Where Wessex Water meets Apple!
A post by David Elliott – Group chief innovation officer
“The key to dominating the 20th century economy was to own the means of production. The secret of our own times is to create the means of connection.” Financial Times 2018
When we were privatised in 1989, the critical need at that time was to invest in new assets to meet challenging directives coming out of Europe (no pun intended) to improve both the quality of drinking water and the water environment.
There was a belief at that time that we would need to invest in new infrastructure for about a decade, and then we would focus on maintaining our assets.
To say that the policy makers underestimated the scale of the challenge, and the investment required, is a bit of an understatement! Thirty years on (and £130bn invested), we are still addressing challenges to improve the quality of the environment, improve resilience and maintain an ever-growing asset base.
However, over that time other things have changed as well.
Climate change and the need to decarbonise, together with growing awareness of the value of our natural environment, and realisation that water resources are coming under increasing strain, have refocused our objectives on the environment.
Socially, customers are becoming increasingly aware of the need to refocus our economy from consumerism to something more sustainable, and affordable.
We are beginning to turn our focus on alternative ways of managing water, and engaging customers to contribute to the outcomes we aspire to. Asset solutions can’t achieve everything we need to deliver at an affordable cost, or without consuming more carbon.
Thirty years on, the water industry still has pretty much the same business model with a focus on building and operating assets, and engaging customers through traditional utility transactions such as paying bills and fixing problems.
Outside, the water industry business has moved on considerably over 30years. Think of how we communicated with each other 30 years ago and how we do today?
Technology has changed much of the way business operates today, and particularly, how it engages with its markets and customers.
The fastest growing businesses today are not necessarily the ones that own the means of production, but those that can make better connections between customers, communities and their needs. Think of Amazon, Apple, Airbnb, Google, Uber – the list goes on and on.
A monopoly that builds and operates all its own assets and services without any interaction with the wider market is becoming increasingly outdated. Smaller, more agile, companies bring products and services to market much faster and tend to be more innovative in what they do.
Some big challenges face us over the next decade with some tough performance commitments to achieve; including:
- water efficiency
- supply interruptions
- reducing pollution
- protection from flooding
- protecting and improving our rivers
Doing things in the way we have always done them is unlikely to deliver the outcomes we seek at an efficient cost.
Through working with the wider market, we can explore alternative delivery with our supply chain and industry bodies, as well as research institutes, catchment partners, local industry, etc.
The other thing to note about these challenges is that if we could get communities to commit to help us to achieve them we are likely to make much faster progress, without the need to build and operate assets.
For example, farmers managing land to improve water quality, or communities using less water, and limiting the use of products that cause problems in the environment, can all help deliver the results at a much lower cost, but also with a lower carbon impact.
To do this we need to be able to connect people and communities to the outcomes and give them ways to collaborate.
When we think of Apple as a company, their smartphones most probably spring to mind first; they are coveted and valued by customers.
Yet their phones only work in the way customers value them because of the operating environment (iOS) they built around them that allowed others to develop services that customers wanted (apps).
The whole thing works collaboratively and enables the smartphone to be much more useful to customers.
So, what would the equivalent model be in water?
That’s where we came up with Open System (now called the Wessex Water Marketplace). Our resources, pipes and plant are the equivalent of Apple smartphones, and the Open System model is our equivalent of iOS.
Through our Marketplace we want to engage with customers, communities and businesses to collaborate on contributing to outcomes in increasingly innovative ways.
Our role is to convene the activities, make sure our assets and services are robust and reliable, and to engage. At the same time, we must manage the transactions and the risks and rewards that arise from them.
Who knows where Wessex Water will be in 30 years? Apart from providing the most essential services to life we might just be a hip, thriving tech company!