Let service drive structure

Let service drive structure

Hospital mergers will ultimately fail if all they do is change management teams and put a new nameplate over the entrance.




Also on KPMG.com

Let service drive structure

NHS staff need to understand clearly defined reasons for going into the merger process if they are to be engaged and help drive forward the new organisation. They are, in general, highly committed to providing the best outcomes for patients. However, staff frequently don’t see how their daily work fits into a bigger picture.

This disconnect is often exacerbated during a merger process, just when it’s essential to get everyone onside. A lack of pre-integration planning means that often trusts do not think about what the real vision is for the new organisation. Putting two trusts together and expecting them to be more successful as a result is not an effective strategy.

Staff are unable to buy into short-term thinking and a focus on solving immediate financial issues. They need to be clear about the benefit to patients of any reorganisation.

There’s often a lack of two-way communication between boards and frontline staff. Typically in a merger process boards are focussed on financial and operational planning, with staff engagement trailing in a poor third.

The planning and effort put into staff integration is an add-on, when it happens at all. Staff are left unclear about both the reasons behind merging and their own individual roles in making it a success. Many staff feel that their job is threatened and a lack of communication exacerbates this.

Acquiring trusts can create additional tension by going into the failing trust as though they are somehow superior. This attitude is frequently reinforced by all the stakeholders, including the regulators.

Staff from the failing trust who are shut out from the decision making process will immediately be disengaged. While the acquirers may well be in a stronger financial position, they’re not necessarily better in every aspect. There is another way, involving more effective communication between the two trusts supported by a proper cultural integration plan.

The attitude of ‘We’re all the NHS, we’ll just bolt together’ is naïve. It’s an old truism that the majority of mergers and acquisitions fail to deliver the benefits claimed for them by their promoters. In this respect, as in so many others, the provision of health and care services is simply a sector of the economy in which the same rules apply as in all the others. Mergers and acquisitions are often promoted on the basis that a different management structure will lead to more efficient service delivery. Too often the belief is confounded because it is based on the misconception that the key to successful change management is clear sighted top management.

The attitude of senior management is certainly important. Strong and consistent management can facilitate change, while the wrong culture can stifle initiative and disable would-be reformers.

But real and sustainable organizational change requires senior management to do much more than set out a vision and reorganize the organogram. It requires them to engage with people in the front line and support them as they adjust their working patterns to meet changing needs.

Senior managers must see the organization from the bottom. Instead of focussing on structures and budgets, they must understand the experience of the people who use and deliver their services.

In a health and care organization this understanding will have multiple different perspectives. It will need to take account of changes in specialist clinical knowledge, changes in patterns of disease, changes in medical and other technology, and – most importantly – the individually expressed preferences of the people to whom the services are delivered.

Organizations whose understanding of the answers to these questions is imperfect will not find it is improved by structural change.

Quite the contrary. Organizational upheaval always has the same result. Insiders focus on the likely impact of proposed changes on themselves and other insiders, with the result that they reinforce the outsider status of the people for whom the services are intended. Far from promoting service change, organizational upheaval more often retards it. So is senior management caught in Morton’s Fork? Damned if it does reorganize and damned if it doesn’t?

Not necessarily. The mistake is to confuse cause and effect.

If working patterns change, or need to change, it is likely that organizational structures will also need to change to encourage different ways of working. Indeed the lessons from elsewhere in the economy demonstrate that structures do change as new demands are met by new technologies. It would be surprising if that was not true. But the key principle is that form should follow function.

As working patterns change, new structures will develop which support new patterns of working – and good management teams will want to be early adopters of the new forms. Development of these new forms will sometimes require mergers and acquisitions of existing structures.

But the key point at every stage is that changes in ownership are driven by a changing vision of how services should be delivered to those who rely on them.

Which is why successful mergers create new institutions which draw strength from their combined legacy but explicitly create a new culture which is independent of the legacy.

Organizations only survive if they are useful. When they stop being useful they begin to decay, and it is powerfully in the interests of the people who rely on their services that the period of decay is cut short by the process of renewal which is the result of a successful merger.

This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

Connect with us


Request for proposal



KPMG’s new-look website

KPMG has launched a state of the art digital platform that enhances your experience and provides improved access to our content and our people, whatever device you are on.