Seeking the approaches that enable faster change in the complex world of health and social care
Sometimes it’s difficult to cost the consequences of not engaging with people about change. The delays, resistance, missed innovation and risk associated with the failure to include others in solution finding, policy or strategy discussions, all have financial and non-financial consequences. Despite this, organisations that are under pressure seem to ignore engagement just at a time when they really need the benefits of good engagement.
Recently, I came across an example of non-engagement, that had a high cost that went into the accounts and another that didn’t.
Imagine a large healthcare organisation with financial problems and many great minds at the centre of this organisation seeking to find cost saving initiatives. This process continues for months, however, progress is slow and the need to be innovative increases. Then someone in the centre of the organisation has a new idea, which is agreed and there is an almighty rush to implement it, of course, without engagement with those impacted by it.
This idea is to reduce payments for additional sessions (or overtime) with the anticipated savings being around £50,000. A staff email goes out outlining the change and is followed by a storm of protest, but the Executive group support each other, hold a line, and the changes proceed.
Within a few weeks the impact starts to show, people stop doing the additional sessions (overtime) and income from these drops significantly and within 2 months the lost income totals more than £2m, furthermore a little known contract clause around capacity mix triggers penalties due to the capacity imbalance created through these reduced sessions, adding a further £400,000 per month. So, after two months the financial impact was £2.8m worse than before.
The Executive team then came under pressure and reversed the decision, however, the number of additional sessions didn’t return to the previous levels and so we have to presume that the financial impact of this one hasty decision, taken and implemented without engagement, cost at least £4m and probably more. Clearly, due to the behaviour change, there has been much more damage than the tangible financial impact, loss of confidence in the top team, disengagement with the organisation, even those who decided to leave the organisation.
I would argue that it would have been possible to achieve the original saving if appropriate engagement had been undertaken both before the decision and as part of implementation. I’d also argue that the solution to reduce costs would have been different.
The lesson here is very clear, not engaging costs money.