Clinical Leadership Development Programme

Integrating performance improvement, clinical and general management

John Deffenbaugh

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Never let a serious crisis go to waste. What I mean by that is it’s an opportunity to do things you couldn’t do before.

Rahm EmanuelChief of Staff to President Obama

WSJ, Nov 2008

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Opening conduits of communication

Staff

Exec team

CDs GMs

Direction from the top

Light a grass fire

Expand the middle

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Let’s talk about…

SegmentationSegmentation

Portfolio analysis

Portfolio analysis

What is our business

What is our business

Strategy

From perspectives of:•Outside the NHS•Your strategy •Your day job

Segmentation

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If you're not thinking segments, you're not thinking. To think segments means thinking beyond what is out there to see.

Theodore Levitt,The Marketing Imagination

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The Cultural Web

Johnson & Scholes (2005)

Myths&

StoriesSymbols

Routines&

Rituals

Paradigm

ControlSystems

OrganisationalStructures

PowerStructures

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Stakeholder mapping

Observers

Informing/ empowering

Key players

Involving

Crowd

Ignoring

Bystanders

Encouraging

Power to InfluenceLow

High

Level of

interest

HighAdapted from Mendelow (1991)

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Stakeholder analysis

Piercy (1989)

Coalition building

For

Winning on board

Distract or fragment

Win over/ coalition building

Against

Take out of play

Low High

Leave alone

Attitude

Influence

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Social grades

Grade Social class Occupation

A Upper middle class

Higher managerial, administrative or professional - Doctor, solicitor, barrister, accountant, company director

B Middle class Intermediate managerial, administrative or professional - Teacher, nurse, police officer, probation officer, librarian, middle manager

C1 Lower middle class

Supervisory or clerical and junior managerial, administrative or professional - Junior manager, student, clerical/office worker, supervisor

C2 Skilled working class

Skilled manual workers – foreman, agricultural worker, plumber, bricklayer

D Working class Semi and unskilled manual workers – shop worker, fisherman, apprentices

E Underclass Casual or lowest grade workers, pensioners and others who depend on the state for their income

National Readership Survey

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Acorn

• A Classification of Residential Neighbourhoods

• Geodemographic information tool, categorising all UK postcodes into various types based on census data, lifestyle surveys, etc

• Categories:– 1.9m postcodes– 125 demographic

statistics– 287 lifestyle variables

Category Description

Wealthy achievers

Wealthy execs, affluent greys, flourishing families

Urban prosperity Prosperous professionals, educated urbanites,Aspiring singles

Comfortably off Starting out, secure families, settled suburbia, prudent pensioners

Moderate means Asian communities, post-industrial families, blue collar roots

Hard pressed Struggling families, burdened singles, high rise hardship, inner city adversity

www.caci.co.uk/acorn

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Group 1 – Existing problems

High levels of serious illness and poor diet and consumption problems

Group 2 – Future problems

High levels of severely unhealthy lifestyles likely to lead to serious illness

Group 3 – Possible future concerns

Generally good health but with some potentially unhealthy lifestyle traits

Group 4 - Healthy Good health with few lifestyle issues

Health Acorn

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Cumulative use of inpatient days – impact of long term

conditions

Kerr Report (2005)

0

100

10

20

30

40

50

60

70

90

80

0 10 20 30 40 50 60 70 80 90 100

Inpatients %

Cumulative % of

inpatient days

1% of patients account for 16% of overall inpatient days2% of patients account for 25% of overall inpatient days3% of patients account for 32% of overall inpatient days4% of patients account for 38% of overall inpatient days

5% of inpatients account for 43% of overall inpatient days

10% of inpatients account for 59% of overall inpatient days

50% of inpatients account for 7% of overall inpatient days

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What are your

customer segments

?

What is our business?

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What is our business?Who is our customer?What does our customer consider valuable?

Peter DruckerThe Practice of Management, 1954

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And the new business models…

The broader aim is to emphasise differences with cost-cutting, growth-driven Ryanair. easyJet, you understand, is classy cheap rather than just plain cheap

FT 30 July 2009

Low cost always wins

Michael O’LearyFT 3 June 2009

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Opportunities to Create Public Value

• Increasing the quantity or quality of public activities per resource expended

• Reducing the costs (in terms of money and authority) used to achieve current levels of production

• Making public organisations better able to identify and respond to citizens’ aspirations

• Enhancing the fairness with which public sector organisations operate

• Increasing their continuing capacity to respond and innovate To locate these opportunities to create additional value,

public managers, like private managers, must re-engineer their organisation.

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Transforming for QIPP

1. Establishing a sense of urgency

2. Forming a powerful guiding coalition

3. Creating a vision

4.Communicating the vision

5.Empowering others to act on the vision

6. Planning for and creating short-term wins

7.Consolidating improvements and producing still

more change

8.Institutionalising new approachesJohn Kotter (1995)

QIPP

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Acute

Community

General practice

Local governmen

t

Vertical v. horizontal integration

Public health

What business are you in?

