Impact with income: The public sector pursuit of healthy commercial growth

Matt Lloyd

By Jon Harding, Matt Lloyd

For public sector leaders, it’s increasingly important to think strategically about how to use resources and opportunities to do things differently. Pursuing new commercial approaches is a way to bring to life and take advantage of the innovation opportunity available to every public sector organisation.

While generating income is not the core purpose of any public sector organisation, there are considerable benefits for all. For example, we’ve seen public health organisations partner with academia and the private sector to drive forward medical innovation; local authorities improve the quality of critical services by working across regions; and organisations leverage the cutting-edge intellectual property developed by the UK Government to achieve outcomes that benefit people and society.

In our experience, a consistent, purpose-driven approach is needed to ensure the outcome is healthy income generation – activity that delivers with impact for the benefit of both the organisation and wider society. Here’s how to set a clear and consistent approach to healthy commercialisation:

Understand your organisation’s context

To set realistic ambitions, organisations must evaluate whether they have successfully pursued new commercial approaches before. It’s important to take stock of what’s realistic before planning the next steps forward – and then iterating towards a long-term goal.

We supported one public sector organisation in taking an honest appraisal of their organisation’s maturity in generating income from a managed service and what mattered most to them. This enabled the organisation to focus on the wider benefits of commercialisation and identify how to unlock additional value.

Be inclusive, bringing together a wide range of skills and capabilities

Successful income generation often requires a diverse team of experts. For example, commercial functions in the public sector may focus on the services and capabilities offered by the market, rather than what they can offer.

Inclusion is also about bringing together a wide range of views to shape new approaches, develop better propositions and better understand the potential opportunities for your organisation.

Invest in a collaborative, innovative culture

For many in the public sector, income generation can be seen as a conflict with their mission. We worked with leaders of a public health organisation to outline what their organisation aimed to achieve through income generation and how this enabled their overall purpose. In doing so, we championed the creation of a supportive culture that brought people along on the journey to achieve their commercial and strategic ambitions.

No ‘one-size-fits all’ approach

With every opportunity comes risk, and an over-reliance on commercialisation can lead to uncertainty or worse. For example, where income generation is ‘baked’ into financial baselines and becomes responsible for propping up core public services. Robust data and responsive governance structures are needed to ensure that decisions to pursue income generation are suitable for local teams and the overall organisation.
There is no single blueprint for guiding public sector organisations on how to pursue income generation. The key is for leaders to start the discussion – and to focus on healthy commercial growth that benefits all.

About the authors

Jon Harding PA economic development expert
Matt Lloyd
Matt Lloyd PA public sector strategy expert 

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