Putting its house in order
Faced with unprecedented change, housing association bpha embarked on a transformational change programme designed to make it fit for the future. But when the programme stalled, an Impact Executives interim change agent came in to give it new impetus.
“Interims have been there, done it, can hit the deck running and have strong interpersonal skills”
Interims have been there, done it, can hit the deck running and have strong interpersonal skills
Bedfordshire Pilgrims Housing Association
bpha was established (as Bedfordshire Pilgrims Housing Association) in 1990 when the tenants of North Bedfordshire Borough Council voted to transfer their homes to a new, not-for-profit housing association. Today bpha continues to grow and diversify its services for a wide range of customers, including key public sector workers and others looking for low-cost home ownership. A leading provider and developer of affordable housing, bpha works across central, southern and eastern England. It manages more than 17,000 homes and employs over 300 staff. It has helped more than 5,000 families into home ownership and manages more than 2,000 shared ownership properties.
Kevin has been outstanding. He has pulled the transformational change programme back on track
Director of Step-Change Management, Kevin Bolt has been an independent change consultant for nine years. He has gained extensive board-level commercial and change management experience in a range of blue-chip and public sector organisations, including Johnson Wax, Bayer, Dairy Crest, the Ministry of Defence and the Department of Health. He began his career as a chemist, moved into sales and marketing and his involvement in two turnarounds gave him an appetite for change management consultancy, at which point he struck out on his own.
Stephen Hallett and John Cross
For the past 17 years Stephen Hallett has pursued a career as chairman, chief executive, interim/turnaround manager, non-executive and consultant specialising in rapid change situations, including acquisitions, exits and turnarounds. He has been chairman of bpha for the past five years. Prior to this portfolio career he was a main board director of one of the top ten listed construction groups, divisional chairman of a FTSE-250 construction group and non-executive chairman of two private-equity-backed groups in construction and facilities management. A chartered engineer, he also has an MSc in management studies.
John Cross has been chief executive of bpha since 1995. He had a long association with the National Housing Federation Board, and served as chair of the Board for three years to 2009. Before joining bpha he worked in the co-operative housing world before joining mainstream housing associations, and was previously chief executive of Swaythling Housing Society in Hampshire.
“Impact Executives is one of the best providers of interim help in the marketplace. Too many people running interim organisations have only ever done recruitment, but [managing director] Christine de Largy has a level of business knowledge and commercial understanding based on her own experience of working in business. This allows her to pick up the threads of what a client is looking for extremely quickly. Also, because she draws on a lot of people she knows very well, rather than just working from a database, she can field the right people very quickly. The service and support Impact Executives provides is first class: they are very customer focused.”
Stephen Hallett, chairman bpha
Stephen Hallett became chairman of housing association bpha five years ago at the point where the entire sector faced sudden and dramatic change. In common with other housing associations, bpha had been providing affordable housing with the help of government grants and competitively-priced bank finance. What’s more, many housing association tenants received housing benefit, and the government paid this directly to the organisation.
The credit crunch changed all that. The Coalition government withdrew its subsidies as part of its austerity measures, long-term bank finance dried up, and as part of a raft of welfare reform changes housing benefit will be paid directly to individuals, making for a potentially less reliable income stream and a bigger administration headache for the housing associations. To cap it all, residents were having to cope with ‘Austerity UK’.
Aware that “significant problems were looming for the sector,” as he puts it, Hallett set about helping bpha to become more commercial, more proactive and more self-sustaining. As part of this, the board was restructured with fewer, but more commercially-focused, non-executives, and the organisation embarked on a transformational change programme designed to create the structure and culture that bpha would need to succeed in the new environment.
However, for a variety of reasons, the ‘Great to Good’ programme stalled, and in July 2012 Hallett, together with long-serving chief executive John Cross, turned to Impact Executives for help in recruiting a change agent who could give it new impetus.
“We needed someone who had experience of business process re-engineering and transformational change, and, critically, who could rally people in the organisation behind the change,” says Hallett. “It was, potentially, a very tricky political situation.”
Cross agrees. “It had to be the right person,” he says. “Bringing in an outsider automatically changes the dynamics of the senior team – and, depending on who that person is, it can be for better or for worse.”
What’s more, adds Cross: “We didn’t want someone to just come in, do a job and then leave; there had to be a legacy whereby a change culture was embedded so that the organisation could continue to change in the future.”
Hallett was well aware of the impact interim executives can make. An experienced user of interim help, he has performed a number of interim roles himself over the past 17 years.
