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A business culture can boost efficiency and need not conflict with a public sector ethos.

Should councils be more businesslike? The idea that developing a 'business culture' is the way forward for councils will not appeal to all staff. The ethics of big business do not always sit comfortably with those of a local government organisation providing services to the community. And the image of what motivates business people is hardly helped by TV shows like The Apprentice, in which a macho, bullying management style is held up as the way to create success.

But there is good news for those who feel that local authorities should maintain their own culture and principles. Talking about business culture in this context does not mean importing a private sector approach. Instead, it means analysing what any organisation is trying to achieve, and finding ways of delivering these goals in an effective and systematic manner. Within these parameters, business culture is very flexible indeed.

"In local government, business culture is a mixture of the ethos of the organisation and the values which dominate its management approach," says Chris Hume, head of programmes for leadership and talent at the Improvement & Development Agency. "The business culture of the organisation should fit in with its overall culture."

That is not to say there is not common ground between local government organisations and private sector companies, Mr Hume says. "Local authorities can learn from private sector organisations. Both have to lead people by engagement and persuasion, and not by the 'command and control' approach used in the past, which followed a military model.

When it comes to working on place-shaping, local area agreements and so on, this is particularly important."

A senior manager who wants to promote a meaningful business culture in their organisation needs to ensure they are communicating their ideas and purpose to staff at all levels.

"The challenge is to articulate your business culture in relation to your purpose, and find out the extent to which staff are allied with that, and to what extent there is a gap. After that, you need to move people on," says Mr Hume. "You can learn from both private and public sector organisations who have already gone through this process."

Yvonne Bottomley, strategic director of corporate services at Warrington BC, has direct experience of implementing a business culture in a local authority and will be addressing delegates about this at the Local Government Association's annual conference. For her, the key issue is how to make councils work as effectively and efficiently as possible.

Analyse council functions

Strategically analysing council functions is a vital starting point. Ms Bottomley says: "Local authorities need to look at the priorities they have, and the outcomes that need to be achieved. This is about ensuring that you are giving the best service to stakeholders in the community. The main difference between local authorities and private business is that they have shareholders, and we have stakeholders."

Government initiatives like the comprehensive spending review have put even more pressure on local authorities to "square the circle" and improve performance while being as cost effective as possible, she says. "We need to know how efficient each business unit is, and to understand the role of the service in terms of delivery and cost."

With this in mind, Warrington compiled information about cost and planning priorities for all its 70 services. It brought in its business- focused culture between 2006-07 and was able to redirect £14.6m into priority investment areas as a result. "This has been possible because we have all the business information we need at our fingertips," says Ms Bottomley.

In addition, the council used this information to identify areas which can generate revenue. For example, Warrington is now providing benefits services to other councils. 

Fundamental to this is a change of mindset among managers and a shift in the way they operate, with a new emphasis on thinking creatively about how to attract funding. "This is about behaviours and skills, as well as the way organisation operates," says Ms Bottomley.

"Areas include good business sense, entrepreneurial skills and creativity. We are aiming to become outstanding as a council, but with limited resources — and the way to achieve this is to become more business focused."

Dos...

• Understand the context in which you are working, both internally and externally

• Learn from other organisations which have successfully implemented a business culture, in both the public and private sector

• Communicate with staff about what you are trying to achieve, and use concrete examples to help get the message across

and don'ts

• Rush into implementing a business culture because it sounds like the next big thing

• Operate in a vacuum and assume you have to work out your approach from scratch

• Assume that staff will support the idea of a business culture — some will be suspicious of the term 'business'