'Insourcing' NHS trusts

Source: National Health Executive Jan/Feb 2012

Why do some NHS Trusts thrive while others fail and succumb to having their operations privatised? Vin Mole, a former UK HR director and senior services line manager at AstraZeneca Biopharmaceuticals; Dave Mettam, an organisation, team and personal development consultant; and Jane Searles, an independent specialist systems practitioner, facilitator and consultant, suggest that successful Trusts are intuitively adopting organisational principles that are identifiable and transferable to other Trusts.

We strongly believe that NHS Trusts can retain their selfmanagement to deliver all that outsourcing claims to deliver, and much more, for the benefit of the country and its people by retaining surpluses within the NHS.

As outsiders looking into the NHS we would not claim to understand the politics and complexity of the operational environment. However, equally, this gives us an unbiased opportunity to ask questions and make suggestions to promote debate about the opportunity to adopt a different organisational approach – many of the principles of which we can readily identify working within successful Trusts.

If Trusts have all the knowledge and experience, then why are they losing bids and being outsourced?

What can the private company achieve that the NHS can’t do for itself? What is so unique about the way the private companies operate that the NHS can’t adopt itself?

For some Trusts the major issue is that of insufficient resources (people, money, investment, time); they enter a spiral of failure and lose their freedom to act independently. They wish to implement change, but change is always ‘resource intensive’ and less efficient in the short term. They are faced with additional costs to improve their performance, yet are trapped in the situation where funding is hard to obtain.

Foundation Trusts that have won a degree of independence and are considered to be a ‘good risk’ are better placed to obtain finance and resources for the initiatives they wish to take on.

It appears that private healthcare providers can more easily access borrowing because shareholders feel they can deliver efficiencies by creating and operating in a nonbureaucratic environment to deliver the patient services and profits for future development, along with shareholder dividends.

So shareholder confidence, and therefore investment, go hand-in-hand with operating in a different way to deliver effective, high-quality patient services in the most efficient way.

How might each Trust take charge?

With the NHS, as with any large organisation, there are parts that perform extremely well and others that under-perform. Accepting that the nature of the services provided are extremely complex and that the local environments vary tremendously, why is it that under-performing Trusts (or elements of Trusts) cannot emulate the successful Trusts, but private companies apparently can?

Has the private sector got a monopoly on talented people, or are they creating an environment that frees them to contribute and provides them with the resources and reward that motivates them to deliver?

Nothing we read about from the private companies’ approach is new; for example involving clinicians and other clinical staff in decision making for the good of the patients, giving employees a stake in the organisation’s success. ICI took this approach in the 1950s and AstraZeneca continues this today; the John Lewis Partnership takes employee ownership a step further.

Why can’t a successful value proposition and operational model be developed based upon the many successful Trusts?

Is it because even the most successful Trusts may not have an underlying approach that can be shared internally and transferred and rely on the localised intuition, experience and talent of their leadership? We believe that all organisations can improve by applying a set of core organisational principles that all leaders at every level can tap into and apply consciously and consistently; a shared mental model.

So why can’t the NHS heal itself?

Well it can!

Caroline Shaw, who runs The Christie in Manchester, outlines in her recent interview with National Health Executive how applying a business strategy has transformed the Trust.

She said: “The Trust is run as an effective and efficient business, with a clear vision and understanding of its purposes and identified business streams that must demonstrate their contribution to the delivery of the value proposition to its stakeholders. Taking a view of the organisation as a whole, adopting a very clear management structure, making shared decisions with input from employees of all disciplines and patients, are seen as critical features in delivering the very best ‘patient experience’ possible.” (‘Head for Business’, NHE, Sept/ Oct 2011)

Other parts of the NHS have been equally successful in turning around their situation. In their report to Government, ‘Engaging for Success: enhancing performance through employee engagement’, David MacLeod and Nita Clarke said: “The London Ambulance Service has been compared with organisations like John Lewis Partnership, Tesco, Sainsbury’s, Standard Chartered Bank, BAE Systems, Toyota, Babcock Marine Clyde, Google, Telefónica O2.

