Ebb & Flow of Business · customer experience more fully into the organisation by building customer...
Transcript of Ebb & Flow of Business · customer experience more fully into the organisation by building customer...
Ebb & Flow of Business How Scottish Water has navigated its way from follower to leader in the UK Water Industry
2
Scottish Water is one of Scotland’s largest
public sector companies serving over 5 mil-
lion customers across Scotland. Since it was
formed 13 years ago, Scottish Water has
successfully weathered its own storms and it
is now positioned as one of Scotland’s most
progressive companies.
We are sitting in ‘The Bridge’, Scottish Water’s new
£15 million national operations centre and it certainly
is impressive, The three-storey 7300 sq. m building
has been set up to be an agile office, packed with
green technologies and flooded with natural light and
height for its workforce. It is built around a large cen-
tral atrium, dotted with brightly coloured seating pods,
touch down points for flexible workers and meeting
areas for its staff. A secure and tightly controlled Intel-
ligent Control Centre sits at its heart both physically
and metaphorically. This is a long way from its old of-
fices at Balmore Road, Glasgow, but it accurately re-
flects the progressive customer-focused company that
Scottish Water is today and its vision for the business
going forward.
The day begins with Head of Corporate Relations, Alan
Thomson, “It might not be obvious but we believe we
have faced and continue to face similar challenges that
the housing sector faces, most notably dealing with
large scale change, customers, regulations, the envi-
ronment and managing all of our assets within our
businesses. The story of Scottish Water is a story of
change and we’ve had to change quickly which is not
always an easy task for a company as large as ours.
While proudly operating in the public sector we have
also had to learn how to act, think and behave like a
private sector business.”
Scottish Water is a large scale business. It has over 5
million customers and is the fourth largest water busi-
ness in the UK providing 1.3 billion litres of water eve-
ry day as well as taking away and treating 842 million
litres of waste water before returning it safely to the
rivers and seas. Commenting on the key drivers for his
business Alan says, “we are a large utility business
with huge geographical and operational areas to serve
but when you ‘boil it down’ most customers want bet-
ter service at the lowest possible cost. We fully under-
stand that as a key utility provider we are providing a
3
service that is part of daily life for our customers.
Since 2002 we’ve been on a journey which has seen
our business change dramatically”
The history of Scottish Water goes back to when it was
formed in 2002 out of three former water authorities,
East, West and North Water. At the time, the water
industry was an uncertain environment with regulators
setting targets that had to be met by set dates, includ-
ing significant water and waste water quality improve-
ments to meet European Directives, while meeting
challenging operating efficiencies of a 40% cost reduc-
tion over 4 years. The initial challenge for Scottish Wa-
ter was to align the three companies to become a sin-
gle efficient organisation which included over 6000
staff. This period of integration was difficult for the
organisation. Summing it up, Alan said, “There is no
doubt we were on the back foot at this time. There
was so much to be achieved across every part of our
operations. So we knew our first action had to be to
make significant changes, build confidence and trust
and have a clear focus on what had to be achieved.
Our business also benefits hugely by having people
who care and have passion to do their best for Scot-
tish Water. So a focused business plan was produced,
outlining what was needed by when and who we
needed to engage to get things done. This included
key stakeholders such as Ministers, Regulators, local
authorities and business groups. We faced a massive
challenge with targets on operating and capital effi-
ciency, while delivering one of the largest investment
programmes in the UK. The regulator also introduced
measures that compared us to places who were ahead
of us in areas such as capital investment and operat-
ing efficiency so there was a large amount of catch up
to be done. “Therefore, the biggest thing for us was to
engage our people. You can have great systems, pro-
cesses and support services but you have to have peo-
ple who care, people with heart and conviction and the
secret is to galvanise them to feel and know that this
is their business.”
Alan outlined an investment programme of over
£5.4bn most of which is underground, but is delivering
significant benefits for customers in terms of quality
and service provision. That, and the fact that compar-
ative regulation has been
good for us, making us
ask questions of ourselves
and look at reasons why
we were doing things in
certain ways. It made us
challenge ourselves to
make improvements in
service, reduce costs and
deliver at pace for cus-
tomers.”
With this massive level of
investment, Scottish Wa-
ter has certainly achieved
some impressive objec-
tives: operating costs have reduced by £3million per
week; record levels of customer service; leakage re-
duced by 50%; environmental improvements; drinking
water quality at its highest ever levels at customers'
taps.
