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Changing the way water utilities think

George Hesmondhalgh, managing consultant at Capgemini, says companies need to stop viewing legislation as an obligation and instead consider it a starting point from which to build a leadership position

In a previous job, I used to attend flooding incidents in people’s homes, public properties and shop basements. It was an incredibly fast-paced role, tackling an onslaught of water pouring out of the ground, dealing with customers, emergency services, local councils and insurers. Everyone wanted to fix the problem and had a ‘go, go, go’ mentality.

You may think that speed is critical to solve these kinds of situations. However, I was taught by an old hand that, when attending to these floods, you should do a drive-by past the incident a couple of times, and sit in your car for 10 minutes. This valuable thinking time, he told me, will allow you to make the clean-up process over the next two or three days go much smoother.

Typically, when faced with dilemmas, we tend to jump in and fix blindly rather than thinking things through. We try to find simplistic short-term solutions rather than negotiating the scope of the problem, which requires comprehensive reflection. Our patterns frequently arise from failing to take a longer-term view and lead to us continuously adopting sub-optimal solutions.

This is something that water utilities, at an organisation level, need to learn. By taking a leaf out of the playbook of their most experienced operational staff, companies will start to value stepping back and viewing things from different perspectives.

Ofwat’s ‘resilience in the round’ report sets out innovative ways that water companies could respond to the challenge of a rapidly changing world and embed resilience strategies into long-term business planning and processes. Ofwat encouraged water companies to adopt a system thinking mindset at all levels for the upcoming AMP7 investment programme.

Earlier this year, Ofwat released its initial assessment of the companies’ business plans, written like a teacher giving feedback. Good grades (fast-track) were awarded to only a few companies that finalised their business plans at the end of May. If a company was unable to demonstrate successful integration of the system-based approach or exhibited other flaws in its business plan, they were issued with a middling grade of ‘please try harder’ (slow-track).

However, only a couple of companies received the dreaded ‘not good enough! Try again’ (significant scrutiny). The common thread running through the assessment report was that companies don’t give enough evidence on long-term resilience.

So, what does Ofwat expect when they talk about long-term resilience, and what does systems thinking look like on the ground in the water industry?

With Cape Town nearly running out of water in January 2018, and more and more cities facing water shortages around the globe, it is perhaps fitting that the chief executive of the Environment Agency (EA) used the term ‘jaws of death’ in March to describe the combination of unpredictable rainfall patterns and acute population growth facing the UK.

The EA aided companies with business planning and issued guidance regarding the environmental, resilience and flood-risk obligations that needed to be factored into the business plans of the water companies. Considering the wider systems the industry operates in, many get frustrated that they adopt a culture of compliance.

What Ofwat is asking for goes beyond the mere fulfilment of obligations and requires a change in thinking. Companies need to stop viewing legislation as an obligation and instead consider it a starting point from which to build a leadership position.

Systems thinking in itself is neither mystical nor revolutionary. People take longstanding concepts and contemplate them from different angles all the time. However, water companies need to push for broader and deeper changes in company culture. Creating a mindset open to combatting complex problems is the first step.

This includes a cultural shift towards innovation and continuous change at the heart of what companies do, and not to simply box in transformation as something only separate innovation and change management departments are in control of.

I see a disconnect with many change programs which are top down and fail at implementation as they don’t engage fully with the end users out in the field. On the other hand, field teams who embark on improving processes themselves come across a wall of resistance from other departments who view change as their remit.

As I write this, global climate strikes are happening on the eve of the UN climate action summit. The challenges the industry faces are fast approaching and becoming ever louder. I wonder how many of us feel the same frustration as those protestors at the speed of change within the industry. Only in allowing a radical willingness to reform the water industry from the bottom up can we develop comprehensive sustained solutions.

This article originally appeared in the November 2019 issue of WWT.

Topic: Policy & Regulation , Sustainability & social value , Water resources
Tags: flooding , resilience in the round , ofwat , AMP7 , resilience

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