Interview: Heidi Mottram, chief executive, Northumbrian Water

“I hope the industry can assure the country that it’s got resilience in hand and that the country shouldn’t worry”

When you first meet Northumbrian Water’s chief executive Heidi Mottram, you feel as if you’ve known her for years. She is ­welcoming and approachable, and she has no problem giving ­Utility Week an hour of her time for an interview at the ­company’s biggest event of the year.

Sitting on a wooden bench in a teepee at ­Newcastle Racecourse, amid Northumbrian’s 2018 Innovation ­Festival, Mottram talks to Utility Week about diversity in the water sector, Northumbrian’s performance, her ambitions for the future, and gives some much-needed advice on how to climb Ben Nevis.

We meet during the driest June on record, and resilience is very much at the forefront of everyone’s minds. However, thanks to some careful planning, Mottram doesn’t foresee a hosepipe ban in Northumbrian’s area. “We’ve got additional demand, but we’re okay,” she says confidently. But the company’s secure position is “not by accident”. “We think long and hard about our resilience… we knew this was coming because, generally, you can see the weather coming, so we’ve planned for it.”

Two water companies have been caught out by the dry weather so far – Northern Ireland Water, which has now lifted its restrictions, and United Utilities. However, Northumbrian is not concerned, and is not anticipating any restrictions in any of the areas it operates – the north east of England and parts of Essex and Suffolk. “Up here we have a lot of water as you know anyway, but in Essex we’re resilient. However, that’s not by accident, that’s because of a lot of thinking over a lot of time and some highly skilled and experienced operational teams. That’s what we’re paid to do, isn’t it, to do our job well and for customers to be able to rely on us.”

Mottram – a mountain-climbing enthusiast from Leeds – is studious, and commands respect through numerous accolades and achievements. When appointed chief executive of Northumbrian Water in 2010, she became the first ever female chief executive of a water company. The absence of women in utilities is all too well known. However, Mottram says she never felt being a woman was an issue. “It never felt like it was anything to do with me and my gender, people were more interested in what I could bring to the company, my newness and my different perspective. That’s what most women will talk about if they get asked about being a woman – it’s about diversity, it’s about difference.”

I certainly wasn’t ever conscious of being the ‘first’ or the ‘only’

Mottram feels passionately that teams with different perspectives are “a real business accelerator”. “There are any number of academic studies that show that, but it’s also been my personal experience. I certainly wasn’t ever conscious of being the ‘first’ or the ‘only’, even on the Water UK board. I’ve never felt the gender issue at all.”

Instead, coming from the rail industry, where she had accelerated through the ranks quickly and held several senior management roles – including managing director of Northern Rail, commercial director of Arriva Trains, and operations director of Midland Mainline – people were keen to have her input.

Not long before our interview, strong headlines had emerged from unions calling out water company bosses for getting paid “too much”. This, along with Labour leader Jeremy Corbyn’s calls for renationalisation and environment secretary Michael Gove’s criticism of water company financial structures, has put pressure on water companies to prove themselves and their legitimacy.

According to Northumbrian’s latest figures, Mottram earned £667,000 in 2017/18. What are her thoughts on whether executive pay is “too high”?

Unperturbed by the question, her reply is considered and sensible. “It’s important that we articulate and describe the contribution that we make and the service that’s provided to our customers.

“Generally, when the debate goes on around executive pay, I think the public get frustrated if the CEO is not successful or delivering but still appears to be well-­remunerated. When people are successful, and they deliver for their customers, people feel it is fair and appropriate. But these calls will cause us to reflect again about a greater level of transparency and a link to what we’re delivering. If you deliver and you lead, and you make success, then I think the public typically go: that’s okay. It’s when there isn’t success, I think, is where that anxiety comes from.”

It’s clear that Mottram is nothing if not successful. Her rapid rise in rail is evidence of this. Having made a success of a rail company previously referred to as a “basket-case”, Mottram felt it was time for a change of scene and to prove herself in a new sector. In making the change she certainly moved up a gear in terms of size of the operation. Northern Rail – which operates one of the largest transport networks in the UK – turned over £135 million in 2016/17. Northumbrian Water is a decidedly bigger company, whose turnover was £835 million in 2017/18.

We’ve been pretty successful, and I’m pleased with what I’ve done

A self-confessed “greenie” with a degree in geography, Mottram was attracted to the company’s environmental and sustainability ambitions, its ethical and values-driven stance, and its commitment to customer service. “The values and behaviours and everything that this company stood for, I thought: this is somewhere I’ll thrive, and that’s been the truth ever since. I think I’ve done a reasonably decent job of it. We’ve been pretty successful, and I’m pleased with what I’ve done.”

Her summation doesn’t take into consideration the most recent assessment from the Environment Agency that emerged after our interview, ranking Northumbrian as one of the worst performers. But more on that later.

