Friday, 2 October 2015

Good Strategy, Bad Strategy, NHS strategy

Strategizing and planning takes up a humongous amount of management effort in the NHS. Given the quality of what emerges, that is mostly a waste of effort.

There are a lot of business books about strategy. But not many good books about strategy. In fact I’d go so far as to say there may only have been five of any merit in the last 30 years. The most recent in my short list was by Richard Rumelt and is called Good Strategy, Bad Strategy.

Rumelt thinks most strategy is bad and provides a useful diagnostic to help identify it. And he thinks that good strategy has of a kernel consisting of just three things: diagnosis; policy and plan. while his focus is mostly on business strategy the issues apply in the public sector too and I want to look at some examples from the world of the NHS. Not necessarily positively.

But first let’s look at a distilled version of what he says good strategy should be and how to identify when it isn’t. And then I’ll review some NHS strategy stuff against the standards (hint: I won’t be very positive).

He argues that bad strategy tends to dominate:

“Unfortunately, good strategy is the exception, not the rule. And the problem is growing. More and more organizational leaders say they have a strategy, but they do not. Instead, they espouse what I call bad strategy. Bad strategy tends to skip over pesky details such as problems. It ignores the power of choice and focus, trying instead to accommodate a multitude of conflicting demands and interests. Like a quarterback whose only advice to teammates is “Let’s win,” bad strategy covers up its failure to guide by embracing the language of broad goals, ambition, vision, and values. Each of these elements is, of course, an important part of human life. But, by themselves, they are not substitutes for the hard work of strategy.”

If you are starting to feel uncomfortable about your organisations strategy, then welcome to the club.

So what does a good strategy consist of?

“The kernel of a strategy contains three elements: 1. A diagnosis that defines or explains the nature of the challenge. A good diagnosis simplifies the often overwhelming complexity of reality by identifying certain aspects of the situation as critical. 2. A guiding policy for dealing with the challenge. This is an overall approach chosen to cope with or overcome the obstacles identified in the diagnosis. 3. A set of coherent actions that are designed to carry out the guiding policy. These are steps that are coordinated with one another to work together in accomplishing the guiding policy.”

What I like about this definition is its clarity. In a few sentences it cuts to the heart of what is wrong with a great deal of the sloppy thinking that many organisations call “strategy”. He elaborates a little more:

“The core of strategy work is always the same: discovering the critical factors in a situation and designing a way of coordinating and focusing actions to deal with those factors…

...A good strategy does more than urge us forward toward a goal or vision. A good strategy honestly acknowledges the challenges being faced and provides an approach to overcoming them…

...good strategy includes a set of coherent actions. They are not “implementation” details; they are the punch in the strategy. A strategy that fails to define a variety of plausible and feasible immediate actions is missing a critical component…”

To summarise in my words a good strategy needs the following:
  • A diagnosis of the most critical problem being faced by the organisation
  • A policy to deal with the most critical problems that also acts as guide to rule out actions that will distract from dealing with the most critical problem
  • A realistic, achievable plan of things that can actually be done that deal with the challenge in a way that is consistent with the policy

That doesn’t seem to hard, does it? Apparently, though, it is (and not just for the public sector) as few organisations come close to having strategies that meet those criteria. To be fair it isn’t defining good strategy that is hard, it is generating good strategy which nobody finds easy.

So how do strategies in the NHS stack up?

Here is an example of one way things fail.

Last winter NHS England was keen to encourage CCGs to sort out their perpetual winter crisis. They were happy to spend serious money (I believe more than £500m has been spent in the last two years) on avoiding the bad headlines that come around every year as “winter pressures” appear to overwhelm the emergency care system. I got a phone call from one CCG who had been kicked out of the room for producing an unconvincing recovery plan (I am an expert on emergency care performance having worked on and off in the area since the 4hr A&E target was originally set). I won’t name them to protect the guilty.

