Leadership and transformational change in healthcare organisations: A qualitative analysis of the North East Transformation System

Abstract

The research project ‘An Evaluation of Transformational Change in NHS North East’ examines the progress and success of National Health Service (NHS) organisations in north east England in implementing and embedding the North East Transformation System (NETS), a region-wide programme to improve healthcare quality and safety, and to reduce waste, using a combination of Vision, Compact, and Lean-based Method. This paper concentrates on findings concerning the role of leadership in enabling tranformational change, based on semi-structured interviews with a mix of senior NHS managers and quality improvement staff in 14 study sites. Most interviewees felt that implementing the NETS requires committed, stable leadership, attention to team-building across disciplines and leadership development at many levels. We conclude that without senior leader commitment to continuous improvement over a long time scale and serious efforts to distribute leadership tasks to all levels, healthcare organisations are less likely to achieve positive changes in managerial-clinical relations, sustainable improvements to organisational culture and, ultimately, the region-wide step change in quality, safety and efficiency that the NETS was designed to deliver.

Keywords

leadership lean thinking NHS reorganisation quality improvement transformational change

Context and background

Health systems across the developed world face multiple challenges, including a mix of increases in healthcare demand, tough budgetary restrictions, higher treatment costs and an expectation that the quality of healthcare will improve over time. Many scholars have argued persuasively, over decades, for a rebalancing of health systems to include increased provision for primary and community care-based prevention and health promotion strategies, and greater focus on public health measures, on the basis of evidence that this will reduce dependence on costly secondary and tertiary interventions, and thereby encourage a more sustainable and affordable model of healthcare with better outcomes for patients and improved population health.¹ However, this approach has not seen sustained or comprehensive implementation, with only short term and patchy success to report,² and overall little change in the relative apportioning of health budgets. To date, the existing structure of health systems has been mostly impervious to large-scale reform, and – despite some restructuring of organisational and governance arrangements and financing mechanisms – existing healthcare models remain firmly in place.

In these circumstances, healthcare organisations must find ways to maintain or improve quality, respond to changing demands and expectations while enacting changes to their service and care models that increase productivity. To succeed, these changes cannot be simply short term, quick fixes: they must aim for sustainable quality improvement and efficiency gains over the medium to long term.

The English National Health Service (NHS) is a case in point which has struggled with such issues over many years. It is now under even greater pressure to find ways to improve the quality and safety of care, owing in part to a number of recent scandals and failings (including excess deaths in hospitals, poor care of the elderly, some increases in waiting times and pressure on A&E departments) and evidence of persistent health inequalities between regions and social classes.^3–7 At the same time, and after a sustained period of investment above the national inflation rate, the service faces near zero growth in its budget over the coming years and has been instructed to find GBP 20 billion of savings by 2014–2015.⁸ All English healthcare organisations, including acute hospital trusts, mental health and learning disability trusts, community healthcare providers, general practitioner (GP) practices and commissioning organisations,^a must therefore urgently enact measures to drive up the quality of treatment and care while achieving greater and sustainable system efficiency. The changes and reforms necessary to achieve this are widely acknowledged to be radical, system-wide and extremely challenging to implement.^9–11

This paper examines the approach adopted in one English region – NHS North East – to achieve the aims of consistent and sustained improvements to quality and safety, greater productivity and efficiency and increased patient and staff satisfaction through the impact of a region-wide programme called the North East Transformation System (NETS). A key focus of the paper is the contribution of leadership behaviours to achieving transformational change in a number of healthcare organisations across the region as a whole, drawing on the findings from a three-year research project titled ‘An Evaluation of Transformational Change in NHS North East’. Key facts about health and healthcare provision in the NHS North East region are summarised in Box 1.

Box 1.

NHS North East: key facts and figures.

