No 168: How to make a $million

I first met George Theo back in 2012 in a greasy spoon café in a grey drizzling London. Back then I was working at Thames Water and George was the recently appointed CEO for Unitywater, a newly formed water utility in South East Queensland, Australia.  Unitywater had been created through the merging of 6 council water businesses, each with their own systems and culture (no challenges there then!). George, bless him, was visiting London to see if there were any lessons he could take from Thames Water. Obviously I was no help at all. Thames Water is the Mary Poppins of the water sector and is practically perfect in every way. She has clearly never been even remotely dysfunctional or complex to navigate.

Despite my inability to help, I distinctly recall that we had a great fried breakfast, and that I was blown away by George’s fervent Aussie spirit of optimism.

I met George again yesterday, this time in his home city of Brisbane, which was distinctly sunnier and cleaner than London, and rather than a cholesterol-imbibed breakfast I instead sipped a healthy fruit smoothie. Five years on and we are both a looking a little bit older, balder, fatter but our collective passion for the water sector is unchanged. The last 5 years for George have been a roller coaster. If Thames is Mary Poppins then Unitywater is Bert Dawes (the Dick van Dyke character that played opposite Julie Andrews in the film). Unitywater is an organisation that has that a cheeky, optimistic, unrepentant, take-no-prisoners approach to life, where everything is possible if you just throw enough attention and energy behind it. I just love Australians.

Unitywater serves about 750,000 people in South East Queensland, stretching from Noosa in the north to Moreton Bay in the south.  It might not be the biggest water utility in the world, but it makes a big noise. They have a style and approach that is fundamentally different. They don’t try and excel at everything, but instead they adopt a laser-like focus on a few key areas where anything less than perfection is unacceptable. Water quality, for example. This focus of resources has created a culture and ethos that breeds further success, even on stuff that might seem peripheral.

For example, I was in awe when George told me their 60+ day debt was less than 1%. This is unbelievable. Water companies (even the perfect Thames) usually have no end of trouble getting pubs and nightclubs to pay their bills. 6 years is a good payment schedule, let alone 60 days. When I asked how they achieved this George explained that one of their initiatives is to deliberately not charge their maximum allowable revenue,  because to do so would make cash recovery more difficult and ‘why try and get an extra $2m revenue if we then have to spend as much building a debt recovery team’. The logic here is so obvious it is embarrassing. Play fair with your customers and they will play fair with you.

My favourite story however is how George and his team managed to persuade a massive chunk of their customers to switch from expensive quarterly paper bills (costing about $10 a household) to an online service. A simple campaign was launched inviting people to switch, with the only incentive being their entry into a  quarterly draw where the prize was free water for a year (capped at $1500). A $6k investment delivered a $1m/year saving. Beautiful.

We were joined by Ray Aspey, one of Georges senior managers. Ray is responsible for delivering some of the non-regulated aspects of Unitywater. He is a  glorious cross between an enthusiastic Labrador and a Great White Shark. He has boundless energy and eagerly embraces new ideas with an infectious, almost child-like enthusiasm, yet he is also scarily hard-nosed and has a commercially savviness that would make Gordon Gekko look like a pussy cat. Ray is developing plans to provide a new service to their industrial customers that will revolutionise their offering. The next few years are going to be fun in in South East Queensland. I fancy the best is yet to come!

No 167: One Problem. Two Cities

Over the years I have been to enough conferences to know that when an important government minister takes to the podium the audience is in for a fairly dull 20 minutes. No one is going to learn very much, although everyone will be respectful and clap at the end as the minister scuttles from the room with the feeble excuse of having another pressing engagement (while everyone actually knows their hasty departure is to avoid answering difficult questions). Somewhat depressingly, it is a universal truth that the more senior the minister,  the less informed they will be, and the faster they will scuttle.  

As I sat at the PUB Spotlight event in Singapore earlier today and heard the chairman announce grandly that ‘His Excellency Ek Soon Chan, Secretary of State for the Ministry of Energy in Cambodia’ was going to speak my little heart sank. I reached for my iPad with every intention of spending the session quietly clearing my email backlog.

Within seconds it was clear that this was not going to be a typical ministerial pontification. This session was going to be uniquely informative and entertaining. His topic was how they have managed to steadily reduce leakage in Phnom Penh from 76% in 1993 to less than 10% in 2017. To be brutally honest, the activities they undertook to achieve this result  were not rocket science, or indeed any different from those that would be adopted in any major city anywhere in the world (namely: identify the key ‘burst risk’ locations, repair and replace aging pipes, install meters, establish robust maintenance schedules). What stood out was the passion and personal experience with which the Minister spoke.

I think my favourite anecdote was how, while rolling out a metering programme, one of the local residents who didn’t like proposed meter installation plan, put a gun to the Ministers head and threatened to pull the trigger. In a ballsy response the Minister simply arranged for the water to the whole street to be turned off. His reasoning was simple: You want water, you pay for it.

