Turning the NHS into a lean, mean, healthcare machine

The old British Leyland plant in Cowley, Oxford, is symbolic of the change that has happened in British industry in the last generation.

Early this century it was rebuilt by current owners BMW to produce the reinvented Mini, thereby securing a high-tech future as part of the wave of foreign investment in British car manufacturing. The slick production lines today – habitually visited by proud politicians – are far removed from its past as home of the Morris Marina and Austin Maestro, when errors were frequent and costly, and stoppages due to poor relations between workers and management were an ever-present threat.

That is a journey the NHS has yet to travel, according to John Neill, chief executive of Unipart, whose headquarters are next door to the factory. The company was the parts supplier to British Leyland, privatised in a management buyout led by Neill in 1987. But he does not have fond memories of how the business once performed.

“When I started in business it was acceptable that about 6 per cent of a part, say starter motors, wouldn’t work. That was acceptable, it was the norm,” he remembers. “If you think about 6 per cent, it’s 60,000 parts per million. Today, we expect to run our factories at 25 parts per million with defects.”

Now, he says, the health service is facing the same problems. “Candidly – and this will upset a lot of people in healthcare – if we ran our factories with the level of defects of an average hospital we’d be out of business in 24 hours.”

Unipart was forced to confront its shortcomings if it was to survive. “We couldn’t believe it when the Japanese showed us they were a hundred times better at quality than we were. Our people, our factories, our managers were in denial for years over it, believing they cheated or it wasn’t true,” he says.

“We were determined to learn and worked hard at studying it and trying to find out how, rather than trying to convince ourselves it was all a con. And we learnt and then started to systematically engage our people, train our people, help them to reappraise their own prejudices to change their attitudes.

“That’s long and difficult and painful. It’s not easy.”

The NHS is now hamstrung by similar problems: “There’s a lot of restrictive practice and poor practice in the health service and that’s got to be dealt with. That’s got to be dealt with by strong leaders and tough managers.”

The Unipart way

Unipart is today one of Britain’s largest privately owned companies, with clients including Sainsbury’s, Vodafone, BMW, Jaguar and Sky taking its manufacturing and logistics services. As a consultancy it sells the hard won secrets of its success to other businesses, including some health service organisations.

It achieved this transformation by developing what it now calls the “Unipart way”. This company philosophy was developed after studying at the feet of former Japanese rivals such as Toyota and Honda. The Unipart way is the company’s own approach to “lean” production – the elimination of process waste and inefficiency.

The effect is like performing a symphony, says Neill, and requires total commitment throughout the organisation: “You have to have all the instruments well orchestrated, individuals who have practised for thousands and thousands of hours. And then they all have to work together as a symphony of products under conductors who deeply understand the result they’re trying to get. And that’s very difficult.”

But one of the hardest parts is persuading your workforce they have to unlearn established ways of working. “You have to be willing to commit massive time and resources to building the capability and leading because a lot of it is counterintuitive,” Neill explains.

“So, people learn to do things in a certain way, then you ask them to do it in a lean way; at first it doesn’t seem instinctively correct, so you have to overcome a lot of people’s previous experience.”

Lean is not a new concept in health service leadership but it is not one that has been adopted widely. Are the processes of manufacturing really analogous to healthcare? Definitely, says Neill.

“I think the principles are identical. It’s a process with a series of process steps. Some
of the processes you can standardise, and some of them need deep expertise in order to make judgements in the moment. You should think about it as a set of process steps, of which you continuously seek to improve the quality, reduce the cycle time and remove defects.”

Introducing change on a scale such as this requires a massive commitment from the organisation, strong leadership and the will of the workforce, he elaborates. “You can’t go and write a cheque and hope it will happen, you have to embark on it as a strategic imperative. You have to provide unambiguous leadership, continuously.”

So how can an organisation convince a hard bitten, seen-it-all-before workforce that it is not just another buzzword – that production line success stories do translate to matters of life and death? The answer is to take your time convincing staff with a cocktail of persuasion and inspiration. After all, without them it just won’t work.

“You have to find a way of engaging everybody to work effectively as a team and we don’t have much space for prima donnas in our company – there are people who are deeply expert but we only make it as a team, we all rely on each other.

“People have an innate desire to be proved right. They don’t like to be proved wrong,” he warns. “If you’ve done something a certain way for 20 years and someone comes along and says ‘actually you can do that in half the time, at twice the quality,’ it’s actually quite a difficult and painful thing for any human being to accept. You can’t instruct people to be different. You have to persuade them and inspire them and work with them and coach them, and it takes a long time and it’s expensive and it’s difficult.

“You have to start with what’s the purpose of this organisation, and whether the people in the organisation are signed up its values and purpose.”

And must everybody be on message for the business to succeed? “I wouldn’t think about it as being ‘on message’. It’s about, whether you’re equipping people with the body of knowledge and the coaching and the training in order to help them do the jobs they want to do better every day.”

An organisation or system that has undergone the Unipart treatment is one in which the expertise and knowledge of every member of the team in each stage of a journey is valued. And while any member of the team can offer ideas for improvement (“It’s not the Kremlin”), it is not a collegiate system – which might jar with the architects of the current NHS reforms.

As Neill goes on to explain: “If I’ve got something wrong with me, I’m going to see a doctor. But if I want to fix a business I’m not going to ask a doctor to do it. People don’t want to say these things, but doctors aren’t trained in management. They’re trained to be doctors and we should have them doing that all of the time.”

Moral imperative

Growing demand for healthcare, says Neill, means there is “a moral and economic imperative for the health service to become massively more efficient”. However, the Unipart chief executive fears the NHS “mythology” is holding it back.

“The NHS is a highly political – and politicised – institution. But fundamentally it needs to perform. It’s a production system that must perform for the patient and must be held accountable to perform for the patients – but we surround it in mythology.

“We want a great healthcare system but it’s got to be efficient.”

And like British Leyland, nationalisation may be the ultimate obstacle. “You have to look at the track record… which state run organisations in the UK have ever delivered high quality at low cost? Just look at the history of state run organisations: British Leyland, British Gas, British Steel, electricity, water. Every single one of them that came out of state control into the private sector put the quality up and the cost down.

“Competition inspires people,” he argues, returning to his theme that engaging the workforce and changing attitudes is vital to achieving improvement.

“There’s almost a built-in system where people will defend what they do, but when a competitor down the road’s doing it twice as well as you do, it compels you to think about how have they done that. And in a highly motivating way, you start thinking ‘how can I do that better?’”

The potential to improve the health service is there, pending the will of the workforce and its leaders.

“In healthcare, 95 per cent of what you do doesn’t add value for the customer – that’s true about every organisation. So the opportunity for waste elimination is absolutely massive but you have to have a mindset to do it and you have to have a body of knowledge to do it. On top of that you have to have a leadership climate in which it can be done as well as a culture that welcomes change, is motivated by change and is keen to engage in changing things for the better.”