Taunton Deane and West Somerset – Towards the enterprise authority

Our Deane Helpline is a service which has been providing a lifeline and response package to people for over 30 years, along with associated monitoring of Lifeline alarms across the South West. Its purpose is to support people to live as independently as possible within their own homes and to prolong their quality of life. This case study forms part of our productivity experts resource.

Efficiency and income generation

We have revamped our strategy, increased the range of services we offer to customers and are developing direct sales and marketing. The impact of the Productivity Programme has seen a shift in the way we think about managing our service budgets, how we generate additional revenue to invest and how we approach decision making in a more commercial way. These changes to our approach are not just beneficial to this project, but right across the council’s services.

With the wider transformation programme across the entire council in full swing, and the foundations of these commercial principles being adopted into the Deane Helpline model, coupled with the improvements and gains already made, now is the time to take stock and consider what the next chapter in this ambitious programme will be.

The challenge

Taunton Deane and West Somerset Councils appreciate that Local Government generally has little alternative but to make significant changes to their organisation, people and processes.

Without this, our ability to continue delivering current services to our communities, let alone improve them, will be at risk. The reasons are well understood.

In this context, we have already embarked upon a radical programme of transformation. Alongside and complementary to this initiative, we successfully secured a small amount of funding from the LGA to explore and develop options that would generate additional income, by fostering a more enterprise-driven mindset within both senior and operational management.

The solution

With the help of Archemys, we organised a series of structured management workshops. Here, managers adapted private sector business models, tools and techniques to several services that we are presently engaged with. These models include:

Asset leverage
The identification of commercial assets that can be 'monetised' and differentiated from competition. This involved how these assets will deliver early and repeatable Return on Investment [RoI]. In turnarounds, soft assets are often unrecognised, yet when re-applied, the quickest to deliver. An example of leveraging our existing asset base in this context has been in relation to our customer database. We hold the details of a great many people that have the potential to be customers of or referrers to our service. However, we have not used this data in any meaningful way. By engaging with the individuals for whom we hold this data on, and seeking the relevant permissions, we have been able to build a meaningful relationship with many and turn them into champions of the service, which in turn can and has led to an increase in customer referrals.

Continuity income
Predictable, repeating income fosters scalable growth, efficient resource management and lower overhead. Aligned with this is the ability to rapidly scale early successes. Authorities can sometimes fall into the trap of 'aiming low'. This model is particularly pivotal to a self-sufficient authority.

Customer-centricity
A cornerstone of our prerequisite 'Mindset & Perspective' shift. A common - potentially fatal - weakness of many early-stage businesses is that they become what Archemys calls product polishers. They spend time building products and voluminous business plans, invest their time and savings in developing products – only to find they have few customers for them. In-depth customer intelligence and the right tools to recruit them are gained and tested in the market; in parallel to demonstrating real RoI potential and building a credible business plan.

Process effectiveness
Successful private sector companies benchmark processes for effectiveness in terms of:

  • revenue generation
  • cost efficiency
  • time efficiency
  • market differentiation etc

Local authorities maintain statutory processes, however perhaps too many others are not RoI benchmarked and have morphed into restrictive and expensive rules and protocols. Equipped with these and other models, our managers gained many insights that shifted mindset and perspective. In addition we were able to briefly test-drive several commercial principles and tools that are used to build successful private sector enterprises – within a Local Government context. The commercial principles that were considered initially was to look at and understand our customer acquisition and the costs associated with this and how this could be improved (linked to our customer segmentation process), the business model we had in place and whether this was relevant and indeed appropriate and a key principle that we employed was to ensure we did not ‘over polish’ any potential new product to the market.

The work with Archemys provided a basis for our councils' current approach to commercialism. Archemys define commerce as being “the efficient exchange of value for reward.” This was helpful to focus our minds on what our primary ‘reward’ was from the activities being undertaken and how we could then value this reward.

We also now understand that in the current financial situation, it's crucial to first establish the essential level of reward – then determine the value that customers would exchange this for.

Given demands on our limited resources, it's important to focus on one or two major opportunities at any time.

This shift and the development of new capabilities will continue to thrive. Initially this will be within Deane Helpline, one of our key services but we envisage that this in turn can become a benchmark venture; acting as a catalyst elsewhere in our transformed organisation. A further step towards the concept of the Enterprise Authority.

The impact 

“The impact of undergoing this process has allowed us to view the business with a new lens. By taking a different approach to how we view who our customers are and how we ‘acquire’ customers and the associated cost of this, we have been able to see an increase of approximately 200 customers for this financial year.”

Deane Helpline has a 30 year track record of expertise and service to a number of communities. However it was marginally 'loss-making' and in current economic circumstances, its future was naturally under consideration.

The re-engineering of Deane Helpline is now under way and it is presently demonstrating a very successful future. Early milestones have impacted our sales and marketing conversions and revenue, our product range and customer demographic. By undertaking a review and analysing our different customer streams, we have been able to develop different marketing messages for each customer sub group. This has resulted in a 15 per cent increase in referrals from one customer sub group just by undertaking this one task alone.

The insights and understanding gained thus far are already being employed beyond just sales and marketing and product development. Other areas include improved pricing strategies and service delivery programmes. We are now implementing the results outlined above and have targeted ambitious but achievable returns from one of our present services. It's important to make clear that this return has several dimensions:

Payback

  • financial self-sufficiency of the service
  • increasing service quality and scope
  • improved reputation and standing
  • prototype for our other services

How is the new approach being sustained?

The LGA Productivity Programme was the start of a challenging journey, producing some early returns. However, we recognised that unless changes in mindset, perspectives and techniques were immediately applied, their value would soon diminish.

Hence we're essentially 're-launching' Deane Helpline  – firstly in local, then regional and later in national markets. Also we'll be monetising 30 years of expertise plus systems and processes, in training and supporting other service providers.

Lessons learned

  • Without our fundamental change in mindset and perspective, we probably would not be rebuilding Deane Helpline and in the near future may possibly not have retained the service.
  • We are far more customer-centric strategically, tactically and operationally. For example, by treating specialist partners as customers, they've had a substantial impact on revenues in just the first few months. Segmenting our customer profiles is allowing us to broaden our product range, increase customer value and our financial returns.
  • Commercial financial models have provided a forward looking budgetary approach-as evidenced by the generation of our own operating budget for the provision of new products. This was generated by buying a few products using an existing budget to ‘on sell’ with a robust margin attached to it, therefore generating a surplus on that product to be reinvested to create a greater budget for the purchase of such products.
  • Getting into the market with an early pilot builds confidence, tests products and programmes, benchmarks the basis of the business case – without 'betting the farm'.
  • Direct marketing programmes today is based upon customer values and service and is not in conflict with professionalism and ethical responsibilities
  • Modern digital tools can be quickly deployed to secure early wins. For example, facilitating engagement and fulfilment for health and care professionals. Examples of these are intelligent, online referral forms that allow for a greater streamlined process and the better collection of relevant data. 

Contact

Liam Canham - L.Canham@tauntondeane.gov.uk

Links to relevant documents

http://deaneassured.co.uk/