Does the NHS need management consultants?

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21 December, 2009

As NHS management expenditure tightens, management consultancy costs are in the spotlight. The NHS is big business for the consultancy industry. We spend hundreds of millions of pounds a year on consultancy services.

My motivation in writing a blog about management consultancy comes from two recent experiences. The first was helping to judge the national “Management Consultant of the Year” awards, run by the Management Consultancy Association. I got to judge some outstanding consultants, at the top of their game, who were delivering a massive return for the consultancy investment that their client organisations were making. My second experience was reading a publication copy of a new book, No More Consultants by Geoff Parcell and Chris Collinson. The authors contend that a lot of investment in management consultancy services is a waste of time and money because we don’t think through the issues properly before we bring management consultants in and we might get better, less expensive outcomes by using our own internal capability and existing networks first.

Over the next period, we need to ensure that as section 3.55 of the NHS Operating Framework 2010/11 states, external consultancy is “used only when there are no other options” and that every pound invested in consultancy support delivers a significant return. However, this doesn’t mean the demise of the consultancy industry in the NHS. In fact I believe that management consultants can play an even more effective role and help us get better, faster results. Key to this is how we, as NHS leaders, become better users of management consultant services.

If we look back over the past five years, we can see what a significant contribution external consultants have made to the transformation of the NHS. They have:

brought skills and perspectives that we just don’t have in our organisations
given us confidence to think the unthinkable and take decisive action
helped speed up the change process
brought an external, neutral perspective that senior leaders take more notice of and therefore given more credibility to our change plans
created additional, much needed, capacity for change
helped us to get better outcomes for our populations and patients

However, there have been many situations where NHS investment in consultancy has just not led to the outcomes we seek. I think that the “blame” for this lies as much with us in terms of how we set up and manage the consultancy relationship as it does with consulting firms who fail to deliver the goods.

Too often, we unthinkingly seek quick fixes, reaching out for an external cavalry to rescue us from our most vexing problems. We bring consultancy support in to help us answer the wrong questions or solve the wrong problems. We need to spend more time reflecting ourselves on what the real issues are. We can be more purposeful in our use of consultants if we understand the problem that we are trying to solve, what resources we already have in the organisation and what help and support is already available in the wider NHS system. In many cases, most of what we need is already there for us.

One of the most significant unintended consequences of working with consultants is that because we purchase their services as experts to help us solve our problems, we subconsciously “let the experts take over”, giving consultants the lead role in diagnosing and making recommendations, in facilitating change events and in initiating action. We move into a subordinate role, even when we are NHS change experts in our own right. Management consultants tend to come to NHS organisations with their own change tools and methods. Often they are quick to disregard other methods or approaches. But if they solve the problem their way, we don’t own their solution because we haven’t played a big enough role in creating it. There is an awful lot of talk of “skills transfer” and “co-production” in NHS consultancy specifications but in my experience, too few consultancy assignments are set up with a delivery model that allows for wholesale knowledge transfer and rapid development of our own people.

The evidence suggests that the receptivity of the local culture for change is more important as a predictive factor of success than the strength of the consultancy intervention. By consistently looking inside the organisation first, and by truly engaging the workforce in the change process, we have the best chance of unleashing the latent energy and potential of the organisation and achieving and sustaining the change we seek.

I want to tell you about a situation that occurred a few months ago. There was an important project which needed a large amount of information to be collected and summarised for use across the NHS. For reasons that are not important to my story, the contract couldn’t be let to external consultants as intended and the work had to be done in house. It meant that all kinds of people from across the NHS were marshaled to help with the initiative. Could one of the consultancy firms have done the work more quickly and have come up with solutions that were more perceptive and more strategically aligned? Probably. However, the fact that the NHS had to do it for itself meant that people got involved from the start, got enthusiastic about the process, surfaced great ideas from within the service and created an energy to fuel the change that would not have been there if they had been asked to implement a pre-packaged solution.

