wharton on change management bp

8/2/2019 Wharton on Change Management BP

1/11http://executiveeducation.wharton.upenn.edu http://knowledge.wharton.upenn.edu

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WHARTON on...Change Managemen


2/11Wharton on Change Management I 2010 University of Pennsylva

Introduction

3Fiona MacLeod of BP OffersSteps to Make Change

Management SustainableWhy do so many change management

efforts fail? Fiona MacLeod, president ofBP Convenience Retail USA & Latin America,

says that too often, the intended change isnot sustainableand sustainability isabsolutely crucial. Corporations are

addicted to serial change managementprograms that consume massive resources

but ultimately fail to solve the problemsthey aim to address, MacLeod says.

If people get it intellectually but dontget it emotionally, I dont believe

the change will be sustained.

6CEO Ellen Kullman Taps Change

Management to Steer DuPontthrough the Economic StormThe financial crisis has confronted many

companies with the biggest test of their changemanagement capabilities in years. For the

largest firmslike DuPontthe challenges were

only compounded. CEO Ellen Kullman hassteered her firm through the economic storm by

adhering to four principles: focus on what youcan control; adjust your business model;

communicate continually with employees; andmaintain pride around the mission.

9Ara Darzi of the UKs NHSOffers His Views on Changina Large System

Ara Darzi, the United Kingdoms HealthMinister, spoke with Wharton managemeprofessor Michael Useem about the BritisNational Health Service (NHS). One of obiggest opportunities is to invest in thetremendous leadership pool we have in tNHS, Darzi says. But a big question is, do you promote that leadership gene thaexists in the system? To do that requires mindset change, a behavioral change,across the system. That is the type oftransformational change that we are thinof at the moment. Darzi, a surgeon, wasappointed Health Minister by British PrimMinister Gordon Brown. Read an edited

transcript of the interview.

EFFECTING CHANGE MANAGEMENT SUCCESSFULLY is one of the

most important and most difficult competencies for organizations to develop.

While the lions share of change management efforts failor quickly fade away

after some initial successthe programs eat up huge amounts of resources.How can organizations wring positive returns from change management and

avoid backsliding?

The articles below, from top leaders who have successfully executed change

management programs, offer insight and examples on how to approach this

knotty management challenge.

Contents


3/11Wharton Executive Education I Knowledge@Wharton

After 20 years of experience leadingchange management programs in theU.S., Europe and New Zealand, MacLeodsays, What really struck me is why so

many of these change managementprograms fail, only to be followed bysimilar initiatives within one or twoyears, often before the original programis completed.

At a recent Wharton LeadershipConference, co-sponsored by the Centerfor Human Resources and the Center forLeadership & Change Management,MacLeod urged her fellow leaders to askthemselves: How can we . . . freeourselves from our addiction to episodicchange and move to a much more

healthy habit of continuous businessimprovement? She compared thephenomenon to a yo-yo dieter who losesweight only to put it back on because hehas not come to understand whatscausing his weight gain, or has failed toadopt the healthy lifestyle that wouldkeep the weight off.

London-based BP is the third largestglobal energy company and one of six

so-called big oil companies, withvertically integrated operations to drill forefine and market petroleum products.Globally, BP reported revenues of $367

billion in 2008. Its ampmstores in theUnited States and Latin Americathename is a reference to the fact that theyare open day and nightwere launchedby ARCO, the old Atlantic Richfield Co.a U.S. oil refiner and marketer that BPpurchased in 2000. BP gasoline ismarketed under the ARCO brand on theWest Coast of the United States. Thecompany also uses the BP brand in NoAmerica and elsewhere, and the ARALbrand in Europe. In addition to gasolinethe markets offer the usual assortment

convenience store goods.

No Big Splashes

Many change management programsare doomed to failure because thechange we are putting in place is notsustainableand sustainability isabsolutely crucial, noted MacLeod,who is based in La Palma, Calif.Change initiatives wither in anorganization for several reasons:

Why do so many change

management efforts fail?

