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Revolution In Culture Required to Stop NHS Failing As Collection of Businesses

The NHS follows every known rule that guarantees failure in the business world, according to a new report from independent think-tank Civitas.

NHS organisations are keeping the ‘Ten Commandments of Business Failure’, first drawn up by Donald R. Keough, the past president and former CEO of the Coca-Cola Company, that ‘so consistently lead to failure they should be written in stone’.1

In Putting Patients Last: How the NHS keeps the ten commandments of business failure, Peter Davies and James Gubb argue that the NHS has been treated as a business, or series of businesses, by successive waves of government reform, with patients as the ‘customers’ whose needs are to be paramount.

There is much to be said for importing the disciplines of the private sector into public sector enterprises, but Gubb and Davies argue that it has all backfired owing to a deep-seated reluctance by Whitehall to let go of control. The ‘customer’ of NHS ‘businesses’ is not, in fact, the patient, but the minister.

NHS organisations remain ‘isolated and risk-averse’, consumed with internal processes, bureaucracy, and conforming to the latest government initiative; rather than focusing squarely on the end-goal of providing high quality care to the patient.

‘Blind faith in structure, process and satisfying government has made businesses immune to what is happening on the ground, where the world of people, cultures and emotion make the real difference. More of the same command-and-control attitude will not pull the NHS through the recession.’ (p.83)


1. Stop taking risks. A 2006 study of change capability by the Office of Government Commerce gave the NHS a score of just two out of five points for seven of the nine categories assessed.

2. Be inflexible. Businesses are hamstrung by state control over factors of production: staff pay is set centrally; capital expenditure is constrained by the DH; the National Programme for IT is a top-down programme; and NICE increasingly decides what treatment can be offered. Local initiative is crowded out.

3. Isolate yourself. Health care is conducted in silos, with patients too often left in limbo – particularly between primary and secondary care. Emergency hospital admissions for chronic and acute conditions usually managed in primary care have rocketed in recent years, from 371.57 admissions per 100,000 patients in 2002/03 for acute conditions to 423.40 in 2006/07.

4. Assume infallibility. Politicians constantly refer to the NHS as ‘the envy of the world’, but the outcomes it engineers are worse than other universal health systems in Europe. On the latest figures, the UK ranked 16th out of 19 industrialised nations in terms of amenable mortality; and 13th out of 30 European countries in terms of patient satisfaction.

5. Play the game close to the foul line. Targets have ruled the roost, pushing organisations to the edge, often to the neglect of patient care. The four-hour A&E target has led to patients being moved to clinical decision units; waiting in ambulances; unnecessary admissions; premature discharge and the miscoding of data.

6. Don’t take time to think. The past ten years has seen a plethora of incoherent initiatives and policy reviews, decreasing the ability of senior managers to display leadership, think and positively affect the delivery of services; and left governance confused and void of focus.

7. Put faith in (external) consultants. NHS organisations now spend £350m on external consultants per year, but their effectiveness is unproven. Of the nine NHS trusts in receipt of management consultant-led turnaround teams in 2005/06, three remained blacklisted as ‘financially challenged’ in 2007/08.

8. Love bureaucracy. The NHS Confederation estimates that 69 bodies currently regulate, inspect and demand information from NHS organisations, many asking similar questions. In secondary care organisations, only 58 per cent of this is considered useful for any internal purpose.

9. Send mixed messages. Only 69 per cent of the 290,000 NHS staff surveyed by the Healthcare Commission in 2008 said they had clear objectives and just 39 per cent felt that they worked in well structured teams.

10. Be afraid of the future. Fear that the NHS budget will not stretch to meet demand has led to initiative after initiative that has left clinicians feeling mistrusted and powerless.

And as a result lose passion for work. In 2008, just 52 per cent of NHS staff said they would recommend their trust as a place to work. Unmotivated staff = unhappy patients.

These are businesses set up to serve the state rather than patients. They do not know who their customers really are.


A change of emphasis is urgently needed as the recession bites. As the former government minister-turned-adviser, Lord Darzi of Denham recently wrote in the British Medical Journal:

‘If we want a world-class healthcare system we need to dedicate ourselves to constantly questioning and challenging what we do… I know from my own experience that we will not realise our ambitions if we simply do the minimum asked of us.’ (BMJ 2009;339:b2970)

This is the right sentiment. But it will require a revolution in culture, both in government and in fledgling NHS businesses. Decades of priorities being determined by the state, rather than by patients, is not an easy legacy to overturn.

As Donald R. Keough, who writes a foreword to the book, says:

‘It’s so easy [for organisations] to lose sight of the customer, to think dispassionately about an amorphous mass called the market or market segment. There are, except as statistical abstractions, no such things as market segments. There are only people. They have faces.’

According to report authors Peter Davies and James Gubb:

‘It is time for NHS organisations to start backing people rather than processes. It is time for the government to stop over-estimating the importance of legislation, crude measurement and regulation as markers of success and put faith in power of frontline organisations to drive quality… The autonomy associated with a more business-like framework means nothing if all it is used for is finding more innovative ways of meeting central targets.’ (p.xv)

1Donald Keough, The Ten Commandments for Business Failure, New York: Penguin Books, 2008


For more information contact: 020 7799 6677

‘Putting Patients Last: How the NHS keeps the ten commandments of business failure’by Peter Davies and James Gubb is published by Civitas. ISBN: 978-1906837099.

Notes for Editors

i. Civitas is an independent social policy think-tank. It receives no state funding either directly or indirectly and has no links to any political party.

ii. Peter Davies is a GP Principal at Keighley Road Surgery, Illingworth, Halifax and a Yorkshire Faculty Representative on the Royal College of General Practitioners’ Council. James Gubb is Director of the Health Unit at Civitas. The views expressed in the publication are the authors’ own.

iii.‘Putting Patients Last: How the NHS keeps the ten commandments of business failure’ is inspired by Donald R. Keough’s bestselling book ‘The Ten Commandments of Business Failure’ (


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