Some years ago our commissioners grasped the reality of market dynamics and sought to break traditional monopolies in healthcare provision. Cue the local opening of one of the country's largest independent sector treatment centres.

As the major university teaching hospital in the South of England, our trust was long seen as a proverbial black hole which sucked in resources and delivered mediocre performance for patients and payers.

A good old financial crisis in 2003-04 after decades of non-recurrent fixes resulted in a major crisis. But when I joined the trust in 2004, it did not feel as though everyone realised this.

Rather it was home to too many Alice in Wonderland style Queens of Hearts who felt we could invent the rules of the game or change the game to defend our position - the very behaviours that caused our paying customers to lose their confidence in us in the first place.

Internally the lack of realistic grasping of the real issues sapped energy, innovation and morale, while our customers decided our monopoly of services was not serving them or their patients.

Independent challenge

So the major shock of the development of an independent sector treatment centre combined with a£16m cumulative deficit in 2004-05 felt as if we were falling into a dark abyss with no end point.

The words of our then interim strategic health authority chief executive Sir Ian Carruthers rang in my ears: "The trust's problem is it gets on with recovery plans and never recovers, it simply gets back to the position of failure."

When you face the prospect of the very destruction of the things people have worked for decades to improve, you have to radically rethink.

Leaders need to quickly grasp the complex dynamics of the culture, capability and capacity of their organisation while managing how it is perceived by external players. Insight and courage are required to hold a mirror of these views to the organisation while creating a sense of urgency for change.

In our case the independent sector treatment centre development made people realise they had a choice to change or fail.

We opted to change, delivering some difficult and rapid alterations to arrest our financial malaise, while backing this up with the development of "best in breed" financial, planning and service performance processes. This work rapidly stabilised our position and reduced operating costs by over£100m in four years.

Improving performance

New leaders, stronger operational clinicians and better responsibility and accountability, aligned to rewarding risk taking, have driven higher performance.

But great visions often fail because of a failure to develop a sense of urgency, a lack of a guiding coalition of leaders, an absence of value based leadership and a lack of how they should be delivered and communicated.

The most humbling and difficult journey we went through was when we systematically set about working with our customers, our university and our public to get an accord on all the positive and negative aspects of our current position.

I had not understood the deeply held animosity to our past, nor the impatience and anger felt towards our current state.

While at times I often wondered whether we could ever change, the strength I drew from those around me from both inside and outside the trust was robustly articulate and supportive. They listened and understood. We focused and set to change.

The result was to develop a strategy which radically repositioned a university teaching hospital in a modern age, with a focus on being world class (before it had become a much misused phrase) in all clinical, educational and research businesses, a fundamental shift away from dependence on certain district general hospital services and a focus on community based development.

The new contestable environment was embraced - we have disinvested over£30m of clinical business to independent and local community providers - as a symbol of our desire to reposition and at the same time drive the development of our specialised work.

Simple messages

The results have been remarkable. We have focused inside the trust on simple messages and the need to improve patient experience, safety and outcomes, aligned to engaged staff.

It works, but only when leaders create the environment, processes and mechanisms which tackle failure or mediocrity and actively promote investment, service redesign and productivity.

Tough love is the message needed to deliver a genuine, two-way street, based on the realities of the market environment and the realistic delivery of market opportunities.

Inside the trust we have built both a culture and clinical-managerial partnership which will help us to endure the uncertainty and challenges that the new environment will bring while exploiting our potential.

There have been downsides. The crass and secretive processes used to create the contestable market have been unhelpful and, because of the uncommercial way the Department of Health's commercial directorate arranged the deal, costs to our local health system will be great. This will be bad for the taxpayer.

On the other hand, the very threat of competition has changed a slumbering giant. In that sense the results for the taxpayer are better quality, world leading services, research and education.

The challenge has been enormous and the most difficult thing I have ever done in 14 years as a chief executive.

Yet we have succeeded in a major cultural, service and financial development of our trust and enabled our people to flourish and restored their pride and passion and delivered better value for everyone.