What are ‘empathic’ business models and why do they matter?

What are ‘empathic’ business models and why do they matter?

Empathic practices in business and design are key to building a better future for stakeholders.

In the housing sector we have a tremendous amount of power to levy software and data to change people’s lives.

Read here how businesses are using these approaches to make a material difference.

Empathic practices in business and design are key to building a better future for stakeholders.

Read here how businesses are using this approach to make a material difference in people’s lives.

Housing professionals more so than many sectors need to employ empathy with their work, in that they are dealing with the most basic of human physiological needs and rights: shelter. Empathic practices in business and design are key to building a better future for stakeholders.

When considering things like software solutions, companies tend to focus on the improvements that deliver on cost and efficiencies. What many companies don’t realise, is that empathy-led approaches can in fact, deliver on both fronts and make sure tenants and employees feel empowered by change. What this means in practise is putting how the customer or user thinks at the forefront of your ethos and building your products and services around their behaviour.

With empathic modelling, a designer or developer puts themselves in the position of the user; it was first used for those with disabilities, but the value of the approach can be extended to most UX (user experience) design. Due to emerging technologies we can now observe the needs of users in real-time and deploy solutions quickly. It is not enough however, to just embrace digital tools; you have to use them creatively to make a positive difference to people’s lives. 

Empathic design is not a new concept, in 1997 the Harvard Business Review wrote the article ‘Spark Innovation Through Empathic Design’, yet it is only in the last decade that it has become central to business deliverables. In the article, a process is described to deploy it:

Step 1: Observation and capturing data

In the digital sphere, observation and capturing data can be one and the same.  Empathic modelling means treating data as behaviour and spotting where improvements can be made.

Step 2: Reflection and analysis

Putting the data and insights in front of the whole team and taking advantage of the different viewpoints, expertise and backgrounds they have to offer.

Step 3: Brainstorming for a solution

With classic empathic design this involves making visual representations of the observations, along with possible solutions.

Step 4: Developing prototypes

In the case of the SaaS solutions that we offer, Housing Partners are in a constant cycle of observation, reflection, discussion and product development. Data analytics can be exciting as a method of market and user research. Participants are observed simply using the product to the best of their abilities. Real-time data collected as people have trips and triumphs can uncover real needs; these qualitative methods, which engage with our end users are invaluable.

To highlight this approach, we’ve taken a look here at three businesses that are improving lives with their customer-centric approach.

This Dutch housing solution provider is aiming to transform Europe’s social housing stock into ‘net-zero energy homes’. Tenants and housing associations often pay a lot of money for housing which is unsuitable due to humidity or damp. The answer from Energiesprong was to develop an easy-to-deploy, cost effective method of retrofitting existing housing stock to be fossil fuel free.

In 2018, social landlord Nottingham City Homes (NCH), adopted the scheme in part for their tenant-led development and long-term solutions, centring on Energiesprong’s ethos. The construction works are designed to pay for themselves because the one-off retrofitting cost supposedly offsets future energy bills and maintenance.

Energiesprong promises a 30 year warranty. If they fail to deliver, they undertake a financial penalty rather than the tenant or housing provider [1].  In Rotterdam, the scheme has been adopted to achieve their mission to make all homes carbon neutral and fossil free by 2050 [2].

Declaring yourself bankrupt, aside from being highly distressing is a bureaucratic and expensive nightmare. For some however, it can be the only path to relief from debilitating debt.  In the US, bankruptcy fees can cost around $2000 and in the UK about half of that. US software non-profit Upsolve have automated and unified complicated bankruptcy forms to assess the finances of users. A lawyer then reviews the data – for free! Upsolve users can then pay ‘what they think is fair’ for the services, which has so far proven to be a viable concept.

Tenants can sometimes have complicated needs and the services provided aren’t always solutions to those problems. Both in the UK and US a leading cause of bankruptcy is the costs incurred by poor health. The idea that that users are directed to other services designed with their best needs in mind, without incurring cost, shows a much more joined-up and empathic process.

Traditionally home security systems are expensive but disproportionately, households in lower income areas are 60% more at risk of a break in or fire[1]. To address this problem, Dutch peer-to-peer security software, Homies aims to offer social and affordable security solutions (with subscriptions from as little as €4 per month). The ‘slim-security’ system uses existing messaging apps, such as WhatsApp and sensors, meaning that all that’s needed to set up is a power outlet, Wifi and a smartphone.

One of the main savings is cutting out expensive call-outs from security professionals when the alarm goes off. Users instead have a group of ‘homies’, a mixture of family, friends and neighbours who get an alert when an alarm goes off. They are then able to communicate with each other via the messaging app and check if there is an emergency. If users don’t know their neighbours, they can connect with others in the ‘Homies neighbourhood circle’ made up of five people living within 500 metres.

The first housing provider to sign up to Homies is Ymere who operate in Amsterdam and Haarlem. The business model is empathic in that technology is deployed as a tool to engage and bolster existing communities, facilitating ‘community watch’ activities in real-time with minimal financial and time cost.

Here at Housing Partners, we believe in the power of technology and data to transform people’s lives. But we also recognise the value of frontline human services. In business some might think that empathy is a “soft” skill; it is not. Employing empathic modelling is a tool to future-proof your organisation. It is a process that anticipates problems as the norm and offers solutions day-to-day, rather than as a reactive response to a crisis.

Having your end user in mind at every step can only make your business better.

In the housing sector we have a tremendous amount of power to levy software and data to make a marked difference in people’s lives for the better.