We need a new way to frame the future

Ofwat’s draft strategy has three directions of travel – a secure long-term future for water in England and Wales, everyday excellence for customers and increasing public value. I have no problem with the direction but the whole strategy is wrapped in a regulatory blanket that, in my view, needs reframed.

First, there has never been more evidence of the need to act at scale to secure a resilient long-term future for water. We face more drought, more flooding and rising sea waters. The impact on the movement of people, food supply, energy generation and a sustainable economy is profound. The framing should be about collaborative action involving individuals, communities and companies from all sectors acting together. Instead the current framing is around the passive concept of stewardship and the lead role of the water companies to be incentivised to manage their assets for the future.

Second, the focus on everyday excellence makes perfect sense. But again the framing is confined. The current draft looks at innovation, usually linked to technological solutions. There is a focus on increasing the customer voice. But every business person knows that progress isn’t just about listening to customers and acting on what they hear. It’s also about understanding and predicting needs often before they are articulated. And there is nothing that explores the balance of responsibilities where everyone shares a responsibility to secure the future for water. There’s nothing on behaviour change at scale. And there isn’t a single mention of the words “customer participation”.

Third, the focus on public value is a unique opportunity to focus on the wider role of water in achieving sustainable communities. This should explicitly include defining and acting on the role of water to improve public health. It should specifically include the role of water to sustain food supplies, to support tourism and to enable the economy where products from clothes to cars are dependent on sustainable water supplies.

There’s this thing called “bounded rationality”. People think within the parameters that have always worked in the past and often struggle to break out of existing patterns of thoughts. I think we have this when the future of water is explored exclusively within existing frames of reference – that this is about water companies doing stuff for customers, managing assets, using financial incentives, engaging customers, deepening relationships. Of course all these things have a role but the current framing is like a new-born chick struggling to break out of its’ egg.

There has never been a better time nor a more important time to reframe this discussion confidently and clearly. The three key directions are in the right ballpark but lack the ambition and clarity I believe the water sector needs. If I were the regulator I’d be asking:

• What can be done to catalyse wide collaborative action within and beyond the sector to ensure a resilient future for water?
• What can regulators do to support the transformation of water companies so that resilient businesses achieve a resilient water future?
• What is the wider impact of water to sustainable communities – the environment, health and the economy and how can that be quantified and managed?

We have to break out of a mindset where the regulators role is seemingly to incentivise, bully and cajole reluctant companies to listen to customers and manage their assets to meet needs. The prize is too important not to focus on the wider value of water, the risks we face and how we can all be catalysed to play a role in securing the future.

 

Watch Ofwat’s response: John Russell, Senior Director of Strategy and Planning, at Ofwat gives his response to John Drummond’s blog.

Find out more about John Drummond and Corporate Culture’s work at www.corporateculture.co.uk.

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