PUBLIC SECTOR LEADERSHIP

Published: 24/03/2005, Volume II5, No. 5947 Page 18 19

In the devolved NHS, trusts will stand or fall on their long-term, director-level recruitment strategies. If the current trend of appointing directors who lack the necessary skills and experience continues, says Hamish Davidson, it could all go horribly wrong

We have an election looming. The whole health agenda - waiting lists, access to treatment and so on - will continue to be a political football - light on rational thinking and reason, and heavy on supposition, prejudice and manipulation.

Local government learned long ago how every director of social services and chief executive is one step away from sacking/early retirement through the death of a child in care. In a devolved NHS, the media and anti-stakeholders will take no prisoners.

In theory, at least, foundation trusts are more or less independent bodies accountable to communities through a board of governors, which will have both elected and appointed members.

In addition they will have a board of directors, including non-executives.

This creates two further massive implications. First, governance. trusts have to appoint their non-executive directors through the NHS Appointments Commission but foundation trusts have more freedom to make their own arrangements.

The truth is that I do not think the Appointments Commission has, to date, got it right about the skills needed to be a chair. There have been too many chairs appointed who really want to be chief executives. That said, there have been too many chief executives who have not properly upward-managed their chairs.

For foundation trusts, governance is an area of intense risk and exposure - but also great opportunity if they get it right. There is an opportunity to bring in some incredible talent from a wide range of sectors. And frankly, in the areas of finance, management of change and communications, talent is badly needed. At the same time, how do you run an organisation that has a board of governors or nonexecutives made up of members of the local community? What skills do you need to do this? I do not think the NHS has got community engagement right.

In the recent past I have rarely heard a word about working with local government from the NHS, while the opposite has been true in local authority circles.

Today, inevitably, we are seeing this need for stakeholder engagement and likely service integration being much more commonly debated, especially with social services around adult/older people services.

There are a lot of willing partners out there, particularly among the police and voluntary sector, and the NHS is going to have to work with them if the concept of a devolved NHS is to work.

Other parts of the public and voluntary sectors are far ahead of the NHS on the best tactics for joint working. There is much that can be learned from local government.

There will be higher risks and fewer buffers for devolved organisations, but the opportunities are significant.

A devolved NHS must work with and alongside other community players in a coherent, open, proactive and productive manner.

The movement away from a command and control regime to one in which you stand by your own decisions is going to be increasingly scary for many. They would do well to heed some of the mistakes made on long-term planning by the corporate world (see box below).

In planning for a devolved NHS I have a deep sense of inadequacy about predicting anything at all with any degree of accuracy. Indeed, I believe the first job facing corporate leaders is to prepare for a future you cannot necessarily predict, and institutionalise a capacity for change at all levels throughout the organisation. You need to inspire frontline teams to seize the opportunities presented by the devolution of power.

The lessons from elsewhere in the public and private sectors suggest that much greater emphasis on top team development, coaching, mentoring and facilitation is also going to be needed.

Foundation trusts have important new financial powers, not least the right to keep any surpluses they make and to raise money through commercial debt. Getting it wrong is going to be embarrassing and potentially suicidal for those involved.

Assuming the ability to seek more interesting and imaginative financing vehicles, the NHS is going to have to look towards accountants from the private sector for finance director and assistant finance director roles. The NHS will need some very good finance people with new skills that are not widespread in the service at present.

In general, lessons from elsewhere in the public sector suggest that we are going to see a greater turnover of all senior staff in trusts as they race to achieve foundation status. Some post holders - finance directors in particular but also perhaps chief executives and operations directors - will be found wanting.

And some will just not want the hassle of another round of reforms.

Where are the new appointees going to come from? The NHS is already desperate for chief executives and finance directors.

The Department of Health recognises this and is pressing for people to join the NHS from the private sector. There are objections to this on the ground, but such is the staffing crisis is so great that eventually it will have to happen or the system will die.

Certainly, foundation trusts might become an interesting area for aspiring private sector chief executives. There is also a chance that the slimmed down civil service might yield some talent.

A few might be found overseas - in fact, looking internationally for chief executives for major acute hospitals might become the norm (it is certainly becoming the norm for other parts of the public sector to look overseas for candidates).

But I would guess that latent conservatism, prejudice and desire to minimise perceived risk will likely mean that most will probably have to be sourced from other parts of our own labour market.

Another significant development is likely to be the sharing of workforce across primary care trusts. The conflict of having to address local needs while simultaneously meeting national standards and delivering enhanced procurement strategies and savings is especially challenging and, frankly, there is not enough talent to go around.

Too junior for their roles PCT chief executives and finance directors are often too junior and inexperienced for their roles. Having fewer people working over larger geographical areas will solve this problem.

There are a growing number of examples nationally of PCTs sharing workforce such as Kennet and North Wiltshire PCT and West Wiltshire where a joint chief executive has been appointed across the two organisations.

In the long run, shared management structures within PCTs will likely mean bigger beasts: more assistant director roles and fewer chief executives.

In the short run, many of these PCTs will stage competitions for the chief executive and other posts, either because they have a genuinely open mind about who should take on the work, or because they want to boost the standing of those they are going to give the jobs to anyway.

How, over the medium and longer term, can the NHS grow its own talent and how can it open itself up more fully to identifying people with transferable skills from outside the NHS?

Stop defining people merely by which sector or discipline they happen to work in.

Instead start selling values, and recruit people whose values are at least in synch with your own. If there are skill gaps, train people to compensate.

You can teach skills - you can't teach values. And by the way, this is also likely to be how the NHS will finally and effectively address the diversity agenda.

The overall challenge for 'leadership' generally in the devolved NHS is to create the environment and conditions for transformational change in your organisations.

There is a need to foster, nurture, recruit, train, enthuse and retain talented staff at all levels (be they clinical, professional, managerial or support.

They will need to be encouraged and empowered to exercise leadership with increasing confidence, knowing that mistakes will be harnessed as learning opportunities rather than reasons to be discredited, penalised or fired.

Whether a trust hires talent from outside or promotes from within, it must recruit/appoint for success and then invest in that talent to make sure it succeeds rather than just 'hoping for the best'.

For trusts can be sure of one thing: if they do not do this, other employers will and the future leaders of the NHS will vote with their feet.

CRYSTAL BALLS: LACK OF STRATEGIC VISION

In his book, The Agenda: what every business must do to dominate the decade, the business writer Michael Hammar tells how he led a management seminar in 2000. He asked the participants to list the biggest headaches that had bedevilled their organisations over the previous 12 months.

After the group identified its issues, he turned the discussion to strategic planning. Usually, a company's strategic plan has at least a five-year time horizon. He innocently asked his attendees if their strategic planners had identified any of the key issues of 1999 in 1994 when they were five years away. No hands were raised. Every year, hundreds of organisations churn out long-term strategic plans showing them to be failures at preparing for the critical issues of the future.

Bizarrely, it gets worse. An American Express attendee reflected on one of the most important innovations his company had undertaken that year. Yet it had not been included in the company's plan for 1999, which had been prepared just the previous year.

In other words, these programmes had been conceived and launched within one calendar year. Forget about projecting the future five years hence: seeing 12 months ahead seems to be beyond anyone's capabilities.