Case Study Creating trust-based contracting relationships. The Adolescent and Children s Trust (TACT)
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1 Case Study Creating trust-based contracting relationships The Adolescent and Children s Trust (TACT)
2 Summary This case study explains the structure and process of developing trust-based relationships between the voluntary sector (and specifically public sector) funders in challenging times. This is based on the skills and best practice of the voluntary sector fostering agency TACT. We detail their methodical and open approach to developing sustainable relationships with all their partners. Their approach is explicitly transparent, build on discussion, compromise, and sticking very clearly to their mission at all times. Ultimately, this has rewarded TACT with better service outcomes, sustainable relationships, and a significant and sustainable rise in their contract income. Content We explain: How to work out your key relationships How to manage relationships Using evidence and mission to communicate effectively Principles for trust-based relationships o Thinking long-term o Transparency o Being flexible (and when to say no!) o Taking positive action Further resources Background. Trust-based relationships are secured by a shared commitment to common outcomes by a tangible empathy that exists beyond legal contract terms. It manifests itself in better commissioning, improved contract delivery, and strengthened and sustainable cross-sector partnerships. These relationships create quantifiable and significant efficiencies. Sustainable public services need trust to exist between providers and contracting bodies, especially in straightened financial times where change can be immediate and challenging. Having contracting relationships that are sustained by trust inevitably means partners can be less reliant on costly compliance procedures and regulations. Problems can be tackled collaboratively, and resources and skills better shared.
3 TACT The Adolescent and Children s Trust (TACT) was set up in 1993 to meet the needs of looked-after children. Now providing fostering placements for over 500 children TACT have grown to become the largest non-profit fostering provider in the UK, and have expanded into adoption services. Beginning in London, TACT now work with 80 local authorities across the UK with public sector income increasing from 12.5m 2006/7 to 18m 2009/10. Those in receipt of services often having multiple and challenging issues histories of disadvantage and the challenge of child protection is of huge public and social importance. Provision is funded by spot-purchasing, which places one child at a time, and means for providers, contract income is potentially hard to predict and plan for. For TACT then it is absolutely crucial that everybody they work with children, staff, foster carers and commissioners all have good reason to trust and rely upon their services. Beginning: defining roles Identifying the customer A contentious term, customer, but one that produces useful argument about an organisation s approach to the current organisation of markets of public services. TACT now use the term, as their Partnerships and Contracts Manager, Andy Pallas explains, to describe all those they have a responsibility towards, from children and foster carers, through to staff and volunteers, and the contracting bodies with which they currently work. As Andy says, using the term customer helps you start thinking you have to look after these people. They re paying your wages. Without local authorities we have no business. Without carers we have no business. It can be frightening to think like that, but we re in a competitive world and people need to be motivated by that. TACT consider how much each customer have invested in them, and then on that basis, determine how much time and energy should be invested in sustaining and strengthening each relationship, whether with the lookedafter children, or the commissioners of that service provision.
