Facing change? Stay flexible

A new approach to project management is changing operations for the better at Blue Cross and Blue Shield of Nebraska—and creating unanticipated shifts to how its legal department does business

Insurance companies are not known for their progressive management philosophies, nor for adopting strategies born in the free-wheeling minds of Silicon Valley developers. But that’s exactly what Blue Cross and Blue Shield of Nebraska (BCBSN) did when it transitioned to an Agile approach for project management.

Agile had been implemented in its IT department and achieved results that prompted CEO Steve Martin to expand the practice throughout the enterprise. As described by Jennifer Richardson, senior vice president of operations, “With Agile, we concentrate on providing our teams with ‘what’ we need and leave the ‘how’ up to them.”

Russell Collins, general counsel and corporate secretary at BCBSN, outlines the implementation of this mind-set in the legal department.

5 Tenets of an “Agile” Business

“Delighting” customers rather than creating shareholder value. Profits are viewed as a result, not the goal.

Teams are self-guided, not part of top-down strategies and bureaucratic hierarchies. Managers are responsible for enabling their teams to do their best work and remove impediments.

Work is guided by customer feedback and employees’ expertise on how to best respond to challenges.

Transparency and continuous improvement are valued over efficiency and predictability.

Communication is horizontal, not top-down.

The Impetus

Around the time the US Affordable Care Act was enacted, the speed of change in health-care regulations and the scope of customer demands escalated dramatically. Collins describes it as a slow buildup that eventually transitioned into a continuous sprint.

“We needed a way to execute better and faster,” Collins says. “Agile provided that with the promise of better communication and better execution of whatever we’re trying to accomplish.”

Collins says people noticed when the IT department increased cooperation across multiple teams using the approach. Agile’s “perfect is the enemy of good” philosophy improved efficiency by allowing ongoing course correction instead of repetitive rounds of analysis and revisions before launching new solutions. This was particularly noticeable in the claims area, in which new processing applications were released to auditors much more quickly.

The Plan

As managers made preparations to include more Agile thinking across the company,  BCBSN folded announcements into its regular communications, identifying prioritized annual goals and high-profile projects. In most cases, the term “Agile” was rarely used. Instead, goals were identified and discussed in the context of how they would deliver value to customers and the company. There were also low-profile descriptions of the new processes that would be used to reach stated goals.

Though there was some skepticism about changing the methods for core operations, Collins says most of the company was open to faster and more efficient methods to get things done.

Still, there were hurdles to overcome along the way. Because Agile projects are organized into cross-functional “stable teams,” traditional hierarchies are often upended when a company overhauls its internal structure to match the Agile philosophy. In some cases, this means managers don’t oversee the work done by subordinates who are producing deliverables for and reporting back to product owners of the teams. In other cases, teams have to develop new or alternate skills when individuals who are considered subject matter experts are no longer part of a project group.

“I’m convinced that working more closely with the people who manage and direct operations is enabling us to provide faster, more effective advice.”

“The transition hasn’t always been smooth,” Collins admits. “But, much like Agile itself, it’s a continuous journey where ultimately the best outcomes are achieved.”

The Results

The Agile transition is well into its third year at BCBSN. During the process, the legal department made adjustments that are contrary to the traditional approach to advising clients. “Lawyers aren’t used to executing anything before we’ve made sure it’s as perfect as it can be,” Collins says. “But we’ve learned that we can mitigate risk more effectively once things are in production, even if that means having to clean up some problems along the way instead of preventing them in the beginning. It’s quite a drastic change when you’re used to identifying issues up front and telling the team, ‘Don’t do that.’”

The new cross-functional teams facilitate interactions that weren’t possible before; individuals from different departments who had no reason to talk now work together on projects.

But by being embedded with teams throughout the iterative sprints, BCBSN’s legal staff is also having to face unforeseen pressures, including committing to completing work within a predetermined timeframe regardless of other issues that may come up.

“Being an ongoing, integral member of a team is definitely a positive development, but the flip side is the stress that comes with the associated accountability,” Collins says. “No one wants to be the person who impedes progress and has to say they didn’t do what they said they would. It forces you to prioritize your work and deliver as promised.”

That prioritization has been essential as the company’s overall volume of business and project completion has increased. To help keep pace, the legal department now routinely cross-trains staff. This creates a fully informed individual who can step in and maintain progress when the primary attorney isn’t available. Collins says this creates “an internal cross-functional team within the department.”

Though BCBSN’s Agile transition is still in progress, it has already resulted in the legal department gaining a more comprehensive understanding of company operations.

“No one wants to be the person who impedes progress and has to say they didn’t do what they said they would. It forces you to prioritize your work and deliver as promised.”

For the legal department, an ongoing challenge is that Agile demands an emphasis on “delighting customers,” and it places great value on efforts devoted to that goal. BCBSN operates in a highly regulated environment that also requires time and manpower be focused on regulatory compliance. Though Collins has some concerns about finding the proper niche for compliance matters within the Agile framework, he will undoubtedly find a satisfactory balance in the future—one three-week sprint at a time.

“Now we know more about the inner workings and connections within the company and between the company and our vendors,” Collins says. “We can spot issues and solve problems much more effectively. I’m convinced that working more closely with the people who manage and direct operations is enabling us to provide faster, more effective advice.”