Fiona MacLeod, presidentof BP Convenience Retail

USA & Latin America,

says that too often, the

intended change is not

sustainableand

sustainability is absolutely

crucial. Corporations are

addicted to serial change

management programs that

consume massive resources

but ultimately fail to solve

the problems they aim to

address, MacLeod says.

Fiona MacLeod of BP Sees Most ChangeManagement Efforts as Unsustainable


4/11Wharton on Change Management I 2010 University of Pennsylva4

New leaders are often more concernedwith making a big splash than withfollowing through on a long-term planto monitor change and keep theprogram on track.

Organizations often revert toold habits because employees do notunderstand why change is needed, orthey lack the tools and training required

to sustain the new approach.

Nothing changes because ownership ofthe change rests with an external teamor consultants, rather than with theleaders responsible for running thebusiness.

MacLeod urged managers to attend tothe soft side of change with programs tofully engage leaders and employees in theprocess of creating change and sustainingit. As business leaders, were very goodat the rational part of change: identifyingwhats wrong and how to fix it. But the softside of change managementin terms ofreally engaging peopleis just asimportant. If people get it intellectually butdont get it emotionally, I dont believe thechange will be sustained.

To be engaged, employees mustunderstand the case for change.Managers should provide data showingwhats not working and how the changewill fix the problem. Develop your killerslide to make your business casewhenever you give a presentation. Its notonly why youre changing, but what itsgoing to look like when youre done.People need to have a sense of what thefuture looks like, so be very clear onthat, MacLeod advised.

Business leaders must own the changeagenda and take responsibility forfollowing through on implementing everystep in the plan and tracking results tomake sure that change continues over time.Never assume that leaders get it . . . .We need to take probably 10 times aslong in engaging, empowering andeducating our leaders as we actuallythink we do, MacLeod said.

Getting the commitment of leaders isessential to avoid the common pitfall ofturning change management into acharade. You have a workshop, learnsome change management jargon, youmaybe do some team building, and have

a pile of flip charts . . . and actually noneof the [steps] are properly measured orfollowed through and it ends up being awaste of time.

Its important also to shift the emphasis ofchange management from big splashesto everyday performance improvement.You can prevent the typical reversion toold habits by providing tools and trainingrequired to continually measure progresstoward specific change objectives. Putwritten charters and contracts in place.

These contracts need to be in peoplesperformance reviews, not somethingseparate, MacLeod said. You need toconstantly look at them and discuss themwith people.

Changing the culture to reward thedesired behavior is critical to success.Make heroes of our day-to-daydeliverers, not those who make thebiggest splash. You reward people onhow they treat the customer, how they

make decisions, how they simplify thebusiness . . . . And crucially, all of thishas to be done in the spirit of opencommunication and respect . . . . If[people are] uncertain and they dontfeel respected, the change will neverstick, MacLeod said.

Since joining BP in 1988, MacLeod hasspecialized in business transformation,

developing the required breadth of skillin a variety of marketing, HR, supply andistribution roles across the UK andEurope. She has led operational, strateand marketing elements of the retailbusiness, and most recently led therestructuring of BPs European marketi

businesses. A native of Scotland with amasters degree from Glasgow UniversMacLeod was tapped to head the U.S.convenience retail business in 2006,providing her biggest challenge yet:restructuring the business andtransforming the brand for about 1,800stores from California to Pennsylvania.

MacLeods project was part of a broadBP reorganization initiative announced October 2007 to improve the companyefficiency and narrow its performance

gap with competitors. When MacLeodembarked on her restructuring programshe had to figure out what was wrongand, more importantly, why three previoinitiatives had not worked. She did notwant to make the same mistakes.

The key thing was making our businespurpose clear, MacLeod said. Wethought we were there to fill up lots ofstand-alone convenience stores and tieup lots of capital, when actually our

New leaders are often more concerned

with making a big splash than withfollowing through on a long-term

plan to monitor change and keep

the program on track.