His talk was followed by Mr Kawagoe from the Bureau of Waterworks in Tokyo. They serve 13 million people and, if I understood the interpreter correctly, they have enough water mains to go around the circumference of the earth, twice. Despite this enormous asset base, Tokyo has been able to reduced leakage from 80% in 1945 (wars have a tendency to mess with pipe integrity) to just 2% in 2012.  Rather humbly they stated that this was ‘probably’ world class. Probably.

Mr Kawagoe went on to say, with just a little bit of shame, that last year the leakage level had crept up to 3.2%. Ignoring the fact that a 1.2% shift must surely be within the margins of error I can think of numerous water utilities who would give their right arm to have leakage levels 5 times this. Leaving arguments aside as to whether this level of leakage control is financially astute (the cost of maintaining it will surely far exceed the cost of allowing some leaks to persist, especially in a city like Tokyo where any street works will be disruptive), this is a staggering achievement. I waited with baited breath to hear how this had been achieved. Mr Kawagoe talked about they utilize some clever widgets to find leaks, and an intensive training programme so their staff know what to do. As with the Cambodian Secretary of State, nothing he said was rocket science. There was one thing however that might just explain their stellar performance: Since Tokyo is in an earthquake zone they install thicker pipes than usual, and they have special earthquake resistant ‘flexi’ joints that move when the earth tremors (how cool is that?). Perhaps that’s the secret. We just need to build better pipes. Who would have thought.

I am also pleased to report that neither speaker scuttled. Indeed, my new Cambodian Ministerial hero stayed for the whole day and participated fully in all the debates and group discussions. A politician who knows what they are talking about and shows respect to his audience. Whatever next? It will never catch on.   

No 166: Poster Boy

My face has been used fairly widely over the past few weeks to advertise Utility Week. I have lost track of the number of times people have come up to me and said that my grinning mug has appeared on their internet feed. I can only assume that earlier this year someone in a dark basement at the publishing firm Faversham House decided that my face was the perfect image to epitomise the water sector: a balding, middle aged, male looking ever-so-slightly smug. That, they no doubt confidently told themselves, that is the face of the UK water industry today.

I am of course delighted to be the Utility Week poster boy. It is a great event, and was held at Birmingham NEC earlier this week, in a space about the size of 10 football pitches. I estimate 10,000 people attended. The real game changer that made Utility Week 2017 stand head and shoulders above others were the multiple parallel conference sessions, all held on the main expo floor. This made it incredibly easy for the delegates to flex between different sessions/the expo, enhancing the whole experience for both attendees and presenters. To avoid unnecessary noise the delegates had headphones which meant they could lock into the conference speaker of their choice.

Aside from the fact that most of the attendees were over 35 and dressed in suits, it gave the conference the feel of a headphone disco at an open air festival after the noise curfew. (When I was presenting I definitely saw some of my audience rocking back and forth in their chairs.)

Perhaps the strangest person to comment on my image appearing in their internet feed was a friend at my local church. He works in the prison sector and has nothing to do with water. Upon learning that my friend had been targeted I wondered if Mr Google had got a sneaky insight into my religious beliefs and had decided to target similarly minded individuals. Realising this was unlikely I wondered instead if my recent driving ban (one month to go now!) had put me on an HMRC watch list.

I finally realised that the more likely explanation was that he was targeted because we had emailed in the past and Google never forgets a link. I am now hoping I will get adverts to attend exciting conferences in the prison sector. If they are going to use our data then this really should be a two way street.  

Once you get past the fact that I look like I am supressing flatulence it is actually quite a nice photo. My wife likes it,  but that is possibly because I don’t normally supress wind in her presence. She is used to the full, glorious, unedited Piers experience. Lucky lady. 

No 165: Wet, Windy and Wild: The secret of a good corporate retreat

It is not unusual for big companies to invest significant time and money bringing their senior teams together once or twice a year so they can bond and discuss company strategy. Isle Group (www.isleutilities.com ), the company for which I am Chairman, is no different. Our senior team is spread across the world from Australia to California, Abu Dhabi to London. Being relatively small (at just 50 people) we lack the budget some companies might have for this exercise, but I like to think we more than make up for it in imagination. We can’t afford 3 days in a posh hotel in a prime holiday location. For us it is 3 days bundled together, sharing rooms and toilets and all our associated personal functions, in a big house in the English coastal town of Southwold. Situated on the Suffolk coastline, with the foreboding North Sea and the chill east winds, I like to think the team bond through shared adversity. Forget luxury. Hardship is the glue that truly binds.

Throughout this week the President of ‘Isle America’, Cristina Ahmadpour, who is used to the sandy beaches of San Diego and the pristine, gloriously warm waters of the Pacific has resolutely refused to even dip her toe in the freezing grey North Sea. Yesterday evening however, following a mix of coaxing and cajoling from myself and our CFO we persuaded her to give it a go. I think the offer to bump up her flight back home from a seat at the very back of the plane to one that was near the very back of the plane was probably the deciding factor.