I have my own views on what the problem is in emergency care and I’m one of the few people to have produced analysis of the performance data that tries to narrow down where the problem is (the regulator Monitor have recently done an exhaustive analysis that pretty much agrees with my less complete analysis and experience).

So I asked the CCG to tell me about the plan they had presented. I compared it against my list of things I thought were likely to work. There was no overlap. I won’t go into the detail but the key issue was that most actions were focussed on diverting patients from A&E on the assumption that the problem was that the emergency departments were being overwhelmed by demand. This should be one of the easiest hypotheses to refute as the weekly national performance data have never shown any relationship between the attendance volume and performance (You can find some of my analysis of this elsewhere on this blog. Monitor’s assessment agrees with mine.)

So I quizzed the CCG as to why they were focussing on actions that didn’t work and proposed that they should look at some other ideas (for example whether their hospitals had a problem with discharging patients and finding free beds. This is Monitor’s top identified cause of poor A&E performance and the one I’ve been ranting about for years). I suggested some tools (eg this one) they could use to explore whether this issue was significant locally. I assumed they had never thought of this. I was wrong. They had already done this analysis and identified that beds were a serious problem in local providers but had ignored that in their strategy. Why? Because, they said, they didn’t want to annoy the clinicians in the hospitals as they didn’t agree with the analysis (even though it was based on their data).

So they produced a strategy that had essentially no hope of addressing the problem they had. They chose to address headlines and naive explanations about what the problem was rather than face down local political pressures that were driven by denial about the real source of their problem.

This identifies two issues that recur repeatedly in the NHS and lead to much “strategy” being built on a foundation of air.
  • They fail to identify the critical issue in the situation
  • They fail to choose a focus that might upset a strong constituency and prefer multiple actions that make people feel something is being done

Of course, the second factor is often the cause of the first. Even when we know what the problem is we can't address it because of politics.

These failures are pervasive in public sector strategy. Even when one part of the process is done well other pressures undermine the result. In the NHS we sometimes (though far too infrequently) see some decent diagnosis of what the top problem is. But the strategy becomes muddled because of an inability to choose to focus on just the top problem. More frequently, the strategy addresses political issues and never bothers with the objective analysis of what the challenges actually are. This problem is exacerbated because just about every distinct group inside the NHS has some lobby pursuing their interests.

The RCGP (the lobby for GPs) thinks the key problem for the whole NHS is that the government hasn’t done enough to mitigate demand on them and hasn’t recruited enough new GPs to make the workload bearable. They even produce numbers to back these ideas up. But the numbers are bogus as the NHS doesn’t collect reliable data about how many GP appointment there are. Moreover there is significant evidence that GPs who apply some operational insights to how they book and deal with appointments can reduce their workload substantially while improving patient satisfaction. The correct diagnosis of the problem might be a poorly designed and inflexible appointment process and not a tsunami of demand.

Or, in recognition of the NHS’s inability to operate properly at weekends, Jeremy Hunt demands changes to doctors contracts. Nobody seems to have done any analysis of the real problem.  Why bother when the headline solution seems to be so attractive. But, while it is clear the NHS doesn’t operate well at weekends, it is far from obvious that the fault is driven by lack of medical cover. Piss poor processes for managing discharges from beds seems to me far more likely, and that isn’t fixed by having more doctors around.

And there are big areas of NHS strategy where we could apply those criticisms. Especially where anything involving those newfangled things, computers. The National Information Board (NIB) has a framework for the future of NHS IT (which is describes as a framework, wisely since it isn’t much of a strategy by Rumelt’s definition). The NIB framework says a lot of plausible things about what the NHS should do with computers and IT. But it lacks a compelling diagnosis of what is broken or why the NHS hasn’t done obviously beneficial things in the past. And it flunks the second test as well by failing to choose. It defines a wide range of actions rather than focussing on the most important action. In an attempt to please many, it fails to make a compelling case to drive a focus on anything that might make a difference.

