The new Labour government has come out of the starting blocks making strong commitments, pledging to build 1.5 million new homes by the end of parliament. Whilst this is great news, the implications for social housing are significant.
In a nutshell, it requires large investment in new affordable homes whilst keeping current stock maintained and well managed. No mean feat for any housing association or local authority. Dealing with issues such as resident needs, building safety, cladding, mould, and the requirements of the Social Housing Act 2023, are just a few of the considerations for Housing Association leadership.
This got Lubna Haq, Director at New Street Consulting Group thinking about asset management vs development.
- With the anticipated shift back to house building, have Housing Associations got the leadership skills, capabilities and behaviours to deliver on these targets over the next 5 years, while maintaining their existing stock?
- Are Executive and Board level discussions and agendas highlighting the importance of the roles of Asset and Development directors, and do they have the capacity to separate them out or they hoping to combine them going forward?
- Previous Asset and Development roles were combined purely as a cost saving initiative, some however had a clear business rational. But what are the ‘red flags’, from a leadership perspective if these responsibilities are combined and what are the opportunities?
We interviewed several people at Executive level with disparate views in an attempt to answer these questions and, through the myriad of opinions and experiences we have the following suggestions.
Leadership Skills, Capabilities, and Behaviours
One ex CEO felt that the debate was a non-issue. From their perspective, they felt the roles could easily be merged with senior leaders having both capability, expertise and transferable skills to take on both aspects. Being able to think strategically, having financial acumen, risk management and strong people skills were a base level expectation. Where this CEO felt there was more of an issue was in three areas; Innovation, External Stakeholders, and Training and Development.
The ability to foster a culture of innovation was questioned, stating “Finances allowing, the need for continuous improvement and keeping up with regulatory requirements does not allow the conditions for innovation. The focus is continuously on being reactive.”
Now more than ever there is a need to collaborate with local authorities, developers and contractors to streamline processes and reduce costs. This often leads to endless debates with all parties incapable of leaving their personal agendas at the door, and working together for the greater good.
Finally, leaders frequently forget that the people delivering projects, are the same essential people that need to be engaged and motivated with an investment in their training and development. Saying,” When finances are tight, this is the first thing to go. The question is not as simple as one role or a combined role. The implications are far reaching.”
Asset and Development Director Roles
All the CEOs and Executive Leaders interviewed felt that the decision to combine or separate the roles of Asset and Development Directors is a complex one, with potential benefits and drawbacks. One Executive Director had a very clear view that the roles should be separate saying, “Bringing them together is a recipe for disaster. The focus will be on their natural preferences regarding maintenance or house building. I am not sure how strategic or innovative the decision making will be.”
Red Flags to observe
For those considering combing the two roles:
Those interviewed highlighted the cost efficiency and the likely strategic alignment as benefits, emphasising a single role will reduce overheads and provide a unified approach that will likely lead to better decision-making.
On the other hand however, there is the consideration that combining the roles will increase the demand on the individual reducing their effectiveness. Plus, there will be instances of clear conflict of interest. What happens when short-term development quotas are pit against longer-term management priorities?
For those considering separating the two roles:
It was suggested that separating the roles allowed for specialist skillsets and expertise to deliver greater outcomes, and clear accountability leads to improved performance. Although there is the ever present issue of increased overheads associated with separation, and the challenge of effective collaboration between these two roles competing for resource it is not totally clear cut which is a better option.
On balance, the conclusions we came to were that when combining the roles of Asset and Development Directors, Housing Associations should be mindful of the following:
- Strong Leadership: The individual(s) taking on Asset and Development must be strong leaders with excellent communication and negotiation skills.
- Strategic Focus: They must be able to balance short-term operational needs with long-term strategic goals.
- Risk Management: A keen eye for risk is essential, particularly when managing a diverse portfolio of assets and development projects.
- Adaptability: The ability to adapt to changing circumstances is crucial, especially in a rapidly evolving housing market.
While you may still feel undecided on the best course of action, by carefully considering these factors, Housing Associations can make informed decisions about the optimal organisational structure to deliver on their ambitious housing targets while maintaining their existing stock. What is clear is that it can’t just be a cost saving decision, or a decision taken in isolation. Other factors such as developing the workforce are as critical too.