Fiona MacLeod, president of BP Convenience

Retail USA & Latin America



purpose was to monetize the gas wemade at our refineries and make sure wehad a secure position in the marketplacefor the long term. The question was . . .how could we put that change in place ina way that would stick.

She chose a bold plan that would requirewrenching change. Among BPs 1,800retail outlets nationwide, 800 were

company-owned and -operated. Shewould change the business model to100% franchised with a revamped ampmstore brand and new marketing programsto compete more aggressively.

Selling 800 stores to franchisees wouldeliminate 10,000 jobs at BP, virtually all ofthe people employed in BPs convenienceretail business. The total included 9,500store employees and an additional 500support staff at two headquarters. For thestore employees there were no guaranteesthey would be hired by the new franchiseowners. MacLeod and her team facedsignificant people management hurdles inreadying the stores for the conversionprocess in only 18 months. She wouldhave to motivate store employees toreduce overhead and improve operations,even though they faced hugeuncertainty about future employment.Our people were displaying the classicsigns of change fatigue.... People werevery jaded and lacked confidence thatthey could make things better, she said.

Confidence is absolutely crucial inmaking change stick. If people areconfident in their leadership, themselvesand the business purpose, you are waymore likely to get a change that issustainable and actually turns intocontinuous improvement, MacLeodnoted. To build confidence, her teamdrafted a business case and showed

it to the biggest cynics in theorganization, asking them for a critiqueand to suggest how to make it work.MacLeod said she built trust by speakingdirectly to store employees, explaininghow the plan would help them beat thecompetition, and showing that we hadgenuine empathy for what they weregoing through.

So that employees would know what wasexpected and see their progress, herteam communicated month-by-monthperformance objectives, includingspecific plans to reduce overhead costs.We focused every single day onengaging our people, using town hallmeetings, small team meetings and theweb to promote continuous improvement,MacLeod said. To prevent backsliding,she offered employees retention bonusesthat would be paid at the time the storewas sold to the franchisees if the stores

were delivered to their new owners withstrong financial controls and safetyrecords. People were very motivated tomake sure the business continued to runin a very healthy way.

Celebrating success, recognizingachievement and making people feelgood about the business were importanttools for sustaining momentum. Peoplegot rewarded for simplifying andimproving things. Importantly, its asmuchif not moreabout therecognition of your peers as it is about

financial rewards, MacLeod said.

Know Your Destination

Organizational design helped to lay thefoundation for change. I put my winning,end-state organization in place from dayone rather than waiting to decide whichemployees would stay to support the

franchises and which would leave,MacLeod stated. We had people whoknew they would be leaving in 18 monthand they stayed motivated for the entireperiod because we had been very straigwith them. People want and expect clarifrom their leaders. Planning was criticalreduce risk as the team rolled out newconcepts. We did lots of road mappingand tested our plans before we went to

market, MacLeod said.

In the end, tracking measures showedthat employees improved and simplifiedoperations throughout the conversionperiod, producing $700 million a year incost savings. Selling the stores freed $1billion in capital for BP to redeploy moreproductively. Pulse surveys showedmorale steadily improved, even though70% of those responding knew theywould lose their jobs, according toMacLeod. The thing Im most proud of

how our people responded . . . . You cando some really tough things as leadersand you can do them in a way thatpeople feel valued and respected.

She noted that its very easy to getaddicted to the change pattern by notgetting the change right in the first placnot making the tough calls or bolddecisions up-front, maybe going forsomething half-way, and then allowingthings to slip back.

Ultimately, MacLeod said, not just

corporations, but the global economydepends on leaders to break the cycle.The economy needs businesses that areclear on why they exist, clear on what thebusiness model is, and have measures inplace to know when they need to makeadjustments. We need organizations thatcan manage continuous improvement in predictable way.


