Customer Stories

Changing a Risk-Averse Culture

By Ella Kobelt

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How do you shift a risk-averse culture to adopt new thinking? In a recent WaterSide Chat, WaterSmart featured three industry leaderswho have earned reputations for being innovators in the water industry: Patricia Mulroy, Ed Archuleta, and George Hawkins. While they ran very different utilities facing their own unique challenges, each leader tackled change and attributed their achievements to collaborative management approaches internally, while emphasizing the value of forming partnerships externally.

When Hawkins first started with DC Water (he recently retired as General Manager and CEO), the organization faced low customer satisfaction and virtually no stakeholder support. He recognized the importance of communication between customers, staff, engineers, and local politicians. Hawkins set out to change company communications and took on his employees’ priorities as his own. As Hawkins put it, “they had to understand, change wasn’t happening to them, it was happening with them.” With a unified organization to back him, DC Water slowly gained rate payer support and funded a $500 million investment to build a first in the nation, and largest in the world, thermal hydrolysis plant to generate clean power.  In many other instances, our panelists were able to form partnerships that mitigated risk and embraced innovation.

Archuleta accomplished a complete overhaul when he joined El Paso Water. The utility needed to reduce costs, better manage assets, improve communication with stakeholders, and subsequently increase rates. He quickly identified his utility champions—those who were willing to take risks and innovate within the company. Finding technology to reduce costs and reduce unaccounted for water gave the company room to increase rates without an uproar. Archuleta identified partners in the local media, and through rebranding and increasing visibility, El Paso Water slowly gained credibility in the community. Archuleta also piloted a conservation program, saving 249 billion gallons of water which resulted in deferred capital investments of over $460 million. He even shared resources with smaller utilities across the border, providing information and technology he had discovered along the way. “Ultimately, we all shared the same resource. It was in our best interest to bring everyone else up to speed.”

At the Southern Nevada Water Authority (SNWA), Pat Mulroy had to correct several decades of passive decision making. As she became more aware of the magnitude of challenges faced by climate change and water management, she knew “one of the biggest arrows in our quiver was knowing that technology advances innovation. We needed to mobilize innovation.” By partnering with the Water Desert Resource Institute, they honed technology developed globally, improving water efficiency, quality, and leak detection. Local utilities could leverage research performed by SNWA. The project was so successful in incentivizing water innovation, Mulroy and other stakeholders launched Waterstart, a resource for technology companies, management agencies, and policy makers.

When Hawkins, Archuleta, and Mulroy entered their organizations, they were playing catch-up: Behind on planning and charged with forming better community ties. Each decided to push something new, battling institutional inertia that had kept their respective organizations at a standstill for years.

At the close of our webinar, we asked each of them: Why rock the boat and try something different? How do you bring new ideas to an organization?

Whether confronting low customer approval or raising rates, our presenters unanimously agreed solutions lay in making systematic changes. By identifying key change agents, these utility titans created entire communities who were willing to innovate and overcome whatever problems they encountered. Embracing change ended up being the only way to sustain their organizations. Utilities today face many challenges, and these utility leaders have given us a playbook of innovative problem solving for the coming challenges facing utilities everywhere.

Posted in Customer Stories, barriers, risk-averse, utility titans, innovation, utility culture, change management

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