Palantir uses the ‘5 Whys’ approach to problem solving — here’s how it works

• Palantir CEO Alex Karp swears by a method that helps employees get to the root of a problem.
• Karp has said the Five Whys method "can often unravel the knots that hold organisations back."
• The approach is often credited to Taiichi Ohno, a Toyota executive during the 1970s.

Palantir's Alex Karp is not the typical tech CEO. It makes sense then that one of the big data company's foundational principles is rooted in the lessons of a 1970s Toyota executive.

Karp is a firm believer in the Five Whys, a simple system that aims to uncover the root cause of an issue that may not be immediately apparent. The process is straightforward. When an issue arises, someone asks, "Why?" Whatever the answer may be, they ask "why?" again and again until they have done so five times.

"We have found is that those who are willing to chase the causal thread, and really follow it where it leads, can often unravel the knots that hold organisations back," Karp and Nicholas Zamiska, Palantir's head of corporate affairs, wrote in "The Technological Republic: Hard Power, Soft Belief, and the Future of the West" which was published earlier this year.

During a recent interview, Karp pointed to his adherence to the approach as a potential reason that Peter Thiel, once his roommate, entrusted him to lead Palantir when they co-founded the software company in 2003 alongside Stephen Cohen, Joe Lonsdale, and Nathan Gettings. At the time, Karp was a Stanford law school grad who, instead of practicing, went on to pursue a Ph.D. in philosophy in Germany.

"The same things that made Peter the world's best value investor—he finds people that understand the sixth, seventh, eighth derivative of a problem in a business context. And we were friends. I do think there's a Germanic overlap, in our aptitude for understanding the consequences of a decision very far out," Karp told Wired in November.

Karp credits Taiichi Ohno, a senior executive at Toyota Motor Corporation, who wrote about about his management approaches for turning him onto the practice.

A 2012 article in the Issues in Information Systems journal praised the Five Whys approach, essentially labeling it Palantir's special sauce."

"To truly define values in the eyes of the customers, Palantir Technologies emphasizes the need to talk with customers throughout the development process, keep asking 'why?' but never ask 'why?' without implementing the answers, and be very disciplined at every step of the process," the authors wrote. "Their success in both the government and financial sectors began with the very first lean principle — identifying the values of customers."

Palantir's culture is almost as iconoclastic as its leader. Employees at the company, named for the magical seeing-stone in The Lord of the Rings, don't have formal titles — many employees report only to their teammates. Karp abhors higher-ed culture; there's even a video devoted to employees who dropped out of college to join Palantir.

Despite being a major defense contractor around the world, Karp recently said that non-US clients shouldn't expect to be wined and dined if they want access to Maven, Palantir's AI-powered platform for security and defense.

"We're not selling you sick dinner, we're not selling you our charm," he told podcaster Molly O'Shea while walking around the company's office.

The Five Whys approach seems to be working. Shares of Palantir are up over 100% year-to-date, and Karp's net worth is estimated to be roughly $15.7 billion.

Why not.