Are You Going To Disrupt Or Be Disrupted?

One of the most notable things about the housing sector is that right now everything is changing. If history has taught us one thing it's that at a time when everything changes there are people who win and people who lose. My conclusion is that those who are going to win are those who are prepared to be disruptive about the business models, about the technology and about the customer orientation that our sector has had in the past.

Let's take the business model first. Housing associations have traditionally had a "have and hold" business model. We own assets that are built using long-term debt raised from banks and grant gained from government. We then hold those assets for ever more using the rental income generated to repay the debt and cover the costs of management and maintenance.

There are some variants - there is an opportunity to increase profit by building housing for sale or shared-ownership and to subsequently recycle those profits to support less financially-viable housing for affordable rent. But the basic model remains as it is since the late 1980s when private finance was first introduced. With two of the three pillars on which that business model is based now gone - long-term debt from banks and significant levels of grant from government - it has to be questioned whether this business model can survive.

When it comes to technology the basics have remained unaltered for even longer. Most IT systems that are available to support housing associations are far better at recording transactions about an individual customer than recording their individual characteristics, hopes and aspirations. And how do these systems help when it comes to showing the impact of housing associations undoubtedly beneficial work on local communities - the whole social value agenda? The answer is that they are entirely inadequate. The technological changes required extend beyond the IT systems in our offices into the technology we use to communicate with our customers in our communities.

My top ten of technological innovations I'd like to see caused a few comments and I've been keeping a close watch on the emerging technologies to see what there is that might be relevant to our sector in the future. I'm not saying it is directly relevant but did you know that there is a project in America which is trying to use a 3D printer to create a gun? Clearly, it is a horrific prospect and it puts an onus on us all to find a more socially-useful application of this fantastic technology. If we want to disrupt, instead of being disrupted then we must look to the new technology and how it can help us achieve our aims, but do so in a relevant, ethical way.

And as for our customers, the disruption here will be obvious, as most of them are about to get the biggest wake-up call for a generation. We are about to witness welfare benefit reform sweep through a customer-base not used to having to think about the value-for-money of the home that they are renting. At the same time the "one best way" regime of the centralist Audit Commission, no longer exists. Finally, housing associations have freedom to respond to their customers in a way that they see best, rather than the way that Whitehall sees best. What they do with that freedom remains to be seen.

My take on all this - and it's one I hope to share with colleagues in the National Housing Federation soon - is that as a sector we are ripe for transformational disruption, it lingers over the sector as both a potent opportunity and a potential threat. What makes this all the more pressing is that if we don't do it ourselves, then there are lots of others waiting in the wings who would be more than happy to bring the disruption to us. 

So How Do We Actually #killwonga?

There’s a well-known philosophical conundrum: if a tree falls in an empty wood – does it make a noise? Well, I'm sorry to reveal to any navel-gazers out there who have been pondering this question for a while, but I can reveal that the answer is yes. The reason I can be so sure is that the tree falling is almost certainly heard by representatives from www.openwonga.com, a website that’s dedicated for people “to discover more about Wonga, the digital finance company.”

Essentially, www.openwonga.com are much like the sensitive outer strands of a spider’s web which when twanged by some hapless insect create vibrations which summon the spider. In this analogy though, the insects are really off-message mentions of the Wonga brand. You can try it on your own blogs and Twitter accounts. For all I know if you whisper Wonga five times into a mirror they might appear behind you. In my own case they got in touch after my last post to point out that actually,their customers don’t pay anything like the 4,212% representative APRs that they’ve been maligned with. 

Strangely they didn’t respond to my question of whether with £48.5m in profits they could charge substantially lower interest rates and still provide a return for shareholders. Or whether, they might like to enhance their brand with a bit of old-fashioned philanthropy towards the marginalised communities from which they make those profits. It seems that like the tree falling in the empty wood, some things are destined to go without an answer. And answers are most certainly needed - read some of the articles covering this topic if you need convincing.

As pointed out last time, #killwonga is not a vendetta against the company itself – and more of a rallying cry to the burgeoning partnerships between those of us who care about Civil-, Big-, Fair- or simply Our- Society [pick your own least offensive phrase] to look at ways that we could create an innovative and disruptive model that would challenge the Wongas of the world. Our values and our focus on social outcomes above distributable profits means we could be part of something that provided a far lower cost alternative for our communities. They wouldn’t then have to turn to private entities, who are duty-bound to make more and more money. 

This notion feels very much of the zeitgeist. Looking around you can see Bank of Dave, My Home Finance, Grameen Bank – it’s not just a general sense of dissatisfaction following the recession that is causing this. Now more than ever, people are looking at the business model of finance and wondering if it can’t be improved upon. Who knows, perhaps the Civil- Big- Fair- Our-Society thinking really will have an effect on our action. 

