The world is changing. Housing providers need to as well

What the organisations we spoke to are doing differently varies greatly. Some are closing central offices, some are reorganising the way they interact with customers, and others are making efforts to embed innovation and transformation into the fabric of their culture. But what runs through all the stories we heard is a recognition that the world is changing around them and so they need to change, too.

New entrants are already shaking up the housing sector. We spoke to Legal & General (L&G) Affordable Homes, which could soon be the biggest provider in the game with a target of 3,000 new homes every year. Crucially, it’s planning on doing this with a staff headcount of just 165.

How is L&G doing this? By rethinking how housing delivery works in a holistic way, cutting out excess back-office cost, building a single data pool for all its stock, and by partnering with existing local providers.

The operating model L&G is putting together may be revolutionary, and it may be easier for a new player to be doing it rather than an established organisation. Nevertheless, there are still important lessons in it for other providers that don’t necessarily want to rip everything up and start again.

For example, many organisations have had to learn to operate more remotely through the pandemic. For those with an eye on the future, that moment in time shouldn’t be seen a strange anomaly but an opportunity to reimagine how they can work more efficiently.

For organisations such as that, one of the key questions that the pandemic sparked was how they can maintain – or ideally improve – connectedness while being physically removed from their customers, staff or the wider communities that organisations serve.

For Johnnie Johnson Housing, the answer to that dilemma was to listen to what both customers and staff told them they needed and to tweak its offering accordingly.

As a result, the association has begun offering round-the-clock services while allowing all its staff to work flexible hours. This type of transformation reflects a perfect synergy between the evolving needs of an organisation’s customers and its staff.

But it could only happen because improving the delivery of service – rather than crude cost cutting – was the catalyst for change. As chief executive Yvonne Castle puts it: “It’s [about] aligning everything with the customer in mind and [thinking] what can make their experience with Johnnie Johnson better.”

Not all the new operating models detailed in our report entirely reinvent the wheel. But all the organisations we spoke to shared an understanding that open-mindedness, flexibility and nimbleness were critical when thinking about the process of transformation.

Whether the change is introducing true flexibility into the workplace (as Johnnie Johnson is doing), using new disruptive digital technology to modernise services such as repairs, changing the ways in which we interact with residents, or switching away from a centralised office structure, the key is to create a culture in which innovation is prized.

Taking this maxim to its logical conclusion, when Believe Housing set out on its transformational journey in 2019 it launched an internal dedicated innovation team and created a new director level role to lead it, both with a specific remit to challenge assumptions. But this team can only be effective by remaining small and working with other parts of the organisation that buy in to the importance of innovation and change.

For chief executive Bill Fullen, the fact that the team is nimble and works collaboratively with other parts of the business has been vital to its success. “It was about encouraging people that it was OK to introduce new things and just get on and deliver them,” he explains.

‘Getting on and delivering’ is what transformation is all about – and in the report there are many fantastic examples of organisations who have done just that.

Transformation is not something that needs to be done right first time, but it is something that needs to be taken seriously if you hope to stay relevant as an organisation. After all, as one of the greatest innovators of modern times, Albert Einstein, said: “You can’t use an old map to explore a new world.”

Top recommendations for implementing new operating models:

• View COVID-19 as a catalyst for change: innovative organisations can use the upheaval of the pandemic to bring about long-needed change
• If you innovate, be quick and flexible: innovation should always be an iterative process, so be prepared to adapt and learn along the way
• Listen to customers’ needs and expectations: your customers are likely to have changed over the years, so understanding their new needs will improve how you work with them
• Data is king: you cannot improve service delivery without knowing your customers, so all major change programmes should be supported by data
• Invest to sustain: new operating models that drive genuine change will need investment to bring them about; a short-term financial hit will drive far greater efficiency and performance in the long term
• Take your people with you: culture is one of the most important part of the puzzle in redesigning your model, so it is vital that your people ‘buy in’ to any changes
• Be flexible with your staff: decentralised, flexible workspaces will change the ways services are delivered and how staff are recruited, so every business must be flexible to attract and retain the best people
• Don’t be afraid to recruit disruptors: being effective in a rapidly changing environment requires new ways of thinking; hiring people with the willingness to challenge old habits can be one of the best investments a business can make
• Try saying ‘yes’: focus on creativity and innovation, and give people space to develop new ideas which can positively transform your business
• Involve the customer: decisions about service delivery should involve the end user as much as possible, so make sure that all voices are heard when redesigning your model

Ian Wright, chief executive, Disruptive Innovators Network; and Alistair Sharpe-Neal, senior consultant, Campbell Tickell

Campbell Tickell and the Disruptive Innovators Network have an upcoming webinar on 10 February to discuss the findings of the report in more depth.