It is time for everyone to point and scold the President of the United States for his inept management of the implementation of the Affordable Care Act. It is a gift to our cable news industrial complex and late night comedians. But, those of us who have been involved in many large scale change initiates are a bit more humble and tentative in our criticism. We have seen failed implementations before. This president, it is fair to say, had no experience implementing large scale change in a very complex system, and to see the implementation “fumbled”, to use his word, should not be a shock. I have witnessed three very large corporations as they implemented enterprise wide SAP. In all three cases the implementation was a large scale disaster at first, and only gradually were issues resolved and the benefits experienced. IBM, Accenture and other large IT companies have been implementing SAP for many years now, and still it is a frequent mess!
My intention here is not political. Others can debate whether the Affordable Care Act was well conceived or not. Personally, I find it completely unacceptable that healthcare spending in the United States is higher by a wide margin than any other developed country, yet healthcare outcomes are worse. (The U.S. spent 16 percent of its GDP on health care. This proportion was nearly double the OECD median (8.7%) and over 40 percent more than the country spending the second-largest share of GDP (France 11.2%). At the same time we are falling behind other developed countries in key healthcare indicators such as infant mortality and life expectancy. If you were CEO of this company your Board of Directors would demand change!
Claims that we have the best healthcare system in the world are simply nonsensical unless you put an asterisk by that phrase and say, “Yes it is true for the most wealthy and for highest cost procedures.” It is certainly not true for the average citizen and frightening for the forty million uninsured. Although it is improving, in 2008, the United States ranked 27th in infant mortality among the 30 countries in the Organization for Economic Cooperation and Development, according to the National Center for Health Statistics.
In my opinion, it is obvious that the current state of our healthcare system is unacceptable and it is equally obvious that the way the new law has been implemented has been unacceptably clumsy.
The question I want to address is what are the lessons one can learn from this mess and if you were the CEO of this organization what would you do differently? My thoughts follow.
1. Vision and Purpose Must be Communicated, Again and Again!
Improving our system of healthcare delivery, in particular to meet the needs of the forty million citizens who have no healthcare insurance, has been a goal of most presidents over the past fifty years. If one positive thing can be said about President Obama’s efforts it is that in two election cycles he did sell the idea of healthcare reform and received a mandate to create some significant change.
However, he has done a poor job, in my opinion, of communicating exactly how the new healthcare law will effect most citizens. The fiasco of his repeated statements that “if you like your current health plan, you can keep it” is an additional failure. But, today, with all the negative publicity the Healthcare.gov website has received, most Americans do not understand what this law is intended to achieve.
2. Surround Yourself with Truth Tellers
The most important asset of any leader is subordinates who have the guts to speak the truth. If a leader punishes truth telling it is inevitable that he or she will find themselves in the same sorry state that the President found himself in when his “you can keep your health plan” statements proved to be untrue.
I don’t believe that the President intentionally lied to the public. He isn’t that stupid! But, I do think he created a leadership culture in which a) he was disengaged from the messy details of the laws implementation; and b) in which subordinates did not have the courage to tell him the truth that his repeated statements were simply untrue. Why did no one on his team confront him and say “Mr. President, that simply isn’t the truth?”
The media has been overly obsessed with the question as to who the President should fire. While everyone in the chain of command should have done a better job, the President should first look into the mirror and ask himself why his subordinates didn’t speak up and stop him from making a statement that someone must have known wasn’t true. As a leader you are responsible for the leadership culture, the nature of conversation between the leader and his team. If you are not told the truth, no matter how painful, you are being done a disservice by your subordinates and headed for an Obamacare type fiasco! The leadership style and resulting culture that produced this disaster are the responsibility of the President alone. He is far from the first CEO to experience this failure. We all know some CEO who has danced merrily down this path before.
We don’t know whether he wasn’t told the truth, or he didn’t listen. This isn’t the first instance of his failure to receive feedback from subordinates. His first debate with Mitt Romney was a fiasco. When this was rehearsed, did no one tell him that he sounded like a detached and arrogant professor? When he gave his recent apology press conference he rambled on and on, when his message could have been delivered with more authority in five minutes. Couldn’t his aids have given him a signal to say “cut, that’s enough?” It appears that he has dis-empowered or discouraged his subordinates from speaking the truth. This is an unfortunate failure that he must correct.
3. Don’t Make It “Yours”, Make it “Ours”
Never allow a major change initiative to be labeled as your initiative. It must be owned by the entire team that must implement that initiative. If you attach your name and ego to the initiative you should be prepared to be crucified when there is a failure.
Republicans first started to call the Affordable Care Act “Obamacare” with the intention of deriding it in the public eye. They succeeded with their core constituents. But, when the public is asked if they support the “Affordable Care Act” or its components, they do. But if the same people are asked if they support “Obamacare” they don’t. Jimmy Kimmel demonstrated this well with his “man on the street” interviews in which he asked people which they preferred, Obamacare or the Affordable Care Act. Some even felt that Obamacare was un-American, where the ACA was an acceptably American way of providing healthcare. It was a pretty funny, but telling skit.
4. Schmooze or Die!
There is intelligence and then there is emotional intelligence. There is the intellectual ability to analyze complex problems and develop solutions. Then there is the simple ability to build relationships, alliances, to listen and express understanding. These are seemingly simple things. One commentator said that the President gets the hard things right and the simple things wrong.
Presidents Obama and Kennedy are similar in that they both had big ideas, a progressive vision of a better society. They were both strong intellects. But both had little experience in the workings and relationships of the legislative branch of government. Both were too young and spent too little time in the legislative branch to have developed an understanding of how things really get done in Congress.
