Ethnography is increasingly being used in the evaluation of quality improvement and change initiatives in healthcare settings, particularly in the form of 'focused' and 'rapid' ethnographies. This new ethnographic genre is tailored to suit narrower enquiries within clinical pathways. However, the application of ethnography to the evaluation of quality improvement is not straightforward or free from reductionist bias, particularly in hospital settings where interventions take place during a limited period of time and instigate change in busy and sensitive settings. This paper discusses problems and emergent solutions involved in conducting an ethnographic process evaluation of co-design projects in lung cancer and intensive care unit services in two hospitals in England. The mixed-methods ethnographic evaluation consisted of observations of the co-design process and triangulation of findings with interviews, questionnaires, participant reflective diaries and service improvement logs. Limitations of observational time and distance from 'the field' were overcome by making most of the pre- and post-event observational periods, situating quality improvement within the wider context of clinical practice, achieving attunement with local clinical cultures and engaging participants in collaboratively guiding observational and interview design. This approach led to a focused ethnographic evaluation that accommodated ethnographic principles to obtain rich insights into quality improvement processes despite the limitations of short-timeframes and the hospital setting.