Learning to fail

Learning to fail

By John Haywardon Thu, 24 Oct 2013

President Obama has often compared the ObamaCare rollout to the launch of a new iPhone.  Surveying the festival of finger-pointing in the ObamaCare hearings this morning, I wondered if Apple has ever considered dealing with a disastrous product launch by lobbing angry accusations at everyone who didn’t buy their product.  As every contractor involved in theHealthcare.gov debacle blames every other – and all of them blame the Administration for bad planning, unrealistic demands, and poor oversight – the Democrats are field-testing some new, utterly deranged efforts to either blame Republicans for failing to fix the disaster their opponents created, or somehow actively sabotaging the launch.

A Twitter friend pointed out this comparison is very unfair to Apple, which has laid a few eggs in its time, but never had anything like the ObamaCare disaster.  It’s not just a question of scale.  Private companies make all sorts of mistakes, but they can’t get away with inflicting something as poorly conceived and non-functional as the Affordable Care Act on their customers, not without facing bankruptcy and lawsuits.  We learned today that scant days of testing were allocated for the largest and most complicated Internet launch in history – a total of two weeks, according to one contractor.

That is utterly inexcusable.  If Barack Obama was a private-sector CEO, the only remaining question would be whether angry customers or angry stockholders got him into court first, and he wouldn’t have any luck defending himself by insisting that he doesn’t know what anybody else in the company is doing, because he’s more of a figurehead and Big Picture Guy than a manager.  Such excuses would bring the entire corporation down around him in flames.  Nobody would trust them any more, at either the consumer or investment levels, at least not until the entire executive structure was torn out root and branch.  Damage to the “brand” would not be easily repaired.

There are certain common elements to the launch of any large project, certain obstacles that would be faced whether it’s the government or a private corporation at work.  But it really is silly to directly compare private and government projects, the way President Obama likes to do, because both the origins and consequences of private-sector failure are very different.   We can start with the obvious difference: the government cannot “go out of business,” no matter how hard it falls on its face.  Compulsory taxation, deficit spending, and monetary tricks can absorb any level of failure.  The American people will never be able to recover the money wasted on ObamaCare, and they will never be compensated for the millions of man-hours they have wasted trying to use the broken system.  Indeed, they will soon be told that repealing ObamaCare would waste all the time and money plowed into it thus far.  Statists always tell us we have no choice but to double down on failure.  The solution to government inadequacy is always bigger government.  Voters really should keep that in mind before voting for anyone who wants to give the State another opportunity to fail, and grow.

It’s also not good that nobody associated with Big Government is terribly worried about damage to its “brand.”  The desire to preserve image is a powerful motivator in the private sector.  It means that a previously successful company stands to lose a lot, maybe even go into a death spiral, after a single major failure.  That means they cannot afford to have major failures.  You can see the lack of concern for such consequences dripping from every pore of ObamaCare.  Nobody in charge of this project – not HHS Secretary Sebelius, or President Obama – gave a second thought to the hell they were about to unleash on Americans.  They calculated that the political damage from admitting serious problems weeks or months in advance would be a greater obstacle than spinning the fallout from a disastrous launch.

A private-sector executive cannot afford to think that way; politicians can’t think any other way.  With all due apologies to the folks at Apple for dragging them into the discussion again, imagine how much damage their brand would suffer if the CEO blew off millions of outraged buyers of a defective product by telling them to call a 1-800 number that doesn’t work, either.

Brand integrity is important to a private company because they have competitors, which means they can lose customers.  Despotic government obviously doesn’t have that problem.  A private company must also face the different, but also highly motivational, fear that customers might choose not to make a purchase at all.  People who walk into a retail outlet to buy a smartphone are not legally required to buy a smartphone.  They can walk away without buying anything.  We should never underestimate how powerful that degree of business failure is.  Everyone selling a smartphone faces the initial challenge of convincing customers to buy a phone, then persuading them to purchase the company’s products.

ObamaCare addresses that challenge by levying a special tax against anyone who chooses not to make a purchase.  Is it really any surprise that the resulting system is very different from a market-based approach in which private industry sought innovative ways to persuade the voluntarily uninsured – a very large portion of the total uninsured – to buy policies?

The private sector executive is worried about both his customers and his investors or stockholders.  Big Government leftists like Barack Obama want the “customers” to hate the “investors,” whose money is sucked into government projects through involuntary taxation.  The game is won by subduing the investors, not by pleasing them.  In fact, the more money an individual taxpayer provides, the less Big Government is interested in how he thinks the money should be spent… unless, of course, he’s also making big political donations to the right people.  By not needing to attract or satisfy investors, government is missing half the pressure that contributes to business success… and mercilessly punishes failure.

How would anyone have been able to rope in voluntary investment for something as ill-conceived as ObamaCare?  Big private sector operations usually begin as small operations, growing through success.  There are advantages to growth, when it’s earned.  As it happens, there are private insurance exchanges that successfully do what ObamaCare has utterly failed to do, with far higher traffic loads on their websites.  They weren’t conjured into existence as nationwide mega-systems intended to serve everyone in the United States, built on a hasty timetable with half a billion dollars of confiscated seed money.  And if they had been, you can bet the people who staked their money and reputations on the project would have kept close tabs on its progress, not waved the whole thing off with the absolutely shocking negligence Barack Obama claims to have displayed toward his namesake program.

The private sector could teach these arrogant politicians a lot about how to fail, including how to learn from failure.  It is a powerful teacher because it is feared and respected… but politicians just shoot spitballs at it, crack jokes behind its back, pass notes in class, and play hooky with depressing regularity.  Failure is anopportunity for the politician, a chance to insist that even more power and money is needed.  Barack Obama is a noted student of leftist theories about creating failure on purpose, in order to profit from it.  Even when politicians have a sincere desire to see a program do well, they are by no means consumed with despair and terror at the thought of disaster.  Layers of obfuscation, scapegoats, legal evasions, loyal voting blocs, and barriers created with other peoples’ money must be penetrated before the politician suffers, and they’re usually years away from hypothetical days of reckoning at the polls – plenty of time to confuse the voters with other matters!

There are private companies that make hideous mistakes and abuse their clients.  The quality of their customer service is directly related to how much they fear losing their customers.  We have cynically low expectations of companies that exist without competition and sell indispensable products.  We insist on anti-trust laws to prevent the deliberate creation of monopolies.  But for some reason, a lot of us are willing to throw common sense out the window and support the ultimate monopoly, Washington Inc., when it moves to control a market.  It’s the mega-corporation that never has to worry about bankruptcy, rarely bothers to fret about cash flow, and knows it will never lose its “customers.”

Since those factors do not compel low prices and good service, we receive those things at the pleasure of the ruling class, crossing our fingers and hoping their compassion, wisdom, and sense of duty will see us through.  We’re the ones who end up getting compelled…. the one power not even the worst private corporation can possess, no matter how much they might desire it, after watching what government gets away with.

 

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