Understanding Strategy as a Key Business Analysis Tool: It’s Not Business Process!
John Matthias recently wrote this about our new book, Building Business Solutions: Business Analysis with Business Rules[1]:“I especially liked the discussion about the mission and goals. I still see business process analysis in organizations I visit where the goals are not articulated well, and the results are not useful. (I’ve done it myself.) It’s easy to get lost among the trees, unaware of the contours of the forest or what direction you’re going.”
Indeed! That’s why we came up with the Policy Charter, which is the deliverable in our approach that lays out the elements of strategy and their motivation. A Policy Charter is all about business goals, business risks, and business policies. It’s not about business process! [2] How do you distinguish between good business strategy and bad business strategy? Noted strategy expert Richard Rumelt distinguishes the good and bad as follows.[3] Good Business Strategy Rumelt, p. 20: “good strategy requires leaders who are willing and able to say no to a wide variety of actions and interests. Strategy is at least as much about what an organization does not do as it is about what it does.” Rumelt, p. 243: “good strategy is, in the end, a hypothesis about what will work. Not a wild theory, but an educated judgment. And there isn’t anyone more educated about your [business] than the group in [the] room.” Bad Business Strategy Rumelt, p. 32: Bad strategy “… is not simply the absence of good strategy. It grows out of specific misconceptions and leadership dysfunctions. To detect a bad strategy, look for …- Failure to face the challenge. When you cannot define the challenge, you cannot evaluate a strategy or improve it.
- Mistaking goals for strategy. Many bad strategies are just statements of desire rather than plans for overcoming obstacles.”
- First, you must have a variety of tools for fighting your own myopia and for guiding you own attention.
- Second, you must develop the ability to question your own judgment. If your reasoning cannot withstand a vigorous attack, your strategy cannot be expected to stand in the face of real competition.
- Third, you must cultivate the habit of making and recording judgments so that you can improve.”
[2] The standard for organizing business strategy is provided by the Business Motivation Model (BMM). See www.BusinessRulesGroup.org
[3] Rumelt, Richard [2011]. Good Strategy Bad Strategy: The Difference and Why It Matters. New York, NY: Crown Publishing, a division of Random House Inc.
Tags: BMM, business analysis, business goals, business processes, business processes vs. business strategy, business strategy, Policy Charter, Rumelt, strategy
Ronald G. Ross
Ron Ross, Principal and Co-Founder of Business Rules Solutions, LLC, is internationally acknowledged as the “father of business rules.” Recognizing early on the importance of independently managed business rules for business operations and architecture, he has pioneered innovative techniques and standards since the mid-1980s. He wrote the industry’s first book on business rules in 1994.
Scott Cleveland
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Good post. I embrace the 3 skills of Good Business Strategy whole heartedly. Especially in this day and age where things are happening at hyperspeed, we can’t be expected to know all of the answers. We need to keep our eyes and ears open to new ideas.