“Customer satisfaction has dramatically increased over
the last years but we’ve had to build trust with cus-
tomers and measuring ourselves through the UK cus-
tomer service index, firstly against other utility compa-
nies closely followed by then measuring ourselves
against other business sectors. Our customer service
programme has successfully moved us from having a
high cost and low quality service to a low cost and
high quality service that we can be proud of.
“One thing we can‘t be is complacent, we still have
much to do. It is easy to slip so you have to keep
your focus. For us, we had to focus on ripping out
costs at the same time as improving the business. We
have shown that this can be done but it is undoubtedly
hard. You have to understand how to make the correct
efficiencies while delivering investment that drives up
service standards.
4
Scottish Water has invested heavily in customer ser-
vice engagement, not least with a bespoke feedback
solution provided by Rant and Rave which gives them
real-time, multi-channel feedback from customers en-
abling staff to respond quickly to customers and drive
improvements to service.
Fiona Templeton is Scottish Water’s Customer Experi-
ence Manager and has been with the company since it
was formed. Heading teams of strategy, insight and
research and training specialists, she also has respon-
sibility for the Service Review Team. This was formerly
known as the complaints team but the renaming of the
team was deliberate in order to ensure that it wasn’t
only equipped to deal with complaints but was also
able to review processes and take ownership to im-
prove customer service as a whole.
“The Service Review Team does still deal with com-
plaints but it also identifies customer service trends
that are taking place as well as identifying potential
changes to services that can be implemented. It’s
about collecting the customer experience information
effectively and getting an insight into what customers
are saying,” explained Fiona, “then beyond this, iden-
tifying larger trends taking place and looking at what
can we do about them whether this is improving pro-
cesses or changing behaviours. This essential infor-
mation has to be fed to wider teams such as customer
training teams so it becomes a linked up process that
has been successful because of three main reasons;
we have to make it easy, make it personal and make
things happen as a result”.
For Scottish Water, the significant change in culture
came with the new vision and direction. Initially this
was driven by regulators and the targets that had
been set, a key turning point was in 2009 when the
company set its own direction and changed its focus,
which in turn implemented a shift in culture.
“Customers sat at the heart of our vision and, most
critically, brought balance where everyone had ac-
countability.” continued Fiona. “In 2002 any research
on customer experience was through transactional
surveys based on talking to the customer, the results
belonged to the research team. In 2010 we imple-
mented a postal survey to all customers which provid-
ed more of a continual customer loop allowing the or-
ganisation a more detailed view on what individual
teams were doing. However, the revolutionary mo-
ment came in 2013 with the introduction and invest-
ment into a customer feedback solution from Rant and
Rave. Initially, this was piloted alongside the postal
survey but today we only use the Fast Feedback dash-
board from Rant and Rave.
“For us it’s revolutionary in a number of ways; firstly it
is Cloud based, so it hasn’t had a major impact on our
IT structure; secondly it allows the customer to give
us same day feedback; thirdly we can use different
channels to reach our customers such as text, email
and telephone meaning that the customer can contact
us in their preferred manner. It’s always led by the
channel the customers first contacted us with, which
has moved us completely away from a postal survey.
Interactive voice response or IVR means we can keep
the recordings in the system so that those staff in the
field can listen to their tone and language before re-
sponding in the best appropriate way.
“We use a 7-point scale for tracking the customer ex-
perience with a scale of 1-4 rated as dissatisfaction, 5-
7 as satisfaction with 7 being the top of the scale. This
means it is easy to use for staff and allows us to see
what a 7 might look like so we can define excellence in
the customers’ eyes and we can pass this on in train-
ing.
“We have therefore created the right methodology
that is working for us and our customers and it has
enabled us to create league tables for coaches and
leaders to see. It also means we can do root cause
analysis on those areas of 1-4 which are showing cus-
tomer dissatisfaction. This puts the impetus on team
leaders to act and capture that information and put it
into improvement plans going forward.”
Rant and Rave has significantly changed things for
5
Scottish Water in terms of capturing the customer ex-
perience from analysing satisfaction levels to dealing
with complaints. Because it is based on real time
feedback from customers, complaints can be turned
round more quickly and staff can see who is respond-
ing and dealing with individual enquiries. It is an area
that is topical in the housing sector in Scotland at the
moment following the Scottish regulator’s latest report
which means that social landlords are now required to
report on customer satisfaction including how they
handle customer complaints. Social landlords will need
to demonstrate that they are aware of customers’
wants and needs and have in place tactics to manage
and measure customer satisfaction.
