By Ian Gee – cross posted from: Albany OD
Perma-austerity’, is what some are calling the new world the public sector finds itself in. Budget reductions and the need to reshape services has led to many public sector organisations exploring how they can operate in a more commercial way. Being more commercial appears to holds out the possibility of generating additional income, raising levels of efficiency and effectiveness, securing inward investment and creating a thriving local economy. It also offers the possibility of keeping services, often in a reshaped form, that would otherwise be lost as part of a package of cuts.
During my consultancy assignments at Albany OD it is very common to hear leaders say “We want our managers to be more commercial, entrepreneurial and business-like”. However as they talk, it becomes clear that no one should underestimate the challenge becoming more commercial, in a public sector context, presents to organisations and those that work in them.
Whatever it means in theory, in practice it means a massive, step change in the way public services think about themselves and how they do business. It also changes the way in which we, as consumers, are likely to experience the services they provide. Commercialism challenges current models of leadership, management and employment. Ultimately, for good or ill, it is likely lead to new types of organisations delivering reshaped and transformed public services.
I have heard of some interesting commercial experiments. I know of local authorities that are trading most of their services. So for example; the local dog wardens will provide, for a fee, advice on dog nutrition or safety around dangerous dogs, an authorities secretariat, for a fee, will provide services such as agenda setting, minute taking etc. for your AGM and revenue services providing a ‘no win no fee’ debt collection service for individuals and businesses. I know of cases where a local authority maintenance service has raised income by offering its service, for a fee, to employees for home repairs and an authority that as well as carrying out road maintenance will also tarmac your drive for a fee. Other authorities are ‘land banking’ outside of their area and in one case an English local authority is buying and letting industrial units in Wales.
Many people find the idea of commercialism threatening. It raises concerns about cuts, organisational change and job losses. Some fear it will challenge their personal values and commitment, others fear it will devalue their professional ethos and status. It also raises questions about the way services are organised and delivered and the people who are leading and delivering them. Do the organisations have the kind of culture, values and beliefs that will allow them to operate successfully in the commercial world? Do public sector employees have the skills, capacity and capability to work in this new way? Previously I have written about the challenges of bringing entrepreneurialism into organisations and I think this applies equally to commercialism in the public sector. If you want to read more about this you can find my latest writing here.
From an OD point of view it is not just a case of ‘lets close down the organisation and reopen, in a more commercial way, in 3 months time’! This is a change that has to happen whilst continuing to deliver excellence to local communities. I would describe it as like retooling a space rocket whilst on the way to Mars! Another way in which some organisations are approaching this issue is to recruit staff from the private sector, in the hope that they will somehow shift the culture and bring about the change. Whilst bringing in skills may be a good idea, the risk here is that you are working on an assumption that your current staff don’t have any of the skills needed and also you run the danger of ‘Tall Poppy Syndrome’. That is those people brought in are considered special and treated as such and this breeds resentment across the rest of the organisation.
At Albany OD we have been giving this a lot of thought. We believe that getting the right kind of OD plans and actions in place is absolutely critical if public services are to reap the rewards of greater commercialism and at the same time avoid the pitfalls. OD has a part to play in the work needed both before commercialism decisions are made as well as in supporting successful implementation once plans are in place. To find out more about our thinking you can look here.
You will no doubt have noticed that I have not taken a stance on whether or not I think public services being more commercial is a good idea or not. I do believe that were it not for the current economic climate, the idea of a more commercial public sector would be seen as a distraction from the organisations core mission. However I do believe that the current move towards a more commercial public sector, if it is managed in the right way, can be seen as an exciting way of renewing the public sector and potentially lead to both exciting career opportunities and a much more engaged way of working with the public these organisations are designed to serve.
It would be great to hear what you think about this and any examples you have of where a more commercial approach is paying dividends as well as where it has gone wrong. This will help us to learn from each other and develop new ideas as to how OD might help move the agenda forward and increase the chances of success.