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NHS Re-Organisation – Hope Over Experience?

June 28, 2010 in Change and Benefits, Leading and Managing Results, Public Services

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At its conference in June 2010, the NHS Confederation published a report challenging the wisdom of constant NHS reorganisations. In “The Triumph of Hope Over Experience”, the Confederation examines a history of rapid and turbulent creations, mergers and disestablishments over 20 years.

Presenting a very interesting analysis of structural change in the NHS, the Confederation’s stated aim was -

“to review the history of restructuring, what is known about its results and the reasons for the pattern of increasingly frequent organisational change to draw out some important lessons that are particularly salient at this time.”

In some respects the report’s messages are relevant to other areas of the public sector. Attractor would encourage leaders of QIPP, Total Place and Efficiency and Reform programmes to read the report as they set about tackling the current financial crisis.

The report suggests a tendency to enthusiastically advocate reorganisation as a solution to all problems, regardless of their nature. It indicates reorganisation can provide opportunities for politicians to demonstrate action, for managers to advance careers, remove “problem people” and take generous redundancies – none of which have anything to do with the “reason” for making change. But the forces supporting reorganisation seem stronger than those resisting.

The Confederation recommends far closer scrutiny for such proposals, better review of the results of organisational change and holding proponents to account for results. In conclusion the report recognises the need to embrace change but expresses strong doubts over the kind of top-down redesign that has been all too common.

“Organisational change is necessary to allow organisations to adapt to changes in the
environment. Experiment and evolution may be a more effective approach to this than
insufficiently intelligent design.”

The analysis and conclusions are clear and ring true. While changing the shape of an organisation can support other business change, simply “moving the chairs around”, redrawing boundaries or lines of accountability rarely addresses fundamental or underlying systemic problems with the way “real work” is organised, supported and delivered.

Weakness in resource allocation and deployment, business processes and systems, communication and information-flows, skills and competences are best addressed by action “close to the coalface” with the teams who are delivering services – not by fiddling with the tiers of management way over their heads. This might suggest programmes like “Total Place” – close to customers and service delivery – are more likely to succeed than other approaches. Read the rest of this entry →

Helping Managers Reduce Absence Costs

June 24, 2010 in Leading and Managing Results, Public Services

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When public sector organisations are looking for ways to save costs, absence management is always part of the standard armoury.

The report “On the path to recovery”, published by CBI/Pfizer in June 2010, reviewed absence management and health issues in the workplace during 2009.

It is based on responses from 241 organisations employing 1.2 million employees.

Employees took on average 6.4 days off sick in the period, equivalent to 3.9% of working time – the lowest since the survey was started in 1987 and a small improvement on the 2007 figure of 6.7 days.

While independent commentators have suggested the recession has had an impact on employee behaviour during 2009, the report does not support this view, concluding instead, the improvement in absence rates is largely due to better absence management by all employers. Effective absence policies and well-being programmes seems to be having a positive impact. Read the rest of this entry →

NHS Targets £850m Savings in Management Costs

June 22, 2010 in Leading and Managing Results, Public Services

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The revised NHS Operating Framework was published on 21st June 2010 and most comment is likely to focus on the removal or reduction in national performance targets.

Alongside these changes however, the updated framework targets significant reductions in management costs in coming years.

It seems Strategic Health Authorities (SHA) and Primary Care Trusts (PCT) will face the greatest initial focus, though local management teams will determine how this is delivered.

The government is seeking to reduce NHS management costs by a total of £850m by 2013, a saving of 46% overall – the first £222m being planned for the coming year.

Andrew Lansley, Health Secretary said -

“Management costs in Primary Care Trusts and Strategic Health Authorities have increased by over £1bn since 2002/03, with over £220m of the increase taking place during 2009/10. Costs now stand at £1.85bn and it’s our intention that during 2010/11 we will remove all the management costs that have been additionally incurred during 2009/10, to get back to the level of 2008/09. Then in subsequent years, we will go beyond that, with a further £350m reduction in 2011/12.”So that’s £222m in 2010-11, £350m more by 2011-12, with the remaining 278m being saved by 2013-14. In the revised operating framework, SHAs are being encouraged to go further, ensuring “all possible efficiencies are realised”.

