Joining two existing Registered Providers (RPs) together is exciting. However, realising the benefit of a merger can be tricky, particularly if both organisations have a very different approach and culture. Golden Gates Housing Trust (GGHT) and Helena Partnerships were brought together in April 2015. Together they own and manage 22,000 homes, have 850 staff and 44,000 customers. Torus, who was charged with merging GGHT and Helena in 2015, is based in St Helens (Merseyside) and Warrington (Cheshire), and has an asset value of £412 million.
There are often significant opportunities to create real cost savings from strategic moves such as a merger; however actually achieving them can be a difficult journey. Mergers and acquisitions often focus more on the infrastructure development, rather than the people and associated cultures, which will have been developed over many years and which cannot be changed overnight. Following the merger of these two local landlords, a repairs and maintenance cost reduction specialists – in this case, Vantage – was asked to come in and assist Torus in maximising the potential benefit and get the best out of their new structure.
There were three main questions: How do we come together with one new strategic approach to asset management? How do we efficiently bring together two existing in-house maintenance operations with radically different cultures and operating styles? And, how can we better communicate in a timely and effective way with customers?
Vantage spent time working alongside Torus to really understand their strategic objectives, the different values of the two RPs and their concerns post-merger. The first question was really answered through Vantage’s work with Torus. Torus led on the second two points, devising and implementing a radical change programme.
ASSET MANAGEMENT: ACTIVE NOT PASSIVE
Torus recognised that as their stock size grew, so did their ability to make a real difference to the community around them. By challenging their existing approach and revisiting the roles of the asset managers, client and in-house contractor teams they were able to establish clearer accountability for the in-house service leaders and free up time for the assets team to focus on strategic asset management priorities. Unlocking the relationships between the client and in-house maintenance team was key to this. We challenged who was accountable for specific workstreams budgets which led to a re-think in R&M budget management. Whilst strong governance was key, Vantage helped the leadership team to ask themselves why they ‘cliented’ maintenance teams in a way that they didn’t any other part of their business. Ultimately all the required skills existed within the teams; it was about thinking differently and a re-focus on each team’s priorities.
REPAIRS AND MAINTENANCE: A NEW WAY FORWARD
Torus understood the potential issues in R&M. Pre- merger both teams had in-house repairs and maintenance teams. Post-merger it was evident a new operating model, combining the best from both organisations, was necessary. Following on from the work Vantage had done on asset management, Torus devised their own approach to R&M.
Harnessing the benefits of the in-house teams, whilst creating an efficient, lean and customer- focused operating model, they were able to transform their R&M service. They conducted an in-house, in-depth review, speaking to their staff on the ground to understand where the strengths and weaknesses were and how a new way forward could be delivered.
The two in-house contractors had a combined budget of £30 million and over 400 staff. However, their service offers were vastly different, they had two different IT systems, there was a large variation in costs, their terms and conditions of employment were not the same and their operating models and practises couldn’t have been more different.
They had some easy wins, such as bringing the two teams to one base and some which took longer and were more complicated. For example, adopting the outsourced stores models across the whole operation was time consuming and complex. Some of the short terms contracts were terminated in favour of defined workstreams. Capital workstreams and cost targets were set on a three-year rolling basis subject to best value review; giving them more long-term certainty.
As the two teams came together as one new RP, clearer accountability on budget responsibility was established. Performance targets and costs were agreed at the outset allowing Torus to accurately measure progress and ensure that performance information flowed effectively from the operational staff up to the executive team. This protected the golden thread of information, creating a framework which encouraged joined-up working and ensured the new RP could grow and thrive.
Although some of the changes were not always easy to implement, they ultimately led to a significant cost reduction from the in-house contractors. This provided surplus funds for re- investment and growth, creating more homes across the region.
FUTURE PROOFING
Working with Vantage, Torus was able to shape and tailor their priorities to the needs of the customers of today and anticipate the requirements of tomorrow’s customer.
The improved collaborative approach, as they began to work as one organisation, also freed up much needed resources. Thereby allowing Torus to invest in new ideas, particularly around their digital service offering.
Implementation of customer satisfaction surveys and increased take-up of customer self-service repairs reporting were both ways in which Torus started to realise some of the benefits of their merger.
Haydn Hansford, managing director of the in- house contractor at Torus commented:
“Challenging our existing approach, we came together as one company. This was followed by an in-house repairs and maintenance transformation programme. The combination of these changes ultimately saved us a significant amount of money, improved the service we provide to our customers and helped us become fit and ready for the future.”