We will need the expertise and brainpower of external consultants to help us reach our quality and productivity goals over the next three years. If we look at other examples of system transformation, we see that bringing in radical ideas, approaches and inspiration from outside the system is a key aspect of change. However, we need to be more resolute as to why we bring consultants into our organisations, the timing and focus of assignments and the process of selecting which consultants we work with. Here are some of the things we should consider:

· give our leaders and staff problem assessment/solving and consultancy skills so that they can create and implement their own solutions

· create and develop internal facilitators to support the free flow of knowledge and skills. Give the facilitators the time and space to do the job properly. The recent research report on The Productive Ward commissioned by NHS London identified that this investment in trained facilitators was one of the key factors that made organisation-wide change fly. Investing in these kind of leadership roles can save overall management costs, not add to them

· involve a wide range of people (staff, patients, public) in identifying the underlying issues and framing the true nature of the problem

· even if we haven’t got the knowledge or capability in house, we need to consider who can help us externally. Find out who else in the NHS has already tackled this problem. Network and benchmark with the best

· be powerful and proactive in our roles as customers of management consultancy services; be clear about the outcomes we seek, and the nature of the relationship; set explicit outcomes for skill and knowledge transfer as well as service or strategic outcomes; define the criteria and manage the process for evaluating the effectiveness of the intervention from the beginning - don’t wait for the consultancy firm to determine it; intervene as soon as questions are raised about the capability of individual consultants; insist on a formal post-assignment review of both outcomes and learning for the organisation

· be role model leaders. Make visible demonstration of continuous learning a part of our everyday leadership job. Change our perspective from seeking out and solving problems to appreciating and building on the strengths of the team and the organisation. Don’t delegate to others the thinking that we should be doing for ourselves

At the end of the day, this discussion is not really about management consultants at all but about our own resourcefulness and power to challenge and change things. Key to meeting our quality and productivity goals is unlocking the talent that already exists in our organisations. We need to start by looking inside our organisations for the answers. By starting inside, we are in the best place to understand what we need externally and we are most likely to get a strong return on our consultancy investment.

One thing that all the award winners from the Management Consultant of the Year understood was that their role was to enable and coach their clients rather than to solve their problems for them. Perhaps they and the authors of No More Consultants aren’t so far apart after all.

Helen Bevan

PS: No More Consultants has some great practical approaches for tapping into the strengths and assets of our own people. The book reference is:

Parcell G and Collinson C, (2009) No more consultants: we know more than we think Wiley ISBN 978-0-470-74603-5

Readers' comments (14)

Patrick Keady | 21-Dec-2009 12:04 pm
Every week, I receive two or three phonecalls about assignments in NHS risk management, governance and safety. However, many of the proposed assignments would be a waste of NHS time and NHS money.

Earlier this year, a PCT asked me to lead on corporate governance, health & safety, risk management, information management, health records, complaints, claims, moving and handling and commissioning strategy.

I challenged the potential client to describe in a few short sentences, what they wanted me to achieve, and by when. They were unable to see or tell me what success might look like.

So, I offered them telephone coaching, free-of-charge. The PCT soon saw that my input would be very worthwhile in one discreet project, where my independent insight and skill-set was just right. The project is mission-critical to the PCT and they were happy with my daily rates too !

And during the course of the phone conversations, the potential client identified in-house people that could lead on many of the other pieces of work.

I fully agree that NHS organisations need to clearly think about what they want to achieve, before contacting independent consultants. And in the meantime I’m looking forward to reading Parcells and Collinsons new book.
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Anonymous | 21-Dec-2009 1:53 pm
More often the NHS and in particular PCTs is looking not just for good and qualified support from so called external consultants but also to cover gaps in their skill and experience as well as cut thorugh their own red tape.

Sometimes, in my 5 year experience working as an external consultant, I have got the job done on time and within budget and the best outcome but then the PCT dither and dont take the matter further forward - now that is a waste of both my time and NHS funds.
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anonymous | 21-Dec-2009 3:39 pm
There's such a huge range of consultancy expertise available at reasonable cost, but are not easily accessible by NHS managers because of tendering arrangements, and the expected timescale in which complex problems require simple solutions. There's also this 'excellence by proxy' problem that applies to nameworthy consultancies that charge excessively for work that can be done better by non-nameworthy consultancies. I've been told by leading commissioning managers to attach myself to a name-worthy consultancy in order to be commissioned - a quite bizarre notion.
There is the divide between consultancy expert skills that are applied directly to a specific problem, and the expert skills that facilitate the development in thinking and action of managers and others so that they may tackle the problem. The latter consultants have to help define the problem and, being soft skills, are less obviously quantifiable in the short term, but have high long term impact that ripples wherever the manager concerned may move to. in my own field, I know that modifying manager behaviour to exhibit the behaviours that build commitment, trust and engagement will save tens of millions of pounds in costs of people suffering psychological distress and leaving. It's not a quick fix. There aren't many people who can do this. Ergo it's not done.
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Liz Miller | 25-Dec-2009 8:40 am
self justifying management bollocks