While recognising the controls implemented by the Efficiency and Reform Group at the Cabinet Office do not formally apply, the revised framework tell NHS organisations they should demonstrate “similar discipline” in relation to spending on consultancy, marketing and ICT spend, recruitment procurement for goods and services as they “progress their quality and productivity plans”.

The Kings Fund has reacted by highlighting the need to continue invest in leaders who can engage frontline clinical staff in improving quality and efficiency, stating -

” … improving NHS efficiency will not come primarily from cutting the waste of managerial overheads. Given the NHS faces a shortfall of up to £21 billion a year, improving productivity at the frontline will have the most impact …”

How will your organisation respond to the challenge of reducing management costs?

Offshoring the Back Office

June 17, 2010 in Corporate Services, Public Services, Shared Services and Outsourcing

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The Management Consultancies Association wrote a pre-election report for all the political parties in April 2010. In  “We Can Cut the Deficit”, they suggested ways to save £25 billion each year from public sector expenditure.

Some might think consider the report more a marketing document for consultancy businesses than a far-sighted analysis of strategic options.

If that, uncharitable, view was accurate, the new government’s “moratorium” on consultancy spending suggests it hasn’t paid off – yet.

The report urged politicians to move public service jobs to countries like India to reduce employment costs.

It would be unwise to deny there are potential gains to be made from offshoring public sector jobs. Such a move could form part of a grander strategy but needs some careful consideration. It would be unfortunate, however, if the strategy contributed to a worsening spiral of economic decline.

At one level, the advocates of offshoring sometimes appear to treat lightly the operational effort, time and cost required to deliver this in the real world seem rather lightly considered. It’s not clear that moving service offshore could contribute savings in the timescales needed for the public sector in 2010.

William Benn, Partner and Head of Public Sector at Alsbridge suggesting -

“the top five spending departments should be able to save around £10 million each per year – that translates to £0.25 bn over a five year term.”

The recommendations in a section called “Send it Offshore and Save” further stated -

“the concern about jobs going overseas has to be set against the conern foe eye-watering public sector costs, and the immediate need for savings to preserve frontline services.”

Furthermore, in the same report, other ways to save money were identified and Jane Ludlow of Atos Origin highlighted that change in front line services would dwarf efficiencies in back office functions.

There are other reasons why offshoring jobs might not be the most attractive path. Read the rest of this entry →

Maximising Value from HR

June 7, 2010 in Our Track Record

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In the past, UK organisation were stereotyped by their slashing of training budgets when finances were tight – and then suffering the skills shortages which followed.

A new stereotype might be organisations looking to make efficiencies and reduce expenditure in their back-office functions so they can protect front line services.

Across the public sector, this “mantra” is being widely and loosely used without being explained in detail.

Real dangers exist where the implications of change are poorly thought through.

In richer times, it is easy to make the case for investment in services which support staff delivering effective front-line services. When times are hard, this is more difficult and its vital then, more than ever, to demonstrate how corporate teams impact on the business.

When organisations are looking to reduce expenditure, it is common to look for reductions in “overheads” – costs which can be reduced with little impact on front line services. Corporate back-office functions look “vulnerable” in this climate.

Organisations should always strive to ensure they are working in the most effective way – the optimum value between expenditure and achieving required outcomes. Back-office functions should be scrutinized as closely as other areas though it’s vital to keep a focus on what will maximise value rather than simply “reduce expenditure”. Read the rest of this entry →

Deploying Rostering to Deliver Benefits

June 3, 2010 in Our Track Record

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Front line managers in NHS Trusts have to deliver the optimum deployment of staff to deliver high standards of patient care while avoiding wasteful expenditure.

Using paper or spreadsheets to deliver this involve significant time-consuming and wasteful administration for front-line managers and back office teams alike.

Attractor was asked to help an NHS Trust prepare and plan for a new rostering project – aiming to ensure the organisation would acheive key objectives.

