Quangos are a hot topic of discussion in the UK; the acronym being quasi-autonomous non-governmental organisation and typically meaning an organisation to which the government has devolved power. They cover different ‘arm’s-length’ government bodies, including non-departmental public bodies, non-ministerial departments, and executive agencies.

Around five years ago, the UK coalition government announced that hundreds of publicly funded government agencies would disappear with the aim of improving accountability and costs, the famous ‘bonfire of the quangos’. In fact, according to a National Audit Office report from March 2014, 285 public bodies had been abolished, apparently saving over £2.6bn, but 184 new organisations were created at the same time. Interestingly, of the 184 groups set up between 2010 and 2014, 66 of them are companies in which the government owns some or all of the shares.

This suggests that quangos are not the epitome of bureaucratic waste and excess, as some have suggested. In our experience, these types of organisations often have good people, brand goodwill and engaged customers. At a time when their government funding is either being reduced significantly or withdrawn completely, what they don’t typically have is a commercial approach or culture.

What therefore to do with an organisation that has a future, but not enough funds?

1. Identify what market you are serving; as a quango or similar, you will have had a captive or guaranteed market for your services. Using a combination of market research and consultation with your existing contacts, the market in the commercial world can be identified and quantified, enough to help strategic direction and help raise funds.
2. Develop a customer proposition; transform your existing offerings into a customer (value) proposition, to answer the question – ‘what can you do for me (target market)?’ and test with a few prospective customers
3. Create a distinctive positioning; there will undoubtedly be competitors already providing similar services, so evaluate what you have to offer and determine what is distinctive (unlikely to be unique) versus others
4. Initiate product development; identify how the current services could be developed and improved, for example by talking to existing customers, and start a programme of new product development; initially building on your in-house capabilities
5. Produce (or update) a business case and plan; an important discipline to help establish whether there really is a commercial opportunity but also for approaching potential funders with a well thought through rationale
6. Consider future status and structure; there are many options for the future status of the organisation, including whether the team want to continue to be part of a not for profit enterprise. There are also key questions about governance and structure; who has the expertise for different roles, where are the gaps and how are they going to be addressed, how is remuneration and ‘equity’ to be decided etc?
7. Develop a communications plan and ‘launch’; the new enterprise cannot be the best kept secret, it needs to communicate and promote your services. Quite likely a ‘soft launch’ initially, contracting with some warm contacts before committing to more ambitious plans

7 steps; quite straightforward in principle, not so easy to achieve but a robust way of transforming from quango to a flourishing enterprise.

How many will then find themselves on fire as opposed to being on the bonfire?