4 Understanding the customer The significance of customer relations to business sustainability, is demonstrated by the fact that 30% of TACT s foster carers come to them through word of mouth. Recruitment is a continuous activity, making a good reputation absolutely core to business sustainability and outcomes. In order to recognise and respond to the needs and positive perceptions of this broad concept of customers, TACT run a number of initiatives. As well as driving up service standards and ensuring effective and comprehensive customer involvement, this knowledge of customer needs arms TACT with evidence and examples for conversations with contracting bodies. 1. Children and Young People s Involvement, Consultation and Participation TACT has a work plan developed with the young people in their care. The Plan outlines how children are consulted, listened to and involved in the running of the organisation. The young people organise an annual survey, organisational training, have developed Children s guides and videos to help the understanding of young people entering the care system. There is a Children s Champion in each office, who is responsible for assisting the young people in that area to meet on a regular basis and feed their ideas into a UK wide central meeting. Annual award ceremonies are also held to mark the young peoples achievements in academic and other areas.. 2. Customer Service Policy Our commitments, principles and actions, are subject to regular monitoring by TACT s trustees. Responsibilities under this policy include: the quantity and type of information given to all customers, for example, carer welcome packs; commissioning research into customer needs; effective communication and customer involvement, including how customer involvement influences decision making. 3. Quality Assurance Framework Setting out TACT s mission and service standards in relation to current legislation. All this is collated and widely distributed on a single leaflet for all customers. The standards are monitored regularly by TACT s trustees. Identifying an internal lead While cross-sector relationships may be developed by a number of individuals across an organisation, process, principles and outcomes for these relationships need to be standardised for trust to confidently develop. A scattergun approach can also be a waste of time and resources, leaving colleagues and partners at crosspurposes. Andy Pallas provides central strategy and standards for TACT s public sector relationships as the Partnership and Contracts Manager. The responsibilities TACT brings together under this role include:
5 Coordinating communication and contact with the portfolio of current and potential contracting bodies, acting as a shop front for TACT Assessing and understanding the potential importance of new service opportunities and new customers, and trends and developments in fostering (market research) Developing strategies to respond to these opportunities, as well as to challenges and crisis in relationships Collating business, service and outcomes information for the drafting of tenders, and for ongoing communication with customers; writing the tenders Setting and evaluating the outcomes of relationship management and supporting staff to use shared principles in their relationships with local commissioners As Andy points out, the first task of his post isn t to assume responsibility for all external relationships but to support staff to maintain their own responsibility for good customer relationships across the organisation. Good internal communications create a culture of transparency that is easily transferred to external partnerships. TACT provide staff training on personal responsibility which incorporates these responsibilities. Asking and supporting staff to share information around all external customers has further practical value the ready flow of information from operational staff to Andy enables him to write locally focused and effective tenders and creates a wider staff buy-in to continued organisational growth through contract relationships. Staff are thanked for their contributions, and its made clear how their contributions have made for positive relationships with external bodies. Define yourself by your mission In times of conflict with contracting bodies, mission-driven organisations are able to clearly mark their intent, and to rationalise their behaviour. A clear mission allows all staff and partners to understand why you make the decisions you do, and to support your organisation in that. TACT look for opportunities to involve all their customers in supporting their mission, and from that they can create a commitment to shared outcomes and the sustainability of their organisation. As an example, a recurring point of conflict with statutory funders can be TACT s advocacy support for children, which can occasionally bring TACT staff directly into dispute with the contracting body. Knowing this is a point of potential conflict, TACT manage their relationships over the long-term by repeatedly emphasising the centrality of advocacy to their mission. They take the following steps: 1. firstly, by emphasising their mission and by ensuring customers contracting bodies have a shared commitment to that mission.
6 2. by making sure that advocacy is clearly known by all to be a key delivery mechanism for this agreed mission This makes TACT s advocacy provision understood within the wider, long-term goal of TACT s mission something to which the contracting body have already demonstrated and agreed commitment. This takes the pressure of short-term conflict by emphasising the long-term and shared gains. Be informed about your customer needs You need to be targeted and justified in the time and resources you spend on developing relationships. To determine this, you need to have a good working understanding of the context in which your organisation operates and therefore what relationships matter most to your organisation. This information has a dual purpose: use it to plan organisational/relationship developments; use it in your communication with external customers like commissioners to prove the value and relevance of your organisational mission. Research other providers Research other providers in order to understand them as both competitors and collaborators. TACT review other organisation s available information - Ofsted reports, company accounts, annual reports. This means TACT have a clearer idea of what sets them apart. They then communicate these relevant similarities and differences to commissioners, as well as using this information to ensure better service delivery and market diversity by knowing where to position themselves. Customer surveys See previous examples of their customer surveys. Local market trends Engaging in the commissioning process is one way to learn about local market trends. Consider what these may be and how you can best learn of them: o What contracts are being tendered in your work/geographical area are there trends? Use sites like Supply2Gov and Funding Central to track this. o What questions are being asked in tenders? If you know the common questions likely to be asked you can prepare answers ahead of time. o Where do your mission, skills and services fit in this environment? This is a challenging question and one for you to consider in any area of delivering public services o How can it influence your communications with contracting bodies, and the shape of your future business?
