Naomi Chambers on NHS lessons from the private sector

These days, boards might be better advised to learn cautiously from best practice rather than slavishly copy their private sector counterparts, some of whom have evidently led their organisations into the abyss.

Michael Useem's research on good practice in the boardroom published in the Harvard Business Review identified a series of actions that are associated with the boards of high-performing organisations. These include getting the basics right, such as having an annual calendar to ensure there is an appropriate balance of board functions. Clarity about matters that should be reserved for the board is also important, and these include areas that are symbolically as well as strategically important.

In the NHS, these symbolic examples abound: it might be the closure of a small, isolated, expensive but much-loved health service facility, or the denial of an expensive drug that could prolong life for a few weeks.

Useem goes on to argue for a relatively hands-on approach to strategy formulation and execution.

Strategic leadership

Also in the Harvard Business Review, Jay Lorsch and Robert Clark counsel for more of a focus on the long-term and for more strategic leadership from the board. From their survey of directors of Fortune 200 companies, they argue that there is currently a danger of too much board time spent in the area of compliance, and that boards are too hands-off in the area of strategy, which risks the destruction of shareholder value in the longer term as their organisations, potentially unnoticed, go into decline.

In the NHS, this can be summed up as too much focus on doing things right rather than doing the right things (for example, a safely conducted inpatient procedure which, according to the latest research, has a low level of clinical effectiveness and impact).

There are also lessons specifically for boards that are steering their organisations out of failure and through turnaround, and for those applying for or that have achieved foundation trust status. The role of the non-executive directors often comes to the fore in times of crisis or stress, particularly outside formal board meetings, for example in board committees, which can be "safer" places to ask searching, pertinent questions that challenge the status quo.

Courting success

For successful turnaround to happen, committed, hands-on, emotionally resilient non-executive board members are required. They must have the know-how and willingness to take responsibility, sort things out and form a coalition for change.

Once the organisation has come through turnaround, or achieved foundation trust status, members need to resist the tendency, described as the stress-inertia dynamic, to return to business as usual rather than maintain that same level of challenge, steer and grip.

Some NHS foundation trusts may have fallen prey to this stress-inertia dynamic: having passed the gruelling tests set by Monitor as part of the authorisation process, their current grip on their business, in clinical and financial terms, may in some cases be less than firm.

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