The rule was she had to fully immerse. See attached 30 second video link. I particularly like Cristina’s impressive face plant and her accompanying Californian squeal. Note also the perfect synchronization as Ryan (our CFO) and I enter the water. We were channelling Tom Daley and Daniel Goodfellow, Ryan especially so with his exceptionally small budgie smugglers.

https://drive.google.com/file/d/0B-kNR9H2w43gOHpYWXM2UWFxTGc/view?usp=sharing

Why do something one once, when there is the perfect opportunity to do it twice? Especially if you can bring in all your friends. As the evening progressed and the wine flowed, the team bonded and at midnight a second dip, this time without the protection of a wet suit, seemed a good idea. Midnight is clearly not the best time for decision making in the Isle family.

It is only now, as I look at the photos, that I see that our MD for Europe, Dutchman Dr Ignaz Worm, appears to have been so whipped up by the enthusiasm that he didn’t let the fact he lacked swimming trunks deter him. Underpants are just as functional. Now that’s impressive team bonding. Beat that IBM and Google!

Fun fact: Someone in the Isle senior team has the copyright symbol, ©, tattooed on the upper cheek of their left buttock. It looks like they have been stamped for the Congestion Charge. Bless.

Cristina - BEFORE THE SWIM

Cristina - AFTER THE SWIM

BEFORE THE MIDNIGHT DIP

AFTER THE MIDNIGHT DIP

No 164: My Ego is like a Tom Cat

Sometimes it sits quietly purring in a corner of my life. Sometimes it endearingly rubs itself up on the legs of people I encounter in a valiant attempt to get stroked. Sometimes it voraciously demands to be fed, meowing incessantly. It is therefore rather wondrous when someone bolsters ones ego without any provocation. It is the equivalent to a kindly old lady stopping on her way to the shops to give 2 minutes of unwarranted love to the smelly Tom Cat sitting on a neighbours garden wall. The cat can’t believe his luck, but he laps up all the love as if he actually had done something to deserve it (he never has).

I had such a moment earlier this week. I received a call from an engineering student at Leeds University, Josh Maillings. Josh had been recommended to speak to me in my capacity as a ‘water expert’. My inner Tom Cat positively bristled with pride. Josh is writing a dissertation on the effects of Brexit on innovation in the UK water sector. Years of being a professional consultant have taught me that for every technical question there are always three responses and I wasn’t about to deviate from this universal truth. I dug deep and gave my three responses.  

•          Firstly, the weakening of the £ was likely to mean costs will rise since a significant proportion of the water supply chain is procured from overseas. This is good for innovation since increased pressure to reduce costs inevitably moves an organisation’s risk appetite upwards. Upon reflection I now realise that this answer is not particularly helpful. I didn’t actually answer the question. The weakening of the £ may be partly due to Brexit, but it is probably more influenced by activities in the US. For failing to answer the exam question I deserve a mere 2/10 for my response. [Interestingly, the smart money (apparently) says that if Mr Trump follows through on his infrastructure investment promises by, for example, building a 100ft high garden wall to keep out the neighbours, then the £ will drop even further. Alternatively if he decides to start WWIII then the whole topic is mute since we will have other more pressing things to worry about than a bit of FX loss.]
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•         Secondly, Brexit is likely to lead to the rejection (or at least the watering down) of various EU environmental legislation. This will remove one of the key drivers behind many environmental ‘technology advancement’ programmes. This is obviously bad for innovation. Unfortunately I now realise I may be wrong with this conclusion also. Perhaps the UK will use Brexit to adopt even more stringent levels of environmental protection. This appears unlikely, but I do remain optimistically hopeful that, irrespective of the legislative changes, water companies will not weaken in their resolve to make the right decisions about protecting and preserving their local environment. Call me naïve but I believe we are still an industry dominated by good people who care deeply about preserving our natural resources. Mostly.  
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•          Thirdly, no discussion around Brexit can avoid the topic of immigration. The water sector relies significantly on overseas workers, in particular for blue/grey collar activities (plumbers, leakage technicians).  As we tighten our immigration rules, this resource pool will reduce, increased demand will push up salaries, which in turn will drive a desire for increased automation. This is good for innovation. Yet again on reflection I realise this conclusion is oversimplified and probably wrong. Our dependence on overseas workers is not just restricted to the blue/grey collar activities. I struggle to think of a single strong competent technical team, in particular in R&D, that does not rely upon a diverse multinational team. Some of those overseas brains are startlingly good. Without them we will have lost something rather special.

Regular readers of this blog (both of them) can attest to the insatiable nature of my ego, and therefore will appreciate my desire to reach out for more informed perspectives on the whole Brexit/Water/Innovation conundrum. I will share any responses to this blog with Josh, taking just a little bit of credit for having provided the communication channel. See it as a friendly scratching of my feline ego chin. Or if the fancy takes you, see it as a chance to let your own personal Tom Cat get some satisfaction, while at the same time helping a hard working student in Leeds.

Just remember though, Tom Cats can be difficult to manage. They roam unrestrained over territories that are not their own, they are astonishing indiscriminate in their hunt for gratification, and every now and then they do something that requires someone else to do the cleaning up. Tom Cats are not ideal pets. Treat yours carefully.

 This blog, and previous editions, can be found at http://notesfrompiers.blogspot.co.uk/