Blog entry by Scotland Excel
There are a few terms that evoke contrasting emotions within local government and “The Commercial Council” is certainly one of them. To some it is simply an oxymoron but to others it’s one of the paths to resolving the challenges of the wider public sector.
Understanding what the term “commercial” means and implies is generally at the heart of the debate. Implications rather than definitions appear to be at the core of many objections. In my own experience, the term evokes negative emotional responses of “outsourcing”, “service reduction” or “abandoning those most in need in our communities due to financial constraints”. Yet this couldn’t be further from the truth for those people and organisations that have started this journey.
Every single council in Scotland, and perhaps most of the public sector, can demonstrate an example of “commercial excellence” and how it positively impacts service delivery. But it is typically not prevalent throughout organisations or is it a core part of their organisational culture.
I created the graphic shown below on the 31st October 2014. As someone who can never remember dates, its unusual for me to recall that date so precisely. On that specific date, I was discussing commercial councils with a colleague and their views were so strongly against the concept I was left speechless. As I sat at home reflecting on the conversation, the tragic news broke about the Virgin Galactic crash in the Mojave Desert. I reflected on the dreadful news but was struck by the outpouring of public support for Sir Richard Branson and his endeavours. People recognised the risks he, his organisation and the pilots had taken to realise their mission. All recognised the potential for failure but were willing to take these calculated risks in order to reap the rewards. Using their extensive resources, they sought to innovate and undoubtedly profit from their enterprises.
We, the public, watched in admiration, felt grief at their failure but ultimately supported their endeavours. We wished them luck and hope they try again.
Now consider another example - Social Bite (http://social-bite.co.uk/). One of my favourite social enterprises. The founders, Josh Littlejohn and Alice Thompson set up this incredible project with a clear mission. They had little in the way of resources but instantly made an impact in their community. Failure was always a risk but they have now taken their idea to new heights and continue to develop it. They may not reap the monetary rewards through retained profit but the social value is evident for every customer to see.
We the public, watch in admiration, are proud of their achievements and support their endeavours.
The leap from Virgin Galactic to Social Bite may seem huge but consider the elements of risk, resources, failure, innovation and reward. They are common throughout entrepreneurial activity regardless of private or social motivation.
The right-hand side of the above graphic shows the public entrepreneur. In order to support a commercial council, we need to consider the previous two examples. For now, let’s ignore the academic discussion between intrapreneur and entrepreneur and consider what we need to do to work towards the commercial council.
Organisations need to consider the risks it is willing to take which are also acceptable for their services. Public bodies often have significant resources irrespective of how they have been reduced over the period. They need to consider the opportunities that are available. This will sometimes mean bringing services in-house but also sometimes involve devolving these services. Failure in many cases is completely unacceptable in public service but not in all cases. We need a new approach and attitude to failure. The public value delivered by local authorities and the wider public sector is immeasurable but the rewards and need to deliver more for less are unquestionable.
This final leap from social entrepreneurs to public entrepreneurs is the step we need to accept and take. This is the step towards the commercial council. It is a long journey. I would argue it is a generational journey and future generations will thank us for it. We owe it to our children and their children. We don’t want or need wholesale privatisation or cuts to our services. We need entrepreneurial leadership to take us on the journey.
So what are the aspects I would recommend to you?
Risks - What is the current risk appetite of your organisation? Is it simply dictated by the chief executive’s view of risk? If you are willing to take risks, then does everyone in your organisation know the organisational risk appetite? A few organisations across Scotland now communicate a one page organisational risk appetite to every member of staff. This allows every employee to understand what is acceptable and what is not.
Resources – Do you truly know and accept all the resources that are at your disposal? This often goes way beyond an asset register and must include your staff and may even be the geography outside your front door.
Innovation - How do you encourage innovation in your organisation? It needs to go beyond the suggestion box with the £10 reward if chosen associated with it. In my experience of the public sector, organisations have a plethora of ideas that often go untapped as staff are unaware that their ideas are welcomed.
Failure is one of the biggest challenges. Extensive research has shown that in general failure is unacceptable in the public sector. If people aren’t rewarded for innovation and failure is an ever-present possibility, then why should they try? We need to challenge this. I see the attitude to this slowly changing in the public sector but becoming much more challenging from a public viewpoint. This is a dichotomy that needs to change.
The commercial council may not be the ultimate panacea to the challenges we face in the public sector but it most certainly not an oxymoron. It is the right direction and by addressing some of the points covered above we can move towards it.
It just takes a few steps in the right direction to start the journey.