“Interims have been there, done it, can hit the deck running and have strong interpersonal skills that allow them to challenge constructively and bring people along with them,” he says. “What’s more, because they have no historical baggage and no political affiliations, they are, and are seen to be, objective.”
Nevertheless, Kevin Bolt, the interim change manager that Impact Executives fielded, exceeded even his expectations.
“Kevin has been outstanding,” says Hallett. “He has pulled the transformational change programme back on track, created clarity around what the organisation needs to do and how, and got both the executive team and non-executives behind it. We now have a six-page programme covering all the elements of the change and the actions required.”
Cross says that he and Bolt worked very well together, based on a mutual trust that they established at the outset of the assignment.
“We were all very clear what we wanted to achieve and how we would work together,” says Cross. “Kevin’s broader experience from other situations is very useful: he not only brings new thinking, but also challenges me and the other executives. He is a good listener, but he has good questioning skills too, and these allowed him to quickly get to grips with the organisation – something that’s very important in a short-term assignment. People opened up to him because they could see his genuine commitment to what weare trying to achieve.”
Cross continues: “We’d all got very close to things, and Kevin was able to see one or two very simple things that we needed to change to give the programme momentum. For example, Good to Great was all about organisation-wide change, but it had come to be seen as ‘an IT project’. Also, we were trying to implement the IT aspects of the change without fully factoring in the implications of expected process improvements and changes in organisational structure.”
We have systems and templates now that will allow us to continue doing project work in a more standardised and consistent way in the future
Bolt takes up the story.
“One of the first things you have to do when you go in as an interim executive is get some credibility and understanding with the team that is there,” he explains. “By talking to them you quickly realise what’s gone wrong and what’s required to put it right. One of the biggest issues was that John had delegated responsibility for the change programme to one of his directors, but for it to be taken seriously it needed leadership from the very top and support from the executive team.
“There was some change going on but they needed a new plan to give it fresh energy and to create belief. That required a very clear vision, clearly articulated, so that everyone could see why they needed to go through the inevitable pain and anguish involved in change programmes. They then needed to break it down into bite-sized chunks to gain ownership and buy-in: it’s important that people ‘do’ change themselves rather than feel it is being ‘done to’ them. Stephen, John and I put together a team of internal and external people to start to mobilise and accelerate the project.”
In essence, the change programme is about reducing costs, improving service, being innovative and providing thought leadership to help the sector as a whole work out how to overcome the substantial challenges it faces, says Bolt. That’s easier said than done in an organisation characterised by the sound, safe and conservative approach that the regulatory environment encourages in the public and quasi-public sectors.
“The culture was very baked-in,” says Bolt. “The organisation had become very set in its ways, partly because of the strictures of the regulatory regime. Relaxation of the rules in April 2012 gave bpha the opportunity to refocus. I spent a lot of time trying to stop them looking backwards and to look forwards instead to see what and how they could improve given the new regulatory environment. There were lots of very good people but they were used to working in one way and not used to asking themselves if they could do it another, better way – with the help of technology, for example. In many ways the whole programme is about being fit for the future.”
Hallett knew that making bpha fitter for the future involved pushing decision-making and accountability further down the organisation, and Bolt and the change teams have already helped to facilitate this. This structural change has been supported by investment in technology to increase the efficiency of some of the existing processes. Bolt has also helped to break down silo working, says Hallett, and improved communications throughout the organisation.
So what is Bolt’s legacy?
“We have systems and templates now that will allow us to continue doing project work in a more standardised and consistent way in the future,” says Cross. “There is also much more clarity and agreement about what we want to do and how we are going to do it, and we are all committed to the same objectives and what it is going to take to get us there. And we have a programme in place to get us there. However, the next stage will be equally challenging, because it takes us from the planning and preparation phase to the implementation stage, and that’s about delivering and embedding change across the organisation.”
Could the situation at bpha, where an interim change agent comes in and acts as mentor, coach and critical friend to the chief executive, provide some sort of blueprint for organisations wishing to maximise their chances of effecting successful transformational change? The precedents for successful change aren’t good: only three per cent of respondents to Impact Executives’ recent survey among business leaders said they get a good return on investment on all their change projects. This might not be as surprising as it sounds, given that most chief executives won’t have done a transformational change to their own business.
Hallett believes bpha could be a model for successful change – “providing the chief executive is strong and secure enough to ask for help and is willing to learn.”