NHS North East:
• 70,000 staff, in:
○ 8 acute hospital trusts.
○ 12 Primary Care Trusts (replaced by Clinical Commissioning Groups from April 2013)
○ 2 mental health and learning disability trusts
○ 1 ambulance trust.
○ 1 Strategic Health Authority (became part of NHS North in October 2011).
• Population served: 2.6 million.
• Mix of urban and rural communities.
• Healthcare organisations consistently perform well, according to centrally-determined targets and measures, but …
• … the region has relatively poor population health, in terms of average life expectancy and incidence of long-term conditions and chronic illnesses.
• Recent reports indicate progress in tackling some health inequalities, but a number of the region’s health indicators continue to lie below the England average.

The conundrum outlined in Box 1 – a high-performing healthcare service operating in a region with poor population health – was recognised in two regional health strategies published in 2008.^12,13 Furthermore, even prior to the global financial crisis of that year, NHS managers and senior clinicians in the north east knew that funding was unlikely to continue to increase in real terms beyond 2009/2010,¹⁴ and that major efforts would be necessary to maintain or improve the region’s quality and safety record and to achieve traction in terms of reducing health inequalities. Senior leaders at the North East Strategic Health Authority (NESHA), supported by many of the region’s provider and commissioning organisations, were convinced that the challenges of achieving greater system efficiency, improving quality and safety standards and tackling health inequalities could only be met by a concerted, region-wide service improvement programme – the NETS – that engaged staff at all levels of the NHS. The key features of the NETS are summarised in Box 2.

Box 2.

Characteristics of the NETS.

The North East Transformation System (NETS):
• A programme for transformational change, within individual NHS organisations but also across the north east region as a whole.
• Predicated on 3 elements for sustained improvement:
○ Vision: a clear statement of values and aims, designed to underpin the ethos of the whole organisation; communicated to staff, patients and public.
○ Compact: a psychological contract between staff (particularly clinicians and managers) and with their employing organisation, setting out expectations and behaviours (often known as ‘the gives and the gets’).
○ Method: a set of quality improvement tools and methodologies, often derived from Lean thinking, that empower staff at all levels to make changes to working practices and processes, improve safety and quality, and reduce waste.
• NHS organisations, including the NESHA, were encouraged to develop their own Vision statements and behavioural staff Compacts.
• At the outset, the NESHA strongly promoted the use of the Virginia Mason Production System (VMPS) as the Method of choice, although there was tolerance of the use of other methods, most of which derived from Lean thinking or from similar programmes for incremental, continuous quality improvement. The VMPS was developed by the Virginia Mason Medical Center (VMMC) in the USA, and is a healthcare oriented version of the Toyota Production System.^{15, 16} The VMPS is designed to empower staff at all levels of the organisation to undertake structured improvement activities and to share the results of these with colleagues elsewhere in the organisation.
• The NETS programme began in 2007 with selection of seven ‘wave 1’ pathfinder organisations (representing acute hospital, mental health, community care and primary care trusts) which were the first recipients of training provided by staff from the VMMC and Amicus (a US consultancy specialising in Compact development). Wave 2 and wave 3 NETS training was programmed to begin at later intervals, with support from wave 1 organisations.
• Early coordination of some region-wide NETS activities, including training, knowledge sharing events and study tours to the VMMC headquarters in Seattle, USA and selected Lean-practising organisations in Japan, was carried out by a small team based within the NESHA.
• NETS activities within individual NHS organisations are variously coordinated and promoted by quality improvement managers, human resources and organisation development staff, ‘Kaizen Promotion Office’ (KPO) leaders, and clinical and management leaders.

