A few years ago, I was an executive at a large health care company. Every month, the officers and directors would meet to discuss matters of strategic importance: new product concepts, innovative marketing concepts, achieving customer intimacy. One month, in the midst of our strategy session, our non-technical president blurted out an interruption to these lofty discussions that deflated our balloon of global dominance--"Before we launch another product strategy, just tell me how many members do we have in our health plan?" This simple question yielded an answer from each department--but each department had answered with a different number.
The president's focus then turned from curiosity to frustration--"How can we run a billion dollar company effectively when we can't even agree on something as simple as the number of members (or customers) we have? Why does each department executive give a different answer?" The answer is that each executive calculated the number of members based on a hidden business rule that they didn't explain with the answer. Marketing counts a member as soon as a customer proposal is approved. Sales counts a member after the first premium payment, and underwriting counts a member as soon as the health plan is at risk to provide payment for a claim. Each scenario has a different business rule to arrive at the "correct" answer.
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