Pilot-Driven Innovation Makes People Receptive to Change

Editor's note: It's important to master the pilot mentality. President Obama is attempting to "sell" health care reform rather than "market it" to the American public.

Trying to go system wide immediately is a recipe for disaster. Inevitably, this will lead to a series of costly corrective actions if enacted. We believe most non-piloted decisions always have to be bailed out.

Peter F. Drucker identified a major failing of many public administrations: They tend not to experiment...they jump the testing stage.

He called this one of the most common errors in government administration. Said Drucker, tongue-in-cheek: "Whatever you do, do it on a grand scale at the first try. Otherwise, God forbid, you might learn how to do it differently."

Piloting: Look Before You Leap!

In technical and product innovation, Drucker observed, we sometimes skip the pilot-plant stage. This usually causes great problems. But at least a model is built that can simulate what's likely to happen under varying conditions.

It appears that the Obama administration is going from idea into full-scale operation in a variety of areas. Drucker emphasized and reemphasized the need for the pilot stage.

When you omit the pilot stage and go from concept to the full-scale, even tiny and easily correctable flaws will be overlooked. And these flaws can ultimately destroy well-intentioned projects.

Fact vs. Fiction

Many "theories" of the administration are speculative and totally untried. With respect to health care, there is not one shred of empirical evidence that the proposed solutions of the government to reduce health-care costs and improve quality will work.

Perhaps our fears about health care reform can be best summed up by the closing paragraph in a recent Wall Street Journal op-ed article titled: "Fact-Checking the President on Health Insurance."

The article was written by Scott Harrington, a professor of health-care management and insurance and risk management at the University of Pennsylvania's Wharton School.

"Responsible reform requires careful analysis of the underlying causes of problems in health insurance and informed debate over the benefits and costs of targeted remedies."

We believe, as does Harrington, the administration is offering prescriptions that won't cure the problem. Indeed, it may make it worse.

But—and this is a big but—regardless of the correctness of the government's proposed remedy, the objective should not be to "sell" it to the American public. It should be to prove it works before committing our nation to a 1.5 trillion dollar, if not more, speculation.

To have a chance of success, "successful application always demands adaptation, cutting, fitting, trying, balancing."

To reiterate: In industry we learned long ago that we are going to be in trouble if we jump the pilot stage. The Obama administration must learn that this is just as true for government projects and programs.

Neither studies nor polling nor computer modeling are substitutes for the test of reality. Everything new must be tested on a small-scale, that is, it needs to be piloted.