Build a Foundation for Growth That Doesn't Rely on Staff Know-How to Manage Critical Business Processes.

“Knowledge is good” was the motto of fictional Faber College in the iconic 1978 film Animal House. Not even Delta Tau Chi troublemaker John Blutarsky could argue with the simple truth of the Faber motto, although he didn’t acquire much of it during his seven years there.

More than three decades later, we’re not going to argue either, except to say that while all knowledge is good, some kinds of it are better than others. Favoring the wrong kind just might get a company in trouble. Let me explain.

Workflow Automation

Every company is composed of teams that, within established guidelines, devise their own methods of getting the work done. These teams, and the individuals within them, have a deep understanding of processes and individual clients. They also possess a wealth of technical and historical knowledge. This know-how that exists within a company’s different functional areas, often acquired over many years, is known as “tribal knowledge.”

In many ways, this tribal knowledge is not only good, but it also is very good and is a real asset to any business. After all, every business wants employees who know what they’re doing, have been around for a while, truly “get it” and get “it” done.

However, over-reliance on tribal knowledge can be harmful to the health of an organization, even one that has been humming along smoothly for years. That’s because despite some teams having developed elaborate and efficient processes, the processes are seldom written down and nearly impossible to audit. And when team members leave, retire or move to other areas of the company, they take with them some of their tribal knowledge, leaving a hole that no one is equipped to fill.

The challenge is especially acute within the highly regulated and quickly evolving world of financial services. As the president of XTRAC Solutions—a cloud-based workflow and document management system—I have spoken with many financial services firms that are struggling with and worried about this issue.

How worried should they be? How can they scale their business to keep up with growth? Are companies over-relying on tribal knowledge not just in certain areas but across many departments and with mission-critical processes?

To help answer these questions and better understand the current reality and needs of these companies, Forrester® Consulting conducted a commissioned study on behalf of XTRAC that was published in January 2014—The Risk to Your Business You May Not Even Know You Have: Financial Institutions Driving Blind—and revealed stark findings that draw even starker conclusions.

Forrester surveyed 50 decision makers at U.S. financial firms with more than 500 employees. Among other questions, the survey asked respondents how they measure progress across seven critical financial process areas, including client account servicing, compliance testing, and audits and financial operations. The finding was that the majority of firms either have only a very limited way of measuring progress or measure progress based largely on subjective assessment and tribal, rather than systematic and data-driven knowledge. The study concluded that across these seven critical areas, “42% report that they have no real way of measuring progress—essentially driving blind, depending completely on human assessment—with no automated metrics or proven key performance indicators (KPIs).”


Simply put, the study found that most financial services enterprises still rely too heavily on tribal knowledge to manage their critical finance and compliance processes. And those failing to establish an effective process management system to help create more efficient, standardized and automated workflows are falling further and further behind those that do.

The Forrester study showed that compliance testing and audits present the greatest set of challenges, with 72% of respondents selecting it as one of their top three most difficult and 34% selecting it as the most difficult. More than 70% of those selecting compliance as a top challenge cited an uncomfortable level of risk inherent in the process. Compliance testing, auditing and reporting struggle to be treated as repeatable and recurring processes in most firms due in great measure to reliance on associates to individually do the work.


Imagine how a company among the 42% with absolutely no systematic and data-driven way to manage critical processes will feel when regulators come calling wanting to see documents and audit trails. A major scramble likely will ensue, and if some steps in a process exist only in an employee’s brain, then the visit probably won’t have a happy ending.

The study also showed that coordinating work across departments is a top challenge for client account servicing and often relies on tribal knowledge and manual labor. Examples are onboarding a new customer and transferring assets from one account to another. This work often exposes the siloed nature of many information systems as employees either create their own processing solutions or need to access or enter information into multiple systems.

A company thinking about where it might be on the tribal knowledge scale vis-à-vis the process management scale can implement a three-step exercise that will show how to address the issue:

1. Assess process readiness. Start by asking some frank questions: Does the organization have a consistent approach to its most important processes? How much latitude do individual employees have to create their own workflow? If the short answers are “no” and “a lot,” you are far from alone but in need of some help.

2. Pick one process to fix, and measure how it is currently done. Don’t try to take on too much at once. Just choose one area to address first, one where you have a significant amount of organizational risk, such as new client onboarding. Then, perform an end-to-end review of how this process is done today and how it is measured.

3. Create an automated workflow. To the extent a process needs to be fixed, fix it. Then automate it by putting in place a workflow that captures best practices and makes every step in the process visible, documented and repeatable.

Once a company has taken these steps, the challenge is to carry its findings forward across the most critical parts of the organization and establish an end-to-end measurement system. Solutions such as the XTRAC® Workflow Suite provide a ready cloud-based platform that can quickly help a company become more efficient, have greater operational control, collaborate
better and make more-informed decisions.

Companies that choose this path don’t lose the benefits of tribal knowledge and the employees who hold it. Rather, they can use it as the foundation for running an enterprise that has the all-around good knowledge it needs to stay on a smooth road, scale for growth, and handle its top business priorities today and into the future.


About Daniel R. Brownell


Daniel R. Brownell is the President and Chief Executive Officer of XTRAC Solutions, an independently operated company of Fidelity Investments®. The XTRAC® Workflow Suite is an advanced business processing platform that has run much of the operations and infrastructure at Fidelity for the past 20 years, including for clients of National Financial through the Business Process Manager (BPM) solution, and is available for implementation by other firms.

Prior to assuming his current position in August 2011, Mr. Brownell spent 25 years in a variety of technology leadership, process excellence and innovation roles at Fidelity. He has led large and globally diverse organizations and has served as chief information officer of various Fidelity businesses and functions.