Wednesday, September 28, 2016

Mastering the Resilient / Sustainable / Smart Business Model

Water utilities are facing a highly complex future.  Strategic challenges can best be viewed as the effective management of the resilient / sustainable / smart utility triangle.  These new challenges call for a completely different set of metrics, mindsets, and leadership approaches.  Future decision-making by water utility leaders will require an integrated approach linking the capabilities of resiliency in an increasingly risky world, with the economic, environment, and social justice considerations of sustainability, with the technological opportunities embedded in a smart and data-driven operating environment. 

One side of the triangle represents the ideas of shock and stress recovery.  Utility operational resiliency is fundamentally the desire to develop capabilities such that you can bounce back more quickly and effectively after an unexpected event.  Texas water utilities face a future dominated by the uncertainties associated with weather and climate change; the risks of cyber-crime and terrorism; increasing public and social-media driven awareness regarding water quality; and the financial constraints of investing in and rehabilitation of a high-fixed cost operating environment.  Organizational and system resiliency will matter this century.  Texas has highly concentrated urban and metropolitan areas that are wonderful places to live, yet their growing populations and increased density make them vulnerable to disruptions, crisis, and disaster in many new ways.  A key component of the triangle will be ensuring water utilities have the governance structures in place that allows them to be strong in a world where things go wrong.

The second side to the triangle incorporates the ideas of sustainability into the operational and planning ecosystem of a water utility.  Developing policy initiatives that address the goals of environmental stewardships, long-term economic viability, and community sustainability will also be critical this century.  Optimization across the complete horizontal space of sustainability will be critical given the increasingly constrained outlook of water resources in Texas.  Cautious balancing between the urgency of resiliency and the importance of sustainability will require greater strategic thought and planning.  The desire for greater resiliency has the potential to constrain sustainability policies and goals, while focusing solely on sustainability might produce less resilient water utilities in Texas.

The final side of the triangle incorporates the disruptive influences of technology on strategic utility management.  This moves beyond the in vogue procurement of smart water meters, to a fuller understanding of what it means to be a technology and data-centric organization.  Increasing digitalization, enhanced machine learning, the exponential growth of sensor infrastructure, and the networked organization will become important tools in the context of how water utilities define and measure customer and citizen value.  The smart utility will have the technological links that connects the goals of resiliency and sustainability more effectively.

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