Scottish Water is now going even further to embed
customer experience more fully into the organisation
by building customer performance into each staff
members’ individual performance measures. A demon-
stration of Rant and Rave gave Business Connect visi-
tors the chance to see the Scottish Water customer
experience happening live. “Rant and Rave enables us
to track progress and responses and so reward individ-
uals who ‘go the extra mile’ as colleagues can nomi-
nate individuals and team leaders - which gives a
sense of personal ownership for each member of
staff,” said Fiona.
“We recognise the people aspects of our business –
our people are our best and most important asset,”
states Julia from the start. “We have
3,600 employees now with hugely
diverse skills from PHD chartered en-
gineers to tanker drivers to head of-
fice workers to remote workers and
our challenge is to make sure we
communicate with each one in the
same way and provide the right train-
ing so they can do the best job possi-
ble and get the best results. We also
want to impart a sense of community
working in our people, not just within
our organisation but to do their best
for the communities they live and
work in.”
This is not an easy task for such a
large organisation with such a mixed
workforce that is currently 75% male who are 45
years and over but Julia sees this as yet another chal-
lenge to be overcome. “We have implemented a talent
strategy that will help us balance out this curve. We
are currently doing a lot of work on youth employment
and supporting careers for women in STEM subjects as
well as the best benefits we can offer our workforce
such as flexible retirement and mentoring. Our aim is
that in 10 years’ time we will not have a skills gap at
all.”
Scottish Water has undoubtedly gone through tumul-
tuous times in terms of its staff. Having to reduce
40% of its costs in four years, which included cutting
its work force by almost half, has seen the organisa-
tion face some very difficult decisions in terms of hu-
man resources.
“We had to cut costs and our workforce just to stay
competitive and it was a hard, hard time. To take the
first steps in doing this we used customer engagement
groups that we empowered to help us make the
changes. They helped us to organise restructuring
agreements and agree new methods of employee en-
gagement as a way forward. It helps that we can pre-
dict long term demand for our product, as it means we
can therefore set a long term asset strategy and a
long term people strategy. Engaging our employees
was undoubtedly a major factor in giving us a compet-
itive advantage. Our aim with this strategy is to create
an environment where leaders can help employees to
become leaders so that all employees can realise their
full potential, find meaning in the work they do, aspire
to outperform and be involved.“
Scottish Water’s employee engagement strategy is
multi-stranded but it includes several core factors,
most notably:
• Leadership development. Ensuring that all leaders
are visible and well informed at a grass roots level.
Every two years, the top team is tasked with taking a
month to visit locations and take employees through
past, present and future vision at themed events.
6
• Learning and development. As a public sector organ-
isation it is impossible to have the same leverage on
pay as other organisations but investment in learning
and development can be key for staff, so Scottish Wa-
ter dedicates time and budget to ensuring further edu-
cation and training opportunities are available for all
staff.
• Change management. There must be a toolkit in
place for managers to work through change and help
map out projects when moving through change. Scot-
tish Water has had to do this as an organisation but it
is essential for teams or services that are going
through change.
• Career development. This is a key driver for engage-
ment. After 4 years of downsizing, Scottish Water is
now very different and has become more focused on
talent and succession planning. There is a new pro-
gramme put in place for identi-
fying potential leaders and a
similar programme for bringing
in and identifying technical tal-
ent, a key area of the business.
• Reward and recognition.
While working within public
sector pay policies, the organi-
sation tries to be as flexible as
possible. Line managers help
decide performance related
increases and non-financial
recognition such as internal
awards programmes and
events, as well as a total re-
ward statement for each indi-
vidual employee that includes holiday, pension, over-
time worth and benefits.
• Volunteering days. All staff are allowed 2 volunteer-
ing days per year.
• Agile working. 90% of the organisation is trusted to
work flexibly. All roles across the organisation are
classified as fixed, fluid or field roles.
• Wellbeing and resilience. This is relatively new to the
agenda but covers physical, financial and emotional
wellbeing including health kiosks which offer blood
pressure checks, etc. Counselling support is an area
that Scottish Water thinks will continue to grow as em-
ployees and organisations are required to handle more
change.
