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Local governments to adopt customer-first approach

Small Business Commissioner David Eaton discusses the customer-first approach adopted by local governments participating in the SBDC’s Small Business Friendly Approvals Program.

One silver lining of the COVID-19 pandemic and recent supply chain shortages impacting many industries, has been an increased appreciation of the significance of small businesses to local communities all around the world.

The concept of localism (supporting the local production and consumption of goods) as opposed to globalism has really taken flight during the past two years of restricted movement in and out of our state. I like to think that this movement to support and shop local has gained traction, not only because our travel has been restricted and we’ve had no option but to spend our hard-earned dollars at home, but because consumers have realised that there are real people behind every small local business.

It’s no secret that the COVID pandemic hit small businesses harder than many other sectors. While we can all appreciate the necessity of lockdowns and restrictions to protect public health, it’s much easier to come to terms with when your livelihood is not affected.

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The more than 220,000 small businesses in Western Australia each have individuals behind them. Staying in our communities and seeing more of these businesses over the past two years means that we have really got to know our local business owners and have witnessed their resilience through rapidly changing public health settings, supply chain disruption, staff shortages, and rapid surges and retractions in custom.

When you see your local café owner every day and observe what they have contended with, you’d be hard pressed not to be empathetic to the challenges facing them.

Role of local government

So, what has this got to do with local government?

Local governments well understand that small businesses are a significant contributor to their local economies and a major source of jobs within communities. Significant resources are invested into economic development strategies and teams to help support local business communities, while placemaking, events and marketing strategies to attract the visitors and retain residents have become an important part of the local government arsenal.

However, beneath comprehensive economic development strategies and inspiring marketing campaigns, there has sometimes been a tension between how local governments attract businesses to establish locally, and the lived experience of someone actually setting up their new business.

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New business owners often navigate complex local and state government approvals while they are also securing business finance, negotiating a lease, managing a fit out and promoting their new operation. Understanding exactly which approvals and licences they require, who in their local government to approach, and how long it will take to receive approval is one of the biggest areas of confusion and often frustration for new business owners. This is not intended as a criticism of the role of regulation, rather the way that different requirements are communicated to small business customers, the number of officers they need to deal with for different approvals, and the length of time that it can take to finalise all the paperwork.

At the start of 2020, the Small Business Development Corporation (SBDC) received funding through the State Government’s Streamline WA (a whole-of-government program to make it easier to do business in WA) to expand the Small Business Friendly Approvals Program. This program, which was piloted in 2019 with the Cities of Canning and Stirling, is designed to streamline the local government approvals process and improve the overall experience for small business customers. The onset of the pandemic increased the urgency for reform, to ensure our economy could recover strongly from COVID impacts.

It was clear from the pilot that making it easier for start-ups to access the permits and licences they needed from local government authorities would be a potent move to encourage local economic growth.

Human-centred design key to change

A year and a half into the expanded Small Business Friendly Approvals Program, having worked with 14 regional and metropolitan local governments so far, it is the human-centred design element of the program that has had the most impact on local government participants and their prospective small businesses.

Human-centred design gives a voice to customers by gathering evidence to inform decision-making, while examining behaviours and emotions, as well as systems and processes. It ensures solutions are designed in consultation between businesses and local government officers, based on the business owners’ needs and experience.

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Listening to the voice of the customer is key in this approach. Every local government who has participated in the Approvals Program has had the opportunity to hear from several local business owners about their experience of applying for a permit with their local government. Hearing directly from their customers has been crucial to enable officers to gain a deeper understanding of their customer’s perspective and identify improvement to their current application and approvals processes.

In many instances, local government staff declared that this was the first time they truly understood the impact that approval delays, internal silos and poor communication had on applicants, who may have left paid employment and committed to paying a lease before being able to start their business and generate an income. They were inspired to make improvements because they could see and empathise with the person behind the business.

Shifting mindsets to human-centred, rather than process-oriented, design, allowed program participants to generate ideas for change that could make immediate and long term benefits for their small businesses.

So far, across 14 participating local governments, 358 process improvements and new initiatives have been identified. Many of these changes, such as simplifying the information provided to small business customers, require low effort and resources to implement but will cumulatively make a big difference to reduce the burden of establishing in these areas.

With many challenges and much uncertainty remaining for the small business sector as we emerge into a post-COVID world, it is a critical time to consider what governments at all levels can do to support the business community as it continues to build long-term sustainability and resilience. Helping our crucial small business sector start strongly, survive and thrive by putting the person at the centre of a small business, at the centre of our thinking, is a change that all of us in government can make.

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This article is republished from the Small Business Development Corporation (SBDC) website. The SBDC is a WA State Government agency that supports small business. Please read the disclaimer before relying on this information, which has been developed primarily with Western Australian businesses in mind.

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