So how would the #killwonga project work? My personal preference would be to look at how the micro loans can assist investment and enterprise, rather than (just) trying to alleviate indebtedness. We are ideally placed as housing associations to see when our tenants are in a position to use the money in a way that would benefit them. What’s more we can also plug them into a network of business advice and support. And between us, we probably have some spare cash that would be well suited to a modest return in exchange for a managed risk.  

As I’ve mentioned before, the idea of being central to our communities can just as easily be achieved through the loan to start a business, as it can through building homes. And a fund, at a manageable rate of interest lent on the proviso that those using the funds also accessed business help, could be just the alternative needed for a group of people who have often been disenfranchised because they have poor credit ratings. 

There are people already doing this; #justfinance is the term coined by the Community Development Finance Association in its report earlier this year (you can find it and other really interesting stuff on the Social Finance site). If housing associations are serious about financial inclusion, and if there really is an enlightened self-interest for us that strengthens our business and strengthens our communities it requires that some new conversations to happen - doesn't it?

Kill Wonga: Or How Could Housing Associations Work With Community Organisers?

I might have mentioned previously that my time working on the National Housing Federation has come to an end. I hugely enjoyed the six years I spent with the organisation and I’m sure – in fact, I know – that my work with them is not done and dusted, more of which in a later blog. So, how does one fill the void left by the Fed? You might assume it’s badminton, cycling and the occasional documentary about glacial movement? Well, you’d be wrong – instead it’s off to another organisation who I feel encapsulates an aspect of housing I find fascinating, namely, the Housing Action Charitable Trust, or HACT.

There’s a variety of reasons why the work of HACT attracted me. Going back to my experience in housing in the 1970s and 80s, housing associations were very much "of" community. You only have to look at the organisations like Paddington Churches Housing Association (now Genesis Group for any youngsters reading) and its formation out of the North Kensington Amenity Trust to see that new housing organisations at that time were formed by community activists who wanted things to be different in their area. That’s the soul of housing that I first encountered in my impressionable mid-twenties, and it was a soul that appealed. If all you are doing in housing is putting one brick on another and standing back and saying, that’s a nice piece of Flemish Bond then that’s not the whole story. My passion for housing is that it’s about a sense of place and understanding why places work and why they don’t work. All of which leads me to HACT.

Thus far, I’ve not had a great deal to do but this week I went to a meeting where HACT people were out in force. It was the first meeting of its kind between housing associations and the 2012 version of community activists - the emerging community organiser movement. For those of you not familiar with what this is, look up www.locality.org.uk to see how it is playing out in the UK, or if you want to feel the real 1970's flavour, go to the works of Saul Alinsky (and as a short cut here are some of his most interesting quotes). There was a nervousness about the meeting. Community organisers are, ultimately, about the transfer of power to communities - instilling an urge to action from unlikely places. For many communities, housing associations are actually part of the power structure that needs to give things up. You can see the potential for conflict...

In practice, it worked extremely well - for those of us in the room, although I can though imagine a few housing association CEOs having apoplexy at the concepts! We found we had much more in common with each other than we might have thought and the Minister for the Third Sector Nick Hurd @nickhurdmp was encouraging of our collective endeavour. Jess Steele from Locality (found at @LocalityJess) and Tony Stacey from the PlaceShapers Group of housing associations @TonyStacey (and the fact that they're all on Twitter proves they must be good guys) spoke warmly about the links that needed to be re-made between two halves of what is essentially the same movement. As the afternoon progressed and the conversations flowed, we were able to conceive of a different world.

In that world, no longer do housing associations have an agenda about "what's best" to be imposed on some hapless and needy community. That deficit model of regeneration that has let us down for 30 years - "as a community you'd be fine if only you had a [insert flavour of month] and we can get it for you" - would be replaced by some deep questioning and some real listening about what it is that the people living in areas want. It builds on the unique assets already present within communities, using their hopes and fears, their loves and their hates as a starting point. For even the most disillusioned and disenfranchised can be impelled to action when these strongest of emotions are engaged. It starts small and local, and may never get to any different scale. Its messy, uncomfortable, and by the way, given recent revelations about the scandals of our press, also provides a much more direct and reliable method for "telling truth to power".

But we also realised that it wasn't going to be easy. For housing associations it requires a quantum leap in engagement and involvement. We will have to get past an approach that too often relies on tick box consultation; quick and dirty surveys; involvement of the usual suspects. We will have to let go, stop knowing all the answers and become curious and questioning instead. And our default "broadcast" mode will have to be retuned to one of "listening". We will also need new metrics - regular readers wouldn't expect me to miss the chance to bang the drum again for the pressing need for a good metric for social return on investment. We need this or else how do real community outcomes get measured, how does attribution of outcome get dealt with and how do we build an evidence base that this approach of community organising works to scratch the itch that other regeneration initiatives have left behind? Tough asks - especially at times when the world is about to get a whole load tougher because of welfare reform.

