Utility Week

14 | 9TH - 15TH MARCH 2018 | UTILITY WEEK Policy & Regulation Market view T he water industry has found itself under the microscope in the past few years. Intensifying scrutiny by both customers and Ofwat has led to increasing merger and acquisition activity, and fur- ther calls for competition have presented both challenges and opportunities across the sector. Now companies have until September to submit their business plans while they await PR19 and the announce- ment of price controls which will remain in place until 2025. One thing is clear though, the regula- tor's promise of a "step- change" means companies are keen to impress. Providers have made significant progress in increasing the sustainability of their business models but as new challenges intensify, they are bringing in external leadership advice to build on this platform ahead of PR19. Last year represented a watershed moment in the water industry, as we saw a twofold increase in the number of candi- dates placed into positions in water services. This upliˆ in demand shows no sign of abat- ing, and is likely to continue for the next 18 months or so, as companies adjust to new requirements. Building on progress As part of the regulator's proposals, com- panies must demonstrate they are both financially and professionally resilient. For operators, this means undertaking a thor- ough review of practices and identifying high-risk pressure points. To do this, providers are enlisting the help of interims, who can provide an exter- nal – and objective – perspective. Leadership is particularly important in the operational space and as water compa- nies are fully aware, improving operational performance is crucial to increasing long- term profit. To continue to deliver this, companies are open to new ideas and leadership. Interims who have held leadership roles within simi- lar industries such as oil and gas and rail are valued for their experience of best in class asset management, but individuals from the energy sector, which has undergone wide- spread deregulation over the years, are par- ticularly prized. Interims in turn are flocking to the water industry. Drawn by the once in a lifetime career opportunity to help steer the sector through monu- mental change, candidates have been bolstered by the influx of opportunities, which have cre- ated a continu- ous stream of cross-industry knowledge exchange and a healthy pipe- line of programme management and project management roles, as well as functional leadership positions. Improve the customer journey At the front end of the chain, customer service is top of the boardroom agenda. Customer service has oˆen been falsely per- ceived as a low priority for water companies, but steps have been made particularly by early adopters of digital platforms. Certainly, the renewed pressure from the regulator and growing customer awareness is making user satisfaction a primary con- cern across the board. Perfecting the customer journey means companies are increasingly seeking profes- sionals to fill customer management roles – prompting a rise in positions such as chief customer officer and director of customer experience. What is more, providers have a specific skill set in mind. They want both interim and permanent professionals with innovative and product-focused experience who can nurture customer relationships. Technology is also a huge factor, and as this frequently underpins interaction with customers, com- panies are looking for individuals who can Call in the troubleshooters As water companies prepare their business plans for PR19, many are increasingly turning to interim management to get in shape for the tough challenges ahead. Duncan Hoggett writes. oversee the implementation of new digital forms of communication and complement their existing team. To fulfil this demand, interims are trans- ferring from the retail, financial services and consumer industries – where the laser-focus on customers fits seamlessly with water com- panies' priorities. Although this talent transfer in itself can present new challenges for those profession- als accustomed to the fast pace of activity in such industries, who must then adapt to a naturally slower pace of change. Future proofing Water companies may be on the search for interim talent, but how can they secure the best professionals as demand grows? It is an exciting time for interims moving into the industry, but they are looking for companies that can demonstrate they are not only dynamic, but willing to invest in further change. To do this, companies need to set themselves apart from the competition by showing a vocal, financial and practical intent to initiate further changes. Interims offer water companies a valuable opportunity to introduce new solutions to existing challenges throughout the business ahead of PR19. Many of the roles that are now available, both operational and in customer service, are by no means new – but the water sector has historically seen significantly less churn than other industries. Leaders are therefore using PR19 as a chance to inject new think- ing at a senior level. The business benefits are clear because professional interim managers offer great flexibility as organisations address the chal- lenges of a changing landscape. For water providers, ensuring their busi- ness is as robust as possible in the advent of PR19 is top of the agenda. To be able to absorb the regulator's measures, they need to ensure they are agile and efficient organi- sations – or they risk being leˆ behind the competition. Duncan Hoggett, head of the Utilities Practice, Odgers Interim "Water companies want both interim and permanent professionals with innovative and product-focused experience who can nurture customer relationships."

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