Does the social housing sector need to be disrupted to continue providing the quality of service that tenants demand, or are iterative improvements enough? Ian Wright, CEO of Disruptive Innovators Network, thinks he’s got the answer
I am fortunate that my job means speaking regularly with CEOs, executive directors, and external stakeholders. One question I’ve been asking them recently is, does social housing need disruptive innovation or is sustaining innovation good enough?
Firstly, let me explain what disruptive innovation is. The term was coined by Prof. Clayton Christensen in his book The Innovators Dilemma:
“Disruptive Innovation describes a process by which a product or service initially takes root in simple applications at the bottom of a market — typically by being less expensive and more accessible — and then relentlessly moves upmarket, eventually displacing established competitors”
I accept social housing doesn’t have any real competitors, certainly not in the traditional sense, but its business model is one which bears a number of similarities with other sectors which have been disrupted in the past few years.
For example, Uber and personal transportation now moving into food delivery and patient transport. Amazon and retail into clothes, fashion, and medicine fulfilment.
These markets share some common traits:
- A mature market with lots of long-term incumbent suppliers
- Legacy IT systems with little investment in new technologies
- Little or no competition
- No significant R&D taking place
So, what are the implications for leaders in social housing looking to prepare their organisations for potential disruption?
There will be plenty who will draw comparisons with the impact of COVID-19. Very few (in fact only one member I have spoken to) had a global pandemic on their risk register but ultimately this was disruption, not disruptive innovation.
But what could possibly impact social housing organisations in such a disruptive way? It’s not that long ago during the Cameron-Osborne era of government that the proposition was floated around nationalising all housing associations.
Okay, this may have been a ‘dead cat’ to nudge us to focus on curbing executive pay, but it shows that this thinking can happen, and we can’t take for granted that something this disruptive won’t happen in the future.
Why not both?
Should social housing providers remain confident that small-scale innovations and thinking will continue to be enough for them to continue as they are, without the need for large-scale investment in new business models?
This could be the case, but do we want to take that risk?
I think social housing can do both. Continue to innovate incrementally, yet at the same time invest in more speculative and potentially disruptive innovations achieved through better collaboration to develop proof-of-concepts or minimum viable products that they can then take to customers to test. A good example is around the development of so-called smart homes, the use of sensor technologies, and the internet of things.
I’m currently seeing a lot of small budgets (£20k-£30k) being made available and a lot of tech ‘bauble’ buying going on. This is not backed up by any real long-term strategic thinking whereby, through the pooling of some of these smaller initiatives, we could develop and test these technologies beyond property level such as at street or neighbourhood level and then gather and analyse real-world data about the problems they can solve. Then, sharing the findings across the whole sector so that others don’t need to repeat the same experiments.
While there aren’t any drivers or competition just yet, wouldn’t it be powerful if social housing was in a position to export some genuinely disruptive innovations for other sectors to learn from?
Main image: Golden Sikorka/Shutterstock
Ian Wright is a Housing Digital columnist and founder and CEO of the Disruptive Innovators Network, a membership organisation for leaders in social housing wanting to invest in innovation.
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