22nd September 2011
The IPA has launched a groundbreaking report on employee ownership in health services. The report is based on a detailed case study of Circle, a health service provider that is co-owned by its employees.
What impact does employee ownership have on public service delivery? How does it affect the culture of an organisation? How does employee ownership relate to employee engagement? What difference does it make to patients?
This report looks at how employee ownership can be used to engage and involve the workforce in the challenges of delivering healthcare today. It shows how participative ways of working and a culture based on ownership are used to support innovation, continuous improvement and productivity increases.
What they say:
"A useful and thought provoking investigation of an innovative approach to engaging staff in a healthcare context”
Steven Weeks, NHS Employers
“The report is a significant contribution to the debate on engaging and involving staff. It reinforces the importance of a culture of inclusiveness that supports the meaningful and genuine involvement of staff in the design and delivery of both services and strategy. It also highlights some critical challenges in relation to rewards and incentives.”
Howard Catton, RCN
"In an age where an organisation's form is so hotly debated, it's great to have a report such as this that explores the real potential, based on case studies, for employe ownership models to act as a tool for increased employee engagement, productivity, and quality of relationship with service users."
Peter Kyle, ACEVO
“Workforce reform in our public services is vital to drive performance. This report is a valuable contribution to the debate about new models for service delivery and organisational culture, focusing on how Circle is innovating on the frontline and engaging professionals to deliver higher quality healthcare.”
Nick Seddon, Reform
Read former government health adviser,
Paul Corrigan's, blog post
'Engaging Employees; the Circle Example' Download the report for free.
You can also read IPA director Nita Clarke's speech from the launch event, below.
Introduction
Employee ownership in public service provision is still a hot topic. Only this week we’ve seen a new report published by APSE arguing that the evidence for employee ownership is weak. Official trade union positions remain ambivalent at best and hostile at worst. Nor is the support from managers of public services always forthcoming: hostility from some NHS trusts and some local authorities, as well as other public bodies remains entrenched. As someone who supported this agenda under the previous government, as an integral part of public service reform, and now a member of the government’s mutuals taskforce, I am only too aware of the practical challenges of becoming a mutual. We are watching and evaluating with interest the path finder projects. But we know there is a long way to go.
However, today is an opportunity to step back from the political debate and look at what employee ownership can achieve. Evidence does matter. It is equally important to look at what can’t be delivered simply by a change of ownership or governance structures. By that I mean understanding what else those managing employee owned services have to have, to see performance benefits. And that is the fundamental and transformational employee engagement that leveraging employee ownership can deliver.
About the case study
The IPA carried out a detailed case study on Circle last year. Yes - we wanted to know what impact employee ownership could have in health services, but we also wanted to know what it actually took to translate employee ownership into improved performance, productivity, and continuous improvement.
We visited three independent sector treatment centres – most based on NHS sites, often using a largely NHS workforce, and Circle’s hospital at Bath, where employees are directly employed by Circle.
We spoke to HCAs, nurses, and bookings staff; hospitality staff, theatre managers, general managers and doctors. It is early days at Circle, but where we could we gathered data on patient satisfaction, employee satisfaction and certain clinical outcomes.
What we saw was a very different view of how to organise health services in order to meet patient aspirations, to keep pace with the changes in clinical best practice, and to improve productivity in the context of rising costs. What was significant was the understanding that this could not be achieved by through dictat from the top.
So what we saw was a significant devolution of power, responsibility and decision making; high levels of information sharing, involvement and consultation; and more important than employee ownership – a widespread culture of service ownership.
Analysis
I want to pick three things from Circle’s practice that we thought were interesting, and might be relevant for our discussion of future health service models:
Firstly – ownership. Circle’s workforce is made up of direct employees, who are awarded shares, and staff who are seconded – often doctors and nurses – from an NHS trust. So clearly not all are ‘owners’.
For some, ownership was a very tangible thing, and was part of their reward package and an investment. But for others, particularly in first tier support roles, it gave them a feeling of being included – of being part of a team where their work really mattered to the patients’ experience and the success of the organisation.
That looser sense of ownership as being part of something applied to seconded employees too. Managers were clear that they did not find different levels of engagement and commitment among the two groups of staff.
The benefits of a culture of ownership spread from continuous improvement and innovation to employees being prepared to ‘go the extra mile’. Every employee interviewed for this case study could name at least one suggestion for improvement they had made recently that had been adopted.
Secondly – leadership and decision making. Many of those interviewed, both managers and clinicians, bore the scars of working in health systems where decisions were taken at the top, often with little engagement with those delivering services, and then pushed through the chain of command.
The result is nurses and doctors who become frustrated, disengaged and disempowered and managers pitched in battles.
Circle has adopted a model of clinical leadership. Its implementation varies at different sites, but the idea of having clinical units, where doctors working with nurse and admin leads, take on a far greater role in managing, designing and improving the services they run is the ambition.
What is significant is that decision making is taking place only a few steps removed from frontline staff. When matched with good communication and involvement techniques, it means that staff feel able to influence decisions affecting their daily work; change is done with them, not to them, and that is a new experience for many.
Thirdly –management. The practice of management at Circle is very different to that which you would find in most health services in Britain.
Management is not just the responsibility of managers, and so doctors and nurses with management roles are given time and training to carry out their role. While ‘pure’ managers might be relatively few, management activity is considerable.
For employees, this is crucial. We know from all the research the importance of the manager/employee relationship in determining employee commitment, engagement and wellbeing. In any organisation, employees want to know, and feel known, by their manager. The returns on feeling cared about, supported, and enabled are huge.
For managers transferring from the NHS this approach to management was a huge challenge. For employees it was often unfamiliar but very welcome.
Conclusion
As some of you might know, I was the co-author of the 2009 report on employee engagement, Engaging for Success, and with my co-author David MacLeod we are currently working with a new national taskforce to extend engagement across the economy, that was launched by the Prime Minister last March.
This study absolutely backs up the evidence in the report that suggests that if the conditions and culture are right, unleashing the power of employee engagement can be truly transformational, both in terms of performance and productivity, but also for the wellbeing of the employees concerned.
Circle is still quite new, and their culture and structure are developing all the time. It will be interesting to explore the challenges of sustaining the level of engagement, the continuous improvement and productivity gains over time. Above all it will be vital to continue to collect the evidence on the holy grail of the relationship between employee engagement, patient satisfaction and clinical outcomes.
We at the IPA think this is a valuable piece of research into the benefits of employee ownership, but we also hope it will spark a discussion on what is possible in health services more generally. Employee ownership might never be relevant to the majority of the UK’s health services, but there are potentially other more important insights from Circle – about how employee engagement can transform public service delivery - that most certainly are.
Nita Clarke is director of the IPA
