Natalie Abraham, Operations Director
I must start with emphasising that commercial activity within the public sector is not a new concept; the public sector has always operated in a commercial way to contribute towards the delivery of intended outcomes. Throughout the 19th century, when the building blocks of the modern public sector were created, Local Authorities invested in large scale capital projects which dramatically increased life expectancy, increased the size of the economy and improved the quality of people’s lives. Quite often these were created as municipal companies which created local jobs and returned profit back to the public sector to pay for our libraries and parks.
Fast forward to 2017, and whilst the drivers may have changed, commercial activity is increasingly viewed as an enabler to financial sustainability within the public sector. As efficiencies are made and there are fewer obvious routes to driving out further costs, I consistently see the most creative of organisations looking to secure new revenue as a way forward; being enterprising is now more important than ever.
There can be a temptation to make commercial decisions driven purely by the forecasted finances, trading for trading’s sake or without due consideration to the capability, key stakeholders, existing policies and intended outcomes of a service or organisation. From my observations, it is clear that this oversight can severely limit the deliverability of decisions made.
C.Co has worked with a number of entrepreneurial public sector organisations on projects driven by a desire to be more commercial and cost effective. What we see is that the most successful organisations are those which have a clear Commercial Strategy in place that defines not only where they want to be in regard to service delivery but, crucially, sets out the priority outcomes for the organisation. Having a Commercial Strategy reduces the risk of reactive or siloed decision making, contributing towards sustainable services in the medium to long term whether this is from fees and charges, establishing trading companies or alternative delivery models. Every organisation’s starting point is different which means that there is no one size fits all strategy.
With this in mind, I wanted to develop a logical framework for organisations to follow which would help you to develop your own bespoke Commercial Strategy. This was the starting point for the development of C.Co’s six-step toolkit. Determining the suitability of any commercial opportunity is driven by an organisation’s Commercial Strategy. I therefore believe that developing such a strategy is vital for ensuring that all activity is consistent with your organisation’s overarching aspirations and the key priority outcomes that you wish to achieve.
The C.Co six-step toolkit embraces our organisation’s core values of collaboration and evidence based decision-making. It takes you through a process that defines what ‘commercial’ means to your organisation and the specific objectives of your commercial activity. The toolkit, if followed in full, will ensure that a clear, useable strategy is put in place to support your organisation’s commercial activity going forward.
The process of developing a Commercial Strategy is a beneficial exercise for all public sector organisations, not least because the end product is a strategy that will result in effective decision-making at all levels. If approached correctly, the collaborative nature of developing the right Commercial Strategy for your organisation can also assist with the necessary cultural mind-set shift that needs to occur in order for true commercialism within the public sector to be successful.
I recently delivered a webinar on behalf of our parent organisation, CIPFA, entitled ‘Developing a Commercial Strategy’, which highlights our approach. You can view the webinar here: http://bit.ly/2fwrdsH