A bureaucracy emerges
As an organisation grows and becomes more successful, the danger is that it creates structures and processes that, essentially, are designed to keep it the same. It becomes a bureaucracy, which is usually run by leaders who value consistency and the application of rules. It has a structure of hierarchy and authority that buries individual decision-making and accountability. This is what happened to M&S. Organisations that operate within a regulated environment face the same risk in becoming overly bureaucratic because the purpose of regulation is consistency, order and compliance – attributes that go against the need for change and innovation.
Keeping things the same serves organisations well when the context within which they are operating doesn’t change. However, when the context does change, it is essential that organisations have the reflexive capability to notice the changes and the ability to adapt, otherwise, like many bureaucratic organisations in the private sector, they will simply become irrelevant and disappear.
Innovation is essential
M&S was always built on its ability to be inventive. It was the first retailer in the UK to introduce mass-market clothing direct from the manufacturer straight to the consumer to serve the post-war market. It led the way in food by being the first retailer to introduce the concept of the ready meal and also the cold chain where exotic produce could be brought into the UK from hotter climates without dropping the quality.
Innovation, or the emergence of novelty and newness, is the lifeblood of every organisation in the private sector. They have to evolve, change and maintain their relevance to the people they serve. A lack of innovation results in creeping irrelevance and customers quickly choose an alternative. Those that are left by the wayside wither and die.
The NHS is different in the sense that it doesn’t have any major competitor. However, the public’s acceptance of this monopoly will be challenged if it’s not seen as being good value for taxpayers’ money and meeting their changing needs.
It’s hard to believe that the provision of a health service 'free' at the point of delivery is something that the UK population would abandon. However, the emergence of the health consumer, where patients are better informed, and more demanding, will have an impact on how the NHS, as a monopoly, provides its services. If it fails to innovate from within, it will become an inevitability that it will be forced to change from outside.
So if the NHS has to find new ways of doing things, we should understand the nature of the forces at work that encourage, or inhibit, innovation. We know that innovation appears in the most unexpected places and that regulation is its killer. Organisations that operate in a regulated environment often cease to be able to adapt because they are strangled by regulation that goes way beyond aspects of the operation that properly need to be regulated. They value staying the same rather than changing.
We shouldn’t relax our drive for quality, and the regulatory environment has an important part to play in assuring progress. But when the regulations become a stick to beat organisations with, then surely we’ve gone too far. We need assurance but we also need improvement. We need an appreciation that the only way in which sustained improvement will happen is to develop long-term strategies that foster a positive culture that encourages risk-taking and avoids blame.
Hierarchy gets in the way of innovation
In the 1990s, M&S lost touch with its customers. I remember that those at the front line knew that our competitors were getting better than us. What we did no longer worked as effectively as it once had. However, the organisation was very hierarchical. Messages from the front line were filtered so that by the time they reached the decision-makers they were subverted. Black had become white and all was well with the world.
The role of the accomplished leader is to flatten hierarchy. Hierarchies reduce the flow of information that is essential to understanding what’s really going on and to enabling innovation to be spotted and amplified.
Even in structure-heavy organisations, leadership is about connecting to the customer and connecting parts of the organisation so that information flows. In the NHS, patients’ needs are changing. Their demands are shifting. In an environment shaped by social media and a consumer mentality, patients are taking control of their health in new ways. The NHS and the medical community need to respond to this.
If the system is to transform, leaders should do their best to increase the connectivity of the NHS – bring the various parts together to hear what’s going on, understand the problems and, above all, celebrate success. They should take the view that for a solution to any problem, the innovation required lies with the people who do the job.
In his 2002 book The living company: habits for survival in a turbulent business environment, Arie de Geus, former head of strategic planning at Royal Dutch/ Shell, argues that the reason why some organisations survive for 40 years or more is because they are regarded as living communities rather than financial assets or machines. The ability of any organisation to adapt to the complexity of the environment is down to its people – the way they are engaged and developed and how their collective wisdom is used to find new and novel ways to operate. It’s light years away from the mechanistic view of the world where a central brain controls the actions of whole organisations.
