IN PRAISE OF THE MAINTAINERS - ASSET MANAGEMENT IS WHERE THE REAL INNOVATION IS HAPPENING

Back in the day - when I had a real job in social housing - the glamorous part of the sector was new homes. It was seen as commercial, innovative and the guys (and it usually was guys then) were a bit more hip and happening. They had a thing going on. They drove BMWs! They had expense accounts! They met contractors that other people had heard of! OK, so now the BMW is as hip as a Ford and expense accounts aren't remotely Madmen, but with the new push in to development it is still seen as the more glamorous bit of the sector. 

 

But we are seeing a radical shift in housing that has been long overdue. A shift that is seeing asset management and stock maintenance now as the area where new and exciting stuff is happening. This begs the question, is maintenance the new innovator?

Back in the day - when I had a real job in social housing - the glamorous part of the sector was new homes. It was seen as commercial, innovative and the guys (and it usually was guys then) were a bit more hip and happening. They had a thing going on. They drove BMWs! They had expense accounts! They met contractors that other people had heard of! OK, so now the BMW is as hip as a Ford and expense accounts aren't remotely Madmen, but with the new push in to development it's still seen as the more glamorous bit of the sector. 

 

But we are seeing a radical shift in housing that has been long overdue. A shift that is seeing asset management and stock maintenance now as the area where new and exciting stuff is happening. This begs the question, is maintenance the new innovator?

 

The last three years has been the toughest I have seen in my thirty years in social housing. But one of the ironies of the recent challenges has been to shake up the core business of managing - and in particular maintaining – homes. 

 

As someone said to me the other day -  if you’re in an organisation where assumptions are not being questioned and challenged, start looking for a new job

 

Pretty much all of the assumptions we have been making are being questioned and challenged. As someone said to me the other day -  if you’re in an organisation where assumptions are not being questioned and challenged, start looking for a new job.  What this means is that everyone is looking for new ways to deliver the same – or better – service for less money, or to generate new incomes and real efficiency gains. And the answer is not year on year budget cuts and pushing the envelope of components further and futher out: the answer is innovation and fresh thinking, and that is now coming thick and fast. But before we look at how this innovation is taking hold, let’s start with some first principles. 

 

First off, let's not forget that the existing housing stock is the backbone of the sector and the basis for its continuing financial success - there would be no new developments (or BMWs) without that asset base and that consistent, critical lifeblood of rent. It's allowed us to build this amazing £multibillion success story - possibly the greatest example of a business that delivers a social good the world has ever seen. 

 

The economist Stephen Dubner proposed that our obsession with innovation, or the new things, has led us to undervalue what we have already built.

 

Second, let’s take some time to sing some praises to the maintainers. In a recent Freakanomics podcast 'In praise of maintenance' – the economist Stephen Dubner proposed that our obsession with innovation, or the new things, has led us to undervalue what we have already built. He argues there should be a nobility in taking care of what we have created and that we should not see maintenance as the enemy of innovation. In the real world, as opposed to the one we all which we wish we inhabit, engineers spend 80% of their time on looking after things that have already been built. As one contributor put it ‘plumbers rule the world’. Not sure you agree? OK - just imagine a world without plumbers and see how quickly that becomes appealing. Tomorrow would be a pretty shitty place pretty quick. So let’s pay a little more respect to those who really make this world a great place to live.

 

The Freakonomics piece also argued that maintenance doesn't mean a lack of innovation. And this chimes loud and clear with the radical changes we are now seeing in the sector. As Dubner puts it:

 

I think that there can be a false dichotomy when it comes to maintenance, which is  maintenance is required, clearly, but in order to effectively do maintenance, I think you need to innovate.

 

And we are now seeing this in the housing sector. For sure, this has been a direct result of the cut in finance which is driving people to ask how can we do more with less, to drive more efficiency or to generate new income and resources.

 

This is operating at all levels now – the strategic and the operational. At the strategic, we are seeing a new asset management that is concerned with outcomes, not outputs. Instead of counting numbers of windows and doors replaced, people are asking what do we want our homes, our portfolio to look like, to perform like in the next 10, 20, 30 years? And how do we put that strategy in place now so that we can build this change over time?

 

At the other end of the spectrum, we are seeing organisations tackling communal and district heating, particularly, but not exclusively, existing schemes. For too long, schemes have underperformed for landlords and customers, and cost thousands more to run than they should. With a clear plan and an understanding that the solutions are not just technical but critically involve management, maintenance, metering and billing, there are significant savings and income that can run in to the hundreds of thousands.

 

We are also seeing more innovation in financing which is building on the growing understanding that there is value – real financial value – in holding large domestic portfolios that can be captured for investment. Whether it is in energy generation, networking, storage or demand management, new solutions are coming to the market that will create new options and new investment.

 

Similarly we are seeing a growing recognition that the homes we manage represent a new opportunity in communication – with the roll out of smart meters and other in-home communication technology we will understand our homes and customers better than we ever have and and this is already driving up innovation and driving down costs.

 

Now that the sector is under pressure and must create new solutions in order to survive and prosper, we are now seeing maintenance becoming the area where real innovation is happening.

 

We are also seeing more and more innovation in heating systems, especially electric heating which means that gas is no longer the default. With new tech, billing and supply options you can save £millions on investment programmes that can be used elsewhere and still deliver better, warmer homes and lower costs for your customers.

 

And behind all of this is making smart decisions about housing stock and investment. For too long Decent Homes led to maintenance and innovation being kept apart. People are now looking at their assets as just that – assets to deliver strategic golas and not just a place to spend money.

 

Now that the sector is under pressure and must create new solutions in order to survive and prosper, we are now seeing maintenance becoming the area where real innovation is happening.