Community transport, housing, pubs - people lead success
So far this blog series has provided you with the key overarching findings from NatCen Social Research and WPI Economics research, commissioned by Power to Change, that explores what makes a successful community business in the housing, transport and pub sectors. The focus of this week’s blog is people and their role in making community businesses a success.
Findings from the research suggests that there are four success factors that relate to people – having charismatic leaders, access to a range of skills and expertise, dedicated volunteers and forming partnerships.
Charismatic and dedicated leadership team
As with all businesses, the people who work for community businesses are crucial to their success. Community businesses in this study often pointed to the importance of a charismatic leadership team (and sometimes one particular individual) with the vision and drive to pilot the business through the many hurdles they faced, particularly during the start-up phase. In contrast to businesses in the commercial sector, this leader is not driven by the prospect of personal gain, but instead by creating an entity with social value. On the one hand, this means that their commitment to the aims of the enterprise keeps them going in situations where it is possible a more financially-motivated individual may have quit. On the other hand, those leading community businesses are often doing it in addition to other roles or a full-time job, and the nature of the community business means that it is not possible for them to be paid to do it full-time. This has obvious implications on the amount of time they are able to dedicate to the project, a deficit that is often made up in successful businesses by persistence.
Particularly as the community businesses grow, it’s important that the director or chairperson ensure that there is collective decision-making among the board or leadership team. In addition, given the pressures on time, it is also clearly beneficial for members of the board to have specific roles that reflect their skills and experience, and in particular at least one board member with strong skills in financial management to oversee costs and revenue and the business planning process.
Reliance on skilled and experienced volunteers
Community businesses are also similar to other businesses in that they require access to people with a range of skills and experiences. What distinguishes them, however, is the fact that inherent in the business model is a reliance on volunteers to supply some of the key skills they require. This was the case across the community transport, housing and pub sectors, but there was also variation in the extent to which the businesses relied on volunteers to operate.
For example, community businesses in the housing sector are less reliant on volunteers to deliver services for them on a day-to-day basis. This means that while they work with volunteers, especially in part-time board roles, there are significantly fewer involved in delivery. In this research, the community businesses in the housing sector used at most 12 part-time volunteers (compared to businesses in the transport sector which had up to 70 volunteers). The difference is partially explained by the nature of the community businesses in the housing sector, which depends on people with highly technical skills that it is difficult to acquire through volunteers. Even when offering paid roles, these community businesses reported that there were significant challenges recruiting individuals with the right mix of skills, especially given the amount of different portfolios or responsibilities the individual would have.
The greater use of volunteers in the transport sector reflects the role they play in making the business viable. This means that the entire staff of some community businesses in the transport sector is composed of volunteers, spread across both part-time and full-time volunteers. Even for those transport businesses that employ staff, one company had nearly ten times as many part-time volunteers than employed staff. Crucially, the one business that was predominantly staffed by paid employees was the one based in an urban area, which relied on tranches of multi-skilled individuals. The importance of volunteers within this sector is related to the fact that using volunteer capacity significantly reduced labour costs and overheads, with fare revenue covering variable costs, and a combination of other revenue and grant income covering capital costs. This means that routes that may not be commercially viable are viable for the community businesses.
The importance of non-paid staff to community businesses does, however, mean that attracting volunteers is uniquely important for this sector, both in terms of scale and sustainability. Notably this was reflected in the difficultly of recruiting volunteers, with all community businesses in the transport sector indicating that the combined challenge of finding volunteers with the right skills and sufficient time were among the top barriers to success and growth for their businesses. This impacts the operations of the community businesses more than in other sectors, as a lack of volunteers simply means certain routes or journey times will have to be cancelled and the work could not be easily shifted around in the same way.
Within the pubs sector, businesses had to make an initial decision about whether to employ a pub manager directly or to go for a tenanted model, with the former requiring significantly more day-to-day input from the board (made up of volunteers) than the latter. However, even where the community business chose the tenanted model, the board and other volunteers were needed to support the business in order to create a unique offering that appealed to the local community in order to sustain the business over time. Nevertheless, community-owned pubs do not seem as critically reliant on a given pool of individuals with specialist skills.
A range of partnerships are important
The final, but no less important factor relating to people is the importance of partnerships. Given the difficulties community businesses in all sectors have in acquiring staff or volunteers with the full range of skills needed, developing partnerships is an important alternative approach to addressing skills gaps. This includes nurturing relationships with funders, other delivering organisations (including other community businesses), and industry bodies experts that could offer specialist advice and guidance, such as the Community Transport Association for those businesses in the transport sector.