A hierarchical structure gets in the way. To overcome this requires a different leadership style to the one that feeds a hierarchy – one that is collective, collaborative and, above all, compassionate.
Confidence is the lifeblood of innovation and change
One of the abiding lessons that I learnt from my time at M&S is that when change is required you also need the highest levels of confidence and belief in what you’re doing. If you’re confident, you can reach new highs, experiment and deliver. You can access your understanding of the complexity of a situation and you know what to do.
However, the paradox is that when the need for change is high, levels of anxiety are also high. As a consequence, those who hold the key for the innovation that is needed tend to retreat into what they know, keep their heads down and the change required doesn’t materialise.
The role of the leader in this situation is to dampen the anxiety, create safety and build confidence. In the NHS, the extraordinary role that leadership has to play is to shield teams from the angst created by the regulatory and political environment and make sense of what needs to be done and by whom.
You also have to believe that the people doing the job you’ve given them to do, know what they’re doing, usually understand the complexity of a situation better than you, and know the risks and opportunities. If you want to be innovative you need to do everything you can to build and nurture the confidence of the people you rely on to achieve the task.
It seems at the moment that there are forces at work that are undermining NHS leaders. It feels like a system under siege where success isn’t celebrated but failure is catastrophised. This saps the confidence of leaders. While we all know the consequences of failure, we have to develop an attitude that is more supportive and tolerant of leaders who are trying new and innovative things.
From a newcomer’s perspective, it is very noticeable how often there seems to be a search for a silver bullet and reaching for experts to provide a simple solution. In my experience, the only way through a complex situation is to build the confidence of the people who hold the problem. Experts can be helpful to provoke and stimulate new thinking, but at the end of the day even the most expert experts won’t appreciate what it’s really like on the front line.
In the late 1990s, I was involved with a large change project in M&S that was led by external consultants. In my view, we abdicated the running of the business to the consultants, who gave the impression that they knew the answer to the problems we were facing. Because we were so lacking in confidence, we wanted to believe they were right. They and we couldn’t have been more wrong. We knew our business better than anyone. We knew where the problems were and what we needed to do to put them right. We just needed the chance. M&S started to find its way again when it took hold of the business and made the changes happen from within.
The key lesson here is that you have to listen to the people close to the front line – they hold the answer. In M&S, the stores knew what was going right and what was going wrong. Day in, day out, they gauged the reaction of the consumer. That vital information has to be passed quickly and without prejudice back to the decisionmakers, who must react.
So it’s essential that we honour the good leaders who hold the problem and give them the chance they deserve. We must start from the perspective that they have the resourcefulness to modernise and find a new solution.
Reading time: 6 mins
Vijaya Nath is Director of Leadership Development at the Leadership Foundation for Higher Education.
The current leadership of the NHS neither reflects nor represents the diversity of its patient population or its workforce, in terms of gender, ethnicity and age, and is often criticised for being elitist and formed from the monoculture. For example, in London the proportion of NHS board members from a BAME (Black, Asian and minority ethnic) background was lower in 2014 than in 2006; the number of chief executives and chairs from a BAME background was also lower at only 2.5 per cent in 2014. Women remain significantly under-represented at senior leadership level, which continues to baffle as women make up more than 78 per cent of the NHS workforce. Post-Brexit, this lack of diversity represents a risk to the United Kingdom and for the NHS in that it limits new ideas and approaches.
In London the proportion of NHS board members from a BAME (Black, Asian and minority ethnic) background was lower in 2014 than in 2006.
The late American publisher and entrepreneur Malcolm Forbes succinctly captured one of the most powerful benefits of a diverse workforce and leadership when he described diversity as ‘the art of thinking independently together’. Imagine the potential of a greater range of ideas generated by a greater range of diversity.
