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10 Rules for Governors and Investment Fund Managers

It's time to reprint a story I wrote when Wall Street imploded and went down the drain in September. These 10 rules are holding up pretty nicely three months later, thanks to Illinois Gov. Rod Blagojevich selling Barack Obama's Senate seat on e-bay, and prominent Wall Street Trader Bernard Madoff's alleged $50 billion fraud, the biggest Ponzi scheme in history.

10 Rules for Wall Street
What are the rules? Did people break the rules, bend the rules, or ignore the rules?

Confidence in Wall Street went down the drain last week. The credit crisis gave business a bad name, and it gave government a bad name for not doing anything about it. Trust disappeared.

It's time to rebuild trust in business and government.

Here are ten rules for restoring trust in business and government. These rules apply to everything from the global financial system, to Wall Street; from federal governments to local jurisdictions; from global corporations, to organizations and small businesses.

Companies that learn to define transparent rules that are sensible, consistent, easy to understand, and easy to follow will be easy trust. On the other hand, companies that rely on opaque rules that are complicated, confusing, illogical, inconsistent, or deceptive will be hard to trust. They will go out of business.

Rule 10 - Have guiding principles. Act on principles, independent of influence by greed or friends.

Rule 9 - Follow policies and guidelines about what is permissible and what will not be tolerated.

Rule 8 - Establish rules of behavior concerning what is right and wrong. Success in business depends on understanding the rules. The rules of the business are the way the business really operates. Design transparent rules that are logical, sensible, easy to understand, and easy to follow.

Rule 7 - Leverage knowledge and judgment. Know what you know, and know what you don't know. Document and retain what your experts know and how they think so their knowledge can be shared with those who need to know. Use wise judgment. Know when to follow the rules, when to bend them, and when to forget them.

Rule 6 - Make smart decisions informed by facts, rules, knowledge, principles, and judgment. Decide using clear, logical, and unbiased rules that explain each decision clearly. Use sound reasoning to make rules-based, principles-based, and knowledge-based decisions.

Rule 5 - Create enterprise architecture to deal with change and complexity. Use architecture to simplify complexity, and to understand how the whole business and the whole system works; Understand who, what, when, where, why, and how. Design the architecture to ensure that all the parts fit (interoperability), connect (integration), work (quality), work as intended (alignment), last (reliability), and can be shared (reusability). Design the architecture so the business can handle increases in complexity and increases in the rate of change (flexibility). Design the architecture to reduce time-to-market and reduce operating costs. Design the architecture to support rules-based and principles-based compliance.

Rule 4 - Do the engineering, to design systems that work, change, and last. Apply architecture and engineering design principles to ensure alignment, flexibility, quality, interoperability, integration, reusability, reliability, compliance, reduced time-to-market, and reduced costs. Build in risk management safety factors so the business and the systems can handle extreme stresses and excessive loads.

Rule 3 - Have a clear vision. Stand for brand.

Rule 2 - Instill confidence. Improve the quality, consistency, and accuracy of decisions and actions.

Rule 1 - Build trust. Align actions, decisions, and transactions with management's intentions. Align execution to goals, strategy, and mission. Align systems to business. Align implementation to intention.

Sept. 25, 2008 Rolando Hernandez BIZRULES

(Reprinted from here)

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Comment by Rolando Hernandez on December 18, 2008 at 4:01pm
Johan, Take a look at the new Agility Alliance architecture group (

There are a few other architects already there, and that's a good place for more advanced discussions with other experts like yourself. There are links to EA resources, you can start a forum discussion for EA members only, add comments to the wall, publish additional links, and upload and save files.

Joining the EA group lets you post and comment. Group members can (optionally) get notified as new content is added to the, so you can get as much or as little notification depending on your preferences.
Comment by Johan Lindberg on December 18, 2008 at 1:48pm
I suppose it doesn't matter much where in the organizational chart you place the department. As long as the job gets done. And gets done right.

But that's the precisely the thing. How many architects are there (in the organization) and how many do you need in order to get a noticable effect from their work? How do you make sure they focus on relevant things and that they work together? How do you make sure that these efforts reach the whole organization?

Getting it all up and running is not the simplest task and it costs a lot of money. I agree that *not* doing EA is expensive in the long run but it's sure quite expensive to do it (right) as well.

I guess it all comes down to whether or not your management team knows enough about this to see the value it brings and I guess that's up to us to explain. Hopefully I'll get lots of good examples and advice on doing just that in this group.
Comment by Rolando Hernandez on December 18, 2008 at 2:53am
You are not alone. Maybe the answer is moving EA out of IT, and into the business side. I believe creating the enterprise architecture (rule 5) and doing the engineering (rule 4) applies to both business and IT... mostly to the business.

Doing EA may be expensive now, but not doing EA is going to be even more expensive later! Your company must decide which path it will take. Doing EA is optional.

If the SEC had followed most of these rules, especially #4/5, their compliance systems would have raised flags about Bernard “Made Off with $50 billion” sooner. If the governor had just followed rules 6-10, he wouldn’t have gotten into this mess.
Comment by Johan Lindberg on December 17, 2008 at 1:38pm
I fear that the increased focus on cost control that seems to be setting the stage for 2009 will make it difficult for most companies to even attempt to follow rule 4 and 5. However important these things are for a company, they cost money. Usually a *lot* of money and IT doesn't have the best reputation of delivering on promises either... I'm guessing I'll be spending most of my time writing proposals rather than code in 2009.
Comment by James Owen on December 16, 2008 at 9:52pm
Rolo et al:

Somehow I would think that a rulebased system (or a BRMS, if you are so inclined) is nothing more than a tool, a compiler, if you will. The rules that you have laid out here are all pertinent BUT they are not part of a BRMS for a company. Rather, they are a code of ethics - of sorts. Building trust might be an end result of a rulebased system, but it is not the rule. Building trust and instilling confidence are much the same thing. Clear vision - Wow!

Show me a company with a clear vision and it will probably have technical managers who actually started the company who know the market, know their customers, know economic laws of supply and demand, know forecasting, know how to do proper data mining, etc, etc. Most companies grow to a point and then they make the fatal error of hiring a CEO, CTO, CIO etc. who know absolutely NOTHING about that particular company. Nope! Steve Jobs has shown us how to do it. He (and the Woz, of course) started the company and it was their vision that made it successful, not some imported CxO crew who were there for the big salary, stock options and perks of office.

Sometimes I think that people like Mark Cuban did the right thing; grow the company to the point where it can be sold for $1B USA, bail out and go do something really cool. Like buy an NBA team and have fun. Steve Jobs is still a terror to work with (or so I've been told) but he's doing exactly what he always wanted to do and he's doing a great job of it.

BUT, this is a start. Now it's up to the members of AA to build on this and hack on it and improve it. I think that Mark Lane might prove to be a tremendous asset in all of this so pick his brain.


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