Briefing 3 – Challenging Senior Management Collusion

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The collusion of mediocrity that is embedded in many senior management teams in social housing is a kind of endemic, cultural behaviour not to share values openly, nor let personal values play into strategic decision making.

These values are often not even fully conscious to the directors and leaders themselves, though most usually are. Major examples include the value that social housing organizations need to “get real” and behave more and more like commercially driven organizations. The organisation, according to this view, needs to behave always as if it is a company with customers, and that it should behave as if it has external shareholders seeking to minimize costs, and maximize profits. Performance improvement is a combination of tight, performance management, driven by key performance indicators (the dreaded KPIs), in order to maximize net revenue to the “business”. Social values are seen as part of the bolted on PR machine – a means of getting good customer care survey scores. The result is a tenant management model that is based on relentlessly reducing costs and resource inputs whilst attempting to maximize survey and inspection scores. This also results in internal staff being asked to perform better, working harder on ever lower resources. This is all labelled as good management and acting in the interest of “stakeholders”. It’s a businessy model, a value based on the idea that social housing organizations are inherently inefficient and weighed down unnecessarily and even wrongly by naive social values. Much evidence and data can be found to support it and it can easily and effectively sweep aside, or even under the carpet, more subtle, softer, moral and humane values, many of which are the slowly being forgotten values that brought the enterprise into existence into the first place.

As this harder business value has taken hold, housing organizations are turned into businesses, finding clever ways to fund declining numbers of authentically social projects with the revenues from commercial and market value builds but, over time, degrading the real benefit to the socially driven part of the business. The social aspect evolves into a largely unaffordable luxury, just as, in the national health service, compassion is no longer a foundation stone but has become relegated to a training variable. Corporate identity and glossy year end reports become as important, if not more important, than on the ground delivery of frontline, caring service, often to vulnerable tenants. At one end of the spectrum, social housing has become entirely indistinguishable from any other commercial sector organisation. In the board rooms, it becomes taboo to expound non-profit driven values at all, a sign of being out of touch, out of date, dysfunctional and even unprofessional or incompetent. Promotion is based on toughness and resemblance to a wealth creating entrepreneur. The nay sayers go silent, picking their smaller battles to win under the radar of senior management, becoming eloquent speakers in private of the “old days” but largely colluding with mediocrity, playing it safe at the toughened top.

In some boardrooms, paradoxically, quite the opposite occurs. Senior management teams are driven by the “social agenda”, clinging onto the tree roots of moral impulse, and attempts to lead the historically sluggish and complacent organisation to become more efficient are viewed as a betrayal of grass roots social values. This is less the case in larger organizations, but in many smaller ones, service and quality have been, over many years, become institutionally confused with cold capitalism and greed. We avoid making smarter use of limited resources because that is “selling out to commercialism”. Inspection reports have to get fairly bad before any action is taken, tenants are viewed as ungrateful recipients of social services who shouldn’t dare to complain or assert their needs too loudly. They most certainly aren’t customers, acording to this view. It’s an approach driven by delivery, not response, by status quo, not innovation. Here, more recent additions to the management team, who may have MBAs or have worked in the commercial sector, throw up their hands in despair, or simply move on quickly, as the intransigence of senior managers results in inefficiency in the name of tenant care. Response is slow, resources are used inefficiently, maintenance contracts are informal, even corrupt, and institutionally costly and often result in poor, inconsistent quality of service. Personalities reign over process, and the way we do things around here is the way we have done them for years, and there is huge resistance to change. All in the name of a view that sees social service in terms of permanence and suspicion of externally inspired change. Challenging the status quo is seen as dysfunctional, troublemaking, and even unrealistic. Once again, more commercially minded senior managers may well collude with mediocrity here if they stay, in order to keep their jobs. They may discover that promotion arises more from collusion and cautiousness that challenge and ambition.