“In a similar way to measuring customer service per-
formance, we also have measurements in place for
staff fulfilment,” continues Julia. “These include full
surveys and tracker surveys every 18 months and our
response rate is high, e.g. 83% of our staff respond.
We have done this since 2004 and work with the same
external survey company for benchmarking and con-
sistency which is key. All results are taken and shared
down to manager level so that individual and team
action plans can be delivered. All results are published
on the intranet and corporate areas of focus are
agreed at all levels as well as local action planning.”
7
Chris Toop is General Manager, Energy at Scottish Power and
his remit is largely to focus on how to utilise the assets that
Scottish Water holds and analyse how the organisation can
maximise these by taking a different approach if required.
“We recognise that we need to maximise more value out of
the resources we own – whether that is water, estates, land,
etc. This starts with energy as our initial focus as we have to
know where our costs are going. It becomes a more and
more difficult task each year as we encounter tighter water
and waste water quality standards and rising power demand
and costs, so we are having to look at two key areas – how to
drive our energy consumption down and are there ways we
can become self-sufficient in meeting our energy needs. Un-
derlying all our energy ambitions has to be the best interests
of our customers.”
To tackle this, Scottish Water has a four pronged approach
focused on:
• Reducing energy con-
sumption. The installa-
tion of over 4000 smart
meters has improved
operational controls
and allowed accurate
assessment of energy
consumption and per-
formance at any given
time. Also, resourcing
research into alterna-
tive treatment technol-
ogies.
• Increasing self-
generation. Deploying
technology that helps
maximise value from
assets and using treat-
ment works and net-
works as energy factories. This includes utilising by-products
such as food waste and fertilisers.
• Facilitating private investment. This includes community-
based projects using renewables for new developments and
taking the power to make energy efficiency savings. For ex-
ample, where communities own the assets and we purchase
the energy through a ‘power purchase agreement'. Another
recent example is where a community close to one of
Scottish Water’s assets in Galashiels is using the heat from
sewage treatment works for Galashiels Borders College cam-
pus.
• Optimising purchasing strategy. Introducing a more bal-
anced purchase portfolio including long-term purchase
agreement.
After outlining these objectives, Chis explained, “when look-
ing at these options we definitely don’t want to be seen as a
nasty neighbour. We have walked away from wind turbines
and certain projects because we don’t want to have a nega-
tive impact on local community. But where we do initiate
projects, we have found that community engagement is key.
Our aim is to keep bills lower and reduce operating costs and
this has played a key part around productivity improvement
and operations and we can see more to come from this area
of our business.”
For the future, renewable heat sources, bio methane, heat
from sewage treatment works and private wires are all op-
tions to be looked at alongside other brand new revenue
streams for its land assets largely including mobile phone
masts, fibre optic cables in sewers, film locations, advertising
space, property search services and more.
8
The man charged with revamping Scottish Water’s
business plan in the face of all its recent change is
Alan Scott, General Manager Water Asset Manage-
ment, "In 2008 we set about introducing a new vision
to our business plan that truly set the context about
what we do. It’s fair to say that we weren’t as custom-
er focused then. We were following others, but it soon
become clear that our business needed to focus on the
customers’ wants and needs so we wrote a plan that
our customers signed off. . Beyond that, it becomes
essential to engage the supply chain too and take the
staff on this journey as well.”
Scottish Water’s current business plan brings together
partners, stakeholders and customers and focuses on
service improvement priorities, legislative require-
ments, economic growth, maintenance and operations.
Balanced on the other side of this is financial sustaina-
bility, customer charges and borrowing. This is some-
thing that housing providers will identify with, if not on
such a large basis.
Continuing with his approach to business planning,
Alan outlined the company’s strategic high level aims,
“for us it begins with a long term vision that incorpo-
rates climate change and its impact, demographics
and population movement and how this will affect our
business and our assets that serve customers, the
growth of revenues and the impact of research which
includes analysing how secure our assets are both in
the short and long term. To guide our vision, it is es-
sential we use our own data and don’t just rely on the
regulators for the industry and service view. If you
understand your own business you have better oppor-
tunities to change behaviour.
“Scottish Water has a business plan that not only fo-
cuses on the next five years but it goes further to 20
and 40 years ahead which can be seen as unrealistic in
terms of length of time. The realistic side of it comes
down to what you can plan to do with your investment
in the short and long term but still supporting growth,
business improvements, reacting to legislation chang-
es and actions you have to take just to continue to
operate. So you have to find ways to get more effi-
cient or new ways of doing things.
