This case study illustrates the Project 13 Capable Owner Principle: 'The Enterprise is set up to deliver clearly articulated customer outcomes'.
“For an organisation to deliver outcomes, the structural and cultural objective to simply ‘deliver scope’ must be shifted.”
James Crompton, Strategic Pipeline Alliance Director at Anglian Water, discusses the business’s Strategic Pipelines Alliance (SPA) initiative; exploring the principles and process of creating a new enterprise organisation that is equipped to deliver core customer outcomes:
“Integration and collaboration are two words we hear consistently, and particularly when businesses are forming alliancing-type models. Whilst these are critical in creating a successful delivery model, the central component should be alignment. This has consistently maintained its prevalence within basic alliancing through to mature enterprising.
Without alignment, there is no key anchor point that informs the operating model or the organisational structure, which ultimately makes it far more difficult to cement a purpose, form goals and identify the outcomes.
When it came to SPA, we had a very clear purpose that was detailed in our procurement documents. We took the time to articulate our aspirations and the type of organisation we wanted to create, as well how, albeit at a high level, it would operate. We also stated the various capabilities and behaviours that were required to successfully deliver our goals and outcomes.
To demonstrate the practicalities of the SPA approach, I want to discuss a specific project and highlight some of the challenges we identified along the way. To begin, we wrote down our purpose: ‘To make the East of England resilient to the risks of drought and to secure water supplies for future generations.’
To bring this vision to life, we created the Integrator with our key partners, this is a high-level operating model that is complimented by a production based operating model, which was backed up by our wider network.
We soon identified how challenging it was to talk solely about outcomes, whilst trying to understand the sheer scale and scope of the project. We discovered that the delivery outcomes were losing impact, particularly when faced with a Water Resources Management Plan that showed over 475km of pipelines.
This was an incredibly valuable lesson to learn; just how easy it is to slip back into that ‘scope and scale’ mindset. Together, we paused and considered two things. Firstly, we stated very specific examples of what an outcome for SPA was: to provide an additional million litres per day from X to Y distribution zones by Z date. This was instead of ‘design and build X length of pipe at Y diameter with Z storage.’ The latter only reemphasised the scope of the project and left little room for innovation.
The second thing we did was to support the above outcome with two mantras: ‘If we don’t lay pipes we will fail. If we just lay pipes we will fail’, and ‘The space that lies between scope and outcomes is where innovation and imagination can thrive.’
We began describing each element of the project as a smart and integrated strategic asset, all consisting of transmission pipes, innovative solutions, and smart technologies. Additionally, we integrated stringent carbon targets into SPA, not only to align with our specific goals and outcomes, but to ensure we continued to support Anglian Water’s ambitions to achieve Net Zero Carbon by 2030.
As we progressed with this project we retained a keen focus on capabilities, behaviours and the value required to deliver our outcomes; this meant we put very little focus on the commercials. In fact, fee only accounted for 12 per cent of the overall scores and no work was priced in the process. This really shifted the goal posts as reward mechanisms were based on out-performance earned from successful delivery, rather than on scope of work.
By using industry best practice and benchmarking we introduced a production based operating model. This successfully pinpointed the various outcomes and aligned them with our community and environmental pledges.
Throughout this operating model, we made a very deliberate change in language. To truly embody and embrace our outcomes, ‘detailed design’ is now ‘engineering and integration’; ‘construction’ is now ‘production and assembly’, and ‘handover’ is now ‘network integration’. Each phrase has been evolved to provide more specificity and depth, and hones in on the specific roles to drive efficiency.
This process has provided us with an integrated and mutually dependent organisation that is completely aligned to the purpose, goals, and outcomes of the owner. In turn, we have witnessed further alignment across organisational structures and across wider operations.
This is a real-world example of how integrated organisations and an alignment around outcomes, powered by concurrent language and terminology, transformed conversations, and fuelled an inevitable drive towards success."