This is by @TomJefford, the CEO of a spin-out called Family Psychology Mutual CIC which was formerly part of Cambridgeshire County Council.
Having decided to explore setting up a public service mutual I discovered that actually spinning out a company from a Local Authority is a tricky, conflicting experience.
As an employee, I was duty bound to give thought to the interests of the council as I consider dthe pros and cons of the future mutual.
But as it’s future MD, I was also thinking about how to make any future commercial relationship optimal to our new venture.
These are two quite different thought processes and mean wearing two hats at the same time. At least ahead of the venture actually spinning out.
In Cambridgeshire , I was fortunate to have supportive internal colleagues and excellent external advisors who helped me along this journey.
The response from other parts of the Council was more mixed.
Responses ranged from uncertainty to bewilderment and once or twice downright suspicion.
I recall being told ‘I can’t talk to you as you are conflicted’ as officers struggled with the idea of us spinning out both conceptually and practically.
‘How could we be trusted?’ I could hear them thinking.
As the first spin out to come out of our Authority our story is probably unsurprising, not least as there wasn’t a clearly defined process to follow.
Spinning out can be perceived by any local authority as a threat and , if the Council has wider difficulties, fuel a sense of existential crisis.
Indeed, I felt at times that parts of our Authority did not know whether Family Psychology Mutual should be helped and encouraged or be treated as some kind of asset stripper whose ambition to set up outside the authority should be resisted.
The reality, in my mind, was that I was still the same well-intentioned person who had been around in the Authority for many years. I saw us all as being on the same side.
But I was setting about creating a radical shift in the relationships that I had with colleagues and with the Council as a whole through a process of reform, redefinition and change.
Throughout all of this, I was acutely aware that I wanted to preserve our relationships for the management of our long-term anchor contract with the Council.
To this end, I focused on relationships and started being very upfront with colleagues about how we could manage conflicts of interest.
And having signed one conflict of interest declaration earlier, I even made sure that this was revised and updated.
This enabled the ‘permission to act’ that I needed in order to free me to up internally to set up the business, using ‘work time’ (in addition to many hours of my own!)
Reflecting, now that I have been out of Cambridgeshire County Council for over a year, the Authority took a cautious but ultimately very helpful role in facilitating the nascent business. Even if this took considerably longer than I wanted.
Looking back, I didn’t need their explicit approval to leave but it was much easier to make this happen in a consensual and collaborative way.
In summary I think that the key points to consider when looking at spinning out are to pay attention to relationships in the authority. Be super-clear about why you are doing it.
Conflict of interest declarations – and the transparency these create – are a good way to manage the tensions of commercial and contractual positions upfront.
Because, until you are out, you will inevitably need to wear two hats – today’s good employee and tomorrow’s CEO of a new venture. It’s not always an easy role to play.
I hope this has helped you wear them well!