THE BLOG

CEO Lessons From Obamacare

Nov 18, 2013 | Updated Jan 23, 2014

CEOs and other leaders, in the corporate world and beyond, should do more than follow the news on the Affordable Care Act (ACA or Obamacare). They should also ask themselves what they would do if they were in President Obama'a shoes. After all, several generic parts of this drama add up to one of the most difficult and frustrating challenges that corporate leaders can confront in their careers.

What President Obama faces today is familiar to many students of corporate history. Indeed, abstracting from the specifics of the ACA, think of the case set up as follows:

  • A committed and visionary CEO pursues a strategic initiative that she/he believes is timely, important, urgent and durable;
  • Significant multi-year efforts are devoted to designing a comprehensive strategy, and to persuade others of its merit and beneficial impact;
  • Protracted and inevitably-tense negotiations lead to modifications and compromises; and
  • The end result doesn't totally correspond to the initial ambition, but it still captures most of the key strategic elements and the visionary essence.

With all this behind the CEO, the time now comes for the much-anticipated roll out. But rather than go smoothly, the execution is - unexpectedly - a debacle.

Such a botched outcome comes as a surprise for all, and especially given the expectations of both supporters and foes of the initiative. Like the CEO, they had assumed that someone had paid careful attention to the technical implementation details - particularly in light of the importance of the initiative and because the CEO had staked so much of her/his reputation on the presumed success of this initiative.

It turns out that this assumption is completely wrong. The launch is undermined by meaningful shortfalls in technical execution. And the result is an unanticipated and very public slippage, with quite far-reaching consequences - not just for this initiative but also for other key corporate objectives.

Given the narratives around the execution failure, the CEO now faces a situation where lots and lots is in play - and, exasperatingly, all this is on account of avoidable technical slippages.

Supporters are embarrassed and angry. Opponents are energized and eagerly exploiting the situation. The media senses the "opportunity" and is having a field day.

Meanwhile, those with more limited information are encouraged by others to extrapolate from the reality of a botched initial execution to a more general narrative suggesting that the whole strategic initiative was ill-advised from day one.

What is a CEO to do in these circumstances?

Quickly acknowledging the extent of the disaster, taking clear public accountability, and understanding the reasons for the competing public narratives are all necessary conditions. So is rolling up the sleeves and getting quickly and decisively into fixing the detailed technical failures.

As important as these first steps are - and they are critical - they are not sufficient. CEOs must also rapidly find a way to re-anchor what remains a highly-valid and valuable strategic initiative. And that is an even more difficult task.

In thinking how best to do this, I am reminded of numerous cases that materialized in the corporate world over the years. Some were handled well; others saw CEOs inadvertently amplify the initial failures.

Drawing on my understanding of these cases, here are a few principles that, rather than provide a definitive analysis, are meant to stimulate a broader conversation among us all.

First, ensure that the destination is unquestionably sound and visible - and do so by repeatedly reminding stakeholders (both internal and external) of the validity of the strategic initiative; and by making it crystal clear to opponents that key elements are non-negotiable.

Second, work backwards from the destination to specify and communicate the key steps in the journey of re-establishing comprehensively the credibility of the initiative.

Third, seek some quick wins in implementation to illustrate that the initial slippage, while meaningful, is indeed temporary and reversible.

Fourth, do not allow this whole issue to consume every other part of the business, activities, public interactions and internal discussions.

Fifth, be totally open with your constituents, including by recognizing that the initiative's full recovery is probably months in the making. Properly managing what are now unanchored expectations becomes a key tenet of leadership and corporate strategy.

There is a reason why all this constitutes one of the CEO's most feared challenges.

Having worked so hard to deliver on the macro aspects of the initiative, it more than infuriating to see it tripped up by the micro. And its really annoying to see opponents use this type of micro slippage to unfairly undercut the macro.

Yet this is the reality of tough operating environments; and there tends to be quite a bit at stake given the extent of competition and of asymmetrical information.

Having been put in such an unfortunate position, successful CEOs grasp quickly the magnitude of the setback, put aside issues of "fairness," and swiftly re-assert strategic legitimacy. And the best way to deliver on this unexpectedly-difficult recovery road is to start by rapidly moving in the right direction.

Cross-posted from LinkedIn.