On November 22, the New York Times ran a long article detailing the organizational and managerial problems behind the crash of HealthCare.gov. Art Kleiner, editor-in-chief of strategy+business, calls this “one of the most important articles on management this year.” I agree. Kleiner goes on to suggest that the Affordable Care Act (ACA) is a test case for the idea that the private sector needs effective government, and that the way to get effective government is to free it to learn and reform. In short, let’s demand and support effective management in our public sector agencies.
What exactly does it mean to manage effectively in the public sector? And how do you produce accountability? In recent posts on this blog, I’ve begun introducing the practices of promise-based management, like making effective requests and reliable promises. The recent experience of HealthCare.gov as described by the Times presents a brilliant opportunity to illustrate these practices through a real-life example that everyone is talking about. Let’s give it a shot.
Knowing how long it would take to complete and test the software, the company’s officials and other vendors believed that it was impossible to open a fully functioning exchange on Oct. 1….Government officials, on the other hand, insisted that Oct. 1 was not negotiable.
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Vendors made a grounded assessment that the October 1 deadline wasn’t possible. The response of government officials, it appears, was not to provide their own grounded assessment, but instead to declare that the timeframe was not negotiable. What assumptions and pressures were behind this declaration? Not clear. One thing that is clear: the officials who declined to renegotiate the deadline lost sight of the larger “core” promise: to deliver a well-functioning web site that allows people to sign up for health insurance. Was there any conversation at the senior levels of government about this core promise? Was there any discussion about what to do—what options to explore—if it became clear that it wouldn’t be possible to fulfill this promise by October 1? Probably not. This was a missing conversation!
Agency officials complained that CGI missed crucial deadlines and that it could not control other contractors, although the company said it had no power to do so.
What exactly were the promises between CGI and other contractors? When these contractors signed contracts, was there a clear agreement that the contractors would be fulfilling promises for CGI, i.e. that CGI would be their customer? If so, were there any explicit promises between CGI and the contractors (remember: promise = offer + acceptance) or merely conversations for possibility along with vague nodding of heads? If there were promises, how clear were the conditions for satisfaction and timelines? Who at CGI was responsible for assessing the competence, sincerity, and reliability of other contractors? Who, for that matter, at the Medicare agency was responsible for assessing CGI’s competence, sincerity, and reliability at creating effective promises with these other contractors? I’d wager good money that the answer to both questions is nobody.
CGI and other contractors complained of endlessly shifting requirements and a government decision-making process so cumbersome that it took weeks to resolve elementary questions, such as determining whether users should be required to provideSocial Security numbers. Some CGI software engineers ultimately walked out, saying it was impossible to produce good work under such conditions.
“Endlessly shifting requirements”—what do those mean in promise-based management? Here’s my hunch: CGI had promises with the Medicare agency that involved clear conditions for satisfaction. Then, at some point—indeed, at many points—the government agency declared that there would be new conditions for satisfaction. In the world of promises, you cannot declare new conditions for satisfaction. Well, you can, but that doesn’t mean you have a new promise. The other party needs to agree to these conditions—and, in all likelihood, have the opportunity to clarify them, negotiate them, and come to a new agreement. Apparently, none of these things happened. And I’d bet good money that the people who declared these new conditions for satisfaction believed that the declaration constituted a new promise.
Another sore point was the Medicare agency’s decision to use database software, from a company called MarkLogic, that managed the data differently from systems by companies like IBM, Microsoft and Oracle. CGI officials argued that it would slow work because it was too unfamiliar. Government officials disagreed, and its configuration remains a serious problem.
Here we have another case of differing assessments. What was the quality of the conversation in which the parties discussed these assessments. Did each party take the time to ground their assessments? Did the other party listen with curiosity and take the time to ask clarifying questions? To what extent did the two parties believe that they were actually making assertions of truth rather than assessments? A transcript of the key discussions of these topics (assuming that there were live meetings rather than just email exchanges!) would reveal the answers to these questions.
Over the past three years five different lower-level managers held posts overseeing the development of HealthCare.gov, none of whom had the kind of authority to reach across the administration to ensure the project stayed on schedule. As a result, the president’s signature initiative was effectively left under the day-to-day management of Henry Chao, a 19-year veteran of the Medicare agency with little clout and little formal background in computer science.
My jaw dropped when I read this for the first time. It is a remarkable revelation, one worth reflecting on. How did this happen? Who was responsible for hiring Mr. Chao and his predecessors? More importantly, who hired the person who hired Mr. Chao? I’m curious how many layers of hiring—how many layers of promises—existed between President Obama and the leader of HealthCare.gov. Did Mr. Chao’s boss’s boss hold skip-level meetings with him? Did anyone stop to assess whether they had the right caliber of person for the job or the right level of responsibility within the bureaucracy? Which individuals within the federal government understood that they did not? How free did they feel to share this assessment? Did anyone declare a breakdown before the last couple of months before launch?
I’m reminded of Charlie Peters, the long-time editor of Washington Monthly who mentored dozens of the country’s top journalists. For decades, he noted with exasperation how little most federal government executives know about what’s happening on the ground levels of their agencies. So I imagine he was not at all surprised to see how the Times concluded their piece:
Despite the behind-the-scenes crisis, the president expressed confidence about the exchange just days before its debut. “This is real simple,” Mr. Obama said, during a speech in Maryland on Sept. 26. “It’s a website where you can compare and purchase affordable health insurance plans side by side the same way you shop for a plane ticket on Kayak, same way you shop for a TV on Amazon. You just go on, and you start looking, and here are all the options.”
As my friends in the world of Lean management would say, the White House forgot to “go to the gemba” (Japanese for “real place,” i.e. where the action is happening). As did the senior leaders of the Department of Health & Human Services. What assessments did they make about how HealthCare.gov was going in the weeks and months leading up to the crash? What evidence did they have to ground these assessments? To what extent were they even aware of the chain of promises upon which the success of the enterprise depended?