By John Knight
As anyone who has been divorced will tell you, it’s a lot easier to get married than it is to get divorced. When a relationship starts to go wrong, unpicking it is a lot more complicated than creating it in the first place. No one really wants to be the one to say something is not working but, just like a troubled marriage, if a trading company appears to be failing, the first step is to recognise the challenges early on and be honest about the problems.
Knowing when to quit with a trading company
Private businesses can be better at knowing when to quit than their public counterparts, and the ability to change their mind may not be in every local authority’s DNA. Local councils have a good track record for setting up new ventures, but are often not very good at declaring enough is enough. They may sometimes suffer from a certain amount of what I describe, in the words of Lewis Carroll’s White Queen, as ‘jam tomorrow’, in that there may be a temptation to think that things will get better, you just need to hang on a little longer. At this point, a reality check is required. Will it really be better? What makes you think it will be? What, if anything will have changed in another six, twelve, eighteen months?
If a trading company is not delivering on its financial promise, then the worst decision is to do nothing and let it keep losing money.
Reviewing performance is crucial to ensure you are getting the best value from your arrangements. Some trading companies may have not made their predicted profits. Were these over promised in the first place? Were the right people, with the right commercial skills set in charge? Are you exploiting all the opportunities you should be? Does the business case for outsourcing still stack up?
Investigating the business case for outsourcing
When investigating the business case for outsourcing, be really rigorous at the start of the process. At C.Co, we are often called upon to help develop a business case and it is part of our role to point out where potential areas of failure could be.
It is vital to have independent scrutiny to ensure you have evidence to show that outsourcing will be beneficial and it will achieve what you want it to achieve. One basic question I often come back to is, if this plan is a real money spinner, then why is the private sector not doing it already?
When it comes to commercialisation, we can help explore options for improvement or provide support to insource services back into the council.
If you are interested in finding out more, please get in touch with us today.