“From our experience, the only way it can truly work is
if you work closely with the regulator. The regulator
can be your best friend and can show you what you
look like in the mirror. A big change for us came when
we realised we had to have more engaging and more
visionary conversations with our regulators.
Going forward it is the motto of keeping the customer
at the heart of all planning that is driving Scottish
Water’s future plans. Because we are answerable to
the customer, this has to direct our approach. It’s easy
to be so busy following the regulatory model that you
forget the things you are supposed to be doing for
your customers and that is certainly something that
the housing sector will recognise. To keep the custom-
er view front of mind, Scottish Water has a customer
panel that reviews the business plan from develop-
ment to point of agreement and we use research and
insights from a customer forum. This panel is made up
of representatives from government, academics, envi-
ronmentalists, researchers and business. Commenting
on this Alan said, “It can be more daunting than going
in front of your own board, but it is a great way to get
legitimacy and will give you an external view on reach-
ing customers.”
Scottish Water’s business plan for 2015 to 2021 in-
cludes targets for continuing to deliver even higher
standards for water and waste water compliance,
managing assets, reducing long term costs, improving
the customer experience and looking at long term as-
set resilience.
9
Set within the Bridge is what is known as the Intelligent Con-
trol Centre. It is a secure office within an office with its own
staff and welfare areas that meets every element of national
infrastructure standards. As the Control Centre is responsible
for handling all operations for supplying Scotland with water
round the clock every day of the year, the centre is an area of
national security.
Each individual screen in the control centre covers something
different from weather conditions to reservoir levels to reports
of problems from field staff and more. All this information is
used to plan operations across the country supported with on-
call staff responding to staff feedback around the clock. The
information covers 4000 assets showing supply and they can
switch and move water around tanks to serve customers and
pump water at times of reduced energy costs. The Control
Centre utilises every form of communication from satellite,
GPS, and has its own power source to ensure it is operational
at all times.
Scottish Water may be a very different business to social land-
lords but the common denominators with the housing sector
are clear in terms of managing change, building relationships
with the regulator and stakeholders, meeting and exceeding
customer expectations, encouraging employee engagement
and business planning.
Gail Gourlay from Trust Housing Association summed up the
visit as “Enlightening, the best visit I’ve been on yet, it was
hugely interesting to hear how Scottish Water have driven
down costs at the same time as losing many of their work-
force and reducing resources -yet they have managed to in-
crease business efficiencies and performance.”
What did attendees take from
the visit?
Rab Wight, Head of Repairs and
Maintenance, Dumfries and Gallo-
way Housing Partnership
“This is the first Business Con-
nect visit I have been on but I am
really looking forward to today to
see how Scottish Water responds
to customers.”
Lynne Macdonald, Head of Hu-
man Resources, Queens Cross Housing Association
“We have 230 staff working across a number of ser-
vices and we’re currently going through change our-
selves so it was really fascinating to hear about how
Scottish Water have kept and are continuing to keep-
ing their staff engaged while going through legislative
and operational change.”
Siobhan Harvey, Business Improvement Officer, Cairn
Housing Association
“My background is in reporting, matrixes, KPIss, per-
formance measurement, process mapping and busi-
ness improvement so this visit I’m looking for new
ideas and innovations that can help when going
through process changes.”
Mike Wood, Strategic Planning Manager, South Lan-
arkshire Council
“I play a role in strategy planning and best practice
policy development and regeneration so I’m looking
to get a sense of how other organisations deal with
maximising the use of their assets and the approach
they take to change and growth.”
Sandra Brydon, Head of Customer Service Scotland,
Home Group Scotland
“I will take back learnings on how commercial values
are aligned with customer service needs and wants.”
Gail Gourlay, Director of Customer Services, Trust
Housing Association
“I’ve been to all 5 Business Connect visits so far.
Housing Associations have definitely become more
business focused in recent years and there are huge
similarities between private and public sectors now
and Scottish Water has shown how they have adopt-
ed new processes and practices to compete with the
private sector in many areas of its business.”
Andrew Kirkpatrick, Asset Management Director, Cal-
edonia Housing Association
“We have recently gone through a merger and I’m
keen to learn how an organisation like Scottish Water
has been through change and adopted new practic-
es.”