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The Secret Sauce of Spinning Out

by Craig Dearden-Phillips 21/09/2015

When sat with senior public sector people, I am often pushed hard on just how new delivery organisations can achieve the same or better with less resources.  

The answer, which is never apparent whilst still sat inside a Council or NHS body, is that there is a Secret Sauce that cannot be easily cooked up whilst remaining part of a large public body.

That Secret Sauce is culture. It is clear that there is something extremely precious and important to be gained by giving public servants – or anybody -  the freedom to set up new enterprises with a brief to delivery more for less.  

Asked to make it happen, and given the licence to do it, people do take up the challenge and invariably succeed. 

The evidence, while patchy, points clearly to improved productivity, quality and innovation. It also suggests that new organisations quickly develop into wider markets and become less dependent on one public sector funder as time goes on.   

On one level, there should be no surprise about this.  

Management Buy-Outs have, for generations, been taking underperforming parts of large businesses and making a success of them. It is well understood in the world of business that if you give a group of people an opportunity and an incentive to succeed, they will often do a lot better than if left as a neglected cog in a Big Machine.

It has taken the onset of austerity to push the public sector to see the gains to be had by pushing business out to new ventures, whether these be mutuals, publicly owned companies or joint ventures. Whether you look at Aspire in Salford, which we helped to launch this year, or Chime in Exeter, who are expanding fast in the South West of England, the changes brought about by setting these ventures free, are visible to the naked eye.

The public sector landscape, in 2015, is still, in many ways, a bit like a hot, spartan desert in which you see the occasional bloom which makes you wonder ‘How can that grow while around it everything else is parched and wilting in the heat?’  

When you look more closely, you tend to find that the colourful flower has adapted better to the conditions because it has used its assets to move, fleet of foot, to a position whereby it doesn’t merely survive in the heat but thrive.   

Public sector austerity is only really now beginning to hurt. 

By 2020 I believe that there will be a far more diverse public services ecosystem than there is today. The choices are getting starker every day between adapt or die. The most adaptive, dynamic organisations will be those that deliver more – and this is right.   

That many of these will be spin-outs and social enterprises I am, on the basis of what I have seen of their performance from 2010, certain.  

Back to stepping out now