NHS managers are meant to be managing a hospital not importing versions of Ernst and Young or KPMG

The NHS is a means of delivering healthcare to the population on a large scale. As such it is unique and, at least at the coalface, has very different beliefs and values from the likes of Ernst and Young, KPMG

Management consultants are great at extracting money from naive organisations. The NHS is a naive organisation. Management consultants are extremely good at making people feel good about hiring them, otherwise they would not get any more work.

Management consultants are "TalkingDoings" full of hot air, making money from teaching their grandmother to suck eggs. It is time to see through their management b***** and spend time focusing on what needs to be done. ie work on the job in hand of making sure that healthcare reaches the people who need it. Instead of going to meetings, writing endless reports, and networking wildly
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Anonymous | 30-Dec-2009 11:11 am
No - to often we are simply trading one bunch of mediocre managers for another.
We need to start addressing poor management and developing/supporting good managers in a more professional way.
Capability policies are there to be used, do this and invest that which we spend on McKinseys and the like in ensuring we have a bedrock of excellent managers accross ALL organisations.
The DoH would do well to lead by example - there again without McKinseys there would be no outputs from the DoH (now there's an idea!)
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David Poynton | 4-Jan-2010 5:34 pm
Another unthoughtful comment from Liz "Scrooge" Miller, who obviously opened her disappointing presents early before writing her comments on Christmas Day. Now I have been on both sides of the fence having used consultants when I was a FD and CE in the NHS and now as Chairman of Public Sector Consultants Ltd and agree that careful consideration needs to be given to when and how you use management consultants. A careful well thought out brief is important so you get what you wanted. Also choose carefully as many "nameworthy" consultancies charge extortionate rates for mediocre or inexperienced consultants. Used appropriately management consultants can add value. The particular skills of good communication (both written and verbal), hitting deadlines (not as the NHS invariably does using them as guidelines) and keeping the client informed through out the process are sadly missing in many internal projects. VFM is also important so make sure you use management consultants sparingly and appropriately. Helen's theme is welcomed as it is saying think through your options. Indeed her reasoning applies to the NHS Institute itself. It is doing things collectively which the NHS could do for itself if it got itself properly organised but...............
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Anonymous | 4-Jan-2010 11:54 pm
I have worked for many different consultancies on many different projects, usually technical stuff the NHS was not equipped to do, but I have never before seen spending on the scale of current PCT expenditure on one or two "top" firms. These firms appear to be essentially doing the same job in every PCT and charging not only very high fees - I have seen £1.7 million in one PCT's accounts alone - but using incredibly high daily rates to limit the amount of work done for the money. But if DH is using a big firm and has endorsed its approach, PCTs probably guess correctly that they cannot be criticised for doing the same. Net result? Lots of cut and paste documents where you just have to substitute the PCT name, and very big profits for one or two big firms. It would be good to see a rigorous value for money audit of this, with a small budget and access to all the information.
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Anonymous | 5-Jan-2010 7:38 pm
two points:
1. I wrote to the Chief Financial Officer of the NHS about 5 years ago outlining a plan to reduce the spend of consultants in the NHS. The response was that he was too busy to consider this!!

