Are water utilities ready for to a new way of thinking?

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Water utilities need to value stepping back and viewing things from different perspectives.

I used to work in the field, out on the water network. Attending to flooding incidents in people’s homes, public properties, and shop basements was a regular part of my job. It was an exhilarating experience responding to these calls, 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.

Often in life, when faced with dilemmas, we tend to jump in and fix blindly rather than thinking things through. We tend to find simplistic 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

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, park around the corner, 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.

Sometimes it’s about realizing that there are moments when you have to postpone the doing and stop to think! There are situations that require a shift from simply learning how to improve what you are already doing (single-loop learning), to realizing that you have to learn something completely different (double-loop learning).

I think water utilities need to take a leaf out of the playbook of their most experienced operational staff and start to value stepping back and viewing things from different perspectives.

Current status of PR 19 plans

Ofwat’s (the industry regulator) report  ‘Resilience in the round’ sets out innovative ways water companies can 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 2020–25 AMP7 investment program.

This year, Ofwat released their initial assessment of the companies’ business plans. This report is written in a similar vein as that of a teacher giving feedback. Good grades (fast-tract) 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, Ofwat issued a middling grade of ‘please try harder’ (slow-track), indicating that amendments needed to be made. 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?

Why the need for change – building resilience to a changing environment

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 in March of this year the chief executive of the Environment Agency used the term “The Jaws of Death” to describe the combination of unpredictable rainfall patterns and acute population growth facing the UK.

When considering the wider systems that water companies operate within, we notice that they have a culture of compliance The Environment Agency assisted with the business planning and issued guidance back in 2018 regarding the environmental, resilience, and flood-risk obligations that needed to be factored into the business plans of water companies.

But what Ofwat is asking for goes beyond the mere fulfillment of obligations and requires a change in thinking. Companies needs to stop viewing legislation an obligation, and instead consider it a starting point, from which to build a leadership position.

Similar to the customers whose properties have been flooded, the challenges the industry faces are fast approaching and becoming ever louder. The emergency services (or, in my analogy, the Environment Agency) are giving directions on what needs to be done. It is now down to the companies to decide – do we jump in or take the time to sit in the car and think how things can be done differently.

Stop doing, start systems thinking!

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.

The challenge Ofwat has issued is to rethink how companies comprehend resilience. This includes a cultural shift to where innovation and continuous change at the heart of what they do and not to simply box in transformation as something only separate innovation and change management departments do.

Only when we do a proverbial drive-by to comprehend the complexity of the problems facing the industry can we take a step back and reflect. In allowing a radical willingness to reform the water industry from the bottom up can we develop comprehensive sustained solutions.

“For more information contact George Hesmondhalgh.

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