A Management Lesson From Healthcare.gov

by Rod Collins

 

As the bureaucrats struggle to fix the failed HealthCare.gov website, fend off the protestations of an engaged press, appease the concerns of a confused populace, and all the other things you need to do when you’re in full damage control mode, there’s an important lesson to be learned for all leaders, whether they are in the public or the private sector: A nineteenth century management model doesn’t work in a twenty-first century world.

While there is much public outrage over the meanderings of the stewards of the website, there aren’t many who can honestly say that they are really surprised. Had we taken bets a few months ago, the money would have been on the result we got. That’s because, while the components of the website were distributed to various contractors, the overall management of the project was the responsibility of the government managers inside the Department of Health and Human Services, and government managers are not generally known for their prowess in leading innovation. However, if the bureaucrats had taken a very different approach and fully outsourced both the management and the engineering of the website to the people at Amazon, Google, Kayak, or Zappos, it’s probably a safe bet that the money would have been on the side of a successful launch because we know from our own experience that these online giants know how to manage innovation. Perhaps that’s why the government managers, in a much-publicized move, have enlisted the aid of Google and other technology experts in a tech surge to salvage their ailing website.

Whether it ultimately works or not, the Affordable Care Act is the most significant attempt at innovating the health insurance market in decades. What the managers at the online giants understand that the bureaucrats have yet to grasp is that managing great change is only possible if we change how we manage.

The digital revolution has suddenly and rapidly thrust us into a new world with new capabilities that operate by a very different set of new rules. Website purchasing is a twenty-first century phenomenon, and when managers venture into this space, they need to let go of traditional ways of managing and become familiar with the radically different management system that has become common practice among the leaders of innovation. We call this system Wiki Management.

Wiki Management is a management system that assumes that the best way to organize the work of large numbers of people in a post-digital world is to build collaborative networks rather than top-down hierarchies. Unlike traditional organizations whose mantra is “plan and control” and where the preoccupation of their leaders is centered upon making sure that everyone knows that they are in charge, the leaders of collaborative networks follow a discipline of “iterate and co-create” and build working arrangements where people are highly connected. These innovative leaders fully understand that, in the twenty-first century, real power comes from many people being fully connected rather than one person being in charge.

As the bureaucrats, contractors, politicians, and pundits all point fingers at each other to ascribe personal blame for the failure of this website, we should keep in mind the sage observation of W. Edwards Deming: “If most of the people engage in the wrong behavior most of the time, the problem is the system not the people.” If the same people who worked on HealthCare.gov, whether they are government employees or outside contractors, had been assigned to work for Amazon using the retail giant’s management system, we would have likely had a very different and more favorable result. There would have been a deeper focus on creating a smooth customer experience, continual cross-functional learning, and a firm focus on the end-to-end process. When the motto of your basic management system is “iterate and co-create,” there’s continual learning and real-time improvements.

Instead, the government managers employed traditional command-and-control management, segregated tasks among the various contributors, and invested heavily in the belief that they could centrally bring all the parts together at the end of the project. Things don’t work that way anymore. We do live in a new world with new rules. And one of those rules is, when organizing the work of large numbers of people, build a collaborative network not a top-down hierarchy.

 

Rod Collins  @collinsrod is Director of Innovation at Optimity Advisors and author of Wiki Management: A Revolutionary New Model for a Rapidly Changing and Collaborative World.