2. An effective consultant engagement is mostly limited in the public sector by the procurement rules. To help clients understand, perceive and act upon the problems as described by the client requires a sloid client:consultant relationship to be built. This needs time to discuss, understand and assess the level of ignorance that exitsts between the client and consultant. The consultant should also make it clear when he/she is chaninging mode from diagnostic/expert or process consultant. Sadly - 9 times out of 10 the procurement departments and rules do not allow this type of dialogue until its too late.
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Anonymous | 5-Jan-2010 8:32 pm
Decent consultants can and should provide Trusts with surgical, precise packages of knowledge/ideas/training, adopting the scalpel approach, rather than the chainsaw.
The big companies are in danger of getting all consultants tarred with an often-undeserved brush.
Please give small companies a chance, treat us like the plumbers of the NHS...
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Anonymous | 6-Jan-2010 11:39 am
How much does the NHS pay to consultancy companies run by Trust directors (and spouses) where lucrative contracts may be awarded, not on merit, but through cronyism?
Can anyone tell me what the disclosure rules are in Annual Reports and Accounts?
Can anyone draw attention to Trusts where the figures are disclosed or conversely where they are not?
Any help would be much appreciated.
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Chris Young | 7-Jan-2010 12:47 pm
Helen's blog strikes a chord with me as someone with 15 months experience as an independent development consultant but with 35 prior years of NHS experience in clinical practice and management. I can also associate with many of the comments made by others, although it was sad to see Liz's 'rant' .... on christmas day of all days! Even if she was working, which I have also had to do on many ocassions, as an occupational health physician I would have thought that her time and skills would have been better used trying to make the working day for herself and her colleagues a much more rewarding and pleasurable experience, rather than sitting at a computer responding in such an emotive way to an HSJ blog. Liz's passion is admirable although her fiery comments, that seem to be aimed at 'all' consultants, can surely only be based on poor personal experience or very limited experience with consultants. I agree that many large consultancy companies charge extortionate rates that the NHS should think about carefully before commissioning. I also agree that the important thing in bringing in any external support is that they should aim to build internal capacity and capability and use the intelligence and experience that is already there. The sadness is that, in my experience, many NHS organisations do not how to use their own people (this was certainly one of my motives for moving into an independent consultancy role) and this inadequacy is often carried through to their use of external consultants too. In that respect, the Parcell and Collinson book should be a valuable addition to the NHS managers toolkit.
My personal view is that the NHS can benefit from external consultants as, if used corectly, they offer a perspective that can be extremely valuable.
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Anonymous | 8-Jan-2010 12:29 pm
Like David Poynton I have also worked on both sides of the fence. In my last substantive NHS role I found myself in an organisation where a significant proportion of the radical change management was automatically deemed to need external, expensive big name consultants attached to it. The team I worked in reviewed what this agency had done and had no doubts that had we been asked to get involved we could have delivered this work far more cheaply and with the benefit of local knowledge and the good will of the parties involved built up because of the relationship we had developed over a number of years. I therefore have alot of sympathy with the cynicism expressed by many people responding to Helen's article about whether these larger agencies in particular really represent not only value for money, but also whether this is really the way to develop organisational skills and organisational memory in making major steps forward in health improvement. I echo the comments made about certain companies employing a bland, dare i say lazy approach to their work where a piece of work for one health economy is deemed suitable for a cut and paste job somewhere else, ignoring important differences in population, priorities, structures and financial circumstances I have also seen a number of reports from these 'experts' which make naive assumptions about how the NHS and local government work and give very little in the way of a 'how' answer - usually the things both commissioners and providers need most.
In the last two years i have worked independently and have seen the other issues Helen mentions. Like Patrick have been asked to lead pieces of work where trying to get a clear brief is trying to nail jelly to the ceiling, where the people attempting to engage me are too busy to meet and discuss what they really want. With the best will in the world even someone competent and conscientious cannot deliver good, targeted work which hits the spot under those circumstances. I agree wholeheatedly with Patrick - if someone can't articulate what outcomes they are looking for, they aren't in a position to make good use of external skills.
Lastly, Liz Miller, I didn't lose my work ethic or my desire to do a job and do it well when i left the NHS
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Anonymous | 9-Jan-2010 8:55 pm
'making money from teaching their grandmother to suck eggs' is a pretty good description of Liz Miller's book 'Mood Mapping', which is unoriginal, simplistic and self satisfied.

I say this as an ex-management consultant diagnosed with and struggling to manage bipolar disorder. Liz Millers' book was of absolutely no help whatsover and her comments on management consultants are equally worthless.
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mike batt | 13-Jan-2010 12:41 pm
Does an octopus need eight socks?
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