sustainable innovation – how to really impress Ofwat

By Nigel Watson and Alex Graham

Innovation without a purpose is all light and no heat, or for the water industry a decorative fountain fed by a leaky pipe. In this article Nigel Watson, Information Services Director at Northumbrian Water Group and Alex Graham, Principal Consultant at Egremont explain how sustainable innovation works in practice and how to mobilise the workforce behind it.

What is innovation really all about?

At its core innovation is creativity that creates value, so in order to be innovative we, the water companies and their partners, need both the creative ‘sparks’, such as design sprints and data hacks but also the ability to make sure these ideas come to fruition. This comes in the form of change management to ensure ways of working are sustainably altered to affect a systemic change and generate return on investment.

Sustainable Innovation – Think in 3 distinct time horizons

To achieve sustainable innovation, it is helpful to think in three separate time horizons. The first of these are the short-term wins that ensure incremental innovation, the life blood of day to day operations working on a one-year horizon. There is a deep well to be tapped by giving frontline teams the support, data, tools and techniques they need to help them to solve their own problems locally. This will drive incremental continuous improvement and iron out inefficiencies within the current framework. The key to success is to enable the workforce by upskilling them and rewarding managers (not just monetarily) to share the newly identified best practice across the business. Egremont worked with NWG to develop new management information and implement Lean approaches such as Team Performance Hubs for frontline managers, giving them improved KPIs plus a forum and tools to problem solve in each operational depot/site.

NWG are also investigating how to draw on the vast bank of knowledge retained by their retired technicians, by dialling in their knowledge from offsite on very short term contract as ‘trouble shooting consultants’ when advice is needed. Instead of losing valuable knowledge when technicians leave the business, the relationship is retained to be drawn on in the future.

Step change innovation for the medium-term c. 1-2 year horizon to full value:

For solutions that have a longer time horizon, NWG use design thinking - a ‘think, make, do, iterate’ methodology, to run innovation events off site which draw on a wide pool of knowledge from both inside and outside the company. Over a 3-5 day period NWG staff and invited guests following a defined structure to work through a thorny new problem and workshop different scenarios to create a new way of working.

One such event focused on deep analysis of data from pumping stations to predict which stations were highly likely to fail. The target was to cut pollution events by 80%. The key to implementation success here is a robust end to end job resolution process which Egremont supported NWG to implement with controls / measurement and management practices so that when asset failure was imminent the right crews attended the right jobs at the right time. For the pumping stations this meant ensuring the operators and maintainers were engaged in the project from the start and motivated to act when the data science predicted pump-station failure. All the innovative efforts would have counted for nothing if the frontline failed to fix the asset once the risk had been identified.

Radical game changing innovation: Long-term 3-10+ year horizon to full value:

For the by-stander this is where innovation thrives – those headline grabbing, blue sky gazing ideas which make a company seem so cutting edge but often never become reality. This is where NWG work on the low probability Moon Shot ideas by scanning the market to see what they can learn from related sectors and the world at large. The biggest project in this area is a collaboration with Newcastle University to build an ‘innovation street’ with advanced telemetry integrated into every house. The idea is to create a house that changes with the lifestyle of the occupants and can be managed by external agencies to even out demand for key utilities i.e. if the street floods can the outflow of water from the appliances in the house be paused to allow the water to drain?

How generate value from creativity and truly innovate

The best ideas in the world will only work if leaders take seriously both the creativity stage and also developing the conditions to enable a sustainable change to actually create value. This means being prepared to back innovation over the long term, understand that it can take 10 ideas to get one that really works and being brave enough to think well beyond the next financial year or next AMP cycle.

With pressures on cost increasing every year the value realised by innovation, as opposed to how much creativity is generated, often comes down to how the business responds to the changes needed. This is where a motivated workforce is essential, employees should be bought on board early so that they feel part of any new innovations. Only then will these new ideas move from beyond the white board into our everyday work practices and the homes of our customers.

This article first appeared in Utility Week on 18th April, 2018. To find out more, please get in touch with Alex Graham: / +44 (0) 20 7298 7878