Final Word (For Now) on the Black Swans and Strategy Discussion: Do Business Rules Derive from a Business’s Goals and Objectives?
Question: Do business rules derive from strategy?
Answer: In our experience only about 2-3% of a company’s business rules derive directly from strategy (goals and objectives). Needless to say, those are a critical 2-3%. The rest of a company’s business rules concerning behavior derive from regulations, contracts, agreements, business policies, warranties, deals, certifications, etc. Let’s call all those obligations.
Every business has a choice of whether to comply with its obligations. Generally speaking, the risks of not doing so will be high in a good many (though not all) cases. So there’s certainly something to be said for being a good corporate citizen in a free enterprise system.
The key is to make sure all business rules align with strategy, even if most don’t derive directly from it.