7 o When legislation changes, contracting bodies need to find new solutions to new demands. Be in a position to offer those solutions by looking ahead to see what best practice and legislation is being developed in your area of service delivery. Networks/forums Take part in relevant forums or networks with other provider organisations. There is much to be learnt in these collective environments: best practice; policy developments; good contacts; and targeted campaigning and action on key issues. Seek to understand the pressures faced by contracting organisations We all face pressures at work, and contracting organisations in TACT s case, local authorities are more driven by challenging bureaucratic targets and restrictive targets than most. If you can help make people s working day easier by helping them meet their targets, they are inevitably going to invest more in your relationships. As Andy Pallas advises, help them manage their managers. Thinking about contracting organisations, what do you understand about their overall mission and day-to-day pressures? Do you understand their structural, financial and cultural pressures? Within reason, are you able to mitigate or work around any barriers? Are you confident to address any barriers directly? Are you familiar with the ambitions of their commissioning frameworks? Remember, the goal is always to develop shared outcomes, so offer criticism as a constructive partner. To learn more about these organisations, look at relevant assessments (like Ofsted reports). Run web searches on their performance; set up automatic trigger word searches on key words (like fostering contracts ) in order to be notified of local and national opportunities and trends. Be aware as well how these organisations are steered by national policy both specific policy relevant to your work area, and general trends in funding, commissioning, and service design. Use the resources and information from national bodies like NCVO to help understand this bigger picture, and read government procurement periodicals (eg Supply Government) for their perspective on market trends.
8 Principles for building trust-based relationships Armed with relevant background information and a clear articulation of your own mission, you need to develop and stick to a clear set of principles for managing your customer relationships. Put altogether, these principles form the bones of a strategy for managing relationships, and will provide clear standards for all staff/volunteers across your organisation. These should principles apply to you work with all customers. Keep them simple so that they get used! Think of the long term reputation counts We all need to be thinking about the long term with our relationships. So be explicit in speaking about the longterm: in doing so you demonstrate your commitment to sustaining your relationship with all your customers. Plan your resources This rule applies to everything, from one-off conversations to your whole business/growth strategy. If you know what you want and you can articulate it, you re far more likely to get it. Don t just go for quick wins, but be clear about your long-term goals and make sure you re making those known. Build a positive reputation Over the long-term, it s your reputation that will count towards you winning or losing contract tenders, and the way people share opportunities with your organisation. People are often afraid or uneasy to say when they re disappointed in organisations, so you have to be insightful and proactive in finding out how contracting bodies view your organisation. Do they believe in your competency to deliver what they need, and can you give them evidence of this? Is their understanding of your work based on history rather than present? As Andy says, you need to get historical conflicts out the way: if people are working on the hypothesis of how TACT may have worked in the past, it costs TACT business opportunities, and it costs kids the opportunities to have a placement with TACT and that s contrary to our mission. When problems occur, you need to have built positive capital for the bad times, advises Andy. An example of this was when an important local authority customer thought that some of TACT s internal processes were not meeting their standards. In normal circumstances referrals would have stopped and business would have been lost with probably no conversations to seek to resolve concerns. But in this case discussions took place about how the problem would be sorted, timescales were set and the local authority stated clearly it had no intention of ceasing referrals as they trusted that TACT would make things right because they had a history of responding clearly to concerns.
