Chief executives designed for the future

When the NHS leadership qualities framework was first published in 2002 I was working with a hospital in the Midlands. The human resources director was running management development sessions for new clinical directors and business managers – a group of “senior middle” managers.

She telephoned the leadership centre (part of the NHS Modernisation Agency) and requested 20 copies. She was told that copies could not be provided because the framework was designed for executive directors, not for more junior staff.

‘Because the concept of “special people with special attributes” has intuitive appeal, we keep throwing money at it’

Fortunately, that view has changed, and recent versions of the framework are seen as applicable to all staff with management or leadership responsibilities. In other words, recognising the value of “distributed leadership”, the framework is relevant from band 5 nurses to board members.

So, what additional capabilities do chief executives need? Attempts to identify the markers of effective leaders – the traits and attributes that they share – were abandoned by leadership researchers in the middle of last century. Trait spotting failed to identify a common set of clearly defined characteristics. But because the concept of “special people with special attributes” has intuitive appeal (and we all know somebody who seems to fit that category), we keep throwing money at it.

The approach failed because leadership effectiveness is highly contingent. Context matters as much, if not more than capabilities. The nature of the problems matters more than the personalities involved.

Break the triangle

How are the context and the problems evolving? Let us start with context. One of the largest employers on the planet wants to cut annual spending by at least one fifth in four years, while reducing waiting times and improving the quality and safety of care.

Every week on hsj.co.uk there are calls for the “fundamental redesign” of this area or the “radical overhaul” of that service. The concept of transformational change, another common phrase, is popular.

For a trust chief executive, here’s the problem. Using the metaphor of “the iron triangle”, health economist William Kissick argued that because access, quality, and cost have equal priorities, attempts to improve one compromises one or both of the other two, and that we have to accept the trade-offs.

However, if we turn to the work of Harvard Business School professor Clayton Christensen, it might just be possible to find ways to break this triangle. He distinguishes between sustaining innovation, improving on what we already do, and disruptive innovation, introducing wholly new ways of thinking and working.

Is disruptive innovation the solution? There are a few hurdles. First, Christensen argues that most organisations are designed to produce sustaining innovations, for which there are well developed processes. There are no routine processes for handling disruptive innovations. This explains why most disruptive innovations are introduced by small start-ups.

A second hurdle is that disruptive new products and services are often not as good quality, initially, as what is currently available.  It would take a persuasive chief executive to sell such an idea to the Care Quality Commission and Monitor.

‘The NHS is not a “fault tolerant” organisation’

Are chief executives therefore constrained to delivering sustaining innovations? Consider the Innovation, Health and Wealthpolicy published by the Department of Health in 2011, which noted ”the premium on game changing innovations”, arguing for “a major shift in culture and “hard-wiring innovation”.

It concluded that “we need to do things differently and innovation is the only way we can meet these challenges”. The report set out the six “game changers” that had to be implemented, with deadlines, with a national oversight body, assisted by “task and finish teams”, and with fines for non-compliance. The policy contradicts everything we know about innovation, and “hard-wires” the service against any major changes that are not centrally mandated.

To break the iron triangle, chief executives and boards have to break the rules. For an individual trust, this could involve, for example, creating wholly new structures and processes within the corporate boundaries, in order to protect and develop innovative services. This is risky and takes courage. The textbook might distinguish praiseworthy failures (trying something new) from blameworthy failures (deliberate sabotage), but the NHS is not a “fault tolerant” organisation.

Playing politics

Back in 2002, “political astuteness” was a quality chief executives were expected to possess. That is now expressed in terms of “demonstrating awareness of the political environment” and “managing political interests and balancing tensions”. Describing political skill tactfully is a political skill.

One dimension of the evolving context putting a premium on political skill is the number of new organisations created by the recent reorganisation. This was advertised as “streamlining” bureaucracy but has had the opposite effect.

Each new organisation has its own remit, strategy, goals and priorities. In addition, they each have their own chief executive and board, who want to establish their own reputations. One doesn’t achieve that by following someone else’s lead when collaborating on cross-healthcare community initiatives, especially if the innovations are disruptive, and may not work.

‘Most middle and senior managers have never had any training or development in political skill’

The number of stakeholders just got bigger, and given the many pressures on the system, including the pressure for transformational change, the stakes just got higher. We know, however, that the casualty rate among chief executives is high, and that membership of the “700 club” (chiefs with an average tenure of 700 days) is growing. 

A study by consultancy Hoggett Bowers found that the main reasons for chief executive departures included difficulties in personal relationships with their chair or a senior figure in a stakeholder organisation, not successfully judging the “local politics”, and not recognising key power brokers. They also found that even internal candidates, with an NHS track record, could take two years to learn how to “influence and manoeuvre” in their new role.

Despite its importance, most middle and senior managers have never had any training or development in political skill. For some, this ability comes naturally, but there are routes to improvement.  Unfortunately “Machiavellian” is an insult, but it is possible to use politics in constructive ways, to achieve corporate outcomes, particularly with regard to driving change. In the current context, those capabilities are valuable.

Staying power

There are the five power bases covered in management 101: reward, coercive, referent, legitimate and expert. There is also a sixth, which I call “staying power”.

It takes time to build relationships. Clinical staff see managers come and go, and ask, “Why should we support someone who will be gone in a couple of years?” One of the hospitals involved in a recent Cranfield study had six chief executives in five years; the average tenure of their executive directors was two years.

Paul Levy, the architect of the turnaround at the Beth Israel Deaconess Medical Centre in Boston, US, only departed once operational and financial goals had been met and the hospital’s future was secure. He was there for nine years. Relationships developed over time increase the chief executive’s power and influence.

This suggests that chief executives should focus on three additional sets of capabilities. First, be prepared to break the rules. Second, nurture your inner Machiavelli. Third, if the first two do not qualify you for the 700 club, stick around and break even more rules.

David Buchanan is professor of organisational behaviour at Cranfield University School of Management