81% of organisations globally say that commercial awareness is needed to achieve main business outcomes. And, with 8/10 councils saying they would have to raise tax or cut services without their commercial activities, this is one of the most prominent and urgent topics in the public sector.
But for many organisations, it can be difficult to know where to start. Others may struggle to reconcile the idea of being commercial with the core purpose and values of public service. The Commercial Maturity Model from Human Engine sets out six key themes that we think organisations will find helpful when adopting a commercially minded approach to solving the complex problems of today’s world.
Strategy and Alignment
It starts with commitment, from the very top. Alignment of the organisation's policies, processes and leadership to its commercial strategy is key. Without the right operating context, a culture of entrepreneurship is unlikely to survive. The organisation's policies need to allow a degree of calculated risk taking. Its processes must allow it to act at speed when an opportunity arises. And the messages from leadership must be consistent and clear. For local authorities, this will include garnering broad support from Elected Members. And for the wider public sector, gaining buy-in at executive level.
The Strategy and Alignment theme of the Commercial Maturity Model sets out how the commercially minded organisation will set itself up for success. Here are a few tips to start with:
Agree overarching objectives for commercial activity. Be clear how this aligns to the purpose and values of the organisation. Adopt a simple statement of policy, endorsed by the leadership of the organisation and communicated to staff, partners and customers.
Be clear on risk appetite. There’s no sense in imbuing staff with the spirits and skills of entrepreneurs then tying their hands with process and rejecting every idea that entails risk.
Likewise, consider governance carefully and pragmatically. Organisations starting out on a journey of commercialisation may wish to put more controls in place to ensure accountability and care is taken in the use of public funds but, as you grow in experience and confidence, consider using the minimum viable governance for projects to allow greater agility.
Collaborate. Don’t create marketing teams in every department and make sure you’re not bidding for the same grants and contracts. Join things up internally (and with partners, if you can) and manage risks and opportunities together.
Leave no stone unturned. Don’t assume that certain services are out of scope because they lack the obvious commercial opportunities found in areas like property or regeneration. Any service that relies on the market to deliver needs to think commercially, too (Adults and Children’s – that includes you). It’s not all about generating income, it’s about being ruthless in the pursuit of value.
If you’re a public sector organisation on a journey of commercialisation and would like to learn more about how we can help you, get in touch at firstname.lastname@example.org
You might also be interested in our Commercial Academy courses aligned to this theme:
Establishing Commercial Acumen http://www.human-engine.co.uk/establishing-commercial-acumen
Strategic Thinking http://www.human-engine.co.uk/strategic-thinking