Leadership and transformational change in healthcare organisations

The literature on attempts to introduce new management styles and new forms of leadership in UK healthcare stretches back almost to the inception of the NHS itself, not least because the service has been subject to almost constant restructuring in response to changes in political ideology, health policy, treatments and technologies, workforce education and training, population healthcare need, clinical practice and the size of health budget itself.¹⁷ These changes, and accompanying modifications to the governance and management structures of the NHS, have been subject to analysis that examines their nature and relative success both from an organisation development viewpoint and from the perspective of change in the wider context of public policy and the external environment in which healthcare organisations operate.^18–21

Pettigrew et al. argued in the 1990s that transformational change in the NHS is enabled and shaped by what they termed ‘receptive and non-receptive contexts for change’. They offered a framework comprising eight interrelated factors (the ‘Pettigrew model’; see Figure 1) that together create propitious conditions for change to start, achieve acceptance and become successfully embedded. The eight factors include ‘key people leading change’ (a term deliberately chosen to avoid the image of ‘heroic and individualistic “macho managers”’) which refers to pluralist, distributed leadership styles that encourage team-building, group accountability and diversity of skills.²² Continuity of key personnel is cited as critical to the success of change projects, with unplanned staff movements associated with loss of purpose and commitment. The quality and direction of leadership, or ‘key people leading change’, may be regarded as central to a number of the other factors, particularly in relation to the management of clinical-managerial relationships, setting of clear goals and priorities creating a supportive organisational culture and cooperative inter-organisation networks – and therefore crucial to the overall success of a transformational change programme.

Figure 1.

The receptive contexts for change model, ‘key people leading change’ highlighted. Reproduced with permission from SAGE, from Shaping Strategic Change: Making Change in Large Organizations: The Case of the National Health Service (Pettigrew et al., 1992).

The leadership themes explored by Pettigrew et al. are manifest in much of the recent literature on improvement programmes and large-scale change in the public sector in general and healthcare in particular. The positive impact of distributed leadership is widely cited by scholars writing on public service networks, service redesign, care pathway development, quality monitoring and governance and large-scale mobilisation for improvement.^23–26 A number of authors note the key role that leaders at all levels can play in encouraging and diffusing innovative practices and behaviours, as long as senior staff support and resource the implementation process and subsequent routinisation of new ways of working.^27,28 Stable, long-term leadership (particularly at senior levels) is also emphasised as a critical element in ensuring that change programmes and quality improvement strategies become embedded as part of an organisation’s culture.²⁹ Writers on Lean programmes in the public sector have identified committed leadership as a central factor in the implementation of new work practices that concentrate on the needs of the customer/patient but also empower teams to reduce waste and to make continuous improvements to standards of care and system efficiency.^30,31

A recent King’s Fund review of leadership in the NHS stresses the need for leadership to extend ‘from the board to the ward’, emphasises the failure of the NHS ‘… to engage clinicians – particularly, but not only doctors – in a sustained way in management and leadership’ and suggests a renewed focus on ‘… developing the organisation and its teams, not just individuals, on leadership across systems of care rather than just institutions, and on followership as well as leadership’.³²

The NETS evaluation

In 2009, we began a three-year, mixed methods research study with the following aims: to evaluate the impact of the NETS on the quality and efficiency of healthcare in the region, to assess the receptiveness of the NETS organisations to sustainable transformational change and to identify the factors that serve to facilitate or act as barriers to changes in processes and behaviours.

One of the key areas in the evaluation has been the extent to which the nature of leadership in the NHS organisations has influenced the progress and success of the NETS programme. The remainder of this paper reports on and discusses some initial findings, from the first phase of NETS evaluation interviews with NHS staff, in relation to this particular topic.

Method

The NETS evaluation has used a mix of qualitative and quantitative research methods across 14 study sites. Qualitative methods included semi-structured interviews and focus group discussions involving NHS staff, collection and analysis of documentary materials, observations of quality improvement and peer learning activities and compilation of in-depth case study materials relating to five selected Rapid Process Improvement Workshops (RPIWs) in two of the study sites. Quantitative work has concentrated on Interrupted Time Series (ITS) analysis of five selected RPIWs.