6/11

DuPont began to feel the impact of thefinancial crisis began about a month after

the collapse of Lehman Brothers inSeptember 2008. Sales volume slid, goodcustomers cancelled orders andemployees were gripped by fear anduncertainty. As the environmentworsened and sales fell by up to 50% insome units, Kullman ordered twotraumatic restructurings. Perhaps moreimportantly for DuPonts future, Kullmanalso concluded that the company faced anew reality requiring fundamentalchanges if it were to remain successful.

Her challenge was balancing the need forimmediate action to maintain the

companys financial stability during thecrisis, while focusing on strategic objectivesthat would preserve the companys leadingmarket position in the future. Among thehighest hurdles: motivating employees towork on the things they could control andavoid becoming paralyzed by the marketsvolatility.

Speaking at the 13th Annual WhartonLeadership Conference, co-sponsored bythe Center for Human Resources and theCenter for Leadership & Change

Management, Kullman described howshe changed the companys thinking

about its business model, whilereinforcing its 200-year-old culture ofinnovation. The question is, given themegatrends in the world and given thenew economy, what changes do we havto make to continue to be successful? .There is no playbook for what we areexperiencing today, said Kullman, a 20year DuPont executive.

In April, DuPont announced first-quarteearnings of $0.54 per share, 59% lowerthan a year earlier, reflecting a severe

Wharton on Change Management I 2010 University of Pennsylva6

The financial crisis has confronted many companies with the biggest test of their change

management capabilities in years. For the largest firmslike DuPontthe challenges

were only compounded. CEO Ellen Kullman steered her firm through the economic storm

by adhering to four principles: focus on what you can control; adjust your business model

communicate continually with employees; and maintain pride around the mission.

CEO Ellen Kullman

Draws on Change

Management

to Steer DuPontthrough the

Economic Storm



decline in industrial demand due to theglobal recession. The company increasedits 2009 fixed-cost reduction goal to $1billion and reduced capital spending by$200 million in an effort to preserve cashand better position the company foreconomic recovery.

Kullmans first step was understandingthe dynamic relationship between what

should not change . . . and what has tochangeand having absolute clarity onthat. Deciding what would not changewas easy: the companys commitment toscience and innovation as primary driversof growth since its founding in 1802 as amaker of black powder. Deciding what tochange was far more difficult.

Kullman identified three trends that wouldtranscend the current crisis and provide astrategic framework for the companysannual $1.4 billion investment in researchand developmentincreasing agriculturalproductivity, reducing dependence onfossil fuels and protecting lives.

Four Principles

But organizing the company to respondto these long-term trends during a periodof extreme uncertainty required strongleadership and specific initiatives tochange the way we think, said Kullman,who joined DuPont in 1988 as amarketing manager for medical imaging,and was named executive vice presidentand a member of the office of chief

executive in 2006, and president inOctober 2008. Prior to joining DuPont,Kullman, who has a B.S. in engineeringfrom Tufts and a masters in managementfrom Northwestern, worked at GE.

She shared four leadership principlesthat she has implemented to guideDuPont through the financial crisissince October 2008.

The first principle: Focus on what you cancontrol. Kullman realized she needed toshift the companys attention from whatwas going wrong to the immediate actionrequired to protect DuPonts financialposition as revenues fell dramatically.Last October, I saw a lot of people wholooked scared and didnt know what todo, she said. So, she directed DuPontsmanagement to figure out those . . .things we can do something about, andget about doing them.

We realized that what we had to protect. . . mostly was our financial stability and

flexibility, so we had to focus on cash.Were a company that spent 207 yearsfocused on earnings and the cashseemed to show up. All of a sudden, its a

new world and we had to adjust everysingle business persons mindset aroundthe notion that earnings are nice, butcash is more important, Kullman said.

To preserve cash, she issued fourfinancial directives: Maximize variablecontribution dollars, drastically reducespending, zero-base capital expenditures,and significantly reduce working capital.Maximizing variable contributionsrequired a tremendous amount of

coaching to teach the sales force howthink about pricing in a downturn andhow to engage with customers whodidnt want to talk.

