Implementing A Commercial Strategy

14 October 2019

Session Objectives

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In this session we will share with you what we’ve done in terms of:

• Our journey so far….

• Public Value

• Our commercial strategy

• How we are embedding commercial acumen in decision making and problem solving across the organisation.

Our Journey So Far….

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• Commercial Policy – Endorsed by Council in July 2018.

• Commercial Strategy – Policy and strategy implementation update taken to Council in February 2019.

• Progress To Date – Bottom up budgeting undertaken last year, to be further embedded this year.

• Commercial Acumen Training - Commercial acumen training rolled out to key members of the organisation.

Public Value – Should be central to our decision making

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Is this what our community (at large) wants?

Where private companies are measured by their shareholders based on the value of their shares and dividends, this Council and its staff will be measured based on our ability to deliver services and infrastructure efficiently.

Services and infrastructure are funded by limited resources (Council Rates, etc.) and are for the benefit of the broader community.

Council will lose community trust and our ability to function if we only focus on the squeaky wheel (smaller factions of the community).

ABILITY TO DELIVERSERVICES

EFFICIENCTLY

LIMITED RESOURCES

CUSTOMERREQUIREMENTS

COMMUNITY TRUST

Our Commercial Vision

• Our vision - is for Mount Barker District Council to become an innovative and entrepreneurial authority that continuously drives positive outcomes through the application of commercial thinking, processes and decision making in the best interests of the community.

• Our staff - will involved in actively seeking out potential for reviewing services, and will have a reputation for being aware, willing and capable

• Commercial Culture - We will adopt a commercial culture whilst retaining strong public, community and social values. We are willing to partner with others who share our ethos and values.

• Governance, management and performance - of commercial enterprises, partnerships and contracts will continue to be robust to ensure that the council adheres to its statutory responsibilities and that public money continues to be appropriately used and accounted for.

Strategic Aims

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Our Objectives & Principles (1)

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• Business thinking is front of mind in all decision making and service deliver.

• Staff are empowered to be innovative and creative in the planning for and delivery of services.

• Business plans are developed and embraced in all service units of council.

• Systems and processes support the commercial and business approach to service delivery.

• Business units that provide a market competitive service are individually identified with detailed business plans including financial plans, marketing plans, risk management plans and detailed reporting requirements.

• Commercial expertise is developed and a board with internal and external appointments be established to advice on the performance and planning of current Business Units and the creation of future commercial activities.

Our Objectives & Principles (2)

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• Explore every opportunity to partner with community groups, government agencies, other councils, schools and private enterprise to provide services and other benefits to our community.

• Establish a pricing framework that reflects the true cost of services in a businesslike manner including return on investments, depreciation and market factors. Where pricing includes social or environmental factors, these will be clearly and transparently communicated.

• Develop a program of future capital works and service initiatives so as to be best placed to secure external grants and funding opportunities.

• Explore the potential to link Sponsorship opportunities between private enterprise and community outcomes.

• Promote the trading of market competitive services offered by business units to raise income for council.

Commercial Strategy – Implementation

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COMMERCIAL STRATEGY – IMPLEMENTATION FRAMEWORK

BUILD STRONG PARTNERSHIPS &

COLLABORATION (Luke Gray; Brian Clancey)

1 – Identify & understand all organisations within the region

that provide services to the

community 2. Prepare a framework to identify,

discuss, negotiate & document

partnership opportunities 3. Develop shared forward work

plans with partners to identify &

minimise areas of duplication & opportunities to work together

4. Promote strategic & detailed

action plans of Council widely to increase awareness & potential

partnership/collaboration

opportunities 5. Prepare a sponsorship program

of activities, developments or

services that may be attractive to private sponsorship & actively

promote program

EMBED COMMERCIAL THINKING

(Andrew Stuart)

1. Communicating clearly & effectively with external organisations 2. Being open to suggestions for improvement, innovation & development from third parties

3. Develop a pipeline of strategic projects that can secure external funding 4. Establish an approach for encouraging and approving external funding bids

PHASE 1

IMPROVE SYSTEMS &

PROCESSES / BUSINESS

PLANNING MODEL (Alex Oulianoff; Paul Emes;

Julie Scoggins)

1. Clearly identify service units across the organisation with

each unit preparing &

delivering services aligned to the annual business plan

2. Annual business plans identify services delivered,

customers, service standards,

business improvement

opportunities, pricing, risk

management & financial plans

3. Service units operate in an open commercial market

environment selling their

services to both Council & the general public

4. Develop a framework for the

structure, management, operation & reporting

5. Strengthen corporate

systems & processes to support Council’s commercial activities,

including referral to & input

from the Commercial Board

STRATEGIC PROCUREMENT

(Alex Oulianoff) 1. Adopt a strategic approach to

procurement

ENHANCE COMMERCIAL LEADERSHIP, AWARENESS & CAPABILITY

(Greg Parker & Anne Pett)

