Is Your Company About to Hit a Brick Wall?Add bookmark
Are you ready for the time when your business rules walk out the door?
You could be at risk of losing critical business capabilities and you might not find out until it's too late.
Rules are everywhere in your company – but most are unobtrusive and people don’t even know they’re there. Rules determine when and how things get done. They guide decisions. They let you stay in business by helping you comply with government requirements. They dictate how everything is done. In reality, they are the knowledge that directs the operation of the company.
While rules can come from anywhere, there are two major places where you will find business rules. The first is the business operation and the second is in the application systems that support the business. The rules in applications are at minimal risk and they will stay imbedded in applications until we replace the application. With business operational rules, the situation is different. These are the rules that people use to guide their work and the company uses to ensure that operations are managed and function the way senior management believes it needs to.
Think what it would be like if these operational rules were suddenly taken away. The chaos that would follow might well be catastrophic, even given managers and staff who each know their individual jobs.
The fact is that the underlying situation is nothing new. We have known about it for years and we have been warned about it time and again. But because of a poor economy and people losing ground on their take home pay, many who would have retired have not done so. But no matter how bad the economy, people can only work so long and then it becomes too much – especially with the doubling of the workload due to relentless staffing cuts. So the edge of the cliff is coming closer every day. Are you prepared for the time when the real knowledge of how the company works (an understanding of its rules) walks out the door in mass over a short period of time?
The pass that companies have gotten in this area is really about over. I don’t think this is an alarmist position, I think it is a realistic position. We can only stay in denial, and we can only avoid doing something about this, for so long. Then we hit the operational performance wall. When this happens, the trouble will be painful and costly.
Some of the most important business capabilities are those that rely upon knowledge based decisions and are entrusted to a handful of highly skilled, seasoned, and experienced employees. These decisions are based on business rules, but the vast majority of them have never been captured or codified because they address complex and/or infrequent circumstances. These rules have been built over time on an as needed basis to handle new situations and changes in the business operation. They replace older rules that are no longer applicable – the world has changed. Because of the way they were created, these business rules usually exist only in the heads of the people who make the decisions – and they are interpretive and rely on situational experience.
In addition to looking for these specialized rules, you may ask yourself how up to date your procedure manuals might be and if they contain rules that reflect the current way work is being done? The reality is that in most companies, the critical business rules that are used to run the daily activity of company operations are also informal – they are not written and seldom up to date. They also exist only in people’s memory and are passed from staff member to staff member as answers to questions.
To test that, look at your policy and procedure manuals. What shape are they in?
In many companies the answer is "not good". Many procedure manuals started as a somewhat modest binder of brief guidelines. Over the years these binders have often grown with memos, emails, personal notes, and other information that was stuffed into the overflowing binder. Even if most directions are in there somewhere, experience has proven that the junior staff relies on the senior staff to tell them the rules and interpret their meaning for them. Why? Because no one can find anything in the mess that is often called procedure
But why should you care now? What is different than in the past?
Many of the most skilled and experienced people may be nearing or are already beyond their normal retirement age. If they leave and no one has captured the details of these informal business rules, the result can be wrong decisions, delayed decisions, or no decisions. This can disrupt every facet and area of the business and cause significant harm.
Because, it is not likely that mid-level managers will know the details of how work is performed (nor should they) reconstructing the logic and information will fall on the line managers and staff who are already fully committed. This will make any attempt to recreate the operational rules costly and time consuming – if it can be done. Reconstruction can also miss important factors or information because the original basis of thinking is not known and generally cannot be fully discovered by working backwards from an outcome.
We have seen companies hit by this situation after mass downsizing and other cost reductions. The result is often such a problem that the companies have hired back key people as temporary consultants. This works until the younger, less expensive staff members are trained by these people. But this is costly in terms of higher compensation for the people brought back, business disruption, opportunity loss, and work slowdowns which hurt customer interaction and loyalty.
However, finding both known and "behind the scenes" business rules is not a straight forward proposition. Most people look at you blankly when you ask them what rules direct their work. The same is true if you ask them for the specific policies or procedures that define their work or govern their decisions. The real situation in most companies is that the rules were never documented and those parts that were dictated by law (GAAP, regulatory compliance, and more) were imbedded in the business operation solution and then promptly forgotten. In addition, few companies have devoted the resources needed to keep rules and their definitions up to date.
So obtaining business rules is often a process of ferreting out the known and little known business rules, as well as the logic and information employed in both decisions and work execution. These activities can include an "archeological dig" through old documentation. However, once discovered the findings must then be turned into accurate and useable documentation and then entered into a formal rule library tool.
This exercise to unearth business rules is not, however, simple or straight forward. It requires experience and an understanding of what to look for. It also requires the time and expertise to pull them out of people who may not understand that the verbal instructions they were given over their years with the company to guide their work are actually rules.
But companies have gambled on this issue for years. Urgency in addressing this issue was tempered by the cost, disruption, and the difficulty of bringing this under control. However, the risk is now rising and given the fiduciary responsibility of senior managers in the company, a time is being reached when inaction is no longer a real option.