“It has transformed its service delivery… in the past few years. A service that was criticised by London’s media as the ‘worst’ ambulance service in Britain in 1997 was hailed ten years later as the best.”

It is our contention that Acute and Foundation Trusts need to ‘insource’, by applying principles from the best Trusts and the successful outsourced providers internally to their own Trusts.

One option is to take control of their local context and situation to deliver value to all stakeholders (including staff, patients, community, and government as part of their local governance arrangements). For the success of Trusts like The Christie to be repeated, the first requirement is to develop a value proposition that delivers their stakeholders’ purposes; to understand what they do and what they don’t do and deliver using a defined business strategy.

To improve their delivery significantly, whether successful or failing, the Acute and Foundation Trusts might consider:

• Looking beyond their organisational charts, which do not embody or help them to manage the complexity of their operation.
• Understanding how to support their people’s productivity and local decision making to increase efficiency, innovation and patient awareness, and not be driven purely by the standardisation of policies and processes.
• Ensuring they have the organisational agility to respond to ever-changing external and internal pressures.
• Understanding the role of leadership in the organisation and the value of positively developing leaders at all levels and in all disciplines.
• Connecting all their people in a way that gives each person their own line of sight from their day-to-day activities to the delivery of the stakeholder value proposition. This can help create the motivation to initiate and introduce changes they see are necessary not just those imposed by others.
• Creating feedback loops both up and down the organisation to allow all individuals to contribute their know-how and innovation. 
• Measuring performance using criteria that really reflect the patient service and delivery of the Trust’s business strategy, which may not be a set of numerical criteria. In this way Trusts can look beyond numbers to monitor the behaviours and values they expect and know will deliver, in the words of Caroline Shaw, “the best possible treatment and patient experience”.
• Recognising and ensuring that all employees and contractors each have a responsibility for delivering the best possible care and also for the financial health of the organisation. Everyone has roles and overall responsibility lies in the gaps between the roles, in the way the delivery is organised, throughout the organisation.

There is a set of fundamental organisational principles based on an interpretation of a template for Viable Organisation (Viable System Model, Stafford Beer) developed in the 1970s and 80s but not widely introduced into mainstream academic and management thinking.

These principles can be used to improve performance, and underpin effective and sustainable organisation. If they are embedded, certain qualities can emerge (like employee engagement, leadership, culture, growth, a higher percentage of ‘satisfied’ patients, and a valued patient experience).

In many organisations, the principles can be observed in action and therefore provide a checklist to determine whether the separate parts of an organisation are working well. Where such principles are missing we are likely to observe a shortfall from what is fully achievable.

We have framed a few questions around the principles to encourage thinking, debate and action on how your organisation, departments or teams might improve, to understand what is present and what might be missing.

To help the debate you might like to answer or score each of the following questions out of 10 and share your perceptions with your peers:

To what extent do you believe the organisation chart helps you manage the complexity of your delivery of patient care?

To what extent do you believe that topdown imposed change harnesses support and delivers improved patient care?

How much flexibility do your frontline staff have to interpret processes using common sense responses to meet the variety of patient needs and improve patient care using the skills and experience you employed them for?

Have you considered that leaders are operating at all levels and in all disciplines in your organisation and the consequences of not recognising and acting on this?

To what degree do your staff understand the purposes of the organisation and the parts they play in delivering the value proposition?

Do your staff contribute to team working to achieve delivery of the bigger picture for the NHS as a whole?

Is there a fully agreed strategy, and how much freedom does each department and team have to interpret, update and renew it locally for their particular circumstances?

How effective are your methods of engaging with staff in harnessing their know-how and innovation to develop future changes?

To what degree is there open and honest two-way dialogue between managers/leaders and staff, which builds confidence in the quality of the decision making throughout the organisation?

How well is patient care and its intended impact on society at large actually delivered?

To what extent does everyone in your organisation recognise that they are all responsible for delivering patient care within the financial resources available and act accordingly?


