Innovation is a word that is used frequently today, mostly with a sense of excitement about something new and fun. Yet in contrast, driving innovation in a large enterprise often seems hard and painful – impeded by a host of obstacles. Arguably, I will write about no more important issue, and no more important concept for a person in a leadership position to master.
Due to my extensive thoughts on the subject, I am going to divide my writing into three posts. The first is an exploration of why and why not! Why is innovation both so difficult, and yet so necessary. The second is on how. What practical steps can be taken to foster innovation in an enterprise. The third is on what — I will provide some examples of the fantastic improvements we have or will see at DC Water due to our commitment to innovation.
Part 1: Why and Why Not!
To sort out the conflicting characteristics associated with innovation, I suggest that at least three competing realities confront us in the water world.
|Tapping a water main for a house connection in 1910
The first is that many people do not think that innovation applies to our industry. Water and wastewater treatment has not changed all that much, and the pipes, valves and fire hydrants out in the street maybe least of all. When people think innovation they think smartphones and smart cars, not drinking water and waste streams. It is hard to support funding for a topic that customers do not associate with your product!
The second reality is that our industry is often stereotyped as being resistant to change. I have argued that part of this perception is true – and for a good reason. When you deliver an essential service 24/7/365 and often struggle for funding, then the incentive to try something new – which might fail – creates a threat to the ability to deliver the service and to the budget if costly remedies are necessary. Moreover, there are those in any industry who fear innovation because it might threaten either their job, or their knowledge of how they do their job.
To keep the water flowing, particularly when our customers only seem to notice us when it does not, we tend to stick with what we know works, what we know how to do, and what we can accurately budget. Innovation is hard when rational motivations cause us to resist change.
|DC Water crew replacing a valve in 2013
The third reality is that while we tend to stick with what we know – what we know is falling apart! Without restating the drumbeat of statistics that have been outlined many times, our water infrastructure is near failure. For a service that is both essential to every living organism (water is life) and to every job (water is a necessity at every job site and business) to be given a D grade from the American Society of Civil Engineers (2013 Report Card for America’s Infrastructure), is a national scandal. Yet our industry faces decades of deferred maintenance, breathtakingly expensive regulatory mandates and a public that is mostly unaware of this potential catastrophe literally at their doorstep.
Thus, an uninformed public is skeptical at best and vigorously opposed at worst to the increase in rates that would allow us to improve our service. A failing system causes service disruptions that infuriates our customers and ironically often makes them less willing to support rate increases that can help solve the problem. Rational incentives on many levels to guarantee current service weigh against change. Yet, sticking with what we have always done will only make the financial and operational catastrophe we face even worse.
What are we to do?
My answer is that we capture the imagination of the people we serve, demonstrate that their rate checks are put to good use, and create an incentive to perform better for our staff. Innovation – or the identification of new approaches that can achieve our performance goals at less cost or time or both – is an essential key to delivering on this promise.
Moreover, without innovation we cannot demonstrate that we are wise stewards of our ratepayer dollars. Of course, we need more to fund new capital projects – whether for regulatory mandates or capital replacements of decrepit infrastructure.
Yet we will fail to gain the revenue needed if we cannot demonstrate that every dollar is being spent wisely, and that over time every dollar is going farther. Demonstrating that every dollar goes farther means innovating – systematically decreasing the costs of service through new approaches.
In short, we seek additional revenue not because we are inefficient, bloated or a big bureaucracy that seeks to feed itself — and yes, I have heard these statements over the years. We seek additional revenue because we have much more work that needs to be done, and can demonstrate in parallel that we are measurably achieving greater productivity with every dollar we gain.
Without a strong case on both fronts: the clear need for expanded revenue to cover necessary work, AND, measurable improvements to how productive we are with each dollar, we fail. Innovation must be a principal part of both proofs.
Coming next: How to Innovate?