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Beyond partnership - beyond profit

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presentation by Dai Powell, Chief Executive, HCT Group

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Beyond partnership - beyond profit

  1. 1. Beyond partnership – beyond profit Dai Powell Chief executive, HCT Group 9 December 2011
  2. 2. HCT Group: Origins <ul><li>Founded in 1982 as Hackney Community Transport </li></ul><ul><li>“ To deliver social change through enterprise, empowerment and partnership” </li></ul><ul><li>In 1993 we won our first commercial transport contract </li></ul><ul><li>“ To be a sustainable social enterprise, we must also be an effective enterprise” </li></ul><ul><li>A business model for hundredfold growth </li></ul><ul><ul><li>from a turnover of £202k in 1993 </li></ul></ul><ul><ul><li>to a turnover of £28.1m in 2010/11 </li></ul></ul><ul><ul><li>700 employees and a fleet of 370 vehicles </li></ul></ul><ul><li>Surpluses reinvested to support the core mission </li></ul>
  3. 3. Our enterprise model
  4. 4. Our social model
  5. 5. A new model: Breaking barriers Barrier 1: Between teams <ul><li>Change what success looks like </li></ul><ul><li>Sharing savings across boundaries </li></ul>Barrier 2: Between you & the community <ul><li>Change the direction of information </li></ul><ul><li>Community designed services will surprise you </li></ul>Barrier 3: Between Statutory & non-statutory <ul><li>What is the statute? </li></ul><ul><li>Who says it has to be delivered the same way? </li></ul>Barrier 4: Between assets & services <ul><li>Change our expectations of what we use to deliver services </li></ul><ul><li>It’s a box with wheels and an engine </li></ul><ul><li>How can it do different things at different times </li></ul>Barrier 5: Between you & different stakeholders <ul><li>If the community values it, can they deliver it? </li></ul><ul><li>Who pays? </li></ul><ul><li>What’s the role of the private sector? </li></ul>
  6. 6. Contracting – the ideal <ul><li>Working with a contractor should provide: </li></ul><ul><ul><li>improved outcomes for communities </li></ul></ul><ul><ul><li>value for money </li></ul></ul><ul><ul><li>innovation in service design and delivery </li></ul></ul><ul><ul><li>accountability </li></ul></ul><ul><ul><li>trust </li></ul></ul><ul><li>How easy has this been to achieve in reality? </li></ul>
  7. 7. Beyond partnership <ul><li>Too often, partnership is about managing competing objectives </li></ul><ul><li>Social enterprises share your values </li></ul><ul><li>They go to work for the same reasons you do </li></ul><ul><li>No competing requirement to create shareholder value </li></ul>
  8. 8. The social enterprise advantage <ul><li>Social enterprises: </li></ul><ul><ul><li>compete in markets – value for money </li></ul></ul><ul><ul><li>are close to their communities – innovation </li></ul></ul><ul><ul><li>prize transparency - accountability </li></ul></ul><ul><li>Relationships based on shared values mean: </li></ul><ul><ul><li>real co-creation and co-design of services </li></ul></ul><ul><ul><li>more workable options for open book, profit share </li></ul></ul><ul><ul><li>opportunities to improve communities though reinvestment </li></ul></ul><ul><li>“ Each of the 19 authorities we have ever worked with is still working with us today” </li></ul>
  9. 9. Example A: contract flexibility <ul><li>Local Authority A implements personalisation </li></ul><ul><li>Long-range block contract for transport </li></ul><ul><li>We believe in personalisation </li></ul><ul><li>Chose to ignore contract terms </li></ul><ul><li>Worked together with Authority A </li></ul><ul><li>Joint approach agreed to the benefit of the community </li></ul>
  10. 10. Example B: Joint venture <ul><li>Local Authority B seeks massive saving in transport costs </li></ul><ul><li>We have invited them to go into business with us </li></ul><ul><li>Profit and cost-saving shared </li></ul><ul><li>Business risk managed by us </li></ul><ul><li>Shared governance </li></ul><ul><li>Asset locked </li></ul><ul><li>Enables us to propose integrated solution </li></ul>
  11. 11. Example C: Profit share <ul><li>Authority C lets the whole network </li></ul><ul><li>Fierce price based competition at tender stage </li></ul><ul><li>The social enterprise advantage in action: </li></ul><ul><ul><li>we split any profit from services 50/50 </li></ul></ul><ul><ul><li>our portion is reinvested back into the community </li></ul></ul><ul><ul><li>their portion reinvested into service development </li></ul></ul><ul><ul><li>full open book to assure accountability </li></ul></ul>
  12. 12. <ul><li>“ Social enterprises trade for a social purpose – which means they share your values” </li></ul><ul><li>Social enterprises: </li></ul><ul><ul><li>compete on price </li></ul></ul><ul><ul><li>deliver at a high quality </li></ul></ul><ul><ul><li>innovate </li></ul></ul><ul><ul><li>are transparent and accountable </li></ul></ul><ul><li>[email_address] </li></ul><ul><li>@dai_HCT </li></ul>

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