Strangely, Presidents Johnson and Reagan were also similar. Neither was a great intellect. But, both knew how to schmooze. Reagan maintained a continual friendly dialogue with Tip O’Neill, then the leader of the Democratically controlled congress. President Johnson had served for many years, from 1937 to 1961, in both the House and the Senate. He had been the leader of the Senate before being selected as Kennedy’s Vice President. LBJ knew everyone, knew their wives, their favorite cigar or drink, and knew the skeleton’s in everyone’s closet. He was the perfect man to pull the levers of power and get legislation passed. He succeed in passing the legislation that Kennedy proposed but could never have passed.
Unfortunately, President Obama, while seemingly personable, does not like to schmooze with those who disagree with him. I doubt he knows the names of many Senator’s wives or the preferred drink of Congressmen. He doesn’t enjoy the intimacy of collegial relationships. Whether he likes it or not, it is those friendships that are the grease that lubricates the wheels of Congress.
Many senior executives of corporations fall into one of these two categories: intellects or schmoozers. The rare ones, those who are most successful, combine both intellectual analysis and the schmoozing ability that gains support for their ideas and initiatives both within their organizations and within their marketplace.
5. Complex Implementations Require Simple and Unified Command Structure
Ask any general of any war. The war strategy may involved Army, Navy and Air Force, with dozens of sub-commands under each. But if it is going to succeed, it better have a simple and unified command structure to coordinate the different forces in unified action.
The Obamacare website implementation had forty-seven major contractors. Some have estimated that with sub-contractors included there may have been as many as five hundred different companies involved. Under each there were additional sub-contractors. But, who was really in charge? Can you imagine if you were the CEO of a company and you were implementing a complete revamp of your IT systems and there were forty-seven different contractors involved in the design and implementation of that change? It is almost guaranteed to fail.
Listening to one of the Congressional hearings it was clear that none of the major contractors felt responsible for the overall effort. And, the senior manager within the Federal Government, Marilyn Tavenner, while responsible for the effort, was in no way equipped to manage the complexity of the implementation. Listening to the testimony of the four executives from four of the major contractors I was extremely unimpressed with their apparent ability as executives who could both assume responsibility and manage complexity. Their primary goal seemed to be deny-ability.
The process of selecting and securing contractors, particularly IT contractors, for the Federal government is in itself a process that must be redesigned. It is completely broken. There have been numerous reports about the previous failures of these contractors. Their primary skill is the political process of securing contracts, not the technical skill of delivering on those contracts. The two skills are in no way related! When I had my consulting firm only twice did we respond to government RFP’s that seemed to be worded in language pulled directly from our marketing materials. After many days of filling out forms, after the first face-to-face interview, which wasn’t so much an interview as an experience in hazing, I informed the government agency that I would not submit my people to that kind of demeaning abuse. I can assure you that the most competent professionals are not drawn to the profession of government contracting!
If you have an extremely complex implementation, and you do not attract the best people, and you have a command structure that makes clear and effective decision making almost impossible, you have created the stage for failure on a grand scale.
6. Complex Solutions Require Iterative Implementation
If we have learned anything from the Toyota Production System, we have learned the principle of continuous improvement and simplification. Toyota has a rule that when they open a new manufacturing plant they only do so with a car that is already manufactured in another Toyota plant. When they design and begin manufacturing a new car, they only do so in an older plant with proven people and processes. Why? To control variables and simplify problem analysis. The ACA implementation is an extremely complex, completely new information technology process, implemented by people who have never done anything similar before. That alone guaranteed failure.
I have been involved in the design and implementation of corporate changes that included changes in the flow of work that defined how customers would be served, the information technology that enabled that service, and the culture of teamwork and decision-making required for the new system. In every case, despite how much effort was put into the design of the new system and the change process, it was not one hundred percent right when it was first implemented. What led to success was not the assumption of success, but on the contrary, the assumption that there would be early failures. Given that assumption, all participants were prepared to immediately recognize needs for change and there was a process to quickly address those needs. With each phase of the implementation, as it was moved from one area to the next, the implementation became more trouble free and successful.
It would have been much wiser to design an Affordable Care Act implementation in which different components of the design were implemented in stages. In other words, the Federal and State Exchanges might be implemented with no requirement to change any aspect of the actual insurance product. By doing this the mechanics of the healthcare website and marketplace could be tested and improved before the requirement for everyone to have healthcare or the requirement for insurance companies to adjust their policies. When those changes were implemented the marketplace would be a well tested exchange.
There is a lesson for every major corporate change process in the complexity and the all-go-day-one approach to the ACA implementation.
7. Constancy of Purpose to the Strategy, Not the Tactics
It is a sign of the disintegration of our society that the Republicans on the one hand are committed to killing the Affordable Care Act at all costs; and the Democrats are so committed to this exact plan that they are closed to options to re-write and improve the law. Neither is rational or best for the American people.
Our politicians should be able to unite around a strategy to provide affordable healthcare to all citizens, utilizing the open market system of private insurance and private providers, while at the same time being willing to experiment, adapt and learn from each phase of implementation. The exact tactics prescribed in the law are not so important. What is important is the goal of reliable and affordable care. If this was the focus, rather than the focus on who is winning or losing, the two parties could work together to create an effective system over time. Fixing an IT system is not that hard. Fixing a culture in which teamwork and compromise are considered failures will require much more skill than writing error free code.