Promoting DuPonts innovations901new product launches last year and arecord 500 in the first quarter of thisyearproved an effective way togenerate sales and increase variable

contributions. Theres nothing like a neproduct, a new innovation that allows yto go out and talk to that customer, shsaid.

One approach involved finding newmarkets for existing products, such asselling an engineered polymer designedfor Indias railways to China. We needeto get our people in India working withour people in China, Kullman said. Theinteraction resulted in an $18 millionorder. Another involved introducingimproved versions of widely-usedproducts, such as Kevlar for bullet-resistant vests and Nomex forfire-resistant suits. DuPont is hoping thaU.S. economic stimulus programs couldcreate a market for upgrading theequipment of firefighters . . . police,and even the military.

The second of her leadership principlesfor the crisis has been to adopt a newtrajectory by rethinking your businessmodel. For DuPont, that meant gettinpeople to think differently about a

business model that had alwaysmeasured success based on plantcapacity and capital investment: Weinvent, we build, we make, we sell,Kullman said. The change has involveddeveloping service-based modelsproviding new ways to engage withcustomers and monetize products.Although it is difficult to get people whoare very successful to embrace changeshe has found that they are willing to trynew models when markets are in disarrand when theres uncertainty about whawill work in the future.

Kullman led a new trajectory 11 years awhen we decided to take our safetycapability and see if we could create abusiness out of it. It wasnt easy. Wespent 200 years trying to figure out howto create a very safe environment for oupeople. We have lots of methodologies. . . but we didnt know how to sell it, hoto create a contract around it. Believe mthe lawyers were really concerned abouour liability.

Theres nothing

like a bad economy

to get people

confused about

what their mission

is. They start

thinking their

mission is to reduce

cost. Thats a tactic,

thats not ourmission.

Ellen Kullman,

CEO, DuPont


8/11

The new venture started as a pilot with asmall team that brainstormed withWharton faculty and made a lot ofmistakes in initial customer pitches oversix months before figuring out a valueproposition that played. The service wasa logical extension of DuPonts industrialbusinesses because our sales force iscalling on plants that have serious issuesaround safety [in which] we can help.

Result: In addition to annual revenues inthe hundreds of millions of dollars,DuPonts safety and protection businesscreates relationships with customersaround the world that we can leverageacross all of the companysbusiness lines.

More recently, DuPonts appliedbiosciences unit developed a high-performance plastic polymer, grainHytrel, made from renewable agriculturalsources that addressed the auto parts

industrys need for sustainableproducts. As a newcomer, DuPont wasable to win business from a demandingglobal parts maker, Denso Corp., byproviding real innovation insustainability that they think isimportant to their future.

The ability to address broader customerneeds through high-value servicesgoing beyond the traditional make-sellbusiness modelis critical in decidingwhich new technologies will receivefunding, Kullman said. But how do you

incite the change required for newtrajectories in a global organization with60,000 employees in more than 70countries? Kullman recommends a viralapproach, starting with a small pilotprogram in one area, generating interest,and communicating its success to otherparts of the business. If you try tochange everybody at once, yourechanging nobody, so you really have tostart in one area, or a couple of areas,and show success.

Getting Employees Attention

Kullmans third crisis leadership principle:Communication is key. Im a firmbeliever that there is a direct correlationbetween growth and the success of ourcommunication. When we have analigned team that understands veryclearly what the goals and the tradeoffsare, thats when things can absolutely

happen, Kullman said.The first step is really getting theirattention, and thats a very hard thing todo with all the noise in the world today,she said. But getting through toemployees is vital because their naturaltendency is to hunker down, hoping thecrisis will pass and everything will goback to normal.

In announcing two restructurings betweenDecember 2008 and May 2009unprecedented at DuPontKullman

insisted that her leadership team get outin front of the troops with a consistentmessage. Its not something they candelegate. She personally went to plantsin Germany and Ohio where there werelayoffs and answered very toughquestions about the deal [employees]thought they had with DuPont.

If company leaders arent willing to getout and communicate on the really toughissues, then the credibility our organizationhas in the decisions we are making isalways going to be called into question,

Kullman said.