This paper reports on an analysis of phase 1 interviews (n = 55) of NHS staff in a group of study sites (n = 14) chosen to represent a wide range of NETS organisations across the north east. These comprised three acute hospital trusts, two mental health trusts, a community health services trust, an ambulance trust and two primary care trust (PCT) clusters of three and four PCTs, respectively. The interviews were carried out between June 2010 and January 2011. During this period, four of the trusts were not using the Virginia Mason Production System (VMPS) method, or were using a mix of different methods, but all of the trusts were part of the overall NETS programme. Staff interviewed included senior NHS managers and directors, non-executive board members, clinical and administrative personnel and employees with specific responsibility for quality improvement and organisation development in their respective trusts. Interviews, which typically lasted around 1 h, were conducted in person using a semi-structured question template, involving two researchers where possible. We note that our phase 1 interviews were, in the main, conducted with a limited number of senior managers and clinicians, and our comments and conclusions should be read with that in mind. However, the views expressed were largely consonant and appear to reflect a broad consensus across the NETS organisations at least at senior level.

Analysis of interview transcripts was undertaken using deductive coding frameworks based on the Pettigrew et al. ‘receptive contexts for change’ model,²² (which relates well to the aims of the NETS) and terms related to the NETS programme, as well as an inductive framework related to the other issues raised by the interviewees. The coding frameworks were iteratively agreed by the research team. Interview transcript coding was carried out by one member of the research team and subsequently verified by another team member.

The deductive, ‘receptive contexts for change’ coding framework was established in accordance with the eight indicators of receptivity to change, as shown in Figure 1.

First-order codes were created to correspond to each of the model’s eight contexts. Each first-order code was further elaborated to reflect more nuanced interpretations of the study participants’ responses to interview questions; for example, ‘Key people leading change’ contains sub-codes that cover issues of continuity, leadership, personality, team building, stability and leading change at national, regional and Trust levels.

For the purpose of assessing the contribution of leadership behaviour to the progress of the NETS programme, the transcripts were interrogated for relevant material by using the ‘Key people leading change’ code from the Pettigrew, as well as inductive codes and key word searches related to concepts of leadership.

Outcomes from phase 1 interviews

The range of interviews conducted during phase 1 of the study is set out in Table 1, along with an indication of the type of study site and the NETS method in use at the time of interview.

Table 1.

Phase 1 interviewees across the study sites (n = 55).

Study site	Phase 1 interviewees	Improvement method in use
01 ‐ hospital trust	Non-executive board member Senior medical manager Senior nurse manager Senior nurse manager Senior manager	Non-VMPS; other Lean tools
02, 03, 04, 05– primary care trust cluster	Senior executive Senior director Senior director Senior director	Non-VMPS
06 – community care trust	Senior manager Quality improvement manager	Non-VMPS
07 – ambulance trust	Manager Clinician Manager Non-executive board member Senior manager Senior director Senior manager Manager Senior director Service improvement manager Service improvement manager	VMPS
08 – mental health trust	Senior clinical manager Non-executive board member Senior director Clinical team member	VMPS
09 – hospital trust	Senior medical manager Senior nurse manager Senior executive	VMPS
10 – mental health trust	Service team manager Nurse Senior executive Non-executive board member Senior executive Service development manager Service improvement manager Administrator Manager	VMPS
11, 12, 13 – primary care trust cluster	Senior nurse manager Service improvement lead Senior director Senior director Service improvement officer Senior service improvement manager Business manager Senior executive Senior director Service improvement lead	VMPS
14 – hospital trust	Senior nurse manager Senior nurse manager Senior director Senior executive Senior executive Senior director Senior director	Non-VMPS; other Lean tools

Nearly two-thirds of phase 1 interviewees commented extensively on issues that were coded under ‘Key people leading change’. Derived from the interview transcripts matching the relevant search criteria are a number of common themes which are summarised below:

Many of the interviewees felt strongly that embedding the principles of the NETS requires committed, stable, long-term leadership at the highest level. Some commented about the particular nature of the NHS in the North East and were of the view that senior leaders, in particular, were perceived to be less likely to move, resign or be replaced than in other regions. This was felt to be a positive advantage when implementing a system-wide programme for change. Staff who had had direct contact with VMMC and Toyota trainers had the message reinforced that stable commitment from the top of the organisation was an essential prerequisite for implementing a successful programme of transformational change. One medical director commented: ‘… the most important thing is to have that organisational commitment and leadership and the constancy of purpose really to just keep going on at it and be prepared for it to take time’.

