Sharon Crosland, Head of Corporate Affairs, was a key part of the MyCSP mutual joint venture process. She takes EQ through her six steps to successful mutualisation.
1: Understand your drivers
Before you embark on mutualisation, you need to have thought very carefully about why you want to do this and what is driving this change. Whether it is budget cuts or a major service challenge, you should understand fully why mutualisation is the best model for your business before you proceed. Having a firm idea of what is prompting the change will prove to be invaluable when you present your business case to your stakeholders.
2: Identify your stakeholders
Establish who needs to be involved in the process: who has an interest in your service/business? Depending on what sector you are in, this could have a much wider reach than just your management team and employees, especially if you represent the public sector. Think about your customers or service users too. Once you know who needs to be involved, you can then get an impression of whether or not they are likely to be supportive of the change. But to action change, gaining support from your stakeholders is critical.
3: Be a good communicator
Communication is key. You must engage with your people; talk to employees in the organisation, understand their attitudes and how they feel about things. Discuss what is going to be difficult and what is going to be easy and consult with them about what they think is best for the business. It’s also important to apply the same principles to your customers and stakeholders. They too should be kept thoroughly informed about what is going on. You’ll also get a range of different perspectives and some good ideas too!
4: Get the commercials right
Ensuring you have a firm grip on your finances is an essential part of executing a successful mutualisation. You should know what your business costs are, what the revenue currently is and what the potential revenue could be if the organisation is mutualised. You should also consider your assets – things like buildings and machinery – skills and capabilities and cash flow. These should all be considered before any decisions are made. If you are entering a competitive market with plans to grow, you need to understand your market and the competition. What can you offer that is distinctive and compelling for potential customers?
5: Consider your model
You should decide whether this is going to be a joint venture either with a commercial partner or with a customer or a fully employee-owned business. A joint venture involves two or more parties that have a vested interest in the business working in partnership to build a profitable business, whereas a mutual model does not seek the support of external stakeholders to buy shares. Instead its employees hold the shares and decision-making powers. The model you choose should be the one that best suits your needs and the benefits you set out to gain from mutualisation in the first place. Once this has been established you then need to decide on your legal model and make sure your contracts and commercials are in place so that the business can operate successfully.
6: Align your objectives
You will know you have a good mutualisation model when all of your partners are fully engaged and you have aligned all of your aspirations and goals for the company with your shareholders and stakeholders. A robust business plan for the future is key. Employees should be really engaged in the business and driving innovation. You also want to see growth within the business and deliver a profit for your shareholders or the community if you go down the community interest company route. Research has shown that mutuals tend to outperform their rivals, so service excellence, profitability and employee satisfaction should be key benefits of adopting a mutual model.
For more information about MyCSP’s products and services, please contact Virginia Burke on 0743 627 0137. The Cabinet Office’s Mutuals Information Service also has a very helpful route map.