? And which ones are they? Or do you have things in there that are effects? Are your products doing effects? And you’re asking the customer to cause something which is almost impossible. So it’s just really unpacking your product that you have and saying, what is the effect I’m trying to get to? And what pieces cause that effect? And what you’re going to find out is, you’re going to have three or four different affects you want. And you’re going to probably have different pieces in there to do that. And then make sure they interact correctly so it doesn’t blow it up.

 

Bob Moesta

That’s right. And what are the trade offs because I can make it faster, or I can make a lighter, but to make it both is hard. So suddenly, where is the tradeoff that I have to make? By studying and being able to understand the outcomes you’re trying to get to? And what are those metrics that represent the outputs you’re trying to get to? Ultimately that makes the rest of it easy. And most of the time we start with very, I’ll say loose outputs, but very concrete inputs, and so that’s my problem.

 

Greg Engle 

You’re preaching that giving homework.

So just take that homework, do the best you can with it. But then also as a little tease, I know you are working with a couple people on building a course around the book. So look for that in the next six months. 

 

Bob Moesta

Three, four months. That’s what we’re working for, we’re shooting for 2023 sometime. Let’s put it that way. 

 

Greg Engle

Just going to launch in 2023. So I don’t know if that really helps people. 

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