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Bob Meade - Best case, worst case & most likely case . . .

It has become fairly well known that President Obama's administration has the fewest advisors with business experience of any president in memory. Currently, only 8 percent of his advisors have a background in business, as compared to around 50 percent for most of his predecessors; Democrat or Republican. Why is this important? To explain why, we need to distinguish between running a business and running a government program.

In business, the job of the entire management staff, from the president of the company right on down to the first level of supervision, is to "prevent things from happening that you don't want to happen". For example, when a business, or a department within a business, develops its business plan, it will identify the aim or goal of each project. The manager will define what will be considered a success. The manager and his or her staff then set forth a number of assumptions, things they believe will happen if their efforts are successful. However, they don't stop there. They then put a value on each of those assumptions and assess the impact if one or many or all fail to take effect as planned. In this process, the group usually is able to prioritize the achievability of each assumption. They can generally tell which are certain to complete successfully, which have at least a 50 percent chance of being on target, and which ones have lower odds of success and will require that extra effort to achieve.

As the staff develops the assumptions, it also identifies what the benefit from each will mean to the overall plan. For example, a sales plan might well include how much new revenue will result if that assumption comes to pass. A manufacturing benefit might be an increase in productivity, getting the same or more product output with less resources. The result of the planning process is that management can assess the resource and other costs necessary to achieve the "best case", "worst case", and "most likely" scenarios. Is the benefit to be achieved worth the cost necessary for that achievement.

The rigor in the planning process allows the staff to develop three looks at what might happen. The "best case" of those looks is that all assumptions will be met and the highest level of achievement will be attained. The "worst case" will result if many of the assumptions, especially the most critical ones, are not met. And, the third is the "most likely" plan, the one that has weighed the assumptions most likely to come to fruition and the benefits to be derived. Management may view the plan and see that the cost of achieving the best case scenarios is unacceptable because the difference/margin between what is achieved and what it cost for that achievement is simply too small to take the risk.

Why go through that rigorous effort and then not take on that project? Because management is charged with preventing things from happening that you don't want to happen and the first thing a business does not want to happen is to not make a profit. And that's the difference between business and government.

There are a number of government departments, bureaucracies, that have never achieved the goals for which they were established. If they were a business, they would have been shown to not have reached their primary goal, that is, to spend less to achieve the results than the benefits derived from what they achieved.

What we find in government is that failure to achieve often means a department getting even more funds, but the people who provided those funds still not getting the achievement or benefits that were to be expected. What is of even more concern is that the departments, such as Energy and Education have never achieved their goals but have ever increasingly been rewarded with a greater level of taxpayer funding with which they have built an even larger bureaucracy. And we've all seen television reports of those underachieving departments spending enormous sums of money on "team building" niceties; learning line dancing, making a "Patton" movie spoof, and so on.

The latest case of government failure has been the attempt at implementation of the Affordable Care Act, aka "Obamacare". The results are inexcusable. No businesses would have so heavily advertised for people to contact them in order to sell them a product, without having had the call center and computer systems pre-tested for volume and content many times as the system development progressed. Prior to cut-over, management would have been assured that every aspect worked properly. Businesses don't want to spend huge sums of money to get customers to contact them, and then not be prepared to professionally process the customer request. Companies that have failed to meet that test, are probably no longer in business.

In the case of the Affordable Care Act cut-over, it appears that there was some last minute system testing, and the systems failed miserably. That didn't stop the President or HHS from going forward as, it appears, the customer's (you and me) inconvenience or anxiety doesn't matter . . . just send more tax dollars so they can continue to make the bureaucracy bigger.

(Bob Meade is a Laconia resident.)

 
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