Perseverance and the Pit of Despair


Perseverance and the Pit of DespairThe number of transformation projects I hear about that get cancelled after one to two years is dismaying. When these cancellations come up in discussions with clients, I understand the reasons behind them; however, I am reminded of two projects from my past that almost met the same fate.

One was the strategic implementation of a policy administration system (PAS) replacement to handle a new life insurance product that was successfully launched with a third-party administrator (TPA) that needed a long-term home. The second was the development of a new business and underwriter workbench system that was retiring four large-scale legacy systems with varying technologies.

Interestingly, both projects were for the same carrier and were sponsored by the same senior executive in charge of policyholder service. I had the benefit of two different perspectives for these projects. For one, I was the vendor delivery executive for the project. For the other, I was the carrier’s IT development executive.

Both projects travelled “the long dark night of the innovator,” a concept introduced in the ’90s that identified several phases that large-scale transformation projects pass through. The cycle starts with early enthusiasm and incredible hype, shifts to later stages where results are not evident, and ultimately hits the phase that a former boss once described as the “Pit of Despair.”

This phase can last from one to two years and is the point where many projects are finally cancelled. Eventually, the business will start to see the payoff and acknowledge that the system is actually working, and the project is deemed a success.

Both projects from my past were in the Pit for at least a year and were able to rise from its depths to an ultimately successful implementation. As I reflect on those projects, I am able to point to four factors that contributed to their success. These factors were:

  1. A clear business imperative or a burning platform.

For the PAS project, the company launched its first variable universal life product utilizing a small TPA. Based on its success, the company would look to migrate the product to a new system that would be the basis for a strategic platform. This was during the time when the stock market was booming, and the agents pivoted their new business to this product. As a result, the sales outpaced the capabilities of the TPA to meet regulatory service levels.

When the project to implement the long-term solution was mired in the Pit, there was no way to go but forward. The team persevered and continued with the project, recognizing that starting over was not an option. In the end, they overcame the project’s obstacles and were able to move all business to the new platform.

  1. Commitment at the highest levels of the business and real, tangible benefits.

For the new business and underwriter workbench project, the company was coming off of two unsuccessful new business projects that failed to deliver the expected results and ended up adding significantly to the technical debt embedded in their environment. The CEO had very low expectations for the new project and required the business executive sponsor for the program to establish specific, measurable objectives for the project.
These were a 15% reduction in new business expenses and a 25% improvement in turnaround time. These objectives were baked into the future business plans and budgets for the new business area and could not be attained with the existing systems. When the project fell into the Pit, the business leader focused the company on the committed goals and the need to persevere and push through to a successful completion.

  1. Robust project governance and problem resolution process and metrics.

When a project lands in the Pit, it is very difficult to know when, if ever, it will come back out of it. Anecdotal evidence usually runs counter to success, so it is important to have a rich set of metrics to support positive trends and see progress. There is usually a lag between what looks like abject failure and evidence that you are beginning to chip away at the issues.

This requires an objective perspective about the number of errors and their arrival rates, severities, closure rates, and the potential to implement sustainable workarounds that can provide some relief. The last item requires a delicate balancing act as too many workarounds can result in increased “Day 2” enhancements and future long-term technical debt. Objective information is required to disarm the naysayers and ensure that future expectations are based on current facts.

  1. Care and feeding of the project team.

Both of these projects were slogs. They placed a lot of stress on the team as the project started to wallow in the Pit. Key resources will shift between exhaustion and burnout. While it is important to keep a firm hand on the tiller, it is equally important to find ways to create and celebrate small successes. This can be difficult when you are in the Pit as the team can sense feelings of despair and will worry about their personal fate along with the fate of the project. Holding to an unrealistic schedule can be a problem and lead the team to lose confidence.

Additionally, it is important to shelter the team members from the corporate politics that can run rampant while they are focused on driving the project to success. Ensuring that the senior leaders continue to support their efforts and emphasize their importance to the organization is critical.

Large transformation projects are difficult. They challenge the resolve and commitment of project teams. The four factors above were vital to the success that my teams experienced in persevering to deliver value to the business.

For more information on best practices for large-scale transformation programs, read our reports Minimizing Project Risk Checklist and PAS Lessons Learned: Implementation Best Practices for Life, Annuities, and Benefits.