Using a commissioning approach can help public sector organisations improve or transform the way services are provided to Australians. Whilst there is growing understanding and valuing of commissioning as a concept, many agencies are grappling with the practicalities of becoming a commissioning organisation.
The challenge moving from concept
Commissioning has gained significant attention as a concept to alleviate pressure on government agencies and deliver improved public services to citizens with increasingly complex needs in an environment of ongoing budgetary constraints. It is an approach that puts the achievement of outcomes at the heart of any system or service design.
Agencies exploring or employing commissioning are seeking to:
- Increase focus on innovation or design thinking for policy interventions and service delivery;
- Present clearer evidence about which interventions produce better outcomes and value;
- Introduce an actual or perceived competitive provider landscape to drive performance and client choice; and
- Enhance relationships and better coordinate efforts to achieve outcomes across government.
Over the last few years agencies and providers have developed a sound understanding of commissioning as a concept and see its potential benefits – but don’t know how to deploy the approach as a business as usual way of working. For commissioning to be sustainably adopted by staff they need to know that it will work, the investment can be justified, the outcomes will be measurable and that it can be implemented in a complex stakeholder environment.
Actions to embed commissioning
To move beyond these concepts into practical implementation leaders need to consider four strategic actions.
- Confirm the overarching commissioning approach
An organisation must agree on its end-to-end commissioning approach, including the principles that will steer people in what commissioning means for the entity and a framework that will underpin how it will be applied. This helps guide the overarching process and flow of activities in business areas that are adopting or using commissioning.
The core commissioning principles and steps have been debated extensively over the last few years in Australia. We have now reached the point where the principles and frameworks in use are largely standardised across Government – so there are opportunities build and refine from readily available material – some existing commissioning approaches are outlined in NSW Treasury’s Commissioning and Contestability Practice Guide and the Federal Government Department of Health’s Primary Health Network Commissioning Framework.
- Define the roles and governance arrangements
The next step in implementation is determining the roles and responsibilities around commissioning. The crux of this is to clearly define the relationship between commissioner and service provider(s). This can be challenging to determine, particularly where the agency is both the commissioner and service provider. However, there should be a clear distinction between the roles to ensure the commissioner is independent and can effectively steward the system as a whole. This enables a fair and efficient system as the commissioner controls spending and decision making and is responsible for ensuring all providers (internal or external) are held to the same standards. This relationship may change over time and go through a series of iterations to establish a transparent commissioning model.
Once the central commissioner / provider relationship is understood, the foundation is set to build out the rest of the model, including roles and responsibilities for the inputs and outputs at each step of the cycle.
Clear roles and governance arrangements will drive the agreed commissioning approach. Governance structures and decision gates will ensure there is merit in allocating resources to a commissioning exercise or cycle, appropriate stakeholders have been engaged and that decisions align with the organisation’s over-arching objectives.
- Operationalise commissioning practices
Organisational processes, tools and policies are required to bring the commissioning approach to life. Once the key organisational structures and responsibilities are in place, this is the main leap in moving from concept to reality.
Many commissioning activities are not unique to commissioning and are being done in some shape or form across agencies. These may include user cohort analysis, service design, procurement, implementation planning, performance management and evaluation. The agency’s current practices and approaches should be assessed against and aligned to the agreed commissioning approach. Re-pointing or re-purposing these existing capabilities is important. Not only is it more efficient, avoiding ‘re-inventing the wheel,’ but it is critical in driving adoption by creating a sense of ownership and avoiding resistance to ‘not invented here’.
Existing methods and tools used in the approach to design, delivery and funding of policies and programs should be supplemented where any gaps exist in operationalising the commissioning approach. Depending on the level of maturity of commissioning within an organisation there are likely to be a few gaps. Common areas where approaches and tools are required include:
- End-user engagement and user-centred thinking – Mechanisms to capture views of service users at the outset and at key points through the cycle.
- Systems-thinking – Approaches to identify and encourage consideration of how the agency operates within and helps steer a broader system in the achievement of outcomes.
- Focusing on outcomes – Performance management techniques to ensure that outcomes are considered and reflected across all elements of the cycle.
- Evidence-based decision-making – Capabilities to enable the collection of evidence to demonstrate the link between actions and outcomes, with procedures to ensure this underpins timely, effective decision-making.
- Encouraging innovation – Organisational processes and culture that foster the development of new ideas, methods and services to drive improvement of outcomes.
These are growing number of best practice examples and organisational guides that are helping to address these common gaps.
- Develop behavioural and technical capabilities to embed new ways of working
Workforce capability needs to be developed to operationalise commissioning in a sustainable way.
Embedding the commissioning approach in the agency’s tools and methods will provide a structure for staff to perform commissioning activities, however, staff need to be equipped with the right behaviours and skills to ingrain commissioning in the organisation’s way of working. This will ensure the benefits of commissioning are genuinely realised. Examples of behaviours and more intangible skills which are likely to be required to sustain and optimise the way an agency commissions include:
- Innovation – Driving the development of new services, programs and service delivery models, which are personalised for the needs of users they serve and underpin new ways of delivering new or better outcomes.
- Design Thinking – An approach to solving problems by focusing on the people that the problem impacts. It requires empathy for users, idea generation and experimentation.
- Collaboration – Encouraging working with service providers, other government agencies and peak bodies to share information and develop solutions that deliver better outcomes across a whole system.
- Engagement – Ensuring individuals and communities are regularly consulted and kept at the centre of all decision making, so that services are better targeted at the needs of the users.
An assessment of the maturity of the desired behavioural and technical capabilities should be undertaken to identify the changes required across the organisation. A continued focus on building these often more intangible skills, from leadership level down, is the critical final action in becoming a confident and self-sustaining commissioning organisation.
Ed Bridgeland – Leads Third Horizon’s Human Services practice and has worked with a number of State and Federal agencies to build their commissioning capability.
Pat Bollen – A member of Third Horizon’s consulting team in Sydney, as well as an experienced not-for-profit board member.
If you have embarked on the commissioning journey or are considering it, contact Third Horizon to discuss how your organisation can embed a commissioning approach to achieve better outcomes.