As to the title, I have nothing personally against those who run Wonga; I know that many people survive because of payday loans that they and others provide. But nobody who is already on the breadline can thrive with 2,120% APR loans. Might "Kill Wonga" just give us the first common campaign between housing associations and community organisers?

How Technology Can Re-invent Housing Part Two

The future?

Following the first part of the rundown on how new technology could influence housing this week's post compiles a top five - although really there's no "order" as such. In fact, if you look at any sensible list of technologies likely to become commonplace in the next fifty years you'll very quickly see how every industry is likely to be radically altered by the incoming tech. There are game-changing technologies emerging every year - whether you know it or not, change is coming.

Even if you take one example like programmable matter you very quickly see that we are talking about an entirely different way of life - a time when buildings can be re-arranged at the flick of a programmer's keyboard. At that point you see that housing must once again return to the sometimes overlooked and perhaps old-fashioned notion that it's not only the bricks and mortar buildings that matter to our organisations, but the communities we help to shape.

5) A workable application of Augmented Reality
The reason I say a workable application is because if you've got a smartphone you can already download applications that are notionally augmented reality. They overlay information from a database over the real world. Some of the more interesting ones are the star maps that allow you to fake a deep and learned knowledge of the various stars in the sky. For augmented reality to really shape our lives though it needs to be in a much more practical form than holding a smartphone up to the night sky.

Google's Project Glass is probably the best vision of how things could come to pass. In that eventuality - augmented reality is less about housing, and more about how humans as a species can get smarter. If your every glance can be recorded, tagged and searched - what does that do to customer engagement? How does it change the way we deliver information? Moreover - what does it do to our brains?

4) Enhance health in communities
Further to last week's talk of the internet of things, we should probably accept that more of our appliances are going to start offering up information about us. While this has to be approached with the concept of user privacy as a paramount concern, it does offer us a tantalising view of how life could be when our stuff gets smarter. One application of this is in achieving health goals. How about getting an X-box style achievement for using the stairs five times rather than the lift? Or a series of networked pedometers that provide a real-time visualisation of who in a community is winning a race?

3) Teleport staff so we don’t need to have a fleet of vehicles
Travelling is one of the least efficient aspects of running any organisation, we need to utilise all of the technology available to reduce employee miles. Whether it's through a sensible policy of teleworking, video conferencing and smarter logistics - there's a huge amount we can do to save money and the environment.

2) Measure happiness in the community
This is potentially far-fetched but the theory is sound, I think! For a few years now Google has been tracking the movement of flu outbreaks by measuring volumes of flu-related searches and then plotting that across maps (http://www.google.org/flutrends/). This idea of using real-time information on what people are saying is fascinating (although again raises the spectre of privacy issues).

Let's say you could also plug in the information that people were adding to social media networks as well. Then if you could filter those terabytes of information through an algorithm that was sensitive to emotions you could theoretically build up a very detailed model of our communities' levels of happiness. That's a mind-blowing tool when you think about setting up alerts from such a system - where you could get alerts about higher-than-average mentions of ASB. I wouldn't be surprised if you could even start to model crime patterns with a tool like that. What's more you would have another metric that would show you precisely where needed work in terms of emotional support.  

1) Enhance community conversations
THT have been on Facebook and Twitter for over two years now and in that time we've seen just how useful these technologies can be in giving us a platform to host and participate in discussions with our communities. It's not just a case of providing somewhere for these discussions to go on - it's also getting the technology to deliver something more useful from these discussions. We could use keyword extraction to find what's really important to our tenants and alert us to possible problems. Perhaps it's when this sort of conversation is allied with augmented reality that it will really allow us an in-depth and real-time insight into the communities we want to support.

Incidentally, I started thinking about this stuff because it looks like THT is about to be in the market for a new IT system. So I started thinking about what I would want in order to position us for what is coming. A quick look at the systems on the market and I'm struck by how far behind the technology leading (let alone bleeding) edge any of them are. As a sector, are we well served by the products out there? Emphatically not. It's time to up our demands - any willing suppliers out there with a compelling 21st Century offer? You know where to find me....

As a bonus thought, isn't it about time someone thought about a realistic option for cloning? Never mind being in two places at once, I need at least four of me if I'm going to have a chance of keeping up...

Amy Cuddy Talk On TED

I watched this fascinating talk from Amy Cuddy at TED and thought I'd share it.