How Northumbrian Water is tapping into innovation in the water industry

How Northumbrian Water is tapping into innovation in the water industry Summary: Across the sector, water companies are looking for ways to deliver better customer services more efficiently. The UK water industry has faced a banner year of bad publicity. Front page headlines have called out the industry for polluting waterways, substandard service, and rising tariffs. Depending on whom you ask, these problems result from mismanagement, overly generous returns, aging physical and digital infrastructure, a talent shortage, climate change, or the demolition of wetlands to make way for development. Against this backdrop, all the water companies are looking for ways to deliver better services more efficiently. One leader in this effort is Northumbrian Water, which has received top marks for innovation and customer satisfaction. Angela MacOscar, Head of Innovation at Northumbrian Water, weighed in on factors of this success at a recent water infrastructure event at Bentley headquarters. After leading innovation efforts at a chemical company, MacOscar came to the utility five years ago. Now, she works underneath the Northumbrian CIO department to help the utility become the world’s most digital water company. They are already making good progress. She welcomes some of the bad publicity because it helps motivate innovation efforts across the company. She explains: Every day you open the newspapers or look on social media, and there is some poor water CEO getting their salaries revealed, threatened with jail, and also seeing the reality that spills and pollution instances are going on out there. That needs to be tackled. However, I like to see this as an opportunity. Because when you are put under scrutiny, then things can change. So certainly, I see this as an opportunity in innovation to do things that perhaps at a speed and pace which we wouldn’t normally be able to do actually drives change and actually do something. Three levers Three levers
Northumbrian Water has three different levers to change what they do: transformations, continuous improvement, and innovation. The transformation aspect relies on ensuring they have updated to the best tools for employees to run the business and services. Continuous improvement is about motivating employees to stay curious and challenge what they are doing to make small incremental improvements. Innovation is the aspect MacOscar is most excited about. The first thing she did when joining five years ago was to ensure they had the senior leadership on board. The company had also established an innovation ambassador program from across the organization. Now, they have over a hundred. These are people with different levels, job responsibilities, and expertise that help champion innovation efforts across various departments. MacOscar says: This is really important because there are only seven of us on the innovation team. And we’re responsible for innovation for the whole business. So we need the whole organization to want to change, to be curious, and to encourage more to innovate, and we’re definitely getting there. They have also established a measurement program to quantify the pace of innovation and engagement. Now, almost 25% of employees are actively engaged in innovation activities, and the number has been growing. This ongoing program also helped Northumbrian take advantage of an industry-wide software innovation fund. Although these projects tend to have higher risk, they also come with financial backing and promote collaboration with other experts in the industry. Outsourcing innovation Outsourcing innovation
Another brilliant insight was the creation of the Innovation Festival in 2017, where they invited the public to suggest ideas, participate in design sprints, and work on data hacks to address water industry challenges and societal problems around it. These run the gamut from how they work with employees and customers to how Northumbrian runs operations. Over 15,000 people have participated thus far. During the pandemic, the event moved online, which helped bring in expertise and help from around the world. MacOscar says: When we opened those digital doors, I can honestly say we did not know what would happen. What did happen was that people from forty different countries walked through those digital doors, opening up a real new opportunity for us to interact with a lot of different people. And this was a real enabler for us to be able to do things in a different way and also to make sure that innovation is really inclusive. The festival also helps bring in help from over forty-five other sectors like military, medical, or space, which may have helpful expertise or suggestions applicable to the water industry. One example was a new process that reduced the time to report and fix a water leak in half. They have also explored using satellite imagery and dogs to sniff out leaks more efficiently. One of the most impactful innovations was a better infrastructure data-sharing process across utilities. Construction teams traditionally had to rely on outdated maps for adjacent utilities when fixing water, electrical, gas, and communications infrastructure. This has been a huge issue across all utilities because, at best, an accidental strike breaks critical infrastructure, but in the worst case, people get injured or killed. The idea of sharing infrastructure data has been around but constantly faced pushback from legal teams and regulators worried about privacy, terrorism, or proprietary information. So, Northumbrian provided the lawyers a bit of extra motivation to actually make progress. MacOscar explains: We put the lawyers of the utilities in the tent and told them that we were not going to let them out until we had one, and lo and behold, within a week, we actually had the data sharing agreement. Once the UK Government saw how well it worked, they funded an expansion of the program across the Northeast and London, eventually expanding it across the country. Now, over three hundred companies are participating in the program. One of the key enablers was a Snapchat-like disappearing messages app that presents a consolidated map to teams that automatically vanishes at the end of a project. MacOscar estimates this has created about £3.2 billion pounds of value across the UK. MacOscar hopes that their efforts will inspire innovation across the UK. She says: We are very happy to pinch with pride things that other people have done. Why would we not? And likewise, we’re really happy to share when we’ve had something that’s good, and we would love other people to adopt that. And actually, that is more of the mindset that I think we need to be moving toward rather than how we’re set up today. Not everybody has a huge innovation department. There are some companies where one person does it part-time, and we need to better support all the water companies. A bigger problem A bigger problem
Lila Thompson, CEO of British Water, also opened up about some of the challenges and opportunities facing the water industry. She says the front paper headlines have tended to focus on executive bonuses, storm overflows, and environmental pollution. But these accounts gloss over the challenges of actually delivering good water services behind the scenes. For example, nature-based solutions could significantly reduce runoff, but regulators have pushed back on this more holistic approach. Thompson says: So, we’re going to have to think creatively and be collaborative in our approach with regulators and policymakers and say, ‘Look, if you want us to do nature-based solutions, we’ve got to make the process quicker to put in place.’ And we’re going to have to have the bandwidth and have the time to be reflective and do things differently. Water companies are also facing a massive talent shortage on their digitalization journey. The sector currently employs about 72,000 people and will need to add another 27,000 by 2029. Some water executives are finding that newly trained data engineers often get picked off by other sectors with much better compensation plans. But Thompson believes that the water sector also presents opportunities for people who want to make a positive impact on their communities: There are a lot of people who want to work in environments where there’s purpose, where they can make a difference, and where they can add value. And I think the sector is in no better place than to actually make that difference. So, there’s a massive opportunity for us to capture that. Bridging data silos Bridging data silos
Frank Braunschweig, Director of Product Management, Water Industry Solutions, Bentley, also believes there is a tremendous opportunity for bridging data silos across the digital infrastructure. Today, many utilities have dozens of different systems for managing GIS, billing, ERP, and control systems that serve the needs of various departments. As a result, operators struggle to make decisions that rely on information across the systems. For example, the process of estimating water losses might require data from the SCADA control system, billing data, and inflows. Bentley has been promoting digital twins as an aggregation tier across these systems to help unify data from across these systems without replacing what is currently working. This can help improve decisions across the organization. One early adopter of this consolidated approach was Águas do Porto, the water utility in Porto, Portugal, which wanted to federate data from across twenty-two IT systems. In the beginning, there was a bit of pushback from employees who were reluctant to learn a new system. But as everyone saw the benefit, it quickly turned around. Braunschweig explains: Instead of working on things that can be automated, they can focus on what they should do and switch from being reactive to being proactive. You gain time and can focus on what you should do rather than copying data from one place to another. My take My take
The water industry has never been particularly renowned for innovation. Enterprises of all shapes and sizes should take notes when a water leader makes such promising progress.