The UK’s social housing sector is facing a customer service crisis; a number of systemic issues are causing stagnated productivity and an urgent need to improve services. Unlike other industries, the social housing industry is dictated heavily by government policy which causes a direct impact on their customer base. Over the past two years, the introduction to Universal Credit and wider welfare reform changes have directly affected social housing tenants, leading to customer service rising to the top of the agenda within the sector.
‘Customer Experience’ is now widely spoken about within housing, with an increased focus and understanding of its importance. Customers expect to be taken on a ‘journey’, requiring real-time feedback through various means of communication.
At Berwick Partners, we have conducted an extensive study to explore the pressures on leadership teams imposed by the growing needs of the customer, particularly post pandemic when ‘normal services’ resume. This report focuses on leadership, highlighting the key behaviours required to maximise the opportunities that exist at both an industry and organisational level. Finally, we explore how organisations are adapting to attract and develop future leadership talent and how digital technology is shaping workforce trends.
Digital transformation & leadership challenges
The social housing industry has been forced to change in order to accommodate the needs of its diverse and evolving customer base, with digital transformation driving the agenda. For Housing Associations, technology is a key part of the answer to keeping up with the rapid pace of change. It provides customers with real time feedback and easy access to information when they need it.
A large proportion of customers are having a similar relationship with Housing Associations as they do with other B2C organisations, by promoting this themselves through a self-serve digital model. Throughout our research, almost all participants described a unique way in which digital technology has impacted their Association and their customer interaction. Despite this, digital transformation has presented many shared and common challenges including changing market dynamics, the impact of Universal Credit particularly given the current climate, attracting and integrating new talent and most notably, leadership.
If properly implemented and fully embraced by an Association, digital transformation evidently improves customer satisfaction levels. It can be argued, however, that digital transformation isn’t about the technology, but culture - creating advocates, staying curious and empowering employees. Change is inevitable and the strength of leadership will be a determining factor as to how, and if, Housing Associations succeed when normal services resume. Those who are excelling in this environment are moving away from a directive style of leadership to a more dynamic and collaborative approach across their organisation. Throughout our research, the concept of the ‘adaptive leader’ was a regular topic of discussion, with all participants alluding to the need for a more adaptive and proactive style of leadership. We have identified several common leadership behaviours that we believe will drive change and enable success.
It is important that Housing Associations build a culture based on collaboration and shared leadership. As organisations move towards a self-serve model, it is vital that senior leadership become collaborative between the directorates to ensure that the organisation is pushing digital boundaries. The current skill gaps in technology within the sector make collaboration essential to improve productivity. Essentially, the responsibility of excellent customer experience lies with everyone involved, not just the customer service teams.
2. Intellectual agility
Organisations will need to adapt and navigate complex market dynamics, to meet increasing customer expectation and to attract new talent. In order to succeed in this environment, leaders will be required to think critically about complex problems and organisational development, increasing the ability to make fresh connections. Leaders will need to be able to re-shape their strategy as new technologies become available, this will enable them to stay ahead of the ever-changing landscape.
With the advancements in technology and Housing Associations actively looking to move into a ’self-serve’ online model, businesses are expected to continue to change, and at pace. This has been demonstrated during lockdown however leaders will need to be agile in their thinking to remain relevant and to match, or ideally exceed, customers’ expectations.
3. High EQ
A high level of emotional intelligence is a key requirement when considering employees and customers. An emotionally intelligent and communicative leadership team will create a loyal and engaged workforce, willing to adapt and collaborate in order to exceed expectations. We have seen an increase in open communication via digital means during lockdown from executive teams to front line staff to increase engagement.
Workers are now being constantly developed and at times re-skilled throughout their career to keep pace with change. An example of this, is during lockdown we have seen repairs staff working as contact centre staff to assist with small repair calls. Leaders need to be able to consistently engage and motivate their workforce, requiring immense self-awareness, self-regulation, empathy and motivational skills in order for this to work effectively.
We live in a world where people expect more from their job and employer, even more so given COVID-19. Millennials and Gen-Z have deeply held values and an instinct for purpose-led work and natural empathy. Employees want to be challenged, valued and inspired by their peers but, most importantly, by their leaders. They prefer, and expect, constant communication and informal feedback, rather than formal and process-driven performance reviews.
It is fundamental that emotional intelligence is used when engaging with customers. There is a risk that the over reliance on data will lead to tenants’ voices being lost. The role of emotion in the customer experience allows organisations to build meaningful relationships and react effectively to customer expectations.
A common theme discussed with participants was ‘how organisations and leaders need to use their emotional intelligence to reframe their relationship with the customers’. Although dictatorial or overly authoritative leadership styles are less effective in the modern workplace, an approach to customers that can only be described as ’paternalistic’ needs to change, and quickly.
Evolving your workforce
As discussed, digital transformation is a key theme as to how Housing Associations are evolving their interactions with their customers. Many Associations are at the beginning of their transformational journey and starting to understand how this will re-shape their organisation post lockdown. Across the sector, leadership teams are analysing their workforce and how to improve to meet the growing demand of the customer. We have focussed on two core areas that leaders will need to address in order to improve their overall performance. The two key focus areas that were re-iterated in our study was data analytics and commercial expertise to enhance customer service.
1. Data Analytics
Data, if handled correctly, is giving organisations the tools to make more informed decisions on tenants’ needs and increase the influence of their services. As organisations rely more heavily on data, senior leadership teams need to view it not as a necessity, but as a strategic asset for the success of their Association.
Data is likely to be the lifeblood for digital transformation in Housing as it flows through every aspect of the asset lifecycle. The challenge, though, is not the collection of data but collecting the right data and having the ability internally to process, translate and refine the information.
From those who we interviewed the consistent feedback was that digital transformation must be driven by the executive team. Many participants noted how existing teams occasionally have someone championing digital, but they lack a dedicated and executive voice with the knowledge and conviction to influence strategy.
With the changing customer landscape, it is also important to look at how the required skillset of the candidate has changed. We are now benchmarking our housing candidates against the very best in the private sector. A customer’s expectation of their journey has changed considerably and, excluding some sections of the tenant base that need different care, they feel Housing Associations should be increasingly B2C focussed.
Traditionally, customer-oriented, competitive sectors such as retail have long been developing best practices in customer experience, led by the likes of Amazon & Royal Mail. Customers value speed, ongoing updates, tracking and timeliness when receiving a service from companies and successful businesses have embedded this in their culture.
If the industry is to make customer-centricity core to its approaches it must begin by analysing its customer demographic. All customers expect reliable services from providers whom they can totally trust. Personalisation, customer support, value-for-money, a proactive service - these are all things consumers are accustomed to receiving from service providers and social housing needs to evolve to match these. Indeed, the lack of an accepted definition of what customer centricity looks like in the social housing industry is a major barrier.
As such, we are using the significant and diverse network we have through our other industry and sector practices to draw talent into housing. By focussing on those within areas such as retail, FMCG, hospitality and telecoms, we are harnessing customer centricity and adapting it to social housing at both a leadership and board level.
Housing Associations need to embrace digital transformation and consider the skills, talent and leadership required to deliver and effectively operate it. Digital transformation offers the sector an opportunity to re-invent itself and improve issues that continue to thwart progress in the sector. It will be instrumental in transitioning the sector into one which is more effective and productive and one which understands its customers, thus creating a better experience for them.
Whilst leaders have the opportunity to drastically reshape their organisations, it is pivotal we are recruiting professionals who understand core transformation and that organisations are bringing through the next generation of leaders. To ensure the above is happening, we must ensure we collaborate and maximise the opportunities available.