Commercialisation: the road to resilience

The road to resilience: Councils should be risk aware, not risk averse. Staff should be empowered and incentivised to be entrepreneurial, fostering and encouraging creative thinking.

For some councils, the term ‘commercialisation’ is used to describe a focus on increasing revenue to balance the books. For others, it is about a broader agenda, such as fostering an entrepreneurial culture or as a means of creating or regenerating vital communities. In my role at Local Partnerships, I lead our strategic approach and provide support to councils on successful commercialisation. Over the last couple of years, I have observed that commercial skills have become integral to achieving and sustaining financial resilience.

There is much good commercial practice in councils. Often, however, it can be fragmented, or achieve only part of its potential. Strong leadership, underpinned by a cogent and coherent corporate strategy, establishes tone and temperature for risk appetite and corporate behaviours. A willingness to innovate should be counterbalanced by an acceptance that not all commercially risky schemes will succeed. Councils should be risk aware, not risk averse. Staff should be empowered and incentivised to be entrepreneurial, fostering and encouraging creative thinking.

Risk mitigation is best achieved through diversification and avoiding over-exposure to market fluctuations. Diligent market analysis is critical to the avoidance of false-friend optimism-bias.

As with any successful enterprise, objectives, priorities, capacity and capability must drive the commercial strategy which, to be successful, will have effective governance and scrutiny. This must be secured at the highest leadership levels for both officers and members to avoid dissonance and distraction, as well as for successful prioritisation of areas with greatest potential to generate a commercial return.

To identify potential income streams, commercialisation requires a healthy and symbiotic relationship between council leaders, staff and other stakeholders. Investment in effective staff training is critical in developing wider commercial awareness and skills.

Councils should consider carefully their assets such as land, property and investments, and create a commercial strategy to maximise revenue from these assets. Before setting out, councils should judge realistically how much time and effort can be consumed by establishing new delivery vehicles. Introducing and sticking to a robust process at the outset establishes the path to successful results and strengthened resilience