Anthony Lewis, Managing Director at Tile Hill, argues that purpose-driven culture and a strong employer value proposition are vital for LATCOs to attract talent and sustain long-term performance.
Local authority trading companies operate in a unique space that allows a public service ethos to co-exist alongside commercial discipline. LATCOs are organisations that deliver significant social value, and this can be calculated in many different ways. Both within the LATCO itself, but also within the council as its shareholder.
Purpose is critical in the formation of a LATCo, and how performance should be continuously monitored. And at the recent MJ LATCO Conference, purpose was a key talking point in every session. Whether talking about governance, commercial discipline, growth, or organisational performance; purpose was the golden thread that united all of the day’s sessions.
Purpose is also the golden thread that should flow from the shareholder’s vision for creating a LATCO, into its strategy, the company’s business plan, and the council's commissioning arrangements. The LATCOs that thrive are those that clearly articulate their purpose and ensure it is embedded in every decision, strategy, and interaction. It should underpin the governance structures and reporting frameworks. Every LATCO is created for a different purpose, and this needs to be reflected in how it is led, monitored, and managed.
Culture is key to this. Without the right culture, governance and reporting become bureaucratic and punitive processes that distort the real value created by a LATCO. Culture is curated and amplified through leadership. And creating the right cultural conditions should be shared by the shareholder, Board, and Executive. Any divergence allows culture to be eroded, which in turn will deflect from the organisations purpose, and in turn its performance.
People make a culture real. It is not words on a wall, or something people occasionally opt into. It should permeate in all they do, their behaviours, their beliefs and their values. Central to getting this alignment is the link between a LATCo’s purpose and its employer value proposition (EVP). The promise it makes to its people about the environment, the work, and the impact they can create. When purpose and EVP are aligned, the organisation is more likely to attract and retain people that align with its vision and the desired culture. In turn establishing the conditions that allow people to flourish, which in turn drives organisational performance.
The learnings from the best performing LATCOs; those who have driven long term success in the face of economic, political, and personnel changes are those with a relentless and consistent focus on their purpose. Those who hire people with not just the skills needed for the role, but the connection to the organisation’s purpose and whose personal drivers align with the organisations.
Unsuprisingly, this makes a difference in an organisation’s ability to recruit successfully. Connecting potential candidates to the organisations EVP helps them to consciously elect to work in that environment because it resonates with them on many levels. It helps them to see how they can deploy their skills and experience in an environment that connects with their personal motivators. And crucially, it helps people see beyond the financial offer, or the organisations terms and conditions. Whilst it does not remove the need to be competitive and have a good employment offer, a clear, andwell-articulated, EVP does make it less of a barrier for those who align.
Maintaining alignment is an ongoing challenge. LATCos evolve, personnel change, and political and operational contexts shift. The organisations that endure are those that revisit purpose regularly, embed it in strategy, and ensure governance and leadership practices reinforce the desired culture. Without these structural conditions, misalignment can creep in, undermining both performance and impact.
Ultimately, the lesson is clear: purpose without alignment to EVP will affect the ability of a LATCO to attract and retain the right talent, which in turn will negatively impact culture, which results in lower organisational performance. Cultural conditions, set and sustained by those at the helm, determine whether a LATCo can translate its mission into tangible outcomes. Leaders who understand this create organisations where people are empowered to perform, innovate, and deliver value to the communities they serve.
