NEWS FOCUS: Forget traffic lights: the new performance ratings are about spreading learning and improvement - and sensitivity, writes NHS chief executive Nigel Crisp

This week's publication of performance ratings is an important part of the bigger drive to improve performance across the whole of the NHS. It is also about changing the culture and style of management.

For the first time, we are reviewing performance in the round.

From now on we will measure performance by paying more attention to quality and to the things that both patients and staff tell us are important to them. This year, the measures are relatively simple. But year on year we will be improving the way we do this, so as to get better measures for clinical quality and a better understanding of staff and patients' views. Many boards and managers already focus on these issues. This provides the incentive for all to do so.

We will also be making sure that action is taken.

We are actively changing our approach to performance management and moving away from simple target setting and box ticking. Broadly speaking, our developing approach to performance improvement is about setting standards and measures, identifying good practice, providing project support and development - spreading learning and improvement - and measuring performance against a 'balanced score card'.

Within this overall approach, we need to make sure that poor performance is tackled firmly and fairly.We also need to give the best performers rewards and incentives.

The responsibility for performance rests with the board. For the poorest performers, we will provide extra support from the Modernisation Agency and the performance fund and will look to boards to strengthen their plans for improvement. We will give extra time for improvement but set rigorous timetables.

Ultimately if this fails, we will need to make changes to the board and management and bring in successful managers from elsewhere in the NHS.

For many trusts, the problems highlighted today will not come as a surprise. Indeed, they have been recognised in many places and plans for improvement are already in hand - with encouraging signs of progress in some areas.

It will be very important to stress - as both health secretary Alan Milburn and I are doing - that these performance ratings only relate to a relatively small number of measures. They do not mean that a poorly performing hospital has low standards throughout, or is unsafe or does not contain excellent clinical services. Staff are often doing good jobs under difficult circumstances, but these assessments show that organisational performance needs to improve in some key areas. We must stress these points for the public and staff alike.

At the other end of the scale, there are trusts which are performing well on these measures.

They will be given an initial set of 10 freedoms which will allow them more 'earned autonomy'.We will be looking to them to use these freedoms to provide even better services for their patients and a better working environment for their staff.

Just as importantly, however, we will also want to see them breaking new ground, developing new ideas and innovating on behalf of the whole NHS.We will be specifically asking them to participate in policy making, to pilot new ideas and learn new ways of doing things on behalf of us all.

We know the NHS has a vast resource of skill, experience and commitment.We know that every problem has been addressed successfully somewhere and there are many new ideas worth piloting and developing.Alan Milburn has talked about the need to create the right conditions for public sector entrepreneurs to flourish and drive change.

The new freedoms for the bestperforming trusts will help. So too will franchising. Where a trust's management is unable to turn around poor performance within the agreed timescale, we will expect the board to bring in successful NHS managers from elsewhere. Individual managers and teams will have the opportunity to run more than one organisation. They will be asked to draw up franchise plans which show how they will improve the organisation and develop it for the future. They and their original organisation will be remunerated accordingly.

I know that performance rating - and league tables of any sort - can be very threatening for individuals and organisations. They must be applied sensitively. We must use these ratings to improve performance, incentivise boards and managers and motivate staff.

Performance management is an important part of changing the culture. We need to listen to patients and staff. We need to concentrate more on quality.We need to act on long-standing problems. This also represents a great challenge to those of us working centrally.

We need to be less top-down and give more scope for local ownership and enterprise.