The NHS needs to take a lead from successful Trusts and private companies and build its own business value proposition and, we would contend, to introduce a different, more efficient approach to structuring, connecting and engaging all employees in the delivery of the most effective healthcare for its key stakeholders the population of the UK.

There is no reason why, with the support of Government and trades unions, the clinical leaders, nurses and management can’t heal the NHS for the good of the patients and the UK economy.

The issues and solutions aren’t unique to the NHS. An example of the application of the principles can be observed within AstraZeneca, the FTSE top 10, £40bn global biopharmaceutical company. Starting in 2000, it transformed its Cheshire-based sports and social club into ClubAZ, a UK-wide ‘not for profit’ independent company.

The club’s purpose and business proposition focused upon improving the physical, mental and spiritual wellbeing of employees and families so that AstraZeneca was a place where employees wanted to come to work, wanted to stay and for the employees and their families to be happy and healthy.

In 2006 ClubAZ had 12,500 members across eight sites, with each location offering a tailor-made wellbeing programme. The club was self-funded via a subscription and member activities, ultimately delivering £1.8m of wellbeing services to club members and contributing over £3m capital to facility development.

In 2007 the club’s service portfolio supported AstraZeneca receiving both the BBC Big Challenge ‘Health Works’ award and the prestigious Business in the Community (BiTC) ‘Award for Excellence’, in the Healthy Workplace category.

How was this success delivered?

How would the club’s leaders answer the questions posed in this article? The organisation chart is necessary, but each individual’s focus is on delivering the services to the members by working in teams across departmental boundaries. And if resources are low in one service area and someone has the skills, they fill the gap; we work as ‘One Team’.

All staff are informed and involved on a week to week, month to month basis, in what the club is trying to achieve; how we are progressing; the issues that arise and how to remedy them. In this way change is influenced by everyone and there are ‘no surprises’.

When opportunities arise to interpret a current process or procedure, we expect them to apply common sense. Staff are well trained and supported and we encourage them to use the skills and knowledge we employed them for. Any learning is discussed amongst the immediate team and shared across the club.

We recognise the benefit of having people who can lead others and encourage every individual to develop their leadership skills. They can then perform this role when called upon within their teams, and with contractors/suppliers, and club members, using a performance management process.

Everyone can see the impact their contribution makes to the organisation’s performance as a whole. We achieve this by using a 10-step model to identify how each person’s roles and deliverables contribute to the delivery of the club’s purposes. The steps include the business strategy, annual plans, the teams and every individual’s deliverables.

We have one strategy, which is developed and reviewed with input from each business stream. Everyone in the organisation is connected by feedback loops down and up the organisation through their teams. In this way every individual has the opportunity to input and understand what is happening and why.

In summary, operating with these structures and culture allows the club to engage with its staff and benefit from their know-how and innovation as a matter of course and leads to change often initiated by the staff at all levels in the organisation. Equally the structures provide for the transfer of information and ideas at all levels and dramatically improves not just the quality of the decision making but also the speed.

What did the staff think about this culture and structure?

In 2008 the Investors in People audit reported: “A number of very complimentary comments were received about managers and how they are perceived to be very approachable, open and supportive. This would appear to be indicative of the culture, inevitably stemming from the leadership of the senior management team and cascading throughout the organisation… Without exception interviewees described ClubAZ as a great place to work, some going so far as to say it was the best place they had ever worked, or describing how they had wanted to work for ClubAZ for some time before a vacancy arose.”

How well can the model cope with change?

In 2009 the club services were put out to tender by AstraZeneca as part of a UK cost reduction programme. The Club’s leadership and staff entered a bid as ‘Compendium Wellbeing Ltd’ for their contract along with Sodexo Ltd and Nuffield Health.

Following Compendium’s submission AstraZeneca suspend the bidding process, and later announced their decision to realign the Club’s services within AstraZeneca.

Vin Mole, one of the authors of this article, who was the UK director of ClubAZ, developed the operational model and led the transformation. With Dave Mettam and Jane Searles, they have translated the structure, adopting a number of the VSM principles, into a transferable model of ‘Dynamic Organisation'.

Tell us what you think – have your say below, or email us directly at [email protected]


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