And many of the other strategies in the NHS suffer exactly the same problem.

A hospital is in trouble. Let’s have a merger! We should get some economies of scale at least. We have compelling evidence this strategy doesn’t work. And one of the key reasons is that scale isn’t usually the problem and mergers distract from rather than fixing the underlying operational problems that cause the trouble in the first place.

Emergency performance is poor in the region. Let’s have a major service reconfiguration! Again, these rarely work as the diagnosis is wrong at the start. Scale isn’t usually the problem and scale doesn’t lead to better operational performance not least because larger units are harder to organise than smaller units.

Demand is growing faster than we can cope. Let’s pursue integration of social care, primary care and secondary care! I’m not even sure what the logic for this is. We know that few NHS organisations are any good at internal coordination among their departments even before we bring others into the mix. And if coordination is what we need we don’t need organisational integration to achieve it. Coordination is an information problem not an organisation structure problem. The drive for integration is not based on a coherent diagnosis or a coherent policy approach. It is pure wishful thinking based on a goal we’d like to pursue which it isn't even clear would make any difference to the underlying problem.

Even when good ideas emerge in the NHS they are often undermined because the other essential elements of effective strategy are missing. The recent saga of Cambridge University Hospitals is an example. I’ve written in more detail about this here. The now departed boss had a reasonably plausible vision for where he wanted the hospital to go and it was based on a reasonable diagnosis of a key organisational problem: the lack of good quality information about patients and hospital activity. His visionary solution: a new hospital-wide eHospital system from respected supplier Epic. Nothing wrong with that. But compelling vision is merely a wish fulfillment fantasy in the absence of the other elements of an effective strategy. It seems like his strategy lacked both focus and the hard, detailed operational plan that would turn it into reality. As a result he has departed and the hospital is in a deep, deep hole.

I could go on, but I’m not sure it would help.

Given the humongous amount of time and effort the NHS devotes to planning and strategizing you might hope that the system would do a better job. For those of you who have to contribute to this futility, save yourself some effort by reading Rumelt’s book. Make sure your strategy has a kernel that works: a diagnosis, a focus and a plan. If it doesn’t, then don’t even bother writing it down or printing it. In fact, run for the hills: you are on the road to nowhere.

1 comment:

  1. Although I'm just a 'bod' on the front line it seems to me that poor strategy in the NHS is due, in large part, to government targets which deflect trust boards and their management teams from focusing on the 'critical problems'. Unlike a 'normal' business these targets can act as a financial and operational drain both in terms of the resources devoted to meeting them and the 'hit' to the bottom line for failure.

    A widget manufacturer might identify increasing profit as a critical problem with strategy options to improve quality, specialisation in a niche market, reduce stockpiling or increase production. In the NHS the target is how many widgets you actually make. Not enough equates to financial penalties so the 'strategy' is always predicated on making 'enough' widgets.

    My own trust, for example, has, apparently, been served with a performance notice (not enough widgets) so our new CEO's strategy is a simple target driven one:
    "if we don’t improve our performance, we simply won’t be able to put in place that vision for clinically focused patient care. Right now, we need to get to patients quicker, show everyone that we can do it, and then use that as a springboard to say ‘so now let us change how we do things’.

    Even if we achieve the targets (and we've failed year after year after year) the vision espoused is none other than Rumelt's description of bad strategy which " covers up its failure to guide by embracing the language of broad goals, ambition, vision, and values."

    Even without these distracting targets the SMT still can't devise a strategy as they don't have the information available about what we actually 'do' with the patients we see. As I mentioned in a previous comment, our electronic system for recording patient outcomes is an unmitigated disaster. Imagine a retailer who doesn't record stock purchased at the check-out and has to rely on staff checking the shelves occasionally to identify stock availability. There's no way of completing any kind of meaningful data analysis if the data is just not available. We can't articulate our 'critical problem' if we have no idea what we're actually doing.