Utility Week expert view: Karma Ockenden

“Last week, the sun shone on WRc’s third annual innovation day for the water industry. And fittingly, the mood was altogether more positive.”

Two years ago, research consultancy WRc held its first innovation day for the water industry. Excepting the enthusiasm of the WRc staff, hell-bent on galvanising some kind of positive action, the mood was pretty bleak.

Frustrated technologists were tired of their products hitting a brick wall – or a bottleneck at least – at the water company stage. I heard that it typically took 11 years for incumbents to consider, trial, adapt, commercialise and implement a successful innovation. Bankers and financiers complained this crushingly slow process was a major turn-off for venture capitalists.

In short, water companies were in the firing line for procrastinating, obfuscating and being at best indifferent, at worst actively hostile, to innovation. Poetically, it even poured with rain all day.

Last week, the sun shone on WRc’s third annual innovation day. And fittingly, the mood was altogether more positive. No, the industry hasn’t become cutting edge in two short years and yes, there are no doubt still plenty of frustrated inventors, new entrants and financiers out there with war stories. But the mood was definitely more upbeat. In particular, there was a sense that water companies are taking the initiative: not in speeding up product time-to-market; but in turning the tables on hitherto critical supply chain types by throwing down the gauntlet to them to up their game.

Afternoon speaker Simon Barnes, programme director at Yorkshire Water, provided possibly the best example of this. He recommended delegates read a just-published Sunday Times article entitled “Death of the old-style salesman”, which carries the intro: “They used to be focused on closing the deal, but now sales staff do best when they think of ways to help their customers.”

Barnes said many of those who criticise water companies for not being innovative are “lazy, lazy sales­people” pushing “mediocre products”. Yorkshire Water, as the “customer” for AMP6 delivery services, will certainly be demanding more from those it works with. Barnes said he recently asked companies interested in helping Yorkshire to outperform its AMP6 deal to devote 12 weeks of their time, at their own expense, to working with him on business development. “Very few stood up,” he said. But some did. He gave an example: “IBM stood up and put resources in.”

Innovation is very much on Barnes’ agenda. But in some instances, with a twist. He is revisiting Clear Water, a change programme Yorkshire Water ran between 2004 and 2009, which aimed to increase service levels and financial performance. The programme, he said, “saved millions of pounds and put service up like never before… did some great things, but let a few diamonds slip by”.

Barnes explained that mining these diamonds five years ago was hindered by the limitations of technology; the business culture norms of the day; and greedy salespeople who demanded extortionate profit margins. He plans now to “mine the DNA of Clear Water, through the lens of today’s culture and technology”. Lazy salespeople beware.

It’s not only Yorkshire planning to make more innovative use of its supply chain in AMP6. Earlier last week I went to Thames Water’s Reading HQ to meet the head honchos at Eight20, the eight-strong alliance formed to deliver Thames’ 2015/20 total expenditure programme. Sure, we have seen alliances before, but the depth, reach and extent of the Eight20 partnership are new, requiring much more from supply chain partners and a change of role for Thames. More on that in next week’s issue.

Back to WRc’s innovation day and there was positive news on water innovation from other quarters. Robert Schröder, EC policy officer, invited the UK to tap into the European Innovation Partnership on Water – an organisation that aims to streamline innovation research, funding and implementation across member states.

Meanwhile, Mark Lane, business and economy action group leader at the UK Water Research and Innovation Partnership, had some good news following a gloomy report released in March by his organisation. It said the UK had only a 3 per cent share of the global market for water-related goods and called for urgent action. Lane reported that since the report’s publication, he has had positive talks with water minister Dan Rogerson and private companies who could help to fund UK progress.

One final piece of very recent good news: two weeks ago, the Department for Business, Innovation & Skills indicated it was considering a £75 million capital investment in a water security innovation centre as part of its consultation on how best to spend the £1.1 billion it has committed to science and research in 2015/16 (and similar amounts through to 2021).

So, unusually for this industry, there is some good news to report on innovation. In some cases, these are small steps; demanding more of the supply chain, though, could have a significant, long-lasting impact. Genuinely innovative contractors and suppliers will be glad of the opportunity. Mediocre product sellers in it for short-term gain might have to find another industry.