Your board needs a small business owner
The sector has for some time been moving towards skills based boards and bringing in people from outside the housing sector. A lot of focus has been on commercial knowledge. Directors from large firms are actively sought for their understanding of business and commercial skills.
These skills are definitely needed on a board. But depending on their background these professionals may only have experience of “big business”.
This could create a problem for the future. Associations are becoming big business and losing that ability to think small.
Within the sector I often hear the phrase “try to imagine if this was your own money”.
The fact is for some people this is more difficult than they think. They imagine if they had £100,000 of their own money to spend on a project they would do just that. But the point is what else could you do with that money? Are the outcomes acceptable? What if it failed? Do we really need to spend that much? Because it isn’t your own money failure doesn’t necessarily mean the end of days.
For a small business owner, particularly a micro business owner (under 10 staff), they are spending their own money everyday. They make the decisions where failure could mean the end. They do not have to imagine, it is an everyday reality to them.
These are the individuals who will question spending £100,000 on a project. Not simply because it is a lot of money but they know they would need to be certain of the return.
Many community projects performed by the housing sector are commendable. The problem is an associations ability to access cash can be too easy. This can lead to situations such as “Lets open up a community cafe and assign it a £50,000 budget. The social ROI is going to be £1m”
The small business owner is going to ask the obvious question. “Do we really believe that independent traders spend £50,000 opening a cafe?”
It is not just about Value For Money, think about the Value of Money.
The small business owner will have spent years squeezing every ounce of value out of everything they have purchased or invested in. It is in their nature to do so.
Do not dismiss the small business owner because they lack the experience of a large organisation. Welcome them because they have the experience of risking their own money.