The only way is trust
Posted by Trevor Morrow, Chief Executive, on 24 Aug 2016
Our future as housing providers has never looked more interesting. When Red Kite was created following a stock transfer in 2011, we planned for most scenarios, as you do. Changes to funding, tweaks to Government policy – the usual stress testing that generates a strong business plan. What we didn’t account for, and I don’t believe anyone could, was the scale of unprecedented transformation that we now face as a sector. There have been many blogs and opinion pieces on these issues which share various views on how we should respond as an industry, but what I keep coming back to is that regardless of what changes we face, there is one constant that must remain, particularly as we progress with our development of a partnership approach to mergers.
Research indicates that many tenants don’t trust Boards or Chief Executives to make the right decisions and act in their best interests. And in some cases it’s easy to see why, when some organisations are taking drastic measures to respond to our operating environment. But I believe that there is no reason to lose the trust of your customers, if from the outset you take the right approach.
Very soon after transfer, we carried out a full stock condition survey to shape our multi-million pound investment programme. The results of this survey influenced our decision to not improve some homes, but rather sell them and make better use of the funds generated. Our approach to sharing this outcome proved integral in the success of what we have delivered in the last five years, because we were totally transparent with our customers about how we planned the improvements. Our customers were exposed to what they needed, to see how we’d put the plan together and subsequently monitored our progress to the expectations we had set. Our approach to explaining the background and the logic very early on, gave our customers the confidence and trust that we had applied a fair process and taken individual homes into account, rather than applying a blanket approach.
For general needs homes, those decisions were straightforward, but for the third of our homes that are based in sheltered schemes, it was much more sensitive. Today, sheltered housing is a top priority when it comes to our Government and our regulator deciding its future, but in 2011 we were already planning how we could make changes then, that would protect this much needed housing now. We quickly established that for the majority of our schemes, upgrades were essential to improve the lives of our customers and bring them up to a better standard. For a handful of schemes, however, there was much more substantial amount of reconfiguration needed to keep them sustainable in the long term.
Together with our Chairman, I knew immediately that our customers – some who had lived in their homes for more than 30 years – deserved to know exactly what the options were and the reasoning behind each one. After the initial survey, Jennie and I arranged coffee mornings called ‘The honest conversation’ at each of the 34 schemes to meet with customers face-to-face and talk through our thinking. In fact, we held up to four conversations at each scheme, making the effort to verbally update each group of customers on the progress we’d made and answer the questions they had at every significant step.
The outcome for five of our schemes was closure, due to their condition, sustainability and viability (two others were changed to general needs housing). What I found overwhelming from these interactions, was the appreciation of our customers and the understanding they had for the decisions we’d reached. It wouldn’t be honest of me to say that we were met with open arms and glowing positivity, but I don’t blame them, given the nature of what we were proposing. What we did get though, was an inquisitive and interested group of people who were genuinely interested in something that would impact them so much.
A change such as closing a scheme, normally creates an onslaught of media enquiries and negative press, but we had none. If anything, they wanted to know more and we took the time to share regular newsletters, Q&A’s, updates in whatever form suited best, to satisfy their curiosity. We’ve since made other changes to the sheltered schemes, related to funding from our County Council, which although customers are disappointed with, they fully understand because we’ve taken the time to communicate with them.
Our whole ethos is around engagement and involvement with the very people who live in our homes. Most recently, we held a workshop with a group of our shareholding members to explore the approach to developing a merger toolkit. We asked them what issues were most important to them and what parameters we should use to guide future decisions. The overriding feedback was that, within the parameters that they’d agreed, they trust us to make decisions on any potential merger approaches that we are presented with in the future. “Don’t bring us an option that you know we won’t agree with – we know that you’ll only consider those that meet the things we’ve talked about”. As an outcome, that trust in us that we will do the right thing before it’s even presented, is gold dust.
As a shareholding organisation, our 750 members ultimately vote on major changes and decisions. So if we want to change our structure in the future, we can only do so with their approval. To that end, there is no alternative to our customers having faith in us, because they call the shots. I used to wonder whether we sometimes shared too much – but when I look back at the honest conversations and the outcome of our merger workshop, I know that there was never any other way to do business.
Trust isn’t a given – it is earned. I firmly believe that communication and honest conversations is the best way to do that, and in a time when we ourselves face uncertainty, and our customers look to us for guidance and support, they need to know that they are in good hands. Albert Einstein once said that “whoever is careless with the truth in small matters, cannot be trusted with important matters” and I defy anyone not to see how trust from our customers is our biggest asset when it comes to the success and fate of our future.