Part 3: Risk and relationship management

Managing risks

3.1
We looked at risk management in the context of HBL’s overall risk management policies and processes. This included analysing risks in three categories: delivery risks, financial risks, and capability/capacity risks. A risk management policy, put in place in February 2012, was updated in March 2013. HBL’s board regularly reviewed significant corporate and programme risks.

3.2
In general, HBL’s risk management policy reflected good practice, was well written, and created a good structure for monitoring risks at corporate and programme levels. The processes that HBL used to put in place its risk management policy were defined, understood, and used well. Any significant risks were referred to the board, which reviewed these risks at every board meeting. We consider that HBL had adequate policies and processes for managing risk. However, our work did not extend to analysing the quality of the decisions made about risks.

Managing relationships with health sector entities

3.3
The way HBL communicated and managed relationships with the sector contributed to the slow progress in achieving objectives. Other than banking and insurance arrangements, HBL’s programmes appear to have suffered from communication and engagement problems with DHBs.

3.4
HBL’s primary purpose was to lead a series of significant changes in DHBs. As autonomous organisations with legal mandates and responsibilities, DHBs would each need to be convinced that the changes proposed were in the best interests of their district, and to be prepared to take a long view on achieving a return on investment. In this context, HBL needed to exercise strong communication and relationship management to ensure that DHBs could buy in to the programmes, and fully support their implementation.

3.5
Problems contributing to HBL’s difficulties in building effective relationships with stakeholders included:

• having a small communication team that appears to have lacked the capacity for the work required;
• the variable flow of information through DHB representatives to DHB decision-makers, possibly a result of the increasing burden on DHB representatives as programmes progressed and demands on their time significantly increased; and
• HBL not engaging enough with the DHB boards that were responsible for approving business cases − HBL appears to have communicated with different people in DHBs, often not reaching decision-makers.

3.6
HBL’s board did include senior representation from DHB boards and management, which should have provided a DHB perspective into HBL’s work, but this did not appear to prevent HBL having difficulties engaging with the sector.

3.7
As well as problems getting information to DHBs, HBL experienced significant delays getting information from DHBs. This, in turn, contributed to delays in planning, costing, and starting programmes.

3.8
Any significant change programme in multiple entities requires engagement at the most senior levels from the outset. HBL appears to have underestimated the importance of securing engagement and under-resourced its communications efforts. Engagement and communication targeted at senior levels in the DHBs could have led DHBs to give more priority to HBL programmes, resulting in HBL receiving more comprehensive information more quickly, and DHBs making faster decisions.

3.9
Any change in the health sector is likely to affect clinicians. Changes in procurement and supply can affect the tools that clinicians use, the food patients eat, and the linen they sleep on, with the potential to affect health outcomes. Although HBL set up a Clinical Council in March 2013 to provide clinical feedback to HBL, this was several months after the approval of the business case for HBL’s largest programme, the FPSC. This suggests that HBL had underestimated the importance of consulting clinicians.

3.10
We look in more detail at how HBL managed relationships for the FPSC programme in Part 4.