Lord Danzi and the “Challenge Prize”

Two weeks ago, Health Minister Lord Darzi announced the ‘Challenge Prize’ scheme as a way of ‘ encouraging innovation’ within the NHS after setting aside £20million to pay for the promotion.

The Department of Health has said  that the scheme is designed to encourage breakthroughs in treating the most serious health problems which cost the NHS billions each year – including cancer, obesity, dementia and the effects of ageing.

The Observer‘s management editor Simon Caulkin, who for a long has argued that suggestion schemes of this kind  are not very effective in improving systems or institutions that need overhauling,

In his column today,  he makes a strong case against Lord Danzi’s contention  that “everyone to be thinking about innovation ….will drive improvement.”

To see what an awesome instrument a simple suggestion can be in the right hands, consider this. Toyota’s Japanese plants generate an astonishing 600,000 improvement suggestions a year. Equally astonishing, almost all are implemented, and none is paid for. Improvement in this scheme of things isn’t separate from the job; it is part of it. In this sense, honed by a constant stream of improvements, Toyota’s standard operating procedures stand as the embodiment of its organisational learning, accumulated over many years. Ability to harness the motivation of front-line employees is a large part of its competitive edge.

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