Curing the books

‘In terms of furthering my career it was a risky move,’ says John Hennessey, speaking candidly of his role as director of finance at London’s Great Ormond Street Hospital for Children. Not only did it mean a break in his career as a management consultant in the private sector, but it had implications for the long-term consequences should this 35-year-old accountant from the American mid-West ever decide to go home.

Two years earlier, he’d accepted the equivalent post with another NHS trust, in this case specifically to gain useful experience for his job at Touche Ross (now Deloitte & Touche). So to go to Great Ormond Street might well brand him a health service money man, threatening his future employability both here and in the US. The skills are vastly different from those required of a management consultant. While the latter are exportable – as Hennessey had already proved – those of a finance director within the public sector might be less so. And then there’s the money, or comparative lack of it – another issue that must have come into his equation at some point.

Why, then, should a man like Hennessey, on the ‘wrong’ side of the Atlantic, with a proven track record as a management consultant and who had every prospect of reaching the top of his well-paid profession, choose to join the National Health Service, especially at a time of such enormous upheaval and uncertainty? Something happened to alter the pattern of his life.

Exchange programme

Born in St Paul, Minnesota, he chose to go to the local university less than a mile and a half from his front door, before going to work for the local office of Touche Ross. But while at university, he applied for a place on the student foreign exchange programme and was sent to St Mary’s College, part of the University of London. It was there he met his future, English, wife Mary. Within months, the couple had married and at the end of his year’s study both returned to Minneapolis so that Hennessey could complete his studies. In due course, they had two sons and a daughter.

The younger boy was born with a medical complication that would ultimately lead both father and son back to Great Ormond Street.

In the meantime, Hennessey’s career was already showing signs of success.

In 1988, four years after joining the firm, Touche Ross made him a management consultant. From then on, he worked mainly in the area of healthcare, helping some of the largest teaching hospitals in the US as they struggled with the problems of costing patient care – the same problems that would later face UK hospitals entering the NHS internal market.

Returning to England

Two years on and the domestic issue of his elder son’s education came to the fore. Deciding on a return to England, Hennessey contacted the London office of Touche Ross and was invited for interview. Coincidentally, the UK Government had published the second of its white papers on the NHS a year earlier and was about to pass the 1990 NHS and Community Care Act introducing the concept of the internal market. It was clear to Touche Ross that in these times of rapid change there was a need for someone with extensive experience of the problems the NHS would be likely to confront.

Hennessey’s arrival was a commercial godsend.

‘John was able to pick up very quickly indeed on the financial problems within the NHS which are supposed to be technically very hard to come to grips with,’ says his former boss Dr Sabri Challah, a partner at Deloitte & Touche. ‘He also brought a perspective of healthcare practice in the US that was invaluable to us.’

Before leaving the US, the Hennesseys had informed the doctor treating their boy of their plans and he immediately referred the case to Great Ormond Street, then the only hospital in the world capable of performing the necessary operation. Hennessey himself remembers with deep affection the way in which the staff dealt with the child. ‘They were very impressive,’ he recalls. ‘Nothing was too much trouble and, in fact, my son remains one of their out-patients to this day.’

It may well be that the seeds of his decision to join the NHS were sown then. However, he continued to work as a consultant until being seconded to the South Bedfordshire Community Healthcare Trust as the interim director of finance in February 1993. The Trust was then facing substantial financial losses: in the 1992-93 financial year, it had the third worst rate of return of all trusts in England and Wales. Five months later, he accepted an invitation from the board to take the position on a permanent basis and resigned from Touche Ross.

‘I thought the job would give me a tremendous amount of experience in managing people and understanding the NHS finance regime from the inside,’ says Hennessey. ‘For the previous three years, I had been running around meeting people in the NHS and giving them advice. I wanted to sit on the other side of the table and make sure I had the capabilities to implement the type of changes I was recommending. I saw it as no more than two years as a director of finance and then moving back into consultancy. I thought it would give me an awful lot of credibility as a consultant.’

South Bedfordshire was a severe test of his capabilities, but within the year it had achieved its financial plan, repaid a u700,000 loan and met its external finance limit and rate of return requirements. Tight fiscal discipline and a realisation that the Trust could only afford what it earned required a fundamental reappraisal of what, for many, had been the self-evident truth – in health terms, cost was an irrelevance.

‘For us,’ says chief executive Valerie Harrison, ‘the priorities meant getting tight financial discipline into this organisation and getting people to think about the financial implications of what they were doing.’

Time for a change

By the end of 1994, after just two years with the Trust and with its problems now solved, Hennessey decided that the time was right for a change.

If he had followed his original plan, that change would have meant a return to the private sector as a management consultant but things had moved on. ‘I just found that I enjoyed my new role much more,’ said Hennessey.

‘(A finance director) is a very different type of job, building up the finance team, working as a team, dealing with many more wide ranging strategic issues, not just the single issue that a consultant is brought in to deal with. A real challenge. There is the camaraderie of working with the same group of people over long periods of time which is very enjoyable and matches what I want out of a career with the skills I have.’

But there was a further reason, suggested by Dr Challah. ‘One of the things that frustrated John about consultancy is that consultants very often do not see things through to the end. A project will be taken so far and will then be handed over to the management of the organisation to complete the implementation. John wanted a set of management achievements in a job that he could call his own.’

And Great Ormond Street could certainly offer that. It was the opportunity to mould a finance department in his own image, one that could cope with the new administrative headache of the internal market with its requirement for an accurate audit trail through the issuing of invoices and collection of debt. The hospital has had to come to terms with losing its ‘special health authority’ position and guaranteed income from the NHS. In its place has come competition with paediatric hospitals up and down the country and a future dependent on its ability to sell its services as products.

The hospital now has over 60 separate contracts to negotiate each year with individual fund-holding authorities.

Perhaps the single most enduring quality that shines through from this man from Minnesota is his conscientiousness. Almost at the end of his second year at Great Ormond Street and Hennessey appears to have got over his management consultant’s instinct to hit and run. It’s a tough enough job to keep him stretched – mostly over 12-hour days and spilling into the weekends.

Now, instead of baseball which he still misses, Hennessey will spend most summer weekends cycling the flatlands of Suffolk with his wife and family. Just occasionally, when they are feeling particularly rugged, they might even go swimming in the North Sea.Patrick Hook is a freelance journalist