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The NHS productivity problem

The Health Foundation – an independent think tank – recently published its findings into NHS productivity and the figures do not make for comfortable reading: NHS hospitals have only improved efficiency at an average rate of 0.4% a year whilst NHS England’s five year forward view is predicated upon productivity efficiencies of 2-3% a year.

People building a creative idea

Despite an expected under-spend from commissioners of £197m, the NHS is projected to overspend by £626m by the end of 2014/15 from what was a net surplus of £582m in 2012/13. Furthermore, during this parliament, NHS hospitals have only improved efficiency at an average rate of 0.4% a year whilst NHS England’s five year forward view is predicated upon productivity efficiencies of 2-3% a year. At the same time NHS Trusts have collectively spent an extra £1bn (+27.8%) on temporary staffing – something we have previously written about on this blog. Acute hospitals are hardest-hit, 76% were in deficit at the end of Q3 2014/15, up from 19% in 2012/13.

In order to highlight the findings the Financial Times (who commissioned the Health Foundation into conducting the research) recently ran a video article focussed on a Trust that appears to be navigating the troubled waters with a great deal of skill - Salford Royal NHS Foundation Trust. Salford Royal is a Trust that has performed consistently well for a number of years and it was reassuring to see, that despite the adversity they face, there remains a genuine commitment to keep their staff engaged and involved in what they are determined will be their continued improvement and success.

When viewing the video it became apparent that a number of parallels can be drawn between Salford Royal’s journey and Unipart’s own experience both internally and in our work with external customers.

Firstly much like our CEO John Neill, their CEO, Sir David Dalton, has been given time to make the changes that would have been necessary for them to reach and then sustain the high levels of performance they now experience. It is unlikely to be a coincidence that the top 20 Trusts and Foundation Trusts for employee engagement have CEOs that have been in place for an average of approximately eight years, versus a national average of between two and three years (Sir David has been CEO of Salford for over twelve years). This will enable the Trust to establish a level of long term thinking that ensures they are better prepared to overcome the challenges they are faced with, whilst being better equipped to avoid them happening in the first place.

A key message from the video article is the attention drawn to the importance at Salford Royal of the application of discretionary effort by staff in order to deliver the highest levels of care for patients. This is a term you will often hear used at Unipart. An engaged workforce doesn’t mean that all the staff are happy all of the time; instead it means that employees are equipped and enabled to go above and beyond for the benefit of themselves and the organisation as a whole. This use of discretionary effort, earned through the engagement of staff, will enable the workforce to be far more resilient in the face of adversity than an organisation that doesn’t value the effort required to generate high levels of employee engagement.

Sir David also mentions that Salford Royal’s approach is focussed on supporting team members to generate and then safely implement ideas for change - Salford Royal does not advocate performance management and the imposition of solutions. This further resonates with Unipart’s internal philosophy and our approach with external customers whereby we encourage employees at all levels to come up with ideas that will improve productivity in their own area. What must not be neglected is the importance of ensuring that these employees are also equipped with the skills to implement the changes in a way that is safe. This is especially important when those changes may have an impact on patient safety.

Visible leadership is another factor highlighted by Sir David as being crucially important to the hospital’s success. This can take the form of the informal support mentioned by Sir David or a systemised approach as adopted by leaders at Unipart that is intended to avoid the construction of ivory towers.

One of the building blocks of the Unipart Way was establishing a cultural shift whereby the visible and transparent sharing of information on performance with employees every day became the norm. Whilst the NHS is often highly adept at generating lots of data and information at organisational level, the sharing of relevant and meaningful performance information is often neglected at the front line. It was therefore encouraging to see in the video the use of visual management being utilised by front line teams, whereby the information appeared relevant and accessible to both team members and the patients they treat. Engagement of staff is vital to the long term success of organisations, but so too is the engagement of their customers.

Solving the productivity problems faced by the NHS will not be easy and the required solutions will need to be diverse in their nature. However, the example provided by Salford Royal NHS Foundation Trust demonstrates that there exist a number of steps that can make a real difference relatively quickly, and that if they were more widely adopted could create a considerable positive impact on the NHS as a whole. At Unipart we know this to be true as we ourselves have taken many of these steps during our own transformational journey, and our customers are benefitting from this experience, as they begin to make their own strides towards sustained performance improvement.

The Unipart Way: performance improvement that sustains

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