9 Be transparent The key to developing trusting relationships is to communicate clearly, openly, and effectively. Consider what they most want to know from you and to what extend you can meet that need. Public service commissioners, Andy argues, mostly want to know that they re getting value for the public money they re spending so make sure you give them the evidence. Explain your decisions Always explain the rationale behind your decisions. Contracting bodies and the organisations they contract may at points have differing priorities and objectives, but honest explanation of why there must be differences will enable potential conflict to be better managed, and shows an ability to be trusted. Be relevant and concise Don t say everything you want to say save some of it. At the end of meetings, commissioners will often ask if you have something to add, so have something in store. Give basic information and human stories, as long as they re relevant. Don t pass on too much written information as it won t be read. Instead, direct them to your website or annual report. Provide detailed business and financial information, and be prepared to negotiate We ve got a responsibility its public money. We have a duty to be open with how we re spending the money, and that we re doing what they want with it. If they aren t happy with an aspect of the services, we want the commissioners to be able to say Andy Pallas, TACT Money is an issue around which mistrust easily grows, so transparency here is absolutely essential. Being active and open around your finances and cost structures will save on speculation, and demonstrate how capable and committed your organisations is to managing risk and planning sustainably. As Andy says, if you throw information out there, it gets that out of the way and then you can start talking about the things you want to talk about like your outcomes. Offer for your financial officer to meet the financial officers from the contracting body its often easier for them to speak to one of their own; send through your financial accounts without them being requested. Remember that financial clarity is important for a number of reasons, and you need to respond to these: o Commissioners often don t understand the business structures of voluntary sector organisations, so for them to understand and help mitigate any financial risks to you, you need to make your accounts information readily available o Its useful for both sides in contracting bodies give comment on financial records
10 o o o Being able to communicate and define your financial position and long term prospects is helpful for staff Know your cost structures and be clear where there is flexibility in these costs and use that in negotiations with contracting bodies. Given our current financial climate, negotiation is expected. Can you sustain a negotiated shortfall in income now if you ll see benefits over the longer term (through better relationships and successful tenders)? Know your ratio of cost and volume, as this is aspect most likely to be negotiated. Any organisation undergoing a period of growth and change will need to understand how flexibility in costs relates to their period of development and future financial objectives. Be armed with this information when you talk to contracting organisations, and have a long-term perspective when negotiating changes to contract terms and costs. (Use ACEVO s Full Cost Recovery resources to help understand your costs.) Be discursive and flexible The best public services are delivered through partnership. Good on-going dialogue is the best way to develop that trust. Understand the value of negotiation Use the information you ve gathered to present a flexible, versatile front to potential contracting bodies. If you have a good business understanding, you ll know where you have flexibility in your costs, resources, and service design. And in negotiation, ask clearly why changes are needed you must understand the drivers behind the conversation to work out whether it s of benefit to you to be flexible. Listen Entering into discussion with commissioners, let them take the lead and explain what they want. Listening is invaluable. It isn t a matter of authority, it s a matter of hearing how decisions have been made so far, and understanding how you can contribute to this background context. Ask commissioners what they want and need what the trends are, the problems, and the demographics and needs they must meet. Find value in dialogue Take part when you can in commissioning discussions around local needs, service design, and commissioning frameworks. Make sure you re a participant in local discussions, demonstrating your commitment to supporting the improved delivery of public services. Recognise as well that it is in the stages of the commissioning cycle prior to procurement that the outcomes and therefore the structure of services are decided. Be a part of those conversations and decisions. That s absolutely essential for you to make sure your knowledge of service user needs is taken into account.
11 Ask for improvements in the contracting organisation s own communications Try and encourage improved communications from your customers as well. Ask that they be: o Communicating enough of the information you need o Being clear about what they want and expect o In the case of contracting organisations, be using a holistic and personal approach to managing performance, conflict and problems o That organisational messages are the same across different teams you re working with (eg commissioning, procurement, and frontline teams) o Developing shared outcomes with you Be Proactive Find out who it is you need to have relationships and set out involving and informing them of your mission and how you deliver on it. People may not work with you immediately, but they may come back to you in changed times or think of you at a moment of crisis. As Andy says, if you re in dialogue, they will use you if you ve given them reason to remember you. Celebrate your outcomes Get out there and speak to people about your mission and your successes. Find new ways to reap rewards for your good work. TACT for example have a Customer Service Excellence Award, which easily demonstrates their success in this area to all their customers. Ask leading questions that will enable you to discuss the best of what you do, but don t give everything away immediately. Keep your customer surveys and other feedback, and use them as an opportunity to reiterate your mission. Help when you can You need to be clear but flexible in how much your organisation is prepared to do without getting something back. There is so much advantage in giving willingly, is Andy s clear recommendation. This is a policy he pursues at TACT, offering support to local commissioners through TACT s national learning and service provision, and being willing to do some of the work for which the local authorities don t have capacity. A recent example is compiling outcomes information on individual children. In this case staff were reluctant to spend the time gathering this information, seeing it as the responsibility of thee local authority. But as a result of the extra information being gathered relationships with the local authority have been strengthened, and TACT have gained from the internal discussion about both managing relationships, and about the outcomes they uncovered in the asked-for exercises. It showed TACT to be a mature organisation, and gave the staff measuring those outcomes the opportunity to see how effective their work is proven to be.
