“George. S. Hawkins, D.C. Water’s general manager, said the utility did not realize that the fee would disproportionately affect newer homes with sprinkler systems.” What kind of idiots are crafting policy and making decisions at DC Water?”
This is verbatim from the comments section of a recent article in the Washington Post describing the Water System Replacement Fee (WSRF), a change we recently made to our rate structure for retail customers. Yes, that idiot would be me, and yes, we arguably made a mistake that needs fixing.
The commenter is making a nasty comment about me, a nastiness that unfortunately seems to dominate the language that overloads much of the commentary in civic society today. But that’s not why he has it deeply wrong. The commenter has it wrong both on what happened, and on a perspective that often creates the very problems that commenters of this sort so often attack.
We can agree that DC Water made a “mistake.” (I’ll explain the quotations in a moment.)
DC Water on October 1 adopted a new rate structure that is the most comprehensive change to the funding formula in our history. I wrote extensively about the proposal and the outreach we have engaged on it here. A number of comments to that post and in other forums revealed that one small segment of our customers faced a change they deemed unfair. We investigated and analyzed the point and determined they were right. Working with our Board of Directors over several special meetings, we changed course and corrected the issue, before the new rate structure took effect.
The commenter is wrong because discovering and curing a problem before the new structure went into effect is actually an example of the system working. We proposed a comprehensive and complicated new approach and presented it to the people we serve in an open and transparent process. The outreach included a letter addressed to each customer that described specifically what would happen to their specific bill. That enabled the people best able to evaluate the change to their circumstances to do so.
A small segment of our customers (about 2,100 of our 140,000) brought to our attention that in their cases our mechanism to calibrate a new infrastructure replacement charge based on meter size did not seem fair. In short, the use of a larger meter for this group did not equate to more water use because a larger meter was only required for fire suppression by new regulations, not because this group sought to use more water. In fact, our subsequent analysis indicated that customers in this group were almost all in newly-built homes that used less water due to updated pipes and low flow fixtures.
We were persuaded by the merit of their point to call a Special Meeting of our Board to modify the rate structure. And remember, this change was made before the new rate structure took effect.
The system worked! This is why the commenter is wrong about us being idiots. DC Water considered a comprehensive and innovative new rate structure. We planned to adopt the structure and described it in multiple venues in advance, giving our customers the chance to help us evaluate the change. They did, and pointed out an unexpected outcome, persuaded us on the merits (as did our own analysis), so we changed the structure. That is a public agency working as it should!
Yet what about the mistake in the first place? Should we not have foreseen the problem ahead of time? Perhaps, for the Monday morning quarterback always knows what play to call. But in the vast nature of the changes we were evaluating, we missed this issue. I think our team is one of the best in the business, but we are human and therefore not perfect. We made a mistake.
And on that score, the commenter is wrong in a far more fundamental way. To explain why, let me consider for a moment an area where the United States and private business is absolutely world class.
My goal is not to fail fast. My goal is to succeed over the long run. They are not the same thing.
— Marc Andreessen (@pmarca) September 12, 2014
I’m talking software, hardware, apps, and the change to almost every business that new world is driving.
Silicon Valley is famous as a center of innovation, even as that center has by its nature shifted to anywhere. Anyone can come up with an innovative idea for a new app or associated service. Innovative practices can transform an industry or service overnight. My children use “Uber” as a verb and order one with a text, and do not even consider calling a traditional cab.
Yet we also know that the vast number of these new ideas, business ideas and service approaches fail. For every Uber there are nearly countless ideas that never see the light of day – some fail at the gate, others after months or even years of development and millions invested. Among entrepreneurs, such failures are almost a badge of courage, and certainly a step along the learning continuum that adds to the wisdom behind dreaming up the next one. Failures and mistakes in any innovative field are part of the process of pushing the envelope, trying new things, not just sticking with what works. Without some failures, we don’t learn. We don’t get wiser. We don’t break through the tried-and-true to get to the new.
For public agencies though, and water utilities for sure, we are not given any such margin to try new ideas, fail on some, learn and then get better. Read the commentary on any newsfeed online, or follow the Twitter-speak, or even the old-fashioned media in print or screen – and the highlight is always on the mistake that was made and recriminations that follow. Public officials are rarely given the leeway to try new ideas, some of which may fail. We are often held to that most inhuman of standards of not making mistakes at all, or being harshly criticized and attacked if we do.
The consequence is rational and obvious.
First, our approach will almost always be to stick with the tried and true – what we know works. Stick with what we know not because it is the most efficient, effective or could be re-engineered to something new. Stick with something we know because we can’t make a mistake or be labeled as idiots.
Second, our approach will almost always drive out of our enterprises the natural entrepreneurs who might want to lead change. There is nothing inherently wrong with the tried and true – and in some cases it is still the right way today. But sticking with it just to avoid the possibility of failure will mean that those employees who want to try the new, want to experiment, want to be entrepreneurs, do not find a place in our enterprises.
Third, our approach then leads to the reality of an outdated and stale performance that becomes the stereotype of our work, or even our agencies and the entire public sector itself. Too often the stereotype then seems to reflect a sense of reality; too often public agencies do seem stuck behind the times with older techniques and approaches.
Which leads back to a painful and dangerous negative feedback loop. If public officials are routinely attacked for mistakes, the natural tendency is to not risk mistakes that are part of creativity. Inhibiting creativity risks losing those people and traits in the agencies. Agencies get caught up in practices mired in the past and become the subjects of constant criticism. Then agencies are criticized either way: criticism from mistakes, and criticism for old practices that are used to avoid mistakes.
Is there a wonder why public agencies are often subject to such easy and broad derision?
There is an answer, for there are ways that public agencies can adopt innovative practices and strategies while minimizing the risk of mistakes. I will write more about that, and have before here. Let me be clear: even as we work to embrace failure as a part of business, we must remain cautious overall. As guardians of public health, responsible for something as important as drinking water, we need to be extremely careful, since the consequences of failure in certain aspects of what we do can be truly disastrous. By acknowledging, calculating, and in the end accepting risks, we can embrace innovation without endangering anyone’s welfare.
But other mistakes will still be made, just as they are by start-ups in Silicon Valley. Such is one cost of an efficient and exciting public agency that is evolving to deliver new and better service at lower costs to our customers. This is the opposite of being an idiot, but is the sum and substance of creativity and leadership in a system that does not favor either.