implement a management system to support a continuous improvement culture based on lean principles. The aim was to support the five hospital providers in developing a sustainable culture of continuous improvement within their organisations, each of which had experienced performance challenges and had significant potential for improvement. With the relationship between the five hospital CEOs and their regulator under the microscope, our research explored how to build mutual trust in practice. In any professional relationship, trust is governed by what HR professionals call a ‘psychological contract’. This is an implicit set of mutual expectations and perceived obligations that govern the relationship, covering relational factors such as fairness and transparency, as well as transactional elements such as autonomy in return for meeting performance standards. Perceived breaches of an implicit psychological contract can lead to a breakdown in trust and, sometimes, in engagement. Because these mutual expectations are often unspoken and subjective, they are easily misunderstood. Making the obligations explicit is a necessary first step. Our research found that a written agreement outlining what is expected of each party helped build trust and create an environment in which meta- regulation was possible. The EPC also helped maintain trust, even when performance-based challenges arose and things got difficult. But how is such a contract actually lived, and how does it build trust? In our study, the EPC was not a document that sat in a drawer. The partnership established a stable context through monthly
face-to-face meetings, with ‘reflections on the EPC’ as a standing agenda item. These formal meetings and regular reflection were crucial for building mutual trust, particularly when relationship ‘visible.’ It allowed both parties to discuss progress in person and in (close to) real-time. The EPC provided opportunities to celebrate its fulfilment and, in doing so, strengthened the relationship between the regulator and the hospital CEOs. things weren’t going well. The meetings made the
living tool for reflexive learning and sustainable service improvement. Our research also found that maintaining trust sometimes requires knowing when not to draw attention to a breach. On occasion, individuals knowingly chose not to flag a breach at the monthly meeting, judging that drawing attention to an unresolvable problem could damage the relationship and its long-term goals more than the breach itself. EPCs could be applied to many public-sector partnerships where different groups work together to serve a third party (e.g., the general public) but face cultural legacy problems in doing so, particularly when there is a large power imbalance. Meta-regulation is one way to address the shortcomings of top-down governance, but it requires an ongoing commitment to new relational ways of working, for which mutual trust is essential and must be actively developed and protected. This is a case study in which an EPC has been an effective mechanism for building and maintaining trust, even when things go wrong. We would love to hear from people in other organisations who want to try enacting a more collaborative and relational approach to governance, including meta-regulation, through the use of EPCs. More research tracking the use of EPCs will help further our understanding of their benefits and how they can be adapted to different institutional contexts.
It also fostered accountability between them, providing a platform for raising and addressing breaches, thereby strengthening trust amongst group members rather than reducing it. For example, when the regulator’s actions failed to represent the behaviours set out in the EPC, the meeting provided a safe relational space for the CEOs to call out the breach without fear of reprisal. It also allowed the regulator to ‘hold up a mirror’ to its own actions that failed to align with its commitments contained in the EPC. By making such breaches visible, the meetings transformed the EPC from a static agreement into a
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Sustainable Development Goals
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