Are we ready for change?

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This week The King's Fund has published, in association with the Institute of Fiscal Studies, its analysis of the likely economic environment for the NHS over the next decade.

The report, How cold will it be?, makes for stark reading. Even the most optimistic scenario suggests that productivity would need to increase by around 3.4 per cent per year for six years to compensate for the gap in funding. Less optimistic scenarios suggest an increase of 8 per cent.

To put this in context, figures from the Office for National Statistics suggest that between 1997 and 2007 NHS productivity fell each year by an average of 0.4 per cent, a 10-year reduction of 4.3 per cent. By comparison, private sector productivity growth averages around 2 per cent per year.

How likely is it that we can turn this around – and still achieve the improvement in quality of care set out by the departing Lord Darzi?

We have spoken recently to a number of senior leaders who do have a track record of turnaround in the NHS. They have improved the quality of services while simultaneously cutting costs. They have achieved this by changing practice and skill mix, implementing structural change, reducing variation, managing demand, and streamlining processes using now-familiar techniques such as lean thinking.

What keeps coming up in our conversations with health leaders, though, is that to work through these major challenges, organisations across the system must work together. Tim Rideout, Chief Executive of Leicester PCT sums it up well, 'we can only do this if we realise that the NHS is a federation of mutually dependant organisations, where success is defined as success for all'.

But is our system – and are our leaders – prepared for these new behaviours?

Many chief executives and others bemoan the structural and behavioural impact of recent reforms and of their impact on our readiness to tackle the coming financial crisis effectively. These changes, they argue, have washed away those relationships and ways of working that were all about the collective good, and instead embedded a set of behaviours and incentives that encourage competition and work against collaboration.

But there is a danger here of romanticising a past that did not exist. I would challenge the assumption that what we experienced before these changes were really effective collaborative partnerships. Rather, these were often 'cosy' relationships, characterised by collusive behaviour and a set of common interests that were too often about professional and organisational good rather than improving the quality of service.

The current system is very far from perfect and will need further reform to ensure that incentives are aligned and a host of perverse incentives tackled and removed. But the changes have allowed us to develop new, more sophisticated and more professional relationships that mix competition and collaboration, not just with colleagues in the NHS but with other agencies and industries outside the NHS. These have improved the level of commercial skills and acumen, ability to negotiate and influence, and skills in creative system thinking, which are all needed to operate in this environment.

These skills will still be needed as we move into a very different financial and political environment. Leaders who have developed the skills needed to operate effectively in this new world, under tougher financial constraints, and still driven by the needs of the patient rather than the professions, will be in a strong position. The relationships that will take us through the next 10 years need to be characterised by the same level of healthy challenge, professional rigour and drive for improvement that has begun to emerge among senior leaders in our current system.

Learning from past experience of leading through recession is crucial, but we must also look outside the NHS for lessons from other industries.

But perhaps the single most important asset we have is a generation of leaders who have begun to develop the skills, competencies and mindsets that are reaping real rewards in terms of improved outcomes and patient experiences.

As long as those behaviours are nurtured and directed toward the common goal of delivering a comprehensive service to patients across the whole health service, rather than being used to protect individual areas, we should be more confident of success than the numbers suggest.


Vikram Millns

operational excellence,
Private industry
Comment date
25 June 2013
I cannot agree more with Laurence. Even in the private industry, often leaders focus on many top-level goals at one time. However we have started to see progressive large private industries focussing on one primary top level strategic goal usually focussed on the higher intent and then a series of bottom-level behaviour-related-goals focussed on ethical practices and operational efficiency. The gap in between the top and bottom levels are protected open areas for innovation, away from top level control, where skills improvement and training is primary focus of leaders. Coaching on collaborative behaviours and communication seeks to reduce a blame game culture and improves mutual trust in an organisation.

Mary E Hoult

Comment date
13 August 2009
We in our area are currently subject to a STRATEGIC RESOURCES REVIEW, objective is to identify the STRATEGIC & OPERATIONAL risks facing the NHS and then to produce and ensure delivery of the necessary plans and actions to manage the current situation. Our SHA finance director is taken the lead on this as managing director,we are told we will know the outcome sometime in September!!!!!! Hopefully this action will achieve the alignment Laurence speaks of? and YES reputation is also key to success COMMUNITY TRUST being essential.

Laurence Wood

Comment date
25 July 2009
The key is, as you say, alignment. But the system pulls in different ways at different levels. By the time decisions are made at the Trust Board, the drivers are reputation and perception, immediate financial balance, litigation, safety (to an extent), and performance against must-do pressures.

Inasmuch as any sustainable year-on-year progress in quality and effectiveness does not appear on any Board agenda, it will not be driven.

All we need to do is all to want to the same thing.

Mary E Hoult

Comment date
23 July 2009
I am not saying it is a bad thing,but it does take time for new people to settle in, learn the housekeeping rules so to speak. As far as I can see, front line staff have carried the weight of all this, New systems, New people, but still the same need for good quality patient care in an ever changing environment. I was just highlighting some comments made previously about CEO only lasting something like 750 days and yes I agree this has not been the case in the Y&H region.

Karen Lynas

Comment date
23 July 2009
Thanks Mary, you're right we don't know enough about our leaders, but your facts about Y&H would suggest to me that we have the benefit of experience there - why is that a bad thing? I'm not sure it is replicated everywhere. And of course our leadership is, thankfully, not just vested in those with a CEO title.

Mary E Hoult

Comment date
21 July 2009
Are we ready for change? You have highlighted some key issues Karen
perhaps the heading should read WHAT DO WE KNOW ABOUT OUR SENIOR LEADERSHIP for example 22 of the potential 37 chief execs in Y&H participated in a survey, some interesting facts emerged.
Average length of service in the NHS of these CEO is 23 years,
Average age 40 plus, 38% of them being over 50 years,
31% of them had an average length of service as CEO of 7 years.
11% of them moved into their existing CEO role from another CEO role,
43% started their NHS career at a very junior level and worked through the ranks.
69% of all CEOs in Y&H are Male, 31% female.
So does this not indicate that there has been very little change? We have just moved people around,and that is the main reason for reduced productivity.

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