It could have been embarrassing. When the judging panels for the Utility Week Industry Achievement Awards independently gave gongs to Northumbrian Water five times over, there were fears that the crowd on the night could turn nasty. In the event, the 1,400 guests that thronged the Grosvenor House Hotel on 2 December showed considerable grace, applauding and cheering as Northumbrian Water swept the board, collecting the coveted Utility of the Year Award alongside four others. And Team Northumbrian? Suffice to say that come the early hours, they were to be found taking turns sliding down the Grosvenor’s iconic ballroom bannisters, with chief executive Heidi Mottram taking her turn alongside
the rest.
Today, the party’s over and it’s back to business for both Northumbrian Water and Mottram – but they’re no less celebratory for that. Mottram’s packed schedule is in evidence as she dashes in from the train station, engages in some intense corridor discussions, before welcoming Utility Week with a smile. An acknowledged leader in both the water sector and industry more generally, Mottram is pleasant, thoughtful and passionately committed to her company. Under her leadership, it has won not only a clutch of Utility Week awards, but industry recognition for leading the way on sustainability initiatives including anaerobic digestion, plus a healthy profit of £150 million after tax in 2012/13.
Mottram’s story is fairly well rehearsed. She is that rare thing in the water industry – a joiner from another sector. She took the job at Northumbrian in 2010, following a successful career in the rail industry, culminating in a spell as chief executive of Northern Rail. There are the obvious contrasts and comparisons to be made between water and rail – “both industries get their hooks into you” – but Mottram hasn’t looked back since switching ships.
The water industry has come in for considerable criticism recently, particularly those companies that are owned by private equity and overseas investors. Northumbrian Water was acquired in 2011 for £2.41 billion by Chinese investment consortium CKI, which also owns UK Power Networks. Asked about the negative publicity that has surrounded water company finances, Mottram replies: “I came out of another industry that’s a privatised public service, and I think wherever those changes have been made this debate perpetuates.”
Mottram reflects further: “A lot of private money has been invested to deliver services for customers and of course it has to generate a return. The numbers are big – when there are big numbers you can make a story because the numbers are big. Nobody is registering the sheer amount of investment either in equity or debt that the investor has put in, their attention is perpetually being drawn to what the person is taking out.”
Her stated ambition is nothing short of making Northumbrian Water the best water company in the UK on every count – and there are 28 of them, according to a multi-coloured scorecard she waves tantalisingly under Utility Week’s nose before tucking it back into her folder. Has she succeeded? “I think we are one of the best,” she replies thoughtfully. “The number of people in that pack is very small, and we’ve got different strengths and weaknesses – you could put a bit of paper between us. By a lot of criteria, the answer would be yes. Across our balanced scorecard we’re tracking about 28 things in the business. We have more firsts than anybody else, but there are some things we need to do better.”
One of these areas for improvement is management of the sewer network. Mottram outlines the problems created here by the extreme weather of the past few years and gives examples of a new catchment-based approach to management, such as working with local authorities in the Newcastle area to divert excess water to a recreational lake and golf course. “We know we are ahead in our thinking,” she says. “We are moving some of our drains to move water into different water courses. That is going to yield really good long-term results.”
If Mottram gets a bit excited when talking about the new approaches to water management, she is practically jumping out of her chair when it comes to Northumbrian’s people. This, she says, is what makes the difference between Northumbrian and other companies. The pride in the company is “in its DNA”, she says, and one of the things that attracted her in the first place. “I met some people at management level and they impressed me hugely,” she says. “I also knew some people who knew people who worked on the front line. Nobody said a bad word about them.”
Mottram spends a lot of time nurturing the culture – and isn’t afraid to use the “l” word. “I have to make sure all of that love for what people do – and I would use the word love – is given free rein. When you’ve got people who feel like that and who care so much about it, if you give them the goals and the targets and freedom to do it, that’s very motivating for them.”
It’s a recurring theme. Asked later what her personal contribution has been to a company that was already doing well, Mottram replies: “I’ve given people a stronger sense of direction, a clearer set of targets about what that means and freedom and empowerment to use their skills and expertise to hit them. And they have flown.”
Perhaps mindful of her competitive advantage, Mottram holds back some of the details around how she trains and empowers her workforce. One example she does give is of an annual performance review dedicated solely to personal development, rather than to other aspects of the role. This has resulted in around 100 people in the business doing something outside of their ordinary role, be it a special project or a placement with a different department. This, thinks Mottram, has directly contributed to an increased staff satisfaction score on the count of individuals helping one another across the business. “People do business with people, so when they know each other, they help each other out,” she says.
Another example of Northumbrian’s culture, and one of the initiatives for which it won a Utility Week award, is the “just an hour” programme. This encourages Northumbrian workers to engage in voluntary work for charity during their paid hours. The company has succeeded in meeting its target of 50 per cent of employees engaging in the programme two years in a row. “We don’t do it to engender culture, we do it because it’s the right thing to do,” says Mottram. “But it does by definition create stronger bonds into the community.”
Whether a strong culture will lend Northumbrian a competitive advantage when the water market opens to retail competition in 2017 is something on which Mottram remains tight-lipped. Asked if she is ready to discuss the company’s ambitions around business customers, she replies: “We set our stall out to be really good at what we do, and we’ve always worked very hard to keep our business customers happy and engaged and served well. We’ve always had a separate team of people working on that and out customer satisfaction scores are very high. Don’t be surprised to hear we want to be a good retailer, that’s what’s governing our thoughts. Beyond that, we’ll keep our powder dry.”
Mottram, who enjoys climbing mountains as a hobby, somehow finds the time to be active on industry issues, and sits on the high level steering group designing the future water market, among other things. As such, she is confident that the market will open on time – “deadlines are a great motivator” – and is reluctant to be drawn on whether companies should be allowed to exit the market.
She is uncharacteristically ambivalent about the received wisdom that competition in the business sector will automatically improve service for household customers: “Do I think it will benefit household customers? I find it really hard to say, other than we were ambitious to do that anyway.”
Don’t underestimate how important customer service is to Mottram, though. Asked whether the water company of the future should see itself as an engineering business with customer services tacked on, or vice versa, she replies immediately: “A customer service business. Supported by engineering. It’s all about the customer – that’s why we get out of bed. They pay the bills, they’re the most important people.”
Mottram is less forthcoming on upstream reform. “We all need to get our heads around abstraction in the first instance because then we would understand how what is available is currently being managed. Then it would be easier to understand how trading fitted into that.”
Asked whether the government has kicked abstraction reform into the long grass, she replies: “I think they’re grappling with this balance… I think they’re recognising how critically important it is to get it right.” By doing nothing? “I don’t want to comment on that.”
Mottram’s too smart and too cautious to be drawn into saying anything unpolitic. Her commitment to her customers and her staff shines through, as does her determination to build on Northumbrian’s already stellar success. And that’s something everyone can cheer for.