Just imagine how the priorities, culture and ways of working in the NHS would be different if its leadership was more representative of the characteristics and values of the diverse patient population and workforce. Benefits would include, among other things, a greater understanding of users’ needs and perspectives, as well as a greater diversity of staff perspectives – for example, through clinical and non-clinical opinions, greater innovation and more creativity in problem-solving. There could also be a concerted drive to improve and widen the pool of people who would be attracted to work in NHS leadership positions.
So far, efforts to achieve a leadership mix that reflects the NHS’s diversity have proved unsuccessful. There are no quick fixes. Individual organisations need to work to alter pre-existing attitudes that still act as barriers to inclusive leadership. Investing in organisational development – including internal appreciative inquiry initiatives, which focus on identifying the positive strengths in individuals and what is working well in the organisation and how these strengths can be incorporated into the culture – can enable organisations to understand the breadth and range of diverse views and talent that already exist at individual and team level. This exploration would also enable leaders to look at ‘what’s missing’ and to use this information to inform future recruitment strategies, as well as individual development portfolios and organisational talent strategies. This is one way of achieving more diversity in leadership – growing your own talent. And let’s not think about diversity just in terms of gender and ethnicity. Respect for the diversity of thought that both youth and maturity bring is already changing many industries. For the NHS to keep up with the demands of the future, including an ageing patient population, accessing talent at both ends of the workforce will require new ways of working.
This is one way of achieving more diversity in leadership – growing your own talent.
A growing body of evidence from sectors outside health (to which health continues to look to improve on clinical innovation and quality improvement) tells us that having a diverse leadership helps companies to perform better. For example, McKinsey’s Diversity matters report found that companies with a gender-diverse board were 15 per cent more likely to outperform their peers financially and those with an ethnically diverse board were 35 per cent more likely to turn in a better financial performance. Harvard Business School has repeatedly stated that multicultural networks promote creativity. This type of evidence moves us beyond the moral argument around fairness and equity into the area of drawing on cultures of inclusion to improve performance and maximise effectiveness.
In the future there will be enormous changes to how the NHS operates both locally and globally. As well as a multi-generational workforce, innovations in technology will transform health care services; we may even see robots delivering health care. Technological innovation will also help bring a shift in power from health care professionals to patients, who will take far more control in determining their care. These and other changes mean that the workforce and leadership teams of the NHS in 2048 will bear no resemblance to the team that was in charge when the first NHS patient was treated in 1948.
A growing body of evidence from sectors outside health tells us that having a diverse leadership helps companies to perform better.
So what if, in 2026, the NHS had a community-led board that was informed by the wisdom of both a council of elders and a local youth forum? Where the ‘director of creative engagement’ is a patient leader, who now sits on the council of elders, and where the position of chair of the board rotates quarterly between clinical, non-clinical and community professionals. Where the board and the leadership team visibly represent the patient population they serve in terms of gender, ethnicity and age ranges. And where, perhaps, artificial intelligence plays a role in decision-making. How would this impact on the quality of care, equity and the provision of truly patient-centred care that better meets the needs of the local population?
This means we will need to establish more inclusive, tolerant cultures within the NHS.
In the future, human empathy could become the most important employing factor in health care. People with long-term health and care needs, for instance, are just as likely to need support in making social connections, maintaining stable employment, and finding ways to manage their own health, as they are to need direct clinical support. This means we will need to establish more inclusive, tolerant cultures within the NHS. In the current composition of the NHS’s workforce, where individual egos loom large, it would be interesting to fast forward 10 or 15 years and look at how those making decisions would fare if they needed to take into account the opinion being spurted out by a robotic team member, or one that emanates from the virtual and augmented reality of the ‘ward’ or ‘examination room’, in tandem with the views of the patient leader who is a voting board member.
The current leadership models and composition of leadership in the NHS will not propel her to achieve the successes which the future demands; we need to make a commitment to change.
The views expressed in this article are those of the author and are not presented as those of The King’s Fund. We have commissioned external authors to write for ‘The NHS if’ series as a way of presenting different perspectives on the future of health and care. We welcome a diversity of views on this issue and encourage you to leave your comments below.