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Viewpoint: Is ownership enough to save our public services?

Viewpoint: Is ownership enough to save our public services?

21st December 2010

Hannah Jameson, looks at what it really takes to turn employee ownership into organisational success

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The government has renewed its commitment to seeing more of the public sector owned and run by public sector workers. Last summer it launched 12 pathfinder schemes to explore how mutuals and co-operatives could operate in different parts of the public sector. Since the last government introduced the right to request for staff to set up their own services in the NHS, 38 social enterprises have been established delivering services worth £900m. 

According to the theory, giving employees a stake in their organisation increases their emotional commitment, which in turn encourages them to innovate, make efficiencies and work harder for the success of the organisation. But will expanding employee ownership in public services have the desired effect? Will it improve quality, customer service and innovation at the same time as reducing costs?

The IPA has recently completed a detailed case study on Circle, an employee co-owned health services organisation. Circle already runs a number of NHS independent treatment centres and private hospitals and has recently been awarded the contract to run Hinchingbrooke NHS hospital in Cambridgeshire, the first contract of its kind.

So what impact does ownership really have? Data gathered for the study showed impressive levels of staff satisfaction (averaging 90 per cent), patient satisfaction (98-99 per cent would recommend the service to a friend) and return to theatre rates (4 times below the national average at the two ISTCs). Productivity had increased dramatically at sites where Circle had taken over from other providers, and innovation and continuous improvement were embedded in daily practice.

But did Circle say that it was making their employees owners that made this possible? No. In fact, at some of the sites, a significant proportion of the workforce were still employed by the NHS and seconded to Circle. It was undoubtedly true that ownership did have an impact, but it was evident that it was the culture that ownership created that was far more significant.

Whatever the size of the stake, staff at Circle saw themselves as ‘partners’. As one member of the hospitality team told me, she no longer felt like ‘just another number’, but that she was important, and she ‘was part of this’. From the caterer to the theatre manager, staff were able to connect what they did with the aims of improving the patient’s experience and making the organisation successful.

But an emotional commitment to work for the success of the organisation was not sufficient in itself to generate the innovation and continuous improvement that contributed both to better patient experience and productivity. The culture of partnership was brought to life through the consistent involvement of the workforce.

Far more was expected of staff than simply turning up and doing a good job; they were expected to question, put forward ideas, participate in continuous improvement structures, and often lead on implementing change. Devolved decision making and an open style of management meant that staff felt able to influence the decisions that affected their day to day work and shape the services they delivered.

So what lessons does Circle’s experience offer to the government’s push on employee ownership? It suggests that although the promise of ‘John Lewis public services’ might be an attractive headline, the recipe for success is far more complex. As company after company at the recent Employee Ownership Association conference made clear, turning employees into owners does little to improve performance and productivity. It is what you do with that ownership that matters.

Involvement and empowerment are essential in order to realise the potential benefits from ownership. And here, the real challenge for public services remains the same whether they are employee owned or not; devolving decision making, empowering and informing staff, developing accessible people managers. The results of the NHS staff survey give an indication of the distance to travel before a culture of partnership becomes a reality in public services. Government and public service leaders must get this right if employee ownership is to be the opportunity they hope it is.


The IPA’s case study on Circle will be published in the New Year.

Hannah Jameson
IPA research manager
hannah.jameson@ipa-involve.com

 

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