Applying commercial acumen

What does applying commercial acumen mean?

The ability to consider the legal and commercial viability of a transformation initiative which includes the potential investment, or development of a commercial entity or service within the council’s portfolio.

Knowledge

• Knowledge of legal basis for commercialisation and powers available to local government.
• Knowledge of the market in which the services will be sold, and the target customers.
• Knowledge of investment and business models.
• Knowledge of profit and loss accounting.
• Understanding of the organisational and political context and appetite for risk.
• Understanding of true service delivery cost, including unit pricing.

Skills

Able to:

• Conduct market research: To understand the revenue potential within the market, including customer needs, likely market demand, strengths and weakness of competitors and pricing parameters.
• Apply legal knowledge: To determine the legal basis for commercialisation of the service, any existing powers, and potential business model vehicles.
• Think strategically: To ensure the initiative is in keeping with the organisation strengths and is a fit with the overall strategic outcomes and political ambition of the Council.
• Collaborate and communicate: Working effectively with a cross functional team to input to analysis.
• Analyse the feasibility, viability, and costs: Including the completion of a commercial risk and liability assessment, analysis of current and future cost of service delivery, research on any regulations around the service, complexity and effort required to design and build the new service, any constraints, and risk.
• Develop an options appraisal: Setting out findings from discovery activities including market research, advice from legal colleagues, feasibility, viability, and strategic fit.
• Apply stress testing: Ensuring in the context of the overall risk and change within the organisation, the initiative is the right thing for the organisation to do.
• Define a go to market/business plan: Setting out the value proposition, and unique selling points of the service offer, revenue projections, risks.
• Create a project plan: For the design and build of the service, working with subject matter experts to create a realistic timeline and set of activities with aligned resources.
• Create a final business case: Setting out the recommended option to take forward, the associated costs, potential revenue, risks, timeline, and measures of success.
• Design and build the service: Using user centric service design techniques to understand customer needs, completing user research, service blueprinting and prototyping before building the end-to-end service.
• Continually review the Business Plan: Ensuring the business initiative remains viable on an ongoing basis.
• Manage risk: Identity, assess and manage the risks associated with commercial service delivery to ensure delivery remains within risk appetite.

Behaviours

Behaviours associated with planning infrastructure needs require team members to be:

• Collaborative
• Analytical
• Solution focused
• Decisive
• Resilient
  Organised
• Adaptable and pragmatic
• Committed to continual learning

Finance for transformation – maturity index

A related finance for transformation maturity index has been created to enable councils to understand their current maturity and to set, and work towards, a target state. This can be downloaded below.