Abstract: A plurality of causal ladder is assembled in advance from component system events taken from previous system failures. The ladders classify the various transitions the system goes through from one set of observed states to another in multiple stages representing issues of differing urgency, importance and need for remediation. These stages are used at runtime determine the criticality of any abnormal system activity and to accurately predict the component failure prior to the system crashing. Each ladder comprises a plurality of elevated stages representing criticality of the problem. At runtime, the causal ladder engine correlates real-time events received from the system to stages of one or more pre-constructed causal ladders and identifies a probable problem (and/or the faulty component) from the corresponding causal ladder. The causal ladder engine also determines the stage of the problem from event occurrences. At each stage, a different potential solution is identified for the problem.