AB Spotlight: McCarthy & Stone

19th February 2020

Author:
Ravi Lal-Sarin

AB Spotlight: McCarthy & Stone

Arca Blanca – the integrated consultancy and data company – has been named as a finalist at the MCA Awards 2020. In this series of short articles, a different partner from our business reflects on each of our four shortlisted nominations.

McCarthy & Stone – the UK’s largest retirement house builder – recently announced that they would create a £300m rental portfolio. It is remarkable just how quickly this has happened. In only 12 months, the business has created a completely new multi tenure offer, tested it in the market using start-up principles, and launched it nationwide. Arca Blanca helped McCarthy & Stone achieve this by bringing an innovative and fast-paced approach.

This would be an impressive announcement for any property company. But for McCarthy & Stone, this marked a more fundamental strategic move for the business. This news will have huge positive benefits for customers and communities.

The multi-tenure project has been a real success. From a standing start, we now have a new nationwide business unit up and running – expanding our offering and offering more choice to customers.

– John Tonkiss, CEO

This article describes the approach that Arca Blanca brought to McCarthy & Stone.

 

Learning to operate like a start-up

When the new CEO, John Tonkiss, decided to launch an ambitious new strategy, he turned to Arca Blanca to bring a fast-paced approach to delivering change. Not only would we need to deliver results for customers and investors: we needed to teach the business how to think and work differently.

Arca Blanca proposed using a completely new way of working for this programme. Rather than creating a large and bureaucratic project structure, we would instead use ‘lean start-up’ principles to quickly launch and iterate a Minimum Viable Product (MVP) at a group of incubator sites. We broke with the usual paradigm of PowerPoint-driven governance meetings to introduce daily scrum meetings and sprint-based working. This allowed us to quickly change all aspects of the propositions as needed, and we embraced a learn-fast, fail-fast mentality.

The incubator turned a complex problem into manageable chunks, teaching us the value of working in a more agile way to deliver faster results.

– John Tonkiss, CEO

Collaborating with customers

Whenever businesses launch new propositions, there is a temptation to over-analyse and over-design. It is all too common to spend excessive amounts of time and money on ideas that do not really meet customers’ needs.

To avoid this, we decided to test the new propositions with customers as soon as possible. Within weeks of the project starting, we were discussing the new propositions with real customers at the carefully selected incubator sites. We listened to customers and improved every element of the proposition on a daily basis.

Within days of launch, we were generating real reservations and converting them into new tenancies. This hit-rate only increased as the proposition was tweaked and improved. The speed of results was apparent to everyone in the business.

Arca Blanca have played a critical role in setting up and driving the rental incubator in the first instance. Their approach and people hugely accelerated the time it would have taken us to get this working, to get momentum, and to roll it out.

– Mike Lloyd, COO

Scaling up

Following the success of the incubator, McCarthy & Stone’s leadership decided to roll out the new propositions nationwide as fast as possible. A critical success factor in this was ensuring that the business ‘owned’ the roll-out, learning to operate in a new way and proactively driving results.

The project had begun with a small team of McCarthy & Stone and Arca Blanca people. We expanded this team by incorporating experts from across the business. This enlarged joint team meant that the business owned the roll-out, with key teams taking controls of the activities that they were experts in.

The joint-team combined our own in-house capability with experienced change practitioners from Arca Blanca – ensuring that the project was anchored in McCarthy & Stone, but benefited from new insights and an innovative approach.

– John Tonkiss, CEO

Results

The effects of the new portfolio will be far-reaching. For customers, the new choice of tenures (rental, part-buy-part-rent and rent-to-buy) increases access to suitable homes. These retirement communities have a measurable effect on physical and mental health in later life. In addition, the majority of McCarthy & Stone’s developments are build on ‘brownfield’ sites, helping to regenerate wider communities and their high streets.

For the business, the new propositions have created a new £300m market opportunity and an exciting new asset class. McCarthy & Stone expects a material proportion of all new customer activity to come from the new propositions. All in 12 months.

McCarthy and Stone have always sold their apartments for the last 40 years. We started renting as a trial through a quick start-up incubator approach and it immediately got traction as we learned what customers liked about it and adapted. It has grown rapidly. Rental is now established and will potentially transform our business.

– Mike Lloyd, COO

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