User blog: 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.
Have you ever failed?
Do you regard yourself as a failure?
Have you ever monumentally failed or failed at anything and were deeply embarrassed about it?
If you didn’t answer yes to any of the questions then we need to talk. It’s worth putting down that magic wand, take five minutes away from perfection and read on. If you answered yes each and every time then well done but perhaps it’s also worth reading on too.
A quick definition search of the word failure will find something like “a lack of success in doing or achieving something” pop up on your screen. So why is it then when people fail we look down on them and avoid them at all costs? Why do we manipulate our children’s lives to avoid failure at all costs? How will that prepare them for life or perhaps starting their own business in years to come?
Sir Richard Branson, the darling of entrepreneurialism has a long list of failures to his name. Remember Virgin Coke, Virgin Cars, Virgin Brides or Virgin Express? So, do you label him as a failure, shun him and put him on the naughty step? In reality, he has a really healthy and positive attitude to failure that supports learning from it and moving forward. Incidentally, he states that it stems from parental advice and support. We can learn a lot from his positive attitude to mistakes and failure in general. Elon Musk, Walt Disney, Steve Jobs, Arianna Huffington, Bill Gates, Edison, Dyson; all failures who dusted themselves down and went on to great success.
Now you may be reading this and nodding to yourself convinced you know this and that its part of your everyday life. But how often do you build opportunities for people in your team to learn from their own failure? I once had an interesting “debate” with a recruiter who was determined that all failure was wrong and had no place in business or an organisation. I disagreed rather vigorously. I believe we can build situations and scenarios where people have an opportunity to take risks, try something beyond their current capabilities and allow for the possibility of failure. The rewards for success are magnified and the lessons from failure are invaluable.
I have worked with numerous organisations that have a formal “lessons learned” processes where the output forms little or no input to the planning of new ventures or projects. I am no longer surprised by this revelation and continue to ask why this would be the case. Despite this, these organisations are a step ahead of those that never reflect on failures or successes but what is it in our psyche that prevents us from opening that door to failure?
I’ve discussed the concept of failure with many entrepreneurs over several years and the response has been relatively consistent and unfortunately unchanging. We have a much more negative response to failure in the UK compared to the USA. This is prevalent throughout government, media, investors and academia. To comparable organisations in the USA, failure is inherent in leading to business success. It’s simply part of the journey.
I was fortunate to sit through a lecture by Tal Ben-Shahar, who at the time was delivering the most popular course Harvard University had ever seen. He had a refreshing view on failure and perhaps not unsurprising based on his background. He believed failure was an inescapable part of life and left me with my favourite and most over used phrase “Learn to fail or fail to learn”. Ten years later and I have quoted him many times. It has become a mantra.
Returning to my original questions, perhaps the one “yes” I may challenge is the person who regarded themselves as a failure. To fail doesn’t mean you are a failure. To fail and to learn from it is a pathway to success. To fall over and stand up again is success. To fail, hide your shame, ostracise yourself and keep your head down, well perhaps you need to work out how to move forward.
So what can we do to make failure a key part of success? Here are some of my suggestions but I would love to hear yours.
- Build a learning culture – It sounds obvious but really it isn’t. Ask yourself what do you do in your business to really capture failure, learn from it and ensure it is a key part of every new initiative in your organisation.
- Fail Safe – Are there opportunities for people to fail in a safe way? Clearly this is a sensitive area but there will be ways that subordinates can stretch their abilities and potentially fail without damaging the organisation or its customers. What they learn from this is vital and invaluable.
- Accept, understand and analyse failure – If failure happens then don’t hide it. Seek to understand why it happened. Don’t ostracise the individual. Make it a key part of the learning that people understand exactly why the failure happened. Perhaps this is where academia etc. can support us most by accepting it into our culture.
- Accept innovation often brings failure – We love innovative people and the goods and services they bring to enrich our lives. Accept and remember that much of what they do now was built on a pyramid of failure.
- Purple Hearts – In America every soldier wounded in conflict is awarded a purple heart. They know the pain that preceded that award and are respected for their courage. Pin a virtual purple heart on your business colleague whose latest venture has not gone the way they wanted, dust them down and thank them for their service.