12 Reflecting on his previous role as a local authority commissioner, Andy recalled: I remember when I didn t have many options or people to turn to, and some providers took advantage of that to secure their own ends rather that supporting us to reach shared outcomes. But when things got better and we were more organised, I wouldn t use those providers again because I remember them putting up fees and taking advantage. So Andy has employed the very opposite approach at TACT, often going above and beyond for commissioners, and being responsive to their challenges. The resulting good cross-sector relationships have been commended by commissioners noting that TACT, consistently show a willingness to go further than most in assisting the Council introducing good practice from their experience nationally. Shared outcomes: stronger markets Managing competition in the market is a common concern among commissioners, and something of which TACT have conscious as the only national non-profit fostering and adoption agency in the UK, in a market dominated by private and public sector provision. TACT s work with one East Anglian authority demonstrates a joint-approach with commissioners to balance market diversity with sustainable demand (and therefore business) for TACT s services. TACT have invested time and energy in developing a strong relationship with the individual commissioners at the Authority. As a result of commissioners subsequent confidence in the relationship and TACT s ability to deliver the necessary service outcomes, the Authority and TACT have agreed the appropriate size of TACT s presence amongst the other providers. This mature relationship gives TACT long term business security and enables them to fulfil their mission through their delivery of services to looked-after children as well as through supporting sustainability in the wider local fostering market. This Council have been open in saying they don t want all their risk to be put on to one dominant provider but that they value TACT s work. The shared goal is to maintain quality and appropriate quantity for local fostering placements. TACT have assured commissioners that their strong status in the market won t lessen the efforts they put into the relationship, as they re in it for the long-term and thinking of the wider remit of their mission. Respond positively to problems what has impressed me most is how the agency [TACT} is able to respond to emergencies or support their carers through periods of crisis Local Authority commissioner Taking problems and turning them to advantage is key to TACT s relationship management. Andy views these moments as an opportunity to show that TACT are active and capable learners, as well as improving the quality of TACT s services by learning from crisis.
13 When problems arise, take control of the situation. Disarm your commissioner by being the party to raise the problem, and to demonstrate actions already taken in remedy. Use it as an opportunity to show how your principles and processes work to mitigate problems, and give them confidence that you can manage risks effectively. Show how your commitment to your mission is always driving your organisation to improve, and effective learning is a core part of that. Andy suggests bringing up mistakes at the next meeting with commissioners, and detailing how you have resolved the issues. That way, you can be the party to close the conversation and move on. Further NCVO support and advice The Public Service Delivery Network s September 2010 seminar, featuring TACT and Action for Children discussion their approaches to relationship management: Guidance on negotiation: Support and training in demonstrating strategy and impact: Public Service Delivery Network for cross-sector partnership and public service contracting and policy news: If you have any questions about the issues raised in this case study, or would like more support, please contact Fiona Sheil on psdnetwork@ncvo-vol.org.uk or Thanks Thanks are due to Andy Pallas who has shared his skills and expertise as Relationship and Contract Manager at TACT. Andy is a former local authority commissioner of fostering services, and has been at TACT since August He sits on the Advisory Group of the NCVO Public Service Delivery Network. We are very grateful to Andy for the generous donation of his time to the Network in co-producing this case study.
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