Commercialisation is about far more than simply profit. It’s about integrating commercial awareness with public sector values to help deliver better and more sustainable services for residents. Chris Bradley, Head of Commercial Development at East Hampshire District Council explains.
We know that a big problem facing many local councils is that staff don’t understand why they’re getting involved in commercial activity. They can struggle to get behind an activity that may be defined as being focused on generating the highest possible profit. It’s still relatively new territory for many councils, and for some it invokes a negative response from colleagues and communities. However, commercialisation is about far more than simply profit. For us, it’s about integrating commercial awareness with public sector values to help deliver better and more sustainable services for residents. Integrating communications from the beginning and being as transparent as possible are key to effective communication and a successful commercial transformation.
- Your first priority should be to define, agree and communicate what commercialisation means to councillors and the executive – simplicity and clarity is key.
- Develop a clear social purpose and put it at the heart of everything you do and say – from governance to operations and everything in-between.
- Build a values based narrative, ideally tell your story with your staff, using case studies and personal accounts where possible. Illustrate how you will balance the needs and priorities of people, place and profit.
- Embed commercialisation into the fabric of your council – it should be a ‘golden thread’ through the corporate strategy, included in objectives and performance targets where appropriate.
If councils are to survive in the current changing and challenging social, political and economic landscapes then we have to radically change. But how do we do this? At East Hampshire District Council, like many others in recent years, we’ve turned to commercial activity to try to improve our finances. The activities we’ve undertaken range from sharing services and investing in leisure centres to major regeneration projects.
The word ‘commercialisation’ has traditionally negative connotations in certain circumstances, especially in the public sector. But councils are increasingly turning to commercial activity not solely in the pursuit of profit, but as a viable option for running the “business” more efficiently, improving our financial position and allowing us to improve the lives of our residents.
Communicating this hasn’t always been easy and we’ve learned a lot along the way.
One of the reasons so many of us work in the public sector is because we want to do something that’s not solely driven by profit. We don’t want to work in a traditionally commercial environment. Right from day one it was important that we explained what commercialisation meant to us and why we were embracing it. We sought to answer any questions or concerns colleagues had - to ensure we could then all deliver the best possible services for our residents.
Once people understood that commercialisation in this context isn’t just about making a profit, but was a necessary evolution that would enable us to deliver the best possible public services, they were excited about what we were trying to do.
We defined commercialisation as: ‘the principles, practices, and spirit of commerce applied to the public sector in order to deliver greater environmental, social and financial value’. Emphasising the real value of our commercial activities was essential in our definition.
A clear social purpose
Once we had decided to branch out into the commercial space, we needed to create and communicate a clear social purpose for each of our commercial activities to our staff and councillors – and then to our residents.
It was important for us to communicate how we were embedding this social purpose into our governance, oversight and performance. This provided clear lines of accountability for the delivery of the purposes we had set out.
Commercialisation marked a significant change in how our council thought and operated. For our commercial activity to be a success we needed to ensure that our staff not only understood our purpose, but that they embraced it fully. Without staff on board with the shift, we simply wouldn’t be able to evolve. It’s been most important to share the journey and co-design the purpose with our staff and councillors from the beginning – to talk candidly about our plans and concerns, and to be open to ideas and suggestions.
Shaping your values based narrative
The most important piece of advice we would give to other council communicators who are starting this process is to tell your story, ideally with your staff, and link it to your values, using case studies and personal accounts where possible.
At East Hampshire, we launched an internal communications campaign, ‘Fit for Future’, which was all about using the commercial skills we had to give other colleagues the skills they need to embrace our new approach, for example better financial training. We were pleasantly surprised at the level of commercial skills we already had within the council. Asking staff to lead the training helped build their confidence, build long-term relationships and ensure our values were embedded from the start.
We also ran ‘Lessons in Leadership’, where we invited speakers from other organisations to come to talk to staff about the challenges and changes they had faced in similar processes, and how they had embraced them. These were really interactive, motivational sessions and staff really enjoyed and learned from them.
The need to think differently led us to establish our own trading company, EH Commercial Services Ltd (EH), to deliver litter and dog fouling enforcement in 2016. Taking a commercial approach would enable a cultural change within the council, allowing the team to develop its commercial skills while retaining a public-service ethos.
The purpose of EH is ‘helping to improve the environment through ethical enforcement.’ - underpinned by values of fairness, honesty, integrity, accountability and community. Public accountability is assured through a shareholder committee consisting of council cabinet Members, supported by key paid executives.
Having run a series of yearlong trials with the support of neighbouring councils, the service has continued to evolve. EH now delivers a high quality, cost neutral service to eight councils across the south; from Salisbury to Arun and Chichester to Hart.
Commercialisation – it’s a constant learning process
We’ve learned a lot in recent months about what works and what doesn’t, and are constantly reviewing and adapting our approach.
It’s normal that people within a council experience the stages of change differently and at different times. This needs to be factored into your communications. For example, our senior management team were a step ahead in knowing the acute need to embrace commercialisation. So, when they were articulating this to staff, they had already processed the need for change, understood why it needed to happen and were already thinking about how they could embrace it.
However, it’s important to realise that staff who aren’t at the forefront of the change need to process and understand what this means before they can embrace it. Messaging and the timing of those messages need to be considered and delivered at the appropriate time and in the appropriate manner for different audiences. For example, we shaped our definition of commercialisation in a way that made our aims clear and transparent, aims that we knew our staff could get behind.
It was also important that we recognised our previous successes and that just because we were evolving, it didn’t mean that what we had done previously was wrong – it was just a natural part of our continuous improvement journey.
To other councils embracing commercialisation, we would say you need to embed it into the fabric of your organisation. This is worth doing as early as possible. Include it as a ‘golden thread’ through your corporate strategy – as well as including it in team objectives and even as individual targets where appropriate.
Acknowledge the risk
It’s important to communicate the risk of not adapting and embracing commercialisation. It’s okay to be honest about the risks to finance, scope and quality of service and to say that these risks are far greater than the risk of starting out in the commercial sphere. That goes for residents too. Residents want to know why councils are making the decisions they are making about where to spend money and how to invest. You can balance transparency and commercial confidentiality in your communications so that your residents can understand and hopefully support your approach.
Undertaking an audit of your organisation to see how you can take a more commercial approach in any area is key to identifying your strengths and weaknesses. We found that by doing this we could ensure we were being as effective and efficient as possible.
We’re really pleased with our results so far and that our approach appears to have paid off. Colleagues and councillors are passionate about our commercial projects and are excellent ambassadors for our work. We were delighted when our approach to commercialisation resulted in being shortlisted for an ‘Entrepreneurial Council of the Year’ award.
People have also seen this is a great opportunity to gain new skills as part of their personal development.
Staff enthusiasm has meant that our teams have been bursting with ideas about how they can apply the principles, practices, and spirit of commerce to the services we provide and help deliver greater environmental, social and financial value for residents.