In 1988, Nicholson moved into the acute hospital sector, appointed as the Chief executive of the Doncaster and Montague NHS Hospitals Trust, a first-wave NHS trust brought in under Prime Minister Margaret Thatcher. He introduced Clinical Directorates there in 1988 and the Trust was a national pilot for Total Quality Management. Under his leadership the Trust promised all staff "a job for life, it may not be the job you are doing now, but you have a job for life with this trust". The promise was printed in various Trust documents including the "Strategic Direction". In 1997, he moved to the Trent NHS Regional Office as the Regional Director of Performance before being appointed as Regional Director in November 2000.