Unless you are completely disconnected from the world, you are undoubtedly aware of the issues associated with the rollout of the website for the Affordable Care Act, otherwise known as ObamaCare. My interest in this article is to explore how this “product introduction” illustrates many of the common pitfalls companies face in managing innovation.
Since the launch of this website on October 1, there have been increasing number of news articles and commentary on the problems (1). I am sure we will learn more in the coming weeks, and there will be much finger-pointing for sure, but this product launch has important lessons for any senior manager responsible for their company’s innovation efforts.
Most failure in new product development can be traced to management problems, and especially the lack of engagement by senior management (2). While this particular product introduction is obviously influenced by politics, I would contend the “senior management” in this case are clearly responsible. Even if the primary contractor is found to be part of the problem, senior management made the decision on who to hire, and chose to use federal agency employees to manage the integration.
According to those familiar with the project, there were warning signs months ago that the system was not working properly, and federal officials pushed ahead with the project despite these warnings from those most familiar with the project. Those working on the project knew that the October 1 date was set in stone, even naming it “the tyranny of the October 1 date” and felt the deadlines were unrealistic. For anyone who has managed large, complex projects, does that sound familiar? The pressure to meet launch dates is relentless, regardless of whether corners are being cut and quality sacrificed.
In so many cases, management responds negatively to teams expressing reservations about the schedule due to technical issues. They just do not want to hear about the problems, and take the attitude that if the team just works harder, all will be well. Those bringing the problems to management are branded as “negative” and not “team players”. I often say there is a difference between being negative and being skeptical. Many times, those who are skeptical base it on experience with similar projects, and should not be ignored. Over time, if teams are chastised for raising the red flag, they will not do it in the future. Knowing about issues as soon as possible gives the organization more time to consider options.
Management Involvement vs. Leverage
Related to the discussion above about management engagement is the concept of management involvement vs. leverage. Senior management must be involved and engaged with major projects from the beginning. So often, management will not engage until late in a project when problems have gotten out of control. This is when they have the least leverage to affect change. They believe that once a project has been defined, they can walk away and the team can take it from there.
When the problems surfaced in the last couple weeks with the ObamaCare website, government officials stated that they were going to do whatever it took to repair the site including requiring teams to work 24-hour days. The President promised a “tech surge”. For those who have managed complex projects, the natural tendency to throw a great deal of resources into the project late in the game may actually hurt rather than help. A “tech surge” at the beginning of a project is much more useful, but typically not done.
Complexity, Risk and Project Management
A key responsibility for senior management is understanding the link between project complexity and risk, especially schedule risk (3). According to reports, this website contains about 500 million lines of software code. By comparison, a large bank system might contain 100 million. It is estimated that to fix the problems, about 5 million lines of code will have to be re-written. The prime contractor has called the project “complex, ambitious, and unprecedented”. A federal agency took on the responsibility for making sure that the databases and software being designed by 55 different contractors were integrated despite the fact they had no expertise to do the job. Some key testing did not take place until the week before the launch, and it was clear there were going to be problems. If that is not a recipe for disaster, then I am not sure what is.
A common way to deal with a complex project and high levels of uncertainty is to introduce incrementally, test on a small scale, learn and adapt. About a month before the launch, a group of ten insurers were asked to test the site and give advice. This group urged federal officials to delay the launch because of the issues. An insurance company IT executive stated: “We discussed…is there a way to do a pilot-by state, by geographic region?” Many of the state-run exchanges that are running successfully did just that.
Another reason to have rolled this out in an incremental fashion was the fact that the site was apparently overwhelmed with volume when it launched. I suspect those defining the requirements for the system realized the uncertainty in the site volume estimates that the design was to be based upon. Again, starting small, failing and learning fast, would have helped to ferret out some of these “unknown unknowns”.
A common problem with many projects is project creep and changes while the project is unfolding. According to reports, significant changes in the requirements for the system occurred seven times in the last ten months alone. Any complex project that undergoes significant scope modification that close to introduction is bound to run into problems. This project was no exception.
So in summary, the problems associated with this website launch is a very public example of the challenge any organization faces when managing very complex projects. Even companies skilled in managing these kinds of projects can experience problems (4). Improving the chance of success requires first and foremost that innovation is treated as a key business process and management is fully and continuously engaged. Management must understand they have much more leverage to affect changes early in projects rather than later when problems might be out of control. Understanding project complexity, risk, and the impact on project management is crucial. Finally, scope changes and project creep can introduce additional risk and uncertainty.
What other aspects of the challenges of managing innovation are illustrated by this website launch? Have you experienced similar problems at your company? How did you deal with the issues?
(1) I relied on the following three articles for information related to the ObamaCare website rollout:
(2) See this article for more information: New Product Development (NPD) as a Key Business Process
(3) See this article for more information: How Project Risk Impacts Project Management in New Product Development (NPD)
(4) See this article on the Boeing Dreamliner: Managing Complex Projects: The Boeing Dreamliner
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