Archive for the ‘Public service’ Category

Paying for consultancy by results in the NHS

Oct 15th, 09 / 0 Comments

Hospital equipment

Hospital equipment


This is not a new subject, but it has raised its head again recently following concern about the amount spent on consultancy by the UK National Health Service (NHS). Alan Downey, former chair of the Institute of Business Consulting and KPMG’s global head of healthcare, wrote in Management Today that “Consultants are…increasingly expected to ‘put some skin in the game’ – to place part or all of their fee at risk, depending on a successful outcome.” A similar argument was put forward in Times Online by Alan Leaman, Chief Executive of the Management Consultancies Association (MCA) : “the NHS can get even better value from consultancy… by increasing the use of ‘payment by results’…”

We welcome the debate, and support the principle of payment by results, but feel it is important to challenge some of the assumptions that lie behind the story.

For example, as Downey points out in his article: “In January, a Conservative consultation document, It’s Your Money, complained of ‘a massive overuse of external consultants’ by government departments. Some commentators have been barely able to suppress their delight at the thought that the recession might hit consultants particularly hard.”

Certainly, as a consultant, you get used to a perception that as a profession we are overpaid, but are all the perceptions true? For example, the NHS experience doesn’t support the Conservative claim of massive overuse. The MCA research found that the NHS spent approximately £300 million on management consultancy in 2008, which is equivalent to less than a third of 1 per cent of its total budget.

As always, we support basing any discussion and decision on the evidence and the facts rather than perception and populist political propaganda.

Health Service, Management Consultants, Public service

How management tools become discredited fads

Nov 21st, 07 / 1 Comment

It is fashionable to be cynical about management fads. The recent past is littered with failed initiatives: Management by Objectives (MBO), Total Quality Management(TQM), Business Process Reengineering(BPR) etc. This doesn’t seem to stem the appetite for new approaches. They are seized on by executives hoping, against all experience, that this time they have found the right formula. Unfortunately, the chances of any new approach working better than the previous ones is slim. Why is this?

Searching for the management answer...

Searching for the management answer...

If you examine the research that has been conducted in these areas, a common trait emerges. For example, a study into failed TQM initiatives in the UK health sector concluded that ‘reasons for failure are to be essentially found in the insufficient support of health professionals, the lack of leadership commitment and the tendency to look at TQM in isolation rather than putting it at the core of the institution’s strategy.’
This lack of management commitment and a tendency to look at initiatives in isolation may be linked to the ‘top down’ approach to public sector reform where the main driver is centrally set targets that local managers are measured against. There is mounting evidence that this tends to push managers into actions that achieve positive results against the targets that may require compromise in the fundamental services they are charged with providing. This was admitted a few years ago by Michael Barber, head of the Prime Minister’s delivery unit, who stated that targets can be counter-productive if public bodies focus on them, “to the detriment of all other activities.”

Against this, research into successful programmes highlights what characterises success. The Clearinghouse conducted the “Organizing & Managing Benchmarking” study in 1995 with 111 participants. Among more than a dozen key findings, the study found that benchmarking generates the highest paybacks when the process is backed by senior management. Further, best practices discovered through benchmarking are utilized more frequently when implementation is strongly supported by senior management

In our experience there is value in most methods and tools. The failures are down to a lack of commitment from the leadership team to fully support the programmes with time and resources.

Health Service, Implementation, Leadership, Management Consultants, Public service, Strategy

Government and Management Consultants

Oct 20th, 07 / 1 Comment

There has been a growing interest in the use of management consultants within government in the UK. Spending has increased significantly in recent years and comparisons are drawn between the fees charged by large consultancies and the wages paid to most public sector workers. However, the biggest question is: do the consultants provide value for money or is government spending being wasted?

In our view the answer lies somewhere in between. One of the most important factors in using external consultants effectively is to ensure they understand that government is not driven by the profit motive, whereas many of the models and tools that are favoured by management consultants were created in, or for, the commercial world. In the public sector it is important to distinguish between profitability and best value. The duty of any public sector organisation is to provide the best service it can for the funding that is available. Management consultants must understand this and not arrogantly apply management models that are designed to maximise profit.

Government, Health Service, Management Consultants, Public service