The water industry has found itself under the microscope for the past few years. Intensifying scrutiny by both customers and Ofwat has led to increasing M&A activity, and further calls for competition, have presented both challenges and opportunities across the sector.
Now companies have until July to submit their business plans while they await PR19 and the announcement of price controls which will remain in place until 2025. One thing is clear though, the regulator’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 candidates placed into positions in water services. This uplift in demand shows no sign of abating, 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, companies must demonstrate they are both financially and professionally resilient. For operators, this means undertaking a thorough review of practices and identifying ‘high-risk’ pressure points.
To do this, providers are enlisting the help of interims, who can provide an external – and objective – perspective.
Leadership is particularly important in the operational space and as water companies 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 that have held leadership roles within similar 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 industry-wide deregulation, are particularly 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 monumental change, candidates have been bolstered by the influx of candidate opportunities, which have created a continuous stream of cross-industry knowledge exchange and a healthy pipeline of Programme and Project Management roles, as well as functional leadership positions.
Improving the customer journey
At the front-end of the chain, customer service is top of the boardroom agenda. Customer service has often been falsely perceived 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 concern across the board.
Perfecting the ‘customer journey’ means companies are increasingly seeking professionals to fill customer management roles – prompting a rise in positions such as chief customer officer and director of customer experience.
And providers have a specific skillset 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, firms are looking for individuals who can oversee the implementation of new digital forms of communication and complement their existing team.
To fulfil this demand, interims are transferring from the retail, financial services and consumer industries – where the laser-focus on customers fits seamlessly with water companies’ priorities.
Although this talent transfer in itself can present new challenges for those professionals 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’s an exciting time for interims moving into the industry, but they’re looking for companies that can demonstrate they’re not only dynamic, but are 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 which 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 thinking at a senior level.
The business benefits are clear as professional interim managers offer great flexibility as organisations address the challenges of a changing landscape.
For water providers, ensuring their business is as robust as possible in advance of 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 organisations – or they risk being left behind the competition.