SIGH. Another grand efficiency wheeze that should have been strangled at birth. At first sight, getting worked up about Lord Darzi’s NHS suggestion scheme – under which pounds 20m in prize money is on offer to staff coming up with the best ideas for saving money over the next four years – might seem over the top. The cash sum is trivial: the NHS needs to cut costs by pounds 2.3bn in the next year alone. And if someone does walk off with pounds 5m for an idea that saves many times that, isn’t that a reasonable deal?

Well, no. Spoilsport though it is to point it out, the calculable costs of the awards will add much more to the headline pounds 20m the unquantifiable costs will be many times the original total and whatever the verdict of the subsequent report, the likelihood of the scheme delivering otherwise undreamed-of improvements to offset those costs is nil. Indeed, it could make matters worse.

The most depressing thing is the ignorance it betrays about how systems work – the management equivalent of a doctor expecting cancer patients to respond to treatment by black magic. ‘The more you look at it, the more frightening the whole thing becomes,’ mutters Jane Seddon of Process Management International, a consultancy whose work is based on looking at systems as a whole.

Start with the cost of the scheme itself. Even before the formal launch, there is the cost of developing, planning and specifying the scheme. Now add the costs of communicating and marketing it to the NHS’s two million employees. There’ll need to be a database of submissions with staff to run it, and trained assessors to rank suggestions. If consultants aren’t involved already, they will be now. Finally, there is the bureaucracy of judging and making the awards, including a review mechanism for appeals.

However, the direct bureaucratic costs will be dwarfed by the unquantifiable ones. The prize money sets up competition among individuals and units that ought to be sharing knowledge, not hoarding it. What about people whose day job is process improvement? Will they hold good ideas back or ‘seed’ them with others to give themselves a chance of sharing the booty?

Many apparently sensible suggestions, says PMI’s Jan Gillett, will be unhelpful in practice, because in a system made up of many interacting parts like the NHS, changing one part will affect many others, some for the worse. As the venerable US systems thinker Russ Ackoff never tires of pointing out: ‘Problems in organisations are almost always the product of interactions of parts, never the action of a single part. Treating a single part destabilises the whole and demands more fruitless management intervention management becomes a consumer of energy, rather than a creator’.

Meanwhile, suggestions that really would make a difference – like getting rid of distorting targets and IT-driven bureaucracy, classic energy-gobblers – can’t even be admitted, let alone acted on. This is partly because, as a complex organisation, the NHS is not susceptible to quick fixes (to quote Ackoff again, the only problems that have simple solutions are simple ones). But in any case, says Gillett, the problems they want to remove have been deliberately created by NHS management and are therefore politically out of bounds. The costs of the cynicism and wasted time occasioned by such a fruitless exercise will never be calculated, but they certainly exist.

The Darzi scheme is perverse in two ways. First, the NHS is home to islands of extremely advanced and sophisticated systems thinking, which under pins radical improvement in cancer and stroke services, for example, and is being explored in a number of hospital trusts. Second, used systematically, suggestion schemes are very far from useless. But, says Gillett, they can only work as an integrated part of the whole system.

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.

Compared with this simple structured approach, Darzi’s incentive-based scheme is almost embarrassingly crude. ‘You don’t need to bribe people to come up with ideas,’ says Seddon. ‘All you have to do is visit the workplace and listen.’ Money prizes won’t make the ideas worse or better, or help the distribution. So here’s a suggestion for Darzi: stop trying to motivate NHS workers with money and use the cash to link up the islands of excellence that exist already.