How to build a crisis
If one major thing goes wrong, most reasonably healthy organisations – and most people – can manage. If two go wrong at the same time, most will still cope. When three go wrong together, typically that’s more than most can cope with and we have the conditions for a crisis. You have to wonder, then, at management teams that deliberately create the conditions for crisis for their organisations by introducing multiple major changes at the same time each of which has a high likelihood of failure and each of which is capable of crashing the organisation if it does fail.
Years before the 2008 financial crash, a radically new design was drawn up for a hospital. The architects had never built a hospital before, but felt sure they could design something that would provide a physical environment that would be more attractive and thereby help people to get better. The design stayed dormant. Then came the financial crash. Suddenly there was a need to save money and one money-saving proposal was to merge two existing hospitals. Merger is a high risk move with a low success rate – in the private sector where the change in value created or destroyed is visible, two thirds end up destroying value rather than creating it. Nevertheless, the plan was hatched to merge two hospitals and this created a problem – where could the merged unit be housed? The plans for the radical new design were dusted off and put into motion.
So now there was a plan which already had in it three major changes all of which had high failure rates: a financial squeeze, a merger and a physical move to a new and untested design. But why stop there? If you’re having a new site, why not also introduce new untried technology and new operating practices?
So the stage was set, five major new changes, all with inherently high failure rates on their own, and each with the potential to trigger failure in the others.
The attractive hospital design had lots of curves and few right angles, so many components were non-standard. As a result, building costs soared and space had to be cut. At the same time, the rivalry between departments from the two hospitals that were merging meant competition for space which meant the hospital wasn’t physically big enough. In turn, the squeeze on space exacerbated the political battles.
Proposed changes to operating practices hadn’t been thought through, so the assumption that new IT would mean waiting rooms were unnecessary were wrong. The plan to save space by hot-desking was dependent on the IT systems working, but these were being introduced for the first time and didn’t work – which meant that it was impossible to locate doctors for emergencies either electronically or by physically going to their office, so private mobile phones had to be used as a backup system.
The IT was supposed to allow patients to send alerts directly to nurses’ smartphones, but this didn’t work, so the hospital had to fall back on alert lights outside patient’s rooms. But with an architect design which had curving corridors, it was impossible to see all the lights for a ward and extra staff had to be recruited to sit and watch a batch of rooms and alert the nurses. As efficiency fell, specialist services got dropped for lack of space and rumours spread, so admissions fell and with it income also fell, exacerbating the financial problems the move and merger had been intended to address.
The first component of this crisis – the financial crash – was not in the control of the managers who planned this hospital restructure, but all the other elements were put together by them and even without the help of the finance crash, were enough on their own to throw the hospital into a crisis and to destabilise the health services of an entire region. This crisis had its genesis in the scale, nature and interdependence of the changes. The merger of the two hospitals was already a change management programme: a physical move and a consequent integration of two sets of services and service teams. The additional challenges came with the degree of innovation introduced by the design of the new hospital and by the new IT and the immediate wholescale reliance on it.
From the perspective of the hospital managers, it’s possible to imagine the thinking which led them here: “well, our solution to the financial problems is to move buildings, and as we’ve got some change going on anyway, we could create a leading medical facility as part of the move…”. Too much innovation, too much change, and too much interconnected change, all applied simultaneously to business-critical (and in this case, life-critical) activities. All of this was avoidable or manageable if this set of high risk changes hadn’t been concatenated, or had been done at a scale that didn’t threaten the whole system.