Having seen an Ofwat update in February around ‘Customer’, I thought it worth bringing this to a conversation as I’m sure everyone has seen it and has their own thoughts around it.

Here’s the update in case you haven’t seen it…

In summary though…

“From today (12 February 2024) Ofwat has new powers to act against any water company that provides poor customer service in breach of a new licence condition, which could see the regulator impose fines of up to 10% of the company’s turnover.”

Degrading performance

The update talks about falls in performance across the past 3 years and if you have a look at the stats online you can see that’s very true.

What is really interesting about that though is that pretty much every water company measured has the same 3 year pattern. If you think about that for a minute it doesn’t quite make sense that all of them are declining in the same way. I can’t believe for a minute they ALL have the same strategy (in fact I know they don’t).

This made me think about 2 things:

1. Is the measurement system being used good enough to actually tell the true story of what is going on?

2. Regardless of what a water company does with its strategy it will track the same pattern across the UK based on where Customers feel that ‘water’ is right now.

When you consider all of that, if it is true then focussing on individual water companies with penalties and league tables might not be the best way forward.

If it’s a systemic problem, in sector, wouldn’t it make sense for them all to figure out together how they can make the trend go the other way for all and not one? Another opportunity missed?

 

Some of the smaller water companies appear to be better at it.

That’s also interesting isn’t it.

If you take Northumbrian out of the mix (unsure of how much is attributed to Essex & Suffolk as they are now combining scores), you see a handful of let’s call them smaller water companies, who will have less assets to worry about and probably less management structures to navigate (just a theory).

Welsh water is in amongst that but I do wonder if the not for profit model impacts customer sentiment given where you might feel that profits go.

It appears to me, as I just think this through, that it’s not a straight forward comparison on the face of it. The measurement system and way of targeting improvement just doesn’t make sense.

Does a big stick approach really work?

I’m saying no.

Here’s my rationale.

We’ve been doing this for a number of years now (decades), and we are still sat here in 2024 talking about the same problems from back then. More worryingly we are still using the same mechanisms to come at it. If it didn’t work all of those other times then why would it work this time?

I understand the need to ‘get tough’ if we think water companies aren’t ‘at it’ but there is nothing wrong with taking a step back, learning from what hasn’t quite worked before and then saying, let’s take a slightly different approach this time.

Why can’t we seem to do that?

I’ll be amazed if we’re not back here in 5 years time talking about the same thing. Seriously. I hope I’m proven wrong.

Is the focus in the wrong place?

One of the quotes from Ofwat made me think about this. It was this….

Mike Keil, Chief Executive of the Consumer Council for Water (CCW), said:

“Every water company should provide excellent customer service but too often through our research and the complaints we handle we see people being badly let down, particularly by poor communication. A complete change in culture is needed in some companies if we’re to improve people’s experiences and repair fractured trust and the new customer licence condition can help to focus minds.”

That bit right there in bold.

How do you bring about a change in culture?

More penalties?

Won’t that just lock in more of the same as we continue to try and figure out how to beat the game?

So, if we believe that quote to be true, there surely should be more discussion, collaboration, problem solving around this idea that we need to work on identifying and embedding ‘cultures’ that help us to improve this Customer performance. More focus on how to help people work better together with shared purpose and collective outcomes.

Almost all of what I have listened to and read from water leaders over the past 6 months has focussed on assets, digital transformation, technical stuff, not culture. Maybe I’m not listening in the right places. As such, I don’t think this problem is of immediate focus, we will concentrate on the metric and how to make it work through targeted intervention, BUT that will only kick the can down the road.

If Ofwat wants water to improve it’s Customer Performance, maybe thinking beyond the big stick approach should be considered.

If Water wants to improve it’s approach then maybe it should forget about the game being created and focus on the health of it’s organisation (if not already).