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30 March 2022 3 min read

Building Commercial Capacity in Government

Sarah Ashley

Sarah Ashley
Partner | Government and public sector | London

John Thompson

John Thompson
Director | Government and public sector

At Baringa, we’ve been fortunate to work with many dedicated government commercial teams in recent years and help them execute complex deals in rapidly changing environments. Commercial teams find themselves responding to an ever-growing list of demands: new policies, expiring contracts, market changes and the disaggregation of the supply base. While the challenges facing each department vary hugely, all teams have one thing in common – they lack commercial capacity. We’ve seen staff shortages rising across commercial teams, with vacancy rates of 10%-20% now becoming a permanent fixture. Dependence on short-term contractors also remains high. Instead of waiting to fill these positions, commercial teams can take steps now to make the most of the teams they have.

  1. Energise the current team: There are many talented commercial professionals who don’t receive honest, real-time feedback. Now is the time for line managers to go the extra mile and do frequent check-ins with their teams, gathering and giving constructive feedback. This can motivate team members and unlock a culture of continuous improvement.
  2. Say goodbye to mediocrity: Underperformers and average performers slow down progress for the whole team. When the department is short-staffed, it can be tempting to fill roles with candidates who ‘will do’. But studies show that groups with even one underperformer do worse than other teams by 30%-40%.* It’s not easy or pleasant, but managers must say goodbye to these bad apples who threaten to spoil the lot. A good place to start are those on fixed-term contracts who are in this group.
  3. Strengthen & streamline the governance: We see too many cases of layers and layers of governance (often just in the commercial team) – more people checking than actually doing.  In the commercial profession in particular, sometimes there’s more focus on assurance activities than on delivering direct benefits. Lack of accountability and unempowered decision makers are the culprits.  It’s easier for people to say ‘no’ or ‘I need more information’ when faced with a commercial decision. Instead, people should be empowered to say ‘yes, and ‘here are the risks we need to mitigate’. The culture needs to change, to remove fear of failure and stop reliance on a narrow, risk-averse interpretation of regulation and good practice. Most commercial teams could have as much as 20% more capacity each week if teams were fully accountable for the work they produced, if authority was delegated effectively and if meetings had the right attendees.
  4. Embrace ambiguity: We see commercial teams lose weeks waiting for ‘the business’ or programmes to identify their requirements. Commercial teams need to be proactive and help the business understand where they can go to market with the ambiguity, and where they do need to focus on full definition. In a world where policy, user needs and technology are all changing rapidly, commercial teams can lead the way. Through active market engagement, they can share their ideas and insights on the risk premium attached to the ambiguity.  
  5. Trust colleagues & share resources: Suppliers are delivering similar scope across multiple departments and arm’s-length bodies. We see some good examples of knowledge sharing and lessons learned into the community that the Government Commercial Function is building. Commercial teams should trust their colleagues and seek to reuse existing materials and know-how before starting a new procurement process. This will help understaffed teams get projects off to a faster start and minimise unnecessary duplication.

Commercial professionals hoping for calmer weather ahead are unlikely to see that anytime soon. Expectations are ever growing, change comes thick and fast and resources remain scarce. The steps above are not easy to take, but they’re necessary to grow a commercial capability that can meet the challenges government will face.

Of course, these actions address only one side of the capacity challenge. In a future post, we will discuss how commercial teams can improve both the quality and quantity of resources and deliver a more flexible service to meet customers’ needs.

* Will Felps et al. “How, When and Why Bad Apples Spoil the Barrel: Negative Group Members and Dysfunctional Groups.” Research in Organzational Behaviour 27 (2006).

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