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Laurence Jackson

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Adopting Commercial Values

Faced with an austerity agenda from central government, UK public sector organisations are being urged to take a more commercial approach and adopt the values and mindset of the private sector. But what exactly does this mean? And how practical is it for a local authority, health trust or university to behave in this way?

Some public sector bodies see themselves as already highly commercial in their approach, striking innovative deals with private partners to deliver services that were once the exclusive province of public sector bodies, and transforming access to services through the implementation of technology. Elsewhere, the byzantine processes of many public sector functions are far from streamlined and cost-effective.

The push from the government is to take services out of the direct control of the public sector into some form of social enterprise or employee-owned mutual, in order to create organisations that are more nimble and responsive to client needs. However, national uncertainty about what forms of new enterprise should develop is reflected at a local level.  A number of innovative approaches are nevertheless starting to surface, including a proposed merger of three London boroughs planned to save £35m over three years, the exploration of a radical new ownership and governance model for FE colleges, converting existing bodies (e.g. British Waterways) into a charitable trust, and a wide range of consortia and joint ventures aiming to fill the void left by the abolition of traditional support frameworks.

To drive the necessary changes, progressive leadership skills will be essential. Organisations will value those distinctive people who demonstrate resilience and strategic vision, and critically, will have the courage to see through unpopular but necessary changes. There is a palpable need to abandon more traditional managerial approaches, and embrace those individuals that have the skill and guts for the road ahead.

Specific leadership attributes will emphasise productivity, innovation and an entrepreneurial outlook, taking ownership for outcomes – and for most this means a significant cultural shift within the organisation. Ultimately it is hoped that a new breed of social entrepreneurs will emerge. Such leaders will demonstrate flexible thinking, willingness to enter into partnerships, a change in thinking from ‘outputs’ to ‘outcomes’, empowering management style, and the willingness to embrace and champion a consumer-driven ethos.  These attributes match the findings of a recent Wickland Westcott study into transformational leadership in the public sector – Trailblazers.

Where will these skills come from? Bringing in commercial expertise from the private sector is part, but only a small part, of the solution. Internal employee development, with an emphasis on support and encouragement, will be critical. This must be allied to fast-track learning through partnership and associations, including with suppliers. Those public sector organisations retaining consultancy support over the coming years will be emphasising knowledge-transfer and legacy benefits, as well as value-for-money.

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