Without the hands on presence of senior leaders – particularly clinical leaders – staff will assume that the NETS programme is another management fad. Linked to the issue of stable, committed leadership, a number of staff felt that rhetoric and exhortation are insufficient to win commitment and support the workforce: senior managers have to take part in practical, day-to-day improvement activities if they are to be taken seriously. In sum, they have to ‘walk the walk’ not merely ‘talk the talk’. A director of nursing was keen to demonstrate the extent to which her organisation had embraced this approach: ‘I think the fact that we have so many of the senior team involved, I mean all of the directors are certified leaders, the Chief Exec’s a certified leader. All of the divisional managers, if they’re not they’re being trained currently’. A divisional manager in a hospital Trust highlighted the importance of clinical involvement: ‘… we’ve done a lot of work in terms of the compact and vision work to try and involve all levels of staff … it’s about having a sort of champion … one of our consultants … leads on Lean and he participates in the Lean project group’. The view that leaders have to demonstrate commitment to quality improvement was echoed by two senior leaders at a study site that had not fully engaged with the NETS programme, although they recognised that, in this regard, their Trust had not progressed as far as some of the other NETS study sites.

Continuity and team building are highly valued consequences of the NETS programme. The implementation of the NETS was seen in some of the study sites to be a purposeful means of bringing rigour to organisational culture and building relations across different staff groups. As a senior manager in one Trust commented: ‘… we’ve developed a leadership programme … each month we do a cohort of ten staff … so on top of the 54 certified leaders we’ve now got ten staff at team leader ward manager level every month starting the leadership programme’. This kind of rolling programme of leadership development had been absent from the Trust in previous years and was cited as a major enabling factor in the organisation’s ability to successfully merge with another Trust. The board chair of the same organisation had a similar view and saw the future as being leadership development of clinical staff: ‘… there’s a whole framework of leadership development that takes people up … And so we’re trying to get more and more of the medics through different development which would improve behaviours and make it more likely that they work in teams’.

‘Key people leading change’ is taken seriously: leadership skills are valued at all levels. Many interviewees, particularly those in the most senior roles, were clear that the top–down, target-driven culture of the NHS would have to change if their organisations were to succeed in maintaining or improving levels of quality and safety, meeting their financial challenges and embedding a culture of continuous improvement. Those closely involved with the NETS programme – as senior managers or as leads for quality improvement and/or organisation development – thought that leadership should be developed as a distributed attribute within their organisation, and characterised it as an ability to empower a team, to communicate a vision and to give staff responsibility for their own area of work. A number of the quotes above illustrate this view, but this comment from an HR Director indicates that the NETS programme had led to leadership becoming an important consideration in annual performance reviews: ‘… we’ve got a leadership compact [an agreement covering expected leadership behaviours], and it’s really important that people live that leadership compact … So with everybody who has an appraisal, the leadership compact is part of that’.