1. Develop a communication & engagement plan to involve all staff &

elected members in Council’s

commercial approach 2. Establish a skills development

program for staff & elected members

to build organisational capacity to

deliver outcomes

3. Establish a Commercial Team within the organisation that supports

& advocates the implementation of

the commercial strategy 4. Establish a Commercial Advisory

Group/Board comprising staff &

external experts to provide high level strategic & commercial advice on

current Business Units and future

commercial projects.

PHASE 2

Phase 1

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EMBED COMMERCIAL THINKING

(Andrew Stuart)

1. Communicating clearly & effectively with external organisations

2. Being open to suggestions for improvement, innovation & development from third parties

3. Develop a pipeline of strategic projects that can secure external funding

4. Establish an approach for encouraging and approving external funding bids

Phase 2

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ENHANCE COMMERCIAL LEADERSHIP, AWARENESS & CAPABILITY(Greg Parker & Anne Pett)

1. Develop a communication & engagement plan to involve all staff & elected members in Council’s commercial approach

2. Establish a skills development program for staff & elected members to build organisational capacity to deliver outcomes

3. Establish a Commercial Team within the organisation that supports & advocates the implementation of the commercial strategy

4. Establish a Commercial Advisory Group/Board comprising staff & external experts to provide high level strategic & commercial advice on current Business Units and future commercial projects.

Phase 2

13

BUILD STRONG PARTNERSHIPS & COLLABORATION

(Luke Gray; Brian Clancey)

1. Identify & understand all organisations within the region that provide services to the community

2. Prepare a framework to identify, discuss, negotiate & document partnership opportunities

3. Develop shared forward work plans with partners to identify & minimiseareas of duplication & opportunities to work together

4. Promote strategic & detailed action plans of Council widely to increase awareness & potential partnership/collaboration opportunities

5. Prepare a sponsorship program of activities, developments or services that may be attractive to private sponsorship & actively promote program

Phase 2

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STRATEGIC PROCUREMENT(Alex Oulianoff)

1. Adopt a strategic approach to procurement

Phase 2

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IMPROVE SYSTEMS & PROCESSES / BUSINESS PLANNING MODEL

(Alex Oulianoff; Paul Emes; Julie Scoggins)

1. Clearly identify service units across the organisation with each unit preparing & delivering services aligned to the annual business plan

2. Annual business plans identify services delivered, customers, service standards, business improvement opportunities, pricing, risk management & financial plans

3. Service units operate in an open commercial market environment selling their services to both Council & the general public

4. Develop a framework for the structure, management, operation & reporting

5. Strengthen corporate systems & processes to support Council’s commercial activities, including referral to & input from the Commercial Board

Commercial Acumen Training – Our Approach

• Commercial Champions – We selected 12 champions from across the organisation.

• Clear Mandate – Trained in advance of main sessions with a clear mandate to:

Lead by example Coach and mentor Advocate Support in training Link to departmental approach Embrace change Celebrate achievements

• Major Investment – Two one and half day workshops. Both sessions attended by CEO, CFO and Manager, Financial Services with key staff members in attendance.

• Training Approach – Interactive training sessions with group activities. Led by experienced consultant in conjunction with CFO and Manager, Financial Services.

• Materials – Used theory, local government practice and Mt Barker Council examples.

Commercial Acumen Training – Scope

• Public Value – Introduction by the CEO.

• Commercial Strategy – Presented by the CFO.

• Strategic Plan Life Cycle – Overview of Strategic Plan, LTFP, AMP, Corporate Plan, ABP and Budget.

• Long Term Financial Plan – Focus on importance of financial sustainability.

• Resource Optimisation – Charging out time. Fixed vs variable costs.

• Source Of & Allocation Of Funds – Using the budget as a base showing where our funds come from and the different ways we can look at our cost base.

• Efficiency & Effectiveness – Continuous improvement.

• Service Review – Teams worked through real life examples and presented back.

• Project Governance – Introducing portfolio planning, investment appraisal techniques, business cases and gating.

What’s Next?

• Integrated Business Planning – We will be taking an integrated approach to business planning that incorporates the Strategic Plan, Asset Management Plan, Corporate Plan, Annual Business Plan and Budget.

• Service Register – We are currently building the first draft of our service register.

• Service Review Framework – We are currently developing our approach to service reviews, something that Paul will take you through next.

Questions?

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