There is a risk that business leaders willgrow tired and stop communicating afterdelivering the message five or six times.We think theyve heard it and move on toanother message, [but] all weve done isconfuse them. It takes 15 or 16engagements [for employees tounderstand] that this is what we need todo and this is where we need to go.Economic uncertainty has made the taskmore difficult, but I think maintaining that

communicationthe strength andalignment around itis more critical intodays environment.

The last of her four crisis leadershipprinciples is to maintain pride around thcompanys mission. Theres nothing lika bad economy to get people confusedabout what their mission is. They startthinking their mission is to reduce cost.

Thats a tactic, thats not our mission,Kullman said.

During informal weekly meetings withemployees, Kullman said she was amazethat the number one question was abouwhether we are going to stick with ourmission. She quickly realized that peopare scared [and] people want direction.Making sure that people understand themissionand linking their daily activitiesto the companys broader purposeisessential to reducing fear, maintainingmorale and keeping employees motivate

Kullman said.

DuPonts mission is sustainable growtdefined as increasing shareholder valueby reducing the companys environmenfootprintand that of its customers,Kullman said. The mission includesdenominator strategies, such asreducing waste and fossil fuel usage at chemical plants. It also involvesnumerator strategies, such asinventions supporting biofuels,photovoltaics and other forms of

renewable energy, or hurricane-resistanbuilding materials that help save lives.

Its really critical that we maintain thefocus on the mission and keep remindinpeople of it. People have a lot of pride ithe mission and they want to understanthat the mission is not going to changeeven though the world around it haschanged tremendously. Youve got tocapture that heart and soul, Kullmansaid. Thats how were going to besuccessful.




Knowledge@Wharton: Welcome toPhiladelphia. Based on almost two years

in office as Health Minister, are theregeneral guidelines for the structuring andoperating of national health systems thatyou can offer?

Darzi: Thank you. Its nice to be inPhiladelphia. May I just add that first, I ama clinician academic and continue to be aclinician, working two and a half days aweek. But at the same time, the PrimeMinister very kindly asked me to serve,and its been my privilege to do so for two

years. Working in the National HealthService (NHS) and also being part of

policy making for the NHS, Im a greatfan. Last year, we celebrated its 60thanniversary. It has stood its test of time.

What really attracts me about the NHS isone of its principal values: Everyone hasaccess to care, irrespective of their abilityto pay. For free. That is a very uniquevalue. We have a universal health caresystem. I think that value actually is morerelevant 60 years down the line than itsever been. As you know, its a tax-funded

system. The government has significantincreased the expenditure in the NHSfrom somewhere around 42 billionpounds in the year 2002 to somewhere

approaching 110 billion pounds next yeThats massive growth. Weve done mareforms in the NHS over the last sevenor eight years. I had the privilege ofdesigning where we are heading forthe next phase of our reform, which Iarticulated in my report last July. [Itcontains] a very clear statement:Quality will be the organizing principleof the NHS.

Knowledge@Wharton: Talkthrough some of the implications for

providing health care given the downwapressure that comes from fewer taxes,fewer pounds coming in from the taxrolls, and other consequences of theeconomic crisis. What is being done tocope with the fact that this is going to ba very difficult 12-month stretch?

Darzi: I think most of us have graveconcerns about the economy, and I thinall governments across the globe areworking very hard dealing with the

Ara Darzi of the British National Health Service

Discusses How to Change a Large System

Ara Darzi, the United Kingdoms Health Minister, spoke with Wharton

management professor Michael Useem about the British National

Health Service (NHS). One of our biggest opportunities is to invest inthe tremendous leadership pool we have in the NHS. But a big

question is, how do you promote that leadership gene that exists in

the system? To do that requires a mindset change, a behavioral

change, across the system. That is the type of transformational

change that we are thinking of at the moment. Darzi, a surgeon, was

appointed Health Minister by British Prime Minister Gordon Brown.