Rostering, Time and Attendance Solutions have the potential to deliver significant strategic and financial benefits to organisations. But delivering those benefits is not easy … they won’t materialise automatically from simply rolling out new tools to all teams and departments. It takes much more than this. Read the rest of this entry →

Benchmarking and QIPP

May 31, 2010 in Our Track Record

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Photo: Darren Hester, Flickr

NHS managers looking at our benchmarking solution have described how they will use it to plan and monitor local actions in response to the challenge of the NHS Quality, Innovation, Productivity and Prevention initiative (QIPP).

A Payroll Manager explained it would enable him to demonstrate how service plans would adjust the profile of the organisation changing high level and detailed performance data.

As well as providing an evidence-base for improvement planning, the tool would enable them to meet the recommendations of the Operational Efficiency Programme, collating relevant information and providing comparison data to inform their decisions.

The solution has been created specifically for NHS organisations (versions for other part of the public sector or on the drawing board). Back-office benchmarking is new for the NHS and, obviously, depends on having significant volumes of data from relevant organisations to provide comparative information.

While still at an early stage in its service lifecycle – only just moving from planning to delivery – the early signs are promising. Already, 60% of the NHS organisations which evaluated the service have subscribed while others are still considering their position. No organisation having reached this point has, yet, decided not to subscribe.

Attractor is now marketing the service widely for the firs time and expects sufficient sign-up from NHS organisations to provide subscribers with authoritative, persuasive and compelling evidence to support local decision-making. Read the rest of this entry →

Organisation Redesign at Aintree Hospitals

May 16, 2010 in Our Track Record

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Photo:Wolfpix, Flickr

Attractor’s work with a number of NHS organisations has helped to support and deliver improvement activity and realise benefits.

Attractor is often invited to facilitate strategic thinking, present options, identify opportunities, validate some ideas and challenge others.

This was the case with Aintree University Hospitals NHS Foundation Trust. A case study published by the Department of Health provides a good example of work delivered with an NHS team with strategic plans supported by decisive action.

Attractor had worked with Aintree earlier, supporting diagnosis and problem-solving actions with the Trust, and helping refine plans for deploying the ESR training administration toolkit.

Attractor was asked to support an organisational design review – taking forward local ambitions to introduce more integrated working arrangements and effective service delivery. Read the rest of this entry →

Shared Services – Reviewing The Evidence

May 6, 2010 in Corporate Services, Leading and Managing Results, Shared Services and Outsourcing

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With the UK’s election result imminent, public sector bodies must soon return to the efficiency agenda.

Shared services or outsourcing solutions seem likely to be deployed for back-office services across much of the public sector.

Organisations with ready plans will probably face pressure to quickly turn blueprints into reality.

Those without plans will have to develop ideas quickly, recognising the pressure to maintain spending on front line services will dominate any discussion on these initiatives.

How can those who have to make decisions “see the wood for the trees”? What evidence is available to support decisions and help them reach judgements and make informed decisions?

HM Treasury’s 2009 report on operational efficiency examined evidence from the private sector before arriving at its targets for efficiency savings. It concluded that back-office savings in the range of 20-30% could be achieved from business process reengineering / shared services. Other revews have reached slightly different conclusions. Read the rest of this entry →

NHS Shared Services – A Rising Tide

April 29, 2010 in Corporate Services, Public Services, Shared Services and Outsourcing

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While the 2010 UK General Election is underway, the convention of “purdah” prevents the development or official announcements of new policy.

Purdah avoids binding a future government to current policy it disagrees with. It also presenting challenges for people delivering strategy and companies seeking to work with the public sector.

It seems clear that public services will need to look for efficiencies in their back office functions. Currently, however, few decisions are being taken to help drive forward delivery on this agenda.

The DoH has established a dedicated national workstream under the Improvement and Efficiency Programme. “Back office efficiency and optimal management”, led by Tony Spotswood (Chief Executive, Royal Bournemouth and Christchurch Foundation Trust) doesn’t have the “catchy” title.

Public attention is likely to focus on changes to clinical services arising under the QIPP programme. It’s obvious however the conclusions and adopted mechanisms from any “back office programme” will be important for the future of shared service delivery in the NHS. Read the rest of this entry →