Portfolio analysis

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There is hardly anythingin the worldthat some mancannot make a little worsecannot make a little cheaperand the peoplewho consider price onlyare this man’s lawful prey.

John RuskinBritish poet, artist,

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Portfolio analysis

Market penetration

Market expansion

Product development

Diversification/ adjacency

Existing New

New

Existing

Risk

Products

Markets

Igor Ansoff (1957)

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Boston Box

0.1 Low

Low

High

Market Growth

Rate

10.0 High

1.0

Relative Market Share (log scale)

5%

Boston Consulting Group 1980)

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Boston Box – Cashflow analysis

Stars Problem children

Cash cows

Dogs

Successful product development

Internal cash flows

LowHighRelative Market Share

Low

High

Market Growth

Rate

Boston Consulting Group 1980)

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Generic Strategies

Overall Cost Leadership

Differentiation

Focus Low Cost

Focus Differentiation

Low cost positionA uniqueness

perceived by the customer

Strategic Advantage

Strategic Target

Industry-wide – Broad Scope

Particular Segment – Narrow Scope

Porter (1982)

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Overall Cost Leadership

Differentiation

Focus Low Cost

Focus Differentiation

Low cost positionA uniqueness

perceived by the customer

Strategic Advantage

Strategic Target

Industry-wide – Broad Scope

Particular Segment – Narrow Scope

Porter (1982)

Flight attendant salaries

BA £31,400

BMI £17,200

easyJet £20,400

Ryanair £?

Virgin atlantic

£14,400

Where do they fit on the matrix?

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0

0.5

1

1.5

2

-40 -30 -20 -10 0 10 20 30 40 50 60

Service Line Reporting

Relative* size of

specialty

EBITDA margin

Paediatrics

Ophthalmology

T&O

Neurology

Endocrinology

Rheumatology

Obstetrics

Gastroenterology

Plastic Surgery

Geriatric Medicine

Cardiology

General Medicine

Gynaecology

General Surgery

Dermatology

Clinical Haematology

Genito-Urinary Medicine

Monitor (2007)*compared to national average for an acute trust

Bubble size corresponds to total spend of

specialty

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Topics for board discussion

Improve cost position

• operational issues

• investigate reason for losses

• keep volume

Benchmark setter

• keep staff happy

• keep commissioners happy

Re-assess economics

• increase volume?

• cut costs?

• service rationalisation?

• find partner?

• subsidise?

• maximise synergies

Potential growth

• talk to commissioners – add activity

• negotiate local prices

-40 -30 -20 -10 0 10 20 30 40 50 600

0.5

1

1.5

2

Relative size of

specialty

EBITDA margin

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How is your specialty

positioned for service line

management?

Strategy

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Planning is an unnatural process; it is much more fun to do nothing. The nicest thing about not planning is that failure comes as a complete surprise, rather than being preceded by a period of worry and depression.

Sir John Harvey Jones

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Strategy definition

AA

BB

Today

VisionChanges along

time line

AA

BB

Today

VisionChanges along

time line

B

A

Changes alongtime line Vision

Today

BB

AA

Changes alongtime line Vision

Today

© Frontline

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Cascading strategy – causal relationship

MissionMission VisionVision

HowHow

Objectives Key result areas

Crafting Strategies

Initiatives / Actions

Board

Operations

HowHow WhatWhat

WhyWhy

WhatWhat

© Frontline

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From Data to Knowledge – A Continuous Process

Subjective and judgmental

Objective and analytical

Data

Information

Intelligence

Knowledge

Insight

Process Driven – ‘Black Box’

What are your decisions based on?

© Frontline

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When the facts change, I change my mind. What do you do, sir?

John Maynard Keynes

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Classical contracts – explicit documents

that are in the form of long term, legal

agreements which contain detailed provisions

as to how dealings between the parties will

evolve as events unfold

Relational contracts – implicit documents

that are expressions of strategies for playing a

repeated game, with provisions that are only

partly specified and are enforced, not by a

legal process, but rather by the need of

parties to have to go on doing business with

each other

John Kay – Behaviours of contracting

John Kay (1993)

Contracts must be agreed on time and reflect the needs of the whole health economy, including efficiency savings, with penalties and sanctions activated when the terms of contracts are not being met.

Operating Plan 2011/12, para 1.10

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Deliberate and Emergent Strategies

Intended strategy

Realised strategy

Unrealised strategy

Mintzberg (1994)

Emergent strategy

Deliberate strategy

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What type of contribution do you want to make to your strategy?

John DeffenbaughDirectorFrontlinejohn.deffenbaugh@frontlinemc.comMobile: 07788 746550www.frontline-consultants.com