Organisational failure and turnaround process in NHS hospital trusts.

Since 1997, public services improvement has been at the centre of the national policy agenda in the UK. The greater visibility of poor quality and performance has led to an increasing interest among policy makers, health care managers and clinicians in understanding the processes by which underperforming organisations can 'turnaround' their situation. The aim of this thesis is to contribute to a wider understanding of organisational failure and turnaround processes in the public sector, particularly health care organisations. A conceptualisation was carried out concerning organisational failure and the turnaround process in the for-profit sector in relation to a range of theoretical frameworks and models. As a result, the 'stages' theory was selected as a conceptual framework with which to organise and interpret the findings of the empirical part of the study. A comprehensive review was conducted to examine the findings of empirical studies regarding the processes of organisational failure and turnaround across a range of public services. The review showed insufficient empirical studies in this field in the health sector. The review concluded that a range of both external and internal factors contributed to organisational failure and various triggers were identified, which initiated the process of change. A range of turnaround interventions were identified including reorganisation, retrenchment and repositioning strategies. A qualitative case study of a purposefully sampled hospital Trust, involving semistructured interviews (57 interviewees from different organisations) and a review of background documents were carried out to explore the symptoms and causes of organisational failure, factors that triggered the process of change, and the perceived effectiveness of a variety of turnaround interventions. Symptoms of organisational performance failure were identified, including financial deficit, lack of good external relationships, inability to meet core targets, lack of clear management systems and low staff morale. These markers had not been taken seriously by the previous senior management team. Symptoms of failure reflected the presence of secondary and primary causes of failure. Poor managerial leadership, poor financial control and performance management, lack of an open culture, distraction by two large projects and the lack of clinician engagement were perceived as internal causes of failure and the high level of policy changes within the NHS as the key external cause. The level of 11 _ . _~ ~ . 'AƒÂ‚? AƒÂ‚? _ AƒÂ‚? AƒÂ‚? , . -. t:. - AƒÂ‚? deprivation in the area was also thought to have had a negative impact on performance. The replacement of the Chief Executive Officer and executive members of the Board and the public reporting of poor performance and external investigation reports were perceived as the main triggers for change. The Trust's managers were able to develop and implement their action plan and turnaround performance without receiving direct intervention from external organisations. The interventions deployed within the Trust may be classified under three key categories: i) Reorganisation (replacement of the Chief Executive Officer and executive members of the board, internal restructuring and increased involvement of clinical staff in the management of the organisation, and an increased focus on performance management); ii) Retrenchment which aimed to stabilise the crisis situation using tight financial control and focus on main performance targets); iii) Repositioning strategies which aimed to sustain performance improvement by attempting to change organisational culture, better stakeholder management and external relationship and developing new vision. Several unintended consequences of turnaround interventions (e.g. distortions of clinical priorities and presence of stress and anxiety among staff) were identified. The findings of this study make a significant contribution to our understanding of organisational failure and the turnaround processes and reinforce and expand those of recent studies in the public sector, particularly in health care.