10/11

causation of this problem. As far ashealth goes, certainly within the NHS, Imade the point earlier, weve increasedthe expenditure to about 110 billionpounds. Thats more than doubling theexpenditure in the health system. Whatdrove my report at the time was [that]quality was an organizing principle. Thereare two things that the NHS has asunique advantages during these difficult

economic times.

First, because its a health care systemthat looks after you from cradle to thegrave, it should start withand we areinvesting inprevention. Prevention is

better than cure. Prevention is cheaper

than treating illness. Many of ourinterventions are: How do we introduceevidence-based measures in prevention?whether these happen to be lifestyle-based diseases or [others]. Ill give youobesity as a good example. We lookat obesity as seriously as climatechange, because we believe, from ahealth perspective, that it could havethe biggest impact on the health ofour population.

The second thing is quality. Its like many

other sectors. Lets not forget that qualitymay be cheaper in health care. Qualitysnot more expensive. It may be cheaper.Doing things right the first time, givingpatients access at an earlier stage of theirdiseasethat in itself will make healthcare costs cheaper. So on the one hand,Im reassured because we have auniversal health care, which is tax-funded.

Knowledge@Wharton: One of thecentral thrusts in your report, which is

going to guide your actions in the nextseveral years, is to focus on developingownership and leadership on the part of allplayers, all participants, in the healthsystem: patients, physicians, nurses,administrators, pharmacists. Its a difficultgoal to achieve, especially on the massivescale that you have proposed. If you couldsay a couple words about how youregoing to go about developing that sense of

identity as a leader on the part of all of theplayers, so that they indeed feel that theyown the system, that the problems aretheirs, and that they have an obligation toaddress the problems and solve them.

Darzi: I couldnt agree more. I think one

of our biggest opportunities is to invest inthe tremendous leadership pool we havein the NHS. The question is, how do youactivate that? How do you promote thatleadership gene that exists in the system?That, in itself, requires more than justsaying, Go out there and be a leader.Leadership has to have a purpose. Itsleadership for quality that Im looking forfrom the Health Service, from those whowork in the Health Service.

To do that requires a mindset change, a

behavioral change, across the system. Thatis the type of transformational change thatwe are thinking of at the moment. Moreimportantly is what weve learned from thenext stage review, which I led. There were10 regional reports. Clinicians felt that theywere actually involved, challengingthemselves with evidence-based care, anddesigning the pathways of care. So therewas ownership in that process.

Besides the ownership, we need to move

on to the next phase, in which they feeempowered to make that change happI think whats important for us, as cliniciaand I will say us, me, toois thatwhen you are empowered, accountabilcomes with it. I think, for the first time,and certainly in this phase of reform, itnot just individual accountability; its acollective accountability around the tealooking after a patient.

Ill give you an example. If you look at apatient pathway, from the day they arereferred from their primary care physiciinto a hospital settingtreatment is doin hospitals by multiple teamsthen ba

to the primary care physician, we need

way in which there is a collective accouability across the pathway of care. Thatwhat we need to work on and developwithin the NHS, and thats exactly whatwere doing. I announced in my reportwhat I call the National LeadershipCouncil, which is the opportunity for thNHS itself to develop and promoteleadership skills within that accountabiframework that I described.

Knowledge@Wharton: Let me asseveral personal questions. As a surgeo

you are in control of the surgical theateAs a member of the House of Lords anMinister, that control is shared with maother individuals. There are forces overwhich you, indeed, can exercise very litcontrol. Guide us through your ownexperience in moving from a clinician, aresearcher, to a person responsible for national health system.

