The appetite for mergers, group structures and amalgamations within the housing sector does not appear to be slowing, fuelled by the need to realise efficiencies, increase financial resilience and to create the capacity to increase the supply of much needed new homes.
As Torus, a north-west based group comprising Golden Gates Housing Trust and Helena Partnerships, prepares to amalgamate with Liverpool Mutual Homes in January 2019, it is timely to reflect on the potential benefits of amalgamation and some of the lessons learned.
Torus was formed as a group structure in 2015, with a mission to maximise the impact of its two social landlords, increase their resilience and enhance their influence within the region. Shortly after the group was formed, the 1% rent reduction was announced, which accelerated the need to realise efficiencies and strengthen the group’s financial position.
Torus launched its Fit for the Future programme with the aim of integrating all operational areas including the in-house contractors, customer service centres, back office teams and housing management services. The integration would be based on a single operating model, and a single suite of IT systems. Perhaps most importantly, it would be underpinned by a single “One Team” culture and set of behaviours.
We encountered a range of challenges, the first being the risk that the programme would not be controlled effectively. Ensuring the right resources and the right skills linked to programme management, and establishing the right governance and controls for the programme were key to mitigating this risk, and ensuring that the objectives of the programme were delivered.
The second challenge was to ensure that operational areas freed up the resources to work on the programme. It’s important that change is an inclusive process, and that frontline teams are engaged in the design of new operating models, as well as the specification and procurement of new IT systems. However there is always the challenge of taking people away from their day jobs to work on the business rather than in the business.
The third challenge was to align IT systems across the new group. There were over 27 different IT systems and none were the same across the two landlords. We engaged more than 250 people across our business to specify our system requirements and select the new suppliers. In January 2018 we went live with 7 new group wide systems after an 18 month implementation project. Go live was not without its challenges and performance dropped in most areas whilst we trained teams on the new systems, ironed out glitches and regained the levels of operational competency that we had had previously.
Last but by no means least, there were significant people related challenges to address. In order to achieve the efficiencies needed to respond to the rent reduction, we had to reduce staffing numbers significantly. Managing this process and at the same time keeping people on board and positive about the future is a key challenge. During this period we also aligned terms and conditions, restructured all our teams, made significant changes to our people policies and retained our Investor in People Gold accreditation. This was achieved through a well-planned and executed organisational development strategy focussed on creating the right culture and behaviours for the new group.
As we plan for the imminent amalgamation with Liverpool Mutual Homes, to form a new Torus with significant scale, strength and influence across North West, this recent experience of integration and transformation and the lessons learned will be invaluable in ensuring the new group continues to build on the successful track record of both businesses. As we move forward with our transformation plans, it is vital that we do not lose sight of our core purpose, to deliver great services to our tenants and to invest in the neighbourhoods that we serve. There is a risk that larger group structures are perceived as more corporate and distant, and it is important that we continue to invest in the positive relationships we have developed with customers, communities and partner agencies in the three heartlands of Liverpool, Warrington and St Helens.