There were mixed views on the consequences for the NETS of major upheaval in the NHS, particularly in relation to the leadership role of the SHA. Some interviewees had concerns that the impending demise of familiar structures, such as Strategic Health Authorities and Primary Care Trusts, and the loss of some organisational memory would be harmful to progress with the NETS across the region and divert attention from the NETS work programme. This view was typified by one Trust CEO: ‘So I think there are two ways it could go … if organisations have the bravery almost to stick with it, I think it could be fine, but otherwise it could completely disintegrate. For provider organisations, I mean they can individually still pursue the NETS approach anyway, but the beauty of what we’re doing in the North East is the fact that we’re all doing it collaboratively’. However, not all staff shared this view. A senior nurse manager commented as follows: ‘I don’t know that personally I feel as if the SHA has a great influencing arm within the work that we do at the moment … So as long as we can sustain what we’re doing and maintain that kind of commitment then I wouldn’t say that we would miss them in that sense’. This view was more typical of provider organisations in the vanguard of implementing the NETS and were more confident of their ability to continue to train staff without support from the VMMC or the NESHA.

Discussion and conclusions

The NETS was conceived as a region-wide response to an impending crisis: how best to maintain or improve safety and quality of care in the face of extreme financial pressure and the likelihood of continued increases in healthcare demand. The programme, recognising the complex interconnectivity of healthcare organisations in the north east, pursued a collaborative approach between NHS organisations, promoting a common language of improvement, in the belief that this would achieve faster and better results than would otherwise be the case.

Leadership of the NETS programme was initially centred around senior leaders in the SHA and the Wave 1 pathfinder organisations. However, the SHA’s own vision was to devolve leadership and development activities to the individual NETS organisations, and in some of the study sites, this achieved early success, with many of those interviewed showing genuine enthusiasm for the NETS programme’s emphasis on empowering staff at all levels to lead change. In this regard, at least, there was little difference between those study sites that were using the VMPS and those using other Lean-type interventions, which suggests that the Vision and Compact elements of the NETS were (and are) at least as important as the Method employed.

Not all study sites made similar progress in implementing the NETS during the period covered by the phase 1 interviews. In one case, a trust was taken over by another, with the consequent loss of its own ‘brand’ of the NETS programme. In two other trusts, progress stalled or was postponed while resources were re-focused on activities that senior leaders regarded as having a higher priority. One study site made little or no progress with NETS implementation from the outset and remained disengaged from this aspect of the region’s improvement activities. However, even in those sites that were less able to follow the NETS programme, interviewees mostly expressed similar views to those of staff working in sites that were making rapid progress, in relation to the impact of ‘key people leading change’ on the success, or otherwise, of the NETS in their organisation.

The interviews reveal a high level of accord with the conclusions of earlier authors on the importance of leadership in effecting successful transformational change in healthcare organisations. Healthcare organisations that are contemplating introduction of a Lean programme, or a large-scale improvement project by other means, could usefully pay attention to a number of practical lessons from the NETS programme, namely:

The principles and practice of the NETS discourage ‘heroic and individualistic’ management and promote a distributed leadership style based on team work and accountability spread between different professional groupings and at different levels of the organisation’s hierarchy.

Continuity of leadership and constancy of purpose are highly valued and recognised as key components in allowing the NETS to achieve its aims. The unexpected demise of one trust was judged to have led to loss of organisation memory and to have undermined staff confidence in the NETS as a long-term route for improving quality and safety of care.

Leaders should address organisation culture and relations between staff with at least as much attention and rigour as they pay to the mechanics of improvement activities, if large-scale change is to achieve traction and become embedded in an organisation. A number of senior directors expressed regret that they had not done more at an early stage to concentrate on these aspects of the NETS and felt that they would have achieved more had they done so.

Clear commitment to transformational change – involving leaders ‘from the board to the ward’ – is essential. Interviewees mentioned provision of adequate financial resourcing, allowing staff time to take part in the NETS activities, and the role of leaders in promoting the successes of the programme both within the organisation and to the external world. However, the most valued expression of leader commitment was simple, hands-on presence of senior managers and clinicians.

Footnotes

Funding

This project was funded by the National Institute for Health Research Health Services and Delivery Research Programme (project number 08/1809/255). The views and opinions expressed therein are those of the authors and do not necessarily reflect those of the HS&DR Programme, NIHR, NHS or the Department of Health.

Notes

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