Understanding Why: Causal Thinking Sets Great Leaders Apart

Not every story that sounds right is true. Not every pattern that looks convincing holds up. A lot of founders learn this the hard way: They tell themselves a story about why sales dipped, why that key hire didn’t work out, why growth hit a wall. But unless you're willing to test that story — unless you're disciplined enough to seek out the real cause — you’re just guessing. And that’s not leadership.

In the last installment of the Why series, I wrote about the organizational Why — how aligning your team to a deep, shared purpose drives real progress. But a shared Why doesn’t necessarily mean a true Why.

Because observing is easy, but understanding takes work. Leaders who stop at correlation may move quickly, but they lack depth. And without depth, their decisions are fragile because they're based on assumptions instead of insight. The leaders who build enduring companies go further. They seek causality. And that has the power to change everything.

People who practice causal thinking don’t mistake patterns for proof. They commit to asking the harder, deeper question:

Why is this happening?

This isn’t just a skill for scientists or data teams. Causal thinking is a core part of leadership — especially if you're leading with purpose and trying to build something that lasts. In this piece, I’ll share why causal thinking matters and how you can start practicing it. Because if you don’t understand how your company actually works, you can’t make it better.

Why Causal Thinking Matters

There’s no shortage of information these days. Most of us have access to more data than we know what to do with. But more data doesn’t automatically lead to better decisions. If anything, it’s just made us quicker to jump to conclusions.

We notice patterns and start drawing lines. Sales rise after a campaign, so we credit marketing. A new tool rolls out, output slows, and we blame the software. Engagement climbs after daily check-ins, and we assume the meetings made the difference. Maybe those links are real. Don't get me wrong, recognizing patterns is a good thing. But unless we dig deeper, we’re still just guessing.

This is where a lot of teams get stuck. They act on assumptions, not understanding. They make decisions based on what appears to be true, not what’s actually driving the results. And when your decisions aren’t grounded in cause, it’s easy to drift away from your purpose by reacting instead of building with intention.

Causal thinking pushes us to go further. It slows us down just enough to ask better questions and resist the urge to react too quickly. It makes us understand the system before trying to change it.  

And over time, it leads to fewer errors because the decisions we make are grounded in cause, not coincidence.

The Science Behind Smarter Decisions

Real breakthroughs don’t come from just spotting patterns. They come from figuring out what’s actually causing them and considering what could happen if we changed something.

Think about questions like these: Why does a vaccine prevent disease? Why does smoking cause cancer? Why do some systems collapse when a single variable changes?

Questions like this take more than data to answer. They take experiments, models, and a willingness to ask, “What if?” Not to mention the persistence to stick with it until the answer holds up.

That’s the insight behind Judea Pearl's Ladder of Causation, a framework for how we move from noticing things to actually understanding them. The ladder has three steps:

1. Association (Seeing): We see two things happen together.
2. Intervention (Doing): We test what happens if we change something.
3. Counterfactuals (Imagining): We imagine what would’ve happened if we had done something else.

Most teams stop at step one. They see a pattern and assume they’ve found the answer. But real insight comes from climbing the ladder — by asking hard questions and testing what’s really going on.

This shows up in everyday leadership. It’s the difference between tracking a number and exploring what’s behind it. Between copying what worked for a competitor and really considering what will work for you. Between reacting to symptoms and stepping back to understand the system that produced them.

Founders who are causal thinkers don’t move slower. They move smarter, which ultimately saves time, money, and resources. Because they’re not just guessing what might work — they’re figuring out what actually does.

How to Practice Causal Reasoning

Causal reasoning isn’t a talent you’re born with. It’s a discipline you build over time. And for founders, it can be one of the most valuable skills to help you make better decisions, strengthen your strategy, and navigate complexity with less errors.

Because let’s face it, running a company means dealing with messy systems, incomplete data, and constant change. You need a way to get real clarity without jumping to conclusions. Practicing causal thinking helps you pause long enough to understand what’s really happening before you commit resources, change direction, or overhaul a system.

So here are five ways to start building your causal reasoning muscles in your everyday work:

1. Distinguish between observation and understanding: Seeing two things happen together doesn’t mean one caused the other. Slow down and ask: Are we observing a real relationship or just assuming one?
2. Run controlled experiments: If you want to know what drives results, change one variable at a time and watch what happens. This can be as simple as A/B testing a headline or as complex as piloting a new compensation model with a small team.
3. Think in counterfactuals: Ask what would’ve happened if you had chosen differently. Would customer retention have dropped if you hadn’t launched that feature? Would growth have stalled without that hire? Counterfactuals help you uncover hidden causes.
4. Model consequences before you act: Don’t just ask, “What will happen if we do this?” Ask, “And then what?” Mapping out second- and third-order effects helps you see beyond the immediate reaction.
5. Challenge the story you want to believe: Founders often build narratives that fit what they hope is true. But causal reasoning means pressure-testing those stories and holding onto only what stands up under scrutiny.

At Ninety, this kind of thinking shows up in how we build tools. Our Scorecard, Meetings, and Issues tools don’t just show what’s happening — they help teams understand why. By linking metrics to roles, issues to systems, and outcomes to core processes, we give leaders a way to explore cause, not just play a guessing game. It’s about building the clarity and confidence to act on what truly matters.

The goal isn’t to slow things down. It’s to make each decision count. When you lead with causal thinking, you’re not just reacting. You’re learning how your business actually works.

Leading Through Complexity

In today's world, we're surrounded by interconnected systems, faster cycles, and tighter feedback loops. As I wrote about in Work 9.0, we've fully entered Work 8.0 — the Age of Understanding — where surface-level thinking no longer cuts it.

The companies that endure will be led by people who don't just react. They observe, model, and adapt. They understand the systems they're operating in and know how to make meaningful changes without losing what makes the system work.

Because here’s the thing: If you don’t know why something’s working, you won’t notice when it starts to break. If you don’t understand the system, you can’t adapt it. And if you can’t adapt, you can’t lead.

We’re not here to make guesses. We’re here to build. And building anything that matters requires the discipline to pause, probe, and persist until the cause becomes clear. So don’t just look at the data. Don’t just follow the trend. Understand why. Upgrade your system. Lead from insight, not instinct — and from purpose, not pressure.

In the next installment of this series, we’ll explore the systemic Why: the deeper forces that shape not just individual outcomes, but the rise and fall of entire teams, cultures, and institutions. Because the same structural dynamics that cause societies to flourish or collapse? They’re at work inside your company too.

And remember, if you don’t understand what’s driving the outcome, you’re flying blind. The leaders who take time to understand why — really understand it — are the ones who make an impact. The ones who leave a lasting legacy.