Wednesday, 27 May 2015

Steps to success

Senior housing figures are about to gather in London for the National Housing Federation’s annual leaders’ forum. They do so at a time when a number of high-profile members of the sector have argued that providers face greater risks as business models become more complex and that non-executive boards need to raise their game to understand, manage and overcome these risks.

There is no doubt that housing and care organisations have become much bigger and more complex than they were when I started my career in the 1970s. It is also true that the external environment is very different. Changes to revenue and capital funding and to loan finance have led to the need to innovate and transform housing organisations to ensure that they survive and prosper in increasingly difficult circumstances. An old friend likened the new world to dancing on a flying carpet.

What has not changed is the growing demand for the housing care and community services that we provide. The very same factors that have brought about the need to change our financial and business models have ensured that the demand for our services increase at the same time as our ability to provide more is threatened by the effects of the recession and government policies. To put it simply we are expected to do more for less in an extremely volatile climate.

So, is it correct to place the emphasis on boards to ensure that associations do not go under and can continue to innovate? Of course boards have an important role to play in this but what is really needed in this new era is excellent leadership at executive and non-executive level: Leadership that scans the horizon and puts in place strategies to address the new challenges and minimise the risks: Leadership that is clear where it wants to go and how it is going to get there: Leadership that innovates to find new ways of doing things. Leadership that works with its colleagues, residents and customers to ensure their needs are understood and incorporated in business plans: Leadership that works in partnership with all stakeholders: Leadership that is comfortable with the unknown: Leadership that inspires others: Leadership that leaves its ego by the door. And above all leadership that remembers the values of an organisation and why it exists.

In my view the last point is the most important of all and one that I fear is becoming lost in the debate about the challenges we face.  Of course our current leaders require a greater understanding of financial risk and a higher level of business acumen than they did in the past when the world was much simpler. Organisations have become more commercial. The operational and financial successes of recent years appear to show that many are able to adapt successfully to face new challenges. Even in the current climate for every one Cosmopolitan there are many successful organisations. This success and the ability to continue to be successful in the future will mean nothing if our purpose is forgotten. What should differentiate us from private sector in this race to become more commercial is the social purpose of our work. Return on capital invested should be measured as much in social terms as in financial. Leaders should not just be stress testing financial and other risks of new projects they should be asking the question how does this help us to further our values and can we measure that as well. This is the way in which we will know that we are still adhering to the original values of an organisation. If this is missing from the board challenge, if this is not part of the leader’s armoury then we will have failed. The sector at its best is a great example of blending business acumen with social values. The leaders that achieve this are the ones that remember that they are mere stewards, who for a short period of time have the privilege of leading organisations which have a past as well as a future. Their job is to secure the future while remembering the past. It is not just boards that have this responsibility it is the job of everyone who aspires to leadership in this sector.

In a recent discussion with a very senior civil servant I was asked why the government should not just transfer all social housing to the private sector. Apart from pointing out that this would be difficult to do in legal terms I reminded him that the social value of our work would be lost and that in many cases this work helped to transform lives and hold communities together. He only really began to take notice when I added that this work directly helped the economy and saved the exchequer millions of pounds. Staying true to our values not only saves lives it also saves money and may prevent Cosmopolitan type failures in the future.

Tom Murtha is former chief executive of Midland Heart

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