Now the trouble is that the second organization often finds itself at the end of poor quality ratings, inspection reports, rising complaints from the new demographic groups entering the sector as tenants wanting more bang for their bucks, and emerging crises of cost and revenue from ever tougher economic conditions, as well as increasing competition from leaner, meaner and greener social housing organisations. It is no longer just a providers’ market.

They go into crisis, and the pendulum often swings to the other extreme. KPIs are dumped on employees, things are tightened up in quick, clumsy and insensitive ways, the culture becomes traumatically depressed, and often things get patchily worse or better, even as a few numbers are fudged to look better. Quick wins are sought. Fires are fought and labelled up as transformation. We take thirty per cent cost out of the system, but do we really? Labour turnover and sickness increase with stress and complaints pour in about the loss of real customer service as chaotic call centres go into meltdown, or worse, function in robotic and unpopular ways. When it is done skillfully, the organization lurches to the opposite commercial extreme, is often bought out by a bigger fish that swallows it whole, or becomes leaner and greener but a lot meaner in ways that are regretted by the grass roots throughout the organization and its community.

The housing association becomes a kind of hybrid with espoused social values that are simply now playing second fiddle to a corporate, commercial agenda. Often trustees are gently replaced by more commercially focused folk who begin to rubber stamp the “tough” decisions, labeling anyone who cries nay as dinosaurs. The trustees begin to role play commercial shareholders. The organization becomes a business. Profit becomes the goal.

Staff in this scenario see senior managers as out of touch, and bemoan key performance indicators as clumsy sticks being used to beat them with. But one thing does start to happen – the inspection reports start to show improvement as tenants get used to the new ways of working, quickly forgetting the old more informal days. A set of new targets are delivered upon – call centre response times, cost targets, conformance to set “standards”. The older softer measures of “how are we realising our values”, warmth of service, the general feel of loving working for a values driven organization disappear into history. The organization morphs, often with at least a few of its social values in tact, but largely now as a commercial company, a kind of toughened up social business.

What gets gained is much more efficient use of resources – processes can become more responsive, net revenue can become higher and ploughed back in for investment. The tenant experience can improve in a number of areas – more consistent maintenance, on the doorstep communication, easier access to information. But things get lost too – the sense of real, personal interaction, a feeling of continuity of service, a feeling of being seen as an individual, as well as all of the softer, informal kinds of interaction. There can also be a sense that I am no longer a tenant of a socially focused initiative – I am now being called a customer of a well-intentioned profit-driven company who is mostly nice to me because they want good customer survey scores.

In all of these scenarios, I believe the situation arises because of a collusion of mediocrity at board and trustee level. Why is social housing called “social”? What are the values behind “Affordable” housing?”

Without a doubt, both social and commercial forces are strongly at play in social housing. At board level, if they become polarised, then either a battle of values results, or one of the two will often be suppressed at the top, and a kind of diseased bias results, cascading through the whole structure. We need to be able to battle out our values in a respectful but passionate dialogue at the top. We need to be able to recognize, acknowledge and celebrate the diverse views that often are part of boards that have often evolved over years, with recent members being brought in from other, more hard-nosed business sectors, needing to work with those who have local authority, more socialist, and also missionary and voluntary sector backgrounds.

Is it possible to be lean and warm? Is it possible to be social AND commercial? Is it possible to keep the best of the old and fuse it consciously with the best of the new? Is there a conflict between efficiency and social responsibility? These are tough questions, which will need skilled and open dialogue at the top. These conversations may result in less stringent profit targets but, equally, more of an openness to learning from other sectors. There may need to be senior management development that joins up at the top. We may need to surface the hidden grudges, challenge habitual thinking, make our trustee base more not less diverse. We may need to dive more deeply into what “social” means in social housing in our currently and emerging economic and social climate. We may need to recognise skill and knowledge shortfalls at the top. We may need to accept that current change programmes are not working or are clumsy and accept more feedback from the rest of the organization. We may need a real, non-collusive dialogue of values.

Are you up for that?

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About Paul Levy

Paul is a writer, thinker, facilitator, theatre-maker, and conversifier. He is the author of the book, Digital Inferno.

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