Darzi: It was a fairly steep learningcurve. [As for] my role in the House of


Quality will bethe organizingprinciple ofthe NHS.Ara Darzi, United KingdomsHealth Minister


11/11

Lords, Im a member of a team of five. Weare five ministers in total, and theSecretary of State for Health, who is inthe House of Commons, is Alan Johnson.Ive benefited a lot from his mentorshipand the mentorship of many othercolleagues in the House of Lords whowelcomed me and mentored me for myinitial introduction there. You started bydescribing me as a clinician and an

academic. Im a professional. I talk aboutwhat I know. My role in the House ofLords is to bring that clinical flavor towhat I do in health care policy. That, initself, the support that I have receivedfrom many noble Lords in the House,[means that] Ive been very fortunate inhaving some fascinating debates, veryinteresting debates. The chamber itself isfull of exceptional people with all sorts ofdifferent backgrounds. So, when you takea bill through, as I didmy first bill wasthe Human Fertilization and Embryology

billI cant remember having heard anydebates of that quality ever in my lifebefore. So it was a great privilege to bepart of that, and be personallyresponsible for leading that bill through.

Knowledge@Wharton: Lets goback a little bit on your career. To do itover again, would you pick a career inmedicine, and in particular, would youpick a career in surgery?

Darzi: Absolutely. Theres no doubt inmy mind. Its not just picking it. There are

two privileges in life. One is to serve yourpatients, and that is the most gratifyingthing you can ever do. In surgery, youtend to see the benefits of that morequickly, because you will see the outcomeof the interventions youve been involvedin with your colleagues from a patientsperspective. The second privilege is toserve in public service itself. Ive been

fortunate enough to do both. Butultimately, Im a clinician, Im a surgeon,and when Im finished with this job, Ill[return to practicing surgery]. Lets notforget, as I said, that I do this two days,or two and a half days a week.

Knowledge@Wharton: Let me askabout that. You wear two hats, you havetwo jobs, youre in senior administrative

roles and you are part of, in effect,politics in Great Britain. But you also arein surgery several days a week. How doyou balance the two very different worldsin the same week, in the same day?

Darzi: It is tough. I do work very hard.But its enjoyable. And lets not forget thereason Im doing the two jobs. That isexactly the purpose of my appointment.The Prime Minister and the governmentwere very keen that [they have] someonewho was an active clinician, who couldcome in and be part of a bigger team offive other colleagues in which I led amajor review, where clinicians were veryactive players in that review, designingthe future of the NHS. So I dont see [thetwo different worlds] in any way opposingeach other. I think they are very muchaligned, and, as I always remind my civilservice colleagues in the department, itsnot uncommon that I do my four days inWhitehall, and then I go to my operatingtheater. I am constantly asking whatsome of my colleagues will think of thispolicy or that policy. Its my testing bed,

as I call it. And that, in itself, has beenvery, very powerful for me.

Knowledge@Wharton: As I recall,the Prime Minister called you to 10Downing Street and offered you theposition you hold now. It did come as asurprise. If theres been one surprisesince then, something you have had to

master that you didnt appreciate, ordidnt really anticipate, what would thabe? What is the biggest surprise youhave faced since the initial offer itself?

Darzi: How long do you have? Youknow, when you go into a new job likethis, you have many, many anxieties. Inrelation to that, I was tremendouslysurprised by the amount of positive

welcome that I had from everyone, andthe support Ive received from, not justgovernment, but people within the Houof Lords and others. Everyone has thispassion in our country about the NHS.That is fascinating. Its part of our sociaculture now. Those positive thingswerent just within the NHS: When I weoutside the NHS, that was very obviouto me as well. So, as I said, its been atremendous experience for me, and I vmuch hope one day I can look back atand say I had the privilege of making a

contribution in the NHS.Knowledge@Wharton: ProfessoDarzi, that takes me to my final questioThe day will come when you do step oof your position, and as you anticipatethat day sometime in the future, what dyou hope will be said about your legacythis role on behalf of the British people

Darzi: Time will tell. Another person whave to answer that question rather thame. I believe what I would like to be sais [that I] focused our minds on what

matters mostwith quality being theorganizing principle of any health caresystem. It is quality that wakes me up the morning to come to work, it is quathat my patients expect from me.

Knowledge@Wharton: ProfessoDarzi, thank you for taking time to talkwith us.

wharton on change management bp

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