System or People

This is a true story and a great example of the challenges of change leadership.

A large insurance company that had grown by M&A was experiencing new levels of competition. In the past, customers were loyal to a provider for many years. Now commercial customers are shopping for new providers each renewal period. Revenues and profits are dropping. Further, there’s a perceived need for a major software application upgrade (in the $40-to-100 million range) for the healthcare insurance division. Should the company change systems at this time? Read and ponder for yourself.

Everyone has a bias. We can’t help but be influenced by our training and experiences. I was speaking with an IT leader who was a proponent of upgrading the systems. He was quite sure once I heard about a recent fiasco, I too would be convinced.

The fiasco story went like this…

Several months previously, customers started calling customers service to complain that claims weren’t being processed. The customer service representatives (CSRs) looked at the account records on their computer screens and agreed that the claims weren’t in the system yet. If not too much time had passed, the CSRs suggested giving the system three more weeks. If months had passed, the CSRs suggested resubmitting the claim.

This went on for months before someone realized the system was indeed broken. The cause was traced to a programming change made months earlier. It didn’t surprise anyone in IT that the programmer was confused by the module’s complexity and “backward logic”. The code was a ticking time bomb and more problems were bound to explode in the future.

Thousands of angry customers complained about terrible service while at the same time the marketplace was becoming more competitive. “In the past we could live with this, but today, the company can’t be competitive with these problems; we need a new healthcare application,” I was told.

This argument was persuasive within the company. The CIO and some outside IT supported the proposal for a new system. The proposal was before the board.

What do you think?

I told the IT Leader that the problem wasn’t the system, it was people. He was speechless. Silence was my opening to give a different perspective.

My alternative view went like this…

The CSRs weren’t proactive. They didn’t see the facts from the customer’s perspective. They didn’t research the specific claims to understand the cause of the delays. If the CSRs aren’t trained or empowered to do research, then that is a people problem too. Management decided to let systemic problems and complaints continue until they become catastrophes.

In IT, people chose to write the highly complex code and the “backward logic”. People, who knew about the problem, chose not to redesign the code or at least chose not to add a warning about the confusing logic in the comments. Further, a good regression test would have found the problem before the code was migrated to production. Some manager decided not to invest in a quality regression test, or not to maintain it, or not to execute it.

Then I shut up. More silence.

He agreed.

The company’s culture is broken. People don’t take responsibility for outcomes.

He tacitly withdrew his support of the new system. The board wisely rejected the proposal too, realizing it would have increased costs at a time of falling profits without any assurances the company wouldn’t be in the same predicament two years from now, but with new software and less cash.

Of course, the new system wouldn’t solve the fundamental problem--an ineffective business culture--the real time bomb in this company.

Knowing where to find the true cause of problems is the reward for pursuing the mastery of change leadership.

Keywords: change leadership, project management, business culture, mechanistic solutions

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Michael Cushman, The Engaging Guru, wants you to master enrolling others in your truth, get the goodies of life, and change the world.  www.engagingchange.com