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Out from behind the 8 ball with decisions

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Jim Sinur had an interesting post this week – Don’t Get Stuck with Bad Policy/Rule Management. In it he said

I think organizations that do not manage their policies/rules may find themselves behind the eight ball

a sentiment with which I completely agree. But I would go one step further, organizations that do not manage their policies, rules and decisions will find themselves in trouble. Jim’s diagram of how policies, rules, mission, goals etc relate omits decisions and I think that’s a problem. It is decisions that tie business rules to the goals and objectives of an organization – how we make decisions determines our results and our results determine if we met our goals or not. We still need to establish links between our rules and the policies that constrain and drive them but we need to link back from rules to goals through the objectives that those rules implement.

Adding decisions to rules and policiesSo here’s what my version looks like. You still have a mission and a set of goals/objectives that support it. You still define various scenarios and think about how you would succeed in your mission and meet your goals in each. All of this drives a current set of policies that will constrain and drive your business rules, just as Jim says. But you also know and keep track of the business decisions that affect those goals and map these decisions to the rules that implement them. Your goals allow you to see what a good decisions looks like (it moves you closer to your goal) and the outcomes of your decisions drive your progress towards these goals. This let’s you tell which rules are working and which are not.

For instance, if you have a customer retention goal then that might drive some policies around how aggressive you are with retention offers, initial pricing, discounts etc. These will be reflected in business rules you write. You make many decisions that contribute to retention – you decide who to retain and how to do it, you decide when to make refunds, you decide how to route calls from a customer and much more. The results of these decisions materially affect your likelihood of meeting that retention goal. To close the loop you need to understand the linkage between decisions made and your goals.

Decisions are critical if you are to “get out from behind the 8 ball”

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  • Jim Sinur December 2, 2010, 12:13 pm

    James,

    You know full well, if you read my blogs that I have not left decisions out. This was meant to be a linkage taxonomy that really expects someone smart enough to set missions, goals, scenarios, policies rules and constraints. Setting these requires decisions, of course. It’s obvious to the reader.

    Jim

    • James Taylor December 2, 2010, 12:30 pm

      I know you don’t leave decisions out in general, just thought it was worth pointing out how they fit in this context!
      Thanks for replying.

  • Mark Norton December 2, 2010, 3:10 pm

    James, as always I like your focus on Decisions. However in this case, I don’t think you have gone far enough.

    In our view of the world, business policy is a ‘specification’ of the required decisioning. The relevant subset of business policy describes the changes in the business assets that create value for the business. These changes in the state of business objects are how the business creates value, and they always require proprietary decision making. This decision making must be at a sufficient level of detail to be able to be validated by the business (by definition). It is a small step to then define this decision making as a decision model and test it formally against the market transactions that the business expects to see.

    The benefits of this approach are: that the business gets to bench test its business policies against presumed market conditions; the fact and process requirements of the decision model provide the core requirements for any subsequent systems development; and the tested, business approved decision module is ready to go. This later point is critical – extracting decisioning from the SDLC is the key to an exponential improvement in software development outcomes.

    Regards,

    Mark