However, that aside, there has been plenty to shout about.

Northumbrian came joint top with Wessex and Portsmouth in regulator Ofwat’s 2016/17 service incentive mechanism (SIM) league table, with a score of 88, against an industry average of 84. Mottram says she is also pleased with the company’s net promoter score, which was 44 in 2017/18 – the highest in the water ­sector ­(anything over 0 is considered “good”, and 50+ is considered “excellent”). The company was also rated top for customer satisfaction in the Consumer Council for Water’s Water Matters survey, published after our interview.

On Northumbrian’s website, Mottram lists her strengths as “leadership, corporate overview, infrastructure and customer service”. Her first few months at Northumbrian proved this to be the case. “I always remember the first few months as being very collaborative,” she says. “I organised a number of meetings and workshops around what our plan might look like going forward.”

It was out of these workshops that the company’s vision rose: to be the “national leader in sustainable water and wastewater services”. And, as the stats show, it is certainly on the way.

Northumbrian was one of a few companies held up as exemplars in a report by Ofwat into the freeze-thaw incident, in which thousands of customers across the country found themselves off water supply during the infamous “Beast from the East”. During the incident, just 0.1 per cent of customers in the Northumbrian region and 0.63 per cent in Essex and Suffolk experienced ­supply interruptions.

Despite its many achievements, including being named Utility of the Year at the 2017 Utility Week Awards, Mottram insists Northumbrian isn’t resting on its ­laurels. “We’re never complacent, we’re not at all arrogant – quite the opposite actually, we’re sometimes probably too modest.”

Everyone’s got strengths and weaknesses

And, she says, there is still much more to be done to improve performance in certain areas. “We would probably claim to be one of the top companies,” emphasising the “one”. “We were top at SIM [in 2016/17], but across the board, there’s no company that’s good at absolutely everything, everyone’s got strengths and weaknesses.” According to Northumbrian’s annual performance report, its score dropped slightly in the latest SIM to 86.4 in 2017/18 – although official figures have yet to be released by Ofwat.

And, as mentioned earlier, there was that less than positive news a few days after our interview that Northumbrian Water had been ranked one of the worst companies for ­environmental performance in 2017 by the Environment Agency. The company scored worst for discharge permit compliance (96 per cent). At the time, wastewater director Richard Warneford insisted that, six months into 2018, with zero compliance failures, the company is ­“confident in turning previous issues around” and is pushing for 100 per cent discharge permit compliance. “We have an ambitious approach to achieving our goals and will be aiming for a four-star rating in 2018,” he said. The company declined to comment further for this interview. However, it did announce, at its Innovation Festival, a £2 million investment in its waterways as part of plans to improve the environment.

“We would put ourselves in the top three, but the bar on everything has gone up,” says Mottram. “What would have been leading performance when I came to Northumbrian Water just wouldn’t pass now.”

We’re a good company, so I think we should aim for the very highest level

Becoming the best will be hard work, as benchmarks become broader and PR19 intensifies the focus on company performance. “The bar is getting higher, and while I definitely wouldn’t say that the PR19 process or the ­regulatory process is driving us – we run the company for our customers, communities and stakeholders – it does cause you to reflect a little bit.”

And how are Northumbrian’s PR19 plans going? “Very well,” says Mottram. Like all of the water companies, it is in the thick of writing its business plan ready for the looming deadline for submission of 3 September.

One thing that’s embedded in Ofwat’s methodology for PR19 is communication and conversation with customers. Mottram claims this is something Northumbrian has been doing for years, but says the regulatory process focuses the mind, as it means having to document it in an “Ofwat-friendly” way. So far, she is pleased with the outcomes of conversations with customers, which have been “very reinforcing”. “It proves to us that we are very well-connected with our customers, and we do know what we’re doing and we’re not stupid,” she says.

Asked which category she hopes the company will be placed in, Mottram says she is aiming for exceptional – perhaps unsurprising for a woman who has won so many awards, including Rail Business Manager of the Year, an OBE for services to the rail industry and a CBE for services to the water industry. “We’re an ambitious company, we’re a good company, so I think we should aim for the very highest level. I’m not at all arrogant, I don’t want Ofwat to go: ‘don’t get too carried away with yourself’, that’s not what it’s about, but you want it for your people and you want it for your customers that you know you’ve done the very best job that can be done.”

What is Mottram’s vision for the future of the water sector? That the country will be able to rely on the sector for a resilient and reliable supply of water?

“I was really pleased when the water sector did a national water resource management plan because I thought that was really important,” she says. “We need to think long term – there’s a combination of developing water resources but also demand management as well.

“I hope the industry, partly in this business planning process and partly beyond, can assure the country that it’s got resilience in hand and that